EXHIBIT 4.2
[Pride International, Inc. Letterhead]
As of June 20, 2002
To Credit Lyonnais New York Branch,
as Administrative Agent
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Floor - Syndications
New York, New York 10019
Attention: Xxxxxx Xxxxxx-Xxxxxx
Re: $250,000,000 Revolving Credit Agreement (the "Revolving Credit
Agreement") dated as of June 20, 2002 among Pride Offshore, Inc.,
the Originals Guarantors, the Administrative Agent, the Collateral
Agent, the Swingline Lender, the Issuing Banks, the Mandated Lead
Arrangers, the Lead Arranger, the Bookrunners and the
Co-Underwriter
Ladies and Gentlemen:
This letter is to evidence our agreement that, in addition to the provisions of
the Revolving Credit Agreement (the defined terms of which are used herein
unless otherwise defined herein), we agree as follows:
1. As set forth in the Revolving Credit Agreement, the Credit Parties
shall maintain insurance (or its equivalent) covering comprehensive third party
liability on the Mortgaged Revolving Credit Facility Rigs in an aggregate amount
not less than 100% of the Total Revolving Commitments. In addition, the Credit
Parties shall maintain insurance (or its equivalent) covering comprehensive
third party liability with financially sound and reputable insurance companies
or associations and in such amounts (and with co-insurance and deductibles) as
are usually insured against by Persons of similar size and established
reputation engaged in the same or similar businesses and similarly situated. For
the avoidance of doubt, it is understood that any insurance (or its equivalent)
maintained by the Credit Parties that satisfies the criteria of both sentences
of this item 1 shall be counted towards the respective quantities of insurance
(or its equivalent) required for purposes of both sentences of this item 1.
2. As set forth in the Revolving Credit Agreement, the Credit Parties
shall at all times maintain insurance (or its equivalent) covering War Risks on
Mortgaged Revolving Credit Facility Rigs, so that the aggregate amount of War
Risk coverage is not less than 150% of the Total Revolving Commitments
(including, as part of this 150%, the insurance (or its equivalent) covering War
Risks on the Pride South Pacific and other Mortgaged Revolving Credit Facility
Rigs referenced in item 3 below). In addition, the Credit Parties shall at all
times maintain insurance (or its equivalent) covering War Risks on Mortgaged
Revolving Credit Facility Rigs having a Market Value equal to or greater than
150% of the Total Revolving Commitments (including, as part of this 150%, the
insurance (or its equivalent) covering War Risks on the Pride South Pacific and
other Mortgaged Revolving Credit Facility Rigs referenced in item 3
below). For the avoidance of doubt, it is understood that any insurance (or its
equivalent) maintained by the Credit Parties that satisfies the criteria of both
sentences of this item 2 shall be counted towards the respective quantities of
insurance (or its equivalent) required for purposes of both sentences of this
item 2.
3. As set forth in the Revolving Credit Agreement, the Credit Parties
shall at all times maintain insurance (or its equivalent) covering War Risks on
the Pride South Pacific and each of the Mortgaged Revolving Credit Facility Rigs
that have a Market Value equal to or greater than $40,000,000 (as set forth in
the most recent Rig Appraisal Reports covering such Mortgaged Revolving Credit
Facility Rig) located outside of the Gulf of Mexico unless such insurance
becomes unavailable in the geographical area where such Mortgaged Revolving
Credit Facility Rig is located. If insurance (or its equivalent) covering War
Risks with respect to any of the Pride South Pacific or any Mortgaged Revolving
Credit Facility Rig that has a Market Value equal to or greater than $40,000,000
(as set forth in the most recent Rig Appraisal Reports covering such Mortgaged
Revolving Credit Facility Rig) located outside of the Gulf of Mexico becomes
unavailable in the geographical area where such Mortgaged Revolving Credit
Facility Rig is located and such Mortgaged Revolving Credit Facility Rig is
located in a geographical area which is declared a war zone by any Governmental
Authority or by the most-recent War Risks insurers of such Mortgaged Revolving
Credit Facility Rig, then such Mortgaged Revolving Credit Facility Rig shall not
be included for purposes of calculating the Security Maintenance Ratio until
such insurance (or its equivalent) covering War Risks becomes available again or
such Mortgaged Revolving Credit Facility Rig is moved to another geographical
area which is not so declared a war zone.
Very truly yours,
PRIDE OFFSHORE, INC.
MEXICO DRILLING LIMITED LLC
PRIDE CENTRAL AMERICA, LLC
PRIDE DRILLING, LLC
PRIDE NORTH AMERICA LLC
PRIDE OFFSHORE INTERNATIONAL LLC
PRIDE SOUTH PACIFIC LLC
By: /s/ Xxxx X. XxXxxx
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Xxxx X. XxXxxx
Treasurer
PRIDE INTERNATIONAL, INC.
By: /s/ Xxxx X. XxXxxx
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Xxxx X. XxXxxx
Chief Financial Officer
Accepted effective as of the 20th day of June, 2002.
CREDIT LYONNAIS NEW YORK BRANCH,
as Administrative Agent for itself and on behalf of the Revolving Lenders
By: /s/ Xxxxxxx Xxxxxxxxx
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Name: Xxxxxxx Xxxxxxxxx
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Title: Senior Vice President
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