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EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
AMONG
PRIDE INTERNATIONAL, INC.,
PM MERGER, INC.,
MARINE DRILLING COMPANIES, INC.,
AND
AM MERGER, INC.
DATED AS OF MAY 23, 2001
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TABLE OF CONTENTS
PAGE
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ARTICLE 1
THE MERGERS.........................................................................................2
Section 1.1 The Marine Merger......................................................................2
Section 1.2 The Pride Merger.......................................................................2
Section 1.3 The Closing............................................................................2
Section 1.4 Marine Merger Effective Time...........................................................3
Section 1.5 Pride Merger Effective Time............................................................3
Section 1.6 Effects of the Mergers.................................................................3
ARTICLE 2
ORGANIZATIONAL DOCUMENTS OF SURVIVING ENTITIES......................................................4
Section 2.1 Certificate of Incorporation of the Pride Merger Surviving Entity......................4
Section 2.2 Bylaws of the Pride Merger Surviving Entity............................................4
Section 2.3 Certificate of Incorporation of the Marine Merger Surviving Entity.....................4
Section 2.4 Bylaws of the Marine Merger Surviving Entity...........................................4
Section 2.5 Adoption of Stockholder Rights Plan....................................................4
ARTICLE 3
DIRECTORS AND OFFICERS OF THE SURVIVING ENTITIES....................................................5
Section 3.1 Directors of Merger Sub................................................................5
Section 3.2 Officers of Merger Sub.................................................................5
Section 3.3 Directors of the Company...............................................................5
Section 3.4 Officers of the Company................................................................5
ARTICLE 4
EFFECT OF THE MERGERS ON THE STOCK OF THE
COMPANY, MARINE, PRIDE AND MERGER SUB; EXCHANGE OF CERTIFICATES.....................................6
Section 4.1 Effect on Marine Stock.................................................................6
Section 4.2 Effect on the Stock of Merger Sub......................................................6
Section 4.3 Effect on the Stock of the Company.....................................................6
Section 4.4 Effect on Pride Stock..................................................................6
Section 4.5 Exchange of Certificates...............................................................7
Section 4.6 Rule 16b-3 Approval...................................................................10
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF MARINE...........................................................10
Section 5.1 Existence; Good Standing; Corporate Authority.........................................10
Section 5.2 Authorization, Validity and Effect of Agreements......................................10
Section 5.3 Capitalization........................................................................11
Section 5.4 Significant Subsidiaries..............................................................11
Section 5.5 Compliance with Laws; Permits.........................................................12
Section 5.6 No Conflict...........................................................................13
Section 5.7 SEC Documents.........................................................................14
Section 5.8 Litigation............................................................................15
Section 5.9 Absence of Certain Changes............................................................15
Section 5.10 Taxes.................................................................................15
Section 5.11 Employee Benefit Plans................................................................18
Section 5.12 Labor Matters.........................................................................20
Section 5.13 Environmental Matters.................................................................21
Section 5.14 Intellectual Property.................................................................22
Section 5.15 Decrees, Etc. ........................................................................22
Section 5.16 Insurance.............................................................................22
Section 5.17 No Brokers............................................................................23
Section 5.18 Opinion of Financial Advisor..........................................................23
Section 5.19 Vote Required.........................................................................23
Section 5.20 Ownership of Drilling Rigs............................................................23
Section 5.21 Undisclosed Liabilities...............................................................24
Section 5.22 Certain Contracts.....................................................................24
Section 5.23 Capital Expenditure Program...........................................................25
Section 5.24 Improper Payments.....................................................................25
Section 5.25 Amendment to Marine Rights Agreement..................................................25
Section 5.26 Pooling of Interests..................................................................26
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PRIDE............................................................26
Section 6.1 Existence; Good Standing; Corporate Authority.........................................26
Section 6.2 Authorization, Validity and Effect of Agreements......................................26
Section 6.3 Capitalization........................................................................27
Section 6.4 Significant Subsidiaries..............................................................27
Section 6.5 Compliance with Laws; Permits.........................................................28
Section 6.6 No Conflict...........................................................................29
Section 6.7 SEC Documents.........................................................................30
Section 6.8 Litigation............................................................................30
Section 6.9 Absence of Certain Changes............................................................31
Section 6.10 Taxes.................................................................................31
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Section 6.11 Employee Benefit Plans................................................................33
Section 6.12 Labor Matters.........................................................................36
Section 6.13 Environmental Matters.................................................................36
Section 6.14 Intellectual Property.................................................................37
Section 6.15 Decrees, Etc..........................................................................37
Section 6.16 Insurance.............................................................................37
Section 6.17 No Brokers............................................................................38
Section 6.18 Opinion of Financial Advisor..........................................................38
Section 6.19 Vote Required.........................................................................38
Section 6.20 Ownership of Drilling Rigs and Drillships.............................................38
Section 6.21 Undisclosed Liabilities...............................................................39
Section 6.22 Certain Contracts.....................................................................39
Section 6.23 Capital Expenditure Program...........................................................40
Section 6.24 Improper Payments.....................................................................40
Section 6.25 Amendment to Pride Rights Agreement...................................................40
Section 6.26 Pooling of Interests..................................................................41
Section 6.27. Representations and Warranties Relating to the Company and Merger
Sub...................................................................................41
ARTICLE 7
COVENANTS AND AGREEMENTS............................................................................42
Section 7.1 Conduct of Marine's Business..........................................................42
Section 7.2 Conduct of Pride's Business...........................................................46
Section 7.3 No Solicitation by Marine. ..........................................................50
Section 7.4 No Solicitation by Pride..............................................................52
Section 7.5 Rights Agreements.....................................................................53
Section 7.6 Meetings of Shareholders..............................................................53
Section 7.7 Filings; Commercially Reasonable Best Efforts, Etc. ..................................55
Section 7.8 Inspection............................................................................57
Section 7.9 Publicity.............................................................................57
Section 7.10 Registration Statement on Form S-4....................................................58
Section 7.11 Listing Applications..................................................................59
Section 7.12 "Comfort" Letters of Accountants......................................................59
Section 7.13 Agreements of Affiliates..............................................................60
Section 7.14 Expenses..............................................................................60
Section 7.15 Indemnification and Insurance.........................................................60
Section 7.16 Marine Employee Stock Options, Incentives and Benefit Plans...........................62
Section 7.17 Pride Employee Stock Options, Incentives and Benefit Plans............................63
Section 7.18 Company Covenants Concerning Incentive Compensation and Benefits......................63
Section 7.19 Company Assumption of Indenture Indebtedness..........................................64
Section 7.20 Pooling Letters.......................................................................64
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ARTICLE 8
CONDITIONS.........................................................................................65
Section 8.1 Conditions to Each Party's Obligation to Effect the Mergers...........................65
Section 8.2 Conditions to Obligation of Marine to Effect the Marine Merger........................66
Section 8.3 Conditions to Obligation of Pride to Effect the Pride Merger..........................67
ARTICLE 9
TERMINATION........................................................................................68
Section 9.1 Termination by Mutual Consent.........................................................68
Section 9.2 Termination by Marine or Pride........................................................68
Section 9.3 Termination by Marine.................................................................68
Section 9.4 Termination by Pride. ...............................................................69
Section 9.5 Effect of Termination.................................................................70
Section 9.6 Extension; Waiver.....................................................................72
ARTICLE 10
GENERAL PROVISIONS..................................................................................72
Section 10.1 Nonsurvival of Representations, Warranties and Agreements.............................72
Section 10.2 Notices...............................................................................72
Section 10.3 Assignment; Binding Effect; Benefit...................................................73
Section 10.4 Entire Agreement......................................................................74
Section 10.5 Amendments............................................................................74
Section 10.6 Governing Law.........................................................................74
Section 10.7 Counterparts..........................................................................74
Section 10.8 Headings..............................................................................74
Section 10.9 Interpretation........................................................................74
Section 10.10 Waivers...............................................................................75
Section 10.11 Incorporation of Exhibits.............................................................75
Section 10.12 Severability..........................................................................75
Section 10.13 Enforcement of Agreement..............................................................75
LIST OF EXHIBITS
Exhibit 2.1 Form of Certificate of Incorporation of the Pride Merger Surviving Entity
Exhibit 2.2 Form of Bylaws of the Pride Merger Surviving Entity
Exhibit 3.3 Directors of the Company
Exhibit 3.4 Officers of the Company
Exhibit 7.13(a)(1) Form of Marine Affiliate Letter
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Exhibit 7.13(b)(1) Form of Marine Letter Relating to Pooling
Exhibit 7.13(b)(2) Form of Pride Letter Relating to Pooling
Exhibit 8.2 Form of Xxxxxx & Xxxxxx, L.L.P. Opinion Certificate
Exhibit 8.3 Form of Xxxxx Xxxxx L.L.P. Opinion Certificate
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GLOSSARY OF DEFINED TERMS
DEFINED TERMS WHERE DEFINED
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Action..........................................................................Section 7.15(a)
Affiliate.......................................................................Section 5.10(q)
Affiliated Group................................................................Section 5.10(q)
Agreement.......................................................................Preamble
Assumed Indebtedness............................................................Section 7.20
Certificates....................................................................Section 4.5(b)
Closing.........................................................................Section 1.3
Closing Date....................................................................Section 1.3
Code............................................................................Recitals(c)
Company.........................................................................Preamble
Company Certificates............................................................Section 4.4(b)
Company Common Stock............................................................Section 4.3
Confidentiality Agreement.......................................................Section 7.3(a)
Cutoff Date.....................................................................Section 7.3(d), 7.4(d)
Deferred Intercompany Transaction...............................................Section 5.10(q)
DGCL............................................................................Section 1.1
Effective Time..................................................................Section 1.5(c)
Environmental Laws..............................................................Section 5.13(a)
ERISA...........................................................................Section 5.11(a)
Exchange Act....................................................................Section 4.6
Exchange Agent..................................................................Section 4.5(a)
Exchange Fund...................................................................Section 4.5(a)
Form S-4........................................................................Section 7.10(a)
Hazardous Materials.............................................................Section 5.13(b)
HSR Act.........................................................................Section 5.6(c)
Indemnified Party...............................................................Section 7.15(a)
Indemnified Parties.............................................................Section 7.15(a)
Junior Preferred Stock..........................................................Section 5.3
LBCL............................................................................Section 1.2
Liens...........................................................................Section 5.4
Louisiana Certificate of Merger.................................................Section 1.5(c)
Marine..........................................................................Preamble
Marine Acquisition Proposal.....................................................Section 7.3(a)
Marine Applicable Laws..........................................................Section 5.5(a)
Marine Awards...................................................................Section 7.16
Marine Benefit Plans............................................................Section 5.11(a)
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DEFINED TERMS WHERE DEFINED
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Marine Certificates.............................................................Section 4.1(b)
Marine Certificate of Merger....................................................Section 1.4(a)
Marine Common Stock.............................................................Section 4.1(a)
Marine Disclosure Letter........................................................Article 5 Preface
Marine ERISA Affiliate..........................................................Section 5.11(b)(10)
Marine Material Adverse Effect..................................................Section 10.9(c)
Marine Material Contracts.......................................................Section 5.22(a)
Marine Meeting..................................................................Section 7.6(a)
Marine Merger...................................................................Section 1.1
Marine Merger Consideration.....................................................Section 4.1(b)
Marine Merger Effective Time....................................................Section 1.4(c)
Marine Merger Surviving Entities................................................Section 1.1
Marine Permits..................................................................Section 5.5(b)
Marine Permitted Liens..........................................................Section 5.20
Marine Real Property............................................................Section 5.5(d)
Marine Regulatory Filings.......................................................Section 5.6(c)
Marine Reports..................................................................Section 5.7
Marine Right....................................................................Section 5.3
Marine Rights Agreement.........................................................Section 5.3
Marine Stock Option.............................................................Section 7.16
Marine Stock Option Agreement...................................................Recitals
Marine Stock Option Plans.......................................................Section 7.16
Marine Superior Proposal........................................................Section 7.3(a)
Material Adverse Effect.........................................................Section 10.9(c)
Meetings........................................................................Section 7.6(a)
Mergers.........................................................................Section 1.2
Merger Sub......................................................................Recitals
NYSE............................................................................Section 7.11
Pride...........................................................................Preamble
Pride Acquisition Proposal......................................................Section 7.4(a)
Pride Applicable Laws...........................................................Section 6.5(a)
Pride Awards....................................................................Section 7.17
Pride Benefit Plans.............................................................Section 6.11(a)
Pride Certificates..............................................................Section 4.4(b)
Pride Certificate of Merger.....................................................Section 1.5(c)
Pride Common Stock..............................................................Section 4.4(a)
Pride Disclosure Letter.........................................................Article 6 Preface
Pride ERISA Affiliate...........................................................Section 6.11(b)(10)
Pride Exchange Ratio............................................................Section 4.4(b)
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DEFINED TERMS WHERE DEFINED
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Pride Issuance..................................................................Section 6.19
Pride Material Adverse Effect...................................................Section 10.9(c)
Pride Material Contracts........................................................Section 6.22(a)
Pride Meeting...................................................................Section 7.6(a)
Pride Merger....................................................................Section 1.2
Pride Merger Consideration......................................................Section 4.4(b)
Pride Merger Effective Time.....................................................Section 1.5(c)
Pride Merger Surviving Entity...................................................Section 1.2
Pride Permits...................................................................Section 6.5(b)
Pride Permitted Liens...........................................................Section 6.20
Pride Real Property.............................................................Section 6.5(d)
Pride Regulatory Filings........................................................Section 6.6(c)
Pride Reports...................................................................Section 6.7
Pride Right.....................................................................Section 6.3
Pride Rights Agreement..........................................................Section 6.3
Pride Superior Proposal.........................................................Section 7.4(a)
Proxy Statement/Prospectus......................................................Section 7.10(a)
Pride Stock Option..............................................................Section 7.17
Pride Stock Option Agreement....................................................Recitals
Pride Stock Option Plan.........................................................Section 7.17
Rule 145 Affiliates.............................................................Section 7.13
Rule 16b-3......................................................................Section 4.6
SEC.............................................................................Section 4.6
Securities Act..................................................................Section 5.6(c)
Series A Preferred Stock........................................................Section 6.3
Significant Subsidiary..........................................................Section 5.4
Subsidiary......................................................................Section 10.9(d)
Tax.............................................................................Section 5.10(q)
Tax Return......................................................................Section 5.10(q)
TBCA............................................................................Section 1.1
Texas Articles of Merger........................................................Section 1.4(b)
Third-Party Provisions..........................................................Section 10.3
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of
May 23, 2001, is by and among Pride International, Inc., a corporation organized
under the laws of Louisiana ("Pride"), PM Merger, Inc., a corporation organized
under the laws of Delaware and wholly owned subsidiary of Pride (the "Company"),
Marine Drilling Companies, Inc., a corporation organized under the laws of Texas
("Marine"), and AM Merger, Inc. a corporation organized under the laws of
Delaware and wholly owned subsidiary of Pride ("Merger Sub").
RECITALS
A. The Marine Merger. Merger Sub is a newly organized Delaware
corporation. At the Marine Merger Effective Time, the parties hereto intend to
effect a merger in which (i) Marine will be merged with and into Merger Sub,
(ii) Merger Sub will be the surviving corporation of the merger and (iii) each
outstanding share of Marine Common Stock will be converted into one share of
Pride Common Stock.
B. The Pride Merger. The Company is a newly organized Delaware
corporation. Following the Marine Merger Effective Time, and at the Pride Merger
Effective Time, the parties hereto intend to effect a merger in which (i) Pride
will be merged with and into the Company, (ii) the Company will be the surviving
corporation of the merger and (iii) each outstanding share of Pride Common Stock
(including Pride Common Stock issued in the merger of Marine with and into
Merger Sub) will be converted into one share of Company Common Stock.
C. Advisability of the Mergers. The board of directors of each
of Marine, Merger Sub, Pride and the Company have determined that it is
advisable and in the best interest of their respective shareholders that the
Marine Merger and Pride Merger be consummated, all as hereinafter provided.
D. Intended U.S. Tax Consequences. The parties to this Agreement
intend that, for U.S. federal income tax purposes, each of the Mergers will
constitute a reorganization described in Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code").
E. Intended U.S. Accounting Treatment. The parties to this
Agreement also intend that the Mergers contemplated by this Agreement will be
accounted for as a pooling of interests under U.S. generally accepted accounting
principles.
F. Marine Stock Option Agreement. As a material inducement to
the execution and delivery of this Agreement, Marine and Pride are entering into
a stock option agreement (the
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"Marine Stock Option Agreement") concurrently with the execution and delivery of
this Agreement, pursuant to which Pride will grant Marine the option to purchase
shares of Pride Common Stock, upon the terms and subject to the conditions set
forth therein.
G. Pride Stock Option Agreement. As a material inducement to the
execution and delivery of this Agreement, Pride and Marine are entering into a
stock option agreement (the "Pride Stock Option Agreement") concurrently with
the execution and delivery of this Agreement, pursuant to which Marine will
grant Pride the option to purchase shares of Marine Common Stock, upon the terms
and subject to the conditions set forth therein.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE 1
THE MERGERS
Section 1.1 The Marine Merger. Upon the terms and subject to the
conditions of this Agreement, and in accordance with the Delaware General
Corporation Law (the "DGCL") and the Texas Business Corporation Act (the
"TBCA"), Marine shall be merged with and into Merger Sub (the "Marine Merger")
in accordance with this Agreement, and the separate corporate existence of
Marine shall thereupon cease at the Marine Merger Effective Time. Merger Sub
shall be the surviving entity in the Marine Merger (sometimes hereinafter
referred to as the "Marine Merger Surviving Entity").
Section 1.2 The Pride Merger. Upon the terms and subject to the
conditions of this Agreement, and in accordance with the DGCL and the Louisiana
Business Corporation Law (the "LBCL"), following the Marine Merger Effective
Time, Pride shall be merged with and into the Company (the "Pride Merger," and
together with the Marine Merger, the "Mergers") in accordance with this
Agreement, and the separate corporate existence of Pride shall thereupon cease
at the Pride Merger Effective Time. The Company shall be the surviving entity in
the Pride Merger (sometimes hereinafter referred to as the "Pride Merger
Surviving Entity").
Section 1.3 The Closing. Upon the terms and subject to the
conditions of this Agreement, the closing of the Mergers (the "Closing") shall
take place at (a) the offices of Xxxxx Xxxxx L.L.P., Xxx Xxxxx Xxxxx, 000
Xxxxxxxxx, Xxxxxxx, Xxxxx 00000, at 9:00 a.m., local time, on the first business
day immediately following the day on which the last to be fulfilled or waived of
the conditions set forth in Section 8.1, or, if on such day any condition set
forth in Section 8.2 or 8.3 has not been fulfilled or waived, as soon as
practicable after all the conditions set forth in Article 8 have been fulfilled
or waived in accordance herewith, or (b) at such other time, date or
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place as Marine and Pride may agree in writing. The date on which the Closing
occurs is hereinafter referred to as the "Closing Date."
Section 1.4 Marine Merger Effective Time. (a) Prior to the
Closing, Marine, Merger Sub and Pride shall prepare, and on the Closing Date
shall cause a certificate of merger meeting the requirements of Section 251 of
the DGCL with respect to the Marine Merger (the "Marine Certificate of Merger")
to be properly executed and filed in accordance with such section.
(b) Prior to the Closing, Marine, Merger Sub and Pride shall
also prepare, and on the Closing Date shall cause articles of merger meeting the
requirements of Article 5.04 of the TBCA with respect to the Marine Merger (the
"Texas Articles of Merger") to be properly executed and filed in accordance with
such section.
(c) The Marine Merger shall become effective prior to the Pride
Merger at such time as each of the Marine Certificate of Merger and the Texas
Articles of Merger are properly executed and duly filed, or at such other time
(but in any case preceding the Pride Merger Effective Time) as Marine and Pride
shall have agreed upon and designated in each such filing as the effective time
of the Marine Merger (such time at which the Marine Merger shall have become
effective is herein referred to as the "Marine Merger Effective Time").
Section 1.5 Pride Merger Effective Time. (a) Prior to the
Closing, Pride and the Company shall prepare, and on the Closing Date shall
cause a certificate of merger meeting the requirements of Section 251 of the
DGCL with respect to the Pride Merger (the "Pride Certificate of Merger") to be
properly executed and filed in accordance with such section.
(b) Prior to the Closing, the Company and Pride shall prepare,
and on the Closing Date shall cause a certificate of merger meeting the
requirements of Section 12:112 of the LBCL with respect to the Pride Merger (the
"Louisiana Certificate of Merger") to be properly executed and filed in
accordance with such section.
(c) The Pride Merger shall become effective following the Marine
Merger at such time as each of the Pride Certificate of Merger and the Louisiana
Certificate of Merger are properly executed and filed, or at such other time
(but in any case following the Marine Merger Effective Time) as Marine and Pride
shall have agreed upon and designated in each such filing as the effective time
of the Pride Merger (such time at which the Pride Merger shall have become
effective is herein referred to as the "Pride Merger Effective Time", and such
time at which both the Marine Merger and the Pride Merger shall have become
effective is herein referred to as the "Effective Time").
Section 1.6 Effects of the Mergers. The Marine Merger shall have
the effects set forth in Section 259 of the DGCL and Article 5.06 of the TBCA.
The Pride Merger shall have the
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effects set forth in Section 259 of the DGCL and Section 12:115 of the LBCL. The
Company agrees that it will be responsible for, and will pay, all applicable
fees, charges and incorporation and franchise taxes required by law to be paid
by Pride to the State of Louisiana. Merger Sub agrees that it will be
responsible for, and will pay, all applicable fees, charges and incorporation
and franchise taxes required by law to be paid by Marine to the State of Texas.
ARTICLE 2
ORGANIZATIONAL DOCUMENTS OF SURVIVING ENTITIES
Section 2.1 Certificate of Incorporation of the Pride Merger
Surviving Entity. As of the Pride Merger Effective Time, the certificate of
incorporation of the Company set forth in Exhibit 2.1 hereto shall be the
certificate of incorporation of the Pride Merger Surviving Entity until duly
amended in accordance with applicable law; provided, however, that at the Pride
Merger Effective Time, the certificate of incorporation of the Pride Merger
Surviving Entity shall be amended to provide that the name of the Pride Merger
Surviving Entity from and after the Pride Merger Effective Time shall be "Pride
International, Inc."
Section 2.2 Bylaws of the Pride Merger Surviving Entity. As of
the Pride Merger Effective Time, the bylaws of the Company set forth in Exhibit
2.2 hereto shall be the bylaws of the Pride Merger Surviving Entity until duly
amended in accordance with applicable law.
Section 2.3 Certificate of Incorporation of the Marine Merger
Surviving Entity. As of the Marine Merger Effective Time, the certificate of
incorporation of Merger Sub shall be the certificate of incorporation of the
Marine Merger Surviving Entity until duly amended in accordance with applicable
law; provided, however, that if so provided in the Marine Certificate of Merger
the name of Merger Sub shall be amended as provided therein.
Section 2.4 Bylaws of the Marine Merger Surviving Entity. As of
the Marine Merger Effective Time, the bylaws of Merger Sub shall be the bylaws
of the Marine Merger Surviving Entity until duly amended in accordance with
applicable law.
Section 2.5 Adoption of Stockholder Rights Plan. As of the
Effective Time, the Company shall adopt a stockholder rights plan substantially
similar to the Pride Rights Agreement as in effect on the date hereof with such
changes as may be necessary or advisable to reflect Delaware as the Company's
jurisdiction of incorporation and to conform such stockholder rights plan to the
certificate of incorporation of the Company.
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ARTICLE 3
DIRECTORS AND OFFICERS OF THE SURVIVING ENTITIES
Section 3.1 Directors of Merger Sub. The directors of Merger Sub
immediately prior to the Marine Merger Effective Time shall be the directors of
the Marine Merger Surviving Entity until their successors are duly elected and
qualified.
Section 3.2 Officers of Merger Sub. The officers of Marine
immediately prior to the Marine Merger Effective Time shall be the officers of
the Marine Merger Surviving Entity until their successors are duly appointed.
Section 3.3 Directors of the Company. Set forth in Exhibit 3.3
attached hereto is the name of each individual who shall become a director of
the Company as of the Pride Merger Effective Time, and whether such director has
been designated for membership on the Company's board of directors by Marine or
Pride. If any individual identified in Exhibit 3.3 is unable or unwilling to
serve as a director of the Company as of the Pride Merger Effective Time, then a
substitute director shall be selected by the party that initially designated
such individual for membership on the Company's board of directors. From and
after the Pride Merger Effective Time, each person identified in Exhibit 3.3
shall serve as a director of the Company until such person's successor is duly
elected and qualified.
Section 3.4 Officers of the Company. Set forth in Exhibit 3.4
hereto is the name of each individual who shall become an officer of the Company
at the Pride Merger Effective Time and such person's officer position with the
Company as of the Pride Merger Effective Time, and each such officer shall
thereafter serve until his or her successor shall be appointed or their earlier
death, resignation or removal in accordance with the certificate of
incorporation and bylaws of the Company. If any such person is unable or
unwilling to serve as an officer of the Company in the capacity set forth in
Exhibit 3.4, then a substitute officer shall be selected by (i) Marine if the
person unable or unwilling to serve is employed by Marine or its Subsidiaries on
the date of this Agreement, or (ii) Pride if the person unable or unwilling to
serve is employed by Pride or its Subsidiaries on the date of this Agreement.
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ARTICLE 4
EFFECT OF THE MERGERS ON THE STOCK OF THE
COMPANY, MARINE, PRIDE AND MERGER SUB; EXCHANGE OF CERTIFICATES
Section 4.1 Effect on Marine Stock. As of the Marine Merger
Effective Time, by virtue of the Marine Merger, and without any further action
by Marine, Merger Sub or Pride or by the holders of any securities of Marine,
Merger Sub or Pride:
(a) Cancellation of Treasury Stock and Pride Owned Stock. Each
share of Marine's common stock, par value $.01 per share (the "Marine Common
Stock"), that is owned directly by Marine, by Pride or their respective
subsidiaries immediately prior to the Marine Merger Effective Time shall
automatically be canceled and retired and shall cease to exist, and no
consideration shall be delivered in exchange therefor.
(b) Conversion of Marine Common Stock. Each issued and
outstanding share of Marine Common Stock (other than shares to be canceled in
accordance with Section 4.1(a)) shall be converted into one fully paid and
nonassessable share of Pride Common Stock (the "Marine Merger Consideration").
As of the Marine Merger Effective Time, all such shares of Marine Common Stock
shall no longer be outstanding and shall automatically be canceled and retired
and shall cease to exist, and each holder of a certificate or certificates which
immediately prior to the Marine Merger Effective Time represented outstanding
shares of Marine Common Stock (the "Marine Certificates") shall cease to have
any rights with respect thereto, except the right to receive the number of
shares of Pride Common Stock into which such shares have been converted.
Section 4.2 Effect on the Stock of Merger Sub. As of the Marine
Merger Effective Time, each share of the common stock, par value $.01 per share,
of Merger Sub that was outstanding prior to the Marine Merger Effective Time
shall not be converted or otherwise effected by the Marine Merger and shall
remain outstanding after the Marine Merger.
Section 4.3 Effect on the Stock of the Company. As of the Pride
Merger Effective Time, each share of the common stock, par value $.01 per share,
of the Company ("Company Common Stock") that was outstanding prior to the Pride
Merger Effective Time shall be canceled and retired and shall cease to exist,
and no consideration shall be delivered in exchange therefor.
Section 4.4 Effect on Pride Stock. As of the Pride Merger
Effective Time, by virtue of the Pride Merger and without any action on the part
of Pride or the Company or the holders of any securities of Pride or the
Company:
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(a) Cancellation of Treasury Stock and Marine Owned Stock. Each
share of Pride's common stock, no par value, (the "Pride Common Stock"), that is
owned directly by Pride, by Marine or by their respective subsidiaries
immediately prior to the Pride Merger Effective Time shall automatically be
canceled and retired and shall cease to exist, and no consideration shall be
delivered in exchange therefor.
(b) Conversion of Pride Common Stock. Each issued and
outstanding share of Pride Common Stock (including shares of Pride Common Stock
issued in the Marine Merger but excluding shares of Pride Common Stock to be
canceled in accordance with Section 4.4(a)), shall be converted into one (the
"Pride Exchange Ratio") fully paid and nonassessable share of Company Common
Stock (the "Pride Merger Consideration"). As of the Pride Merger Effective Time,
all such shares of Pride Common Stock shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and each holder
of a certificate or certificates or rights thereto that immediately prior to the
Pride Merger Effective Time which represent outstanding shares of Pride Common
Stock (the "Pride Certificates") shall cease to have any rights with respect
thereto, except the right to receive certificates ("Company Certificates")
representing the number of shares of Company Common stock into which such shares
have been converted.
Section 4.5 Exchange of Certificates.
(a) Exchange Agent. As of the Closing Date, the Company shall
enter into an agreement with American Stock Transfer & Trust Company (the
"Exchange Agent"), which shall provide that the Company shall deposit with the
Exchange Agent, for the benefit of the holders of Marine Common Stock and Pride
Common Stock, for exchange in accordance with this Article 4, through the
Exchange Agent, Company Certificates representing the number of shares of
Company Common Stock (such shares of Company Common Stock, together with any
dividends or distributions with respect thereto with a record date after the
Pride Merger Effective Time being hereinafter referred to as the "Exchange
Fund") issuable pursuant to this Article 4.
(b) Exchange Procedures. As soon as reasonably practicable after
the Pride Merger Effective Time, the Exchange Agent shall mail to each holder of
record of a Marine Certificate or a Pride Certificate (each a "Certificate" and
collectively the "Certificates") whose shares were converted pursuant to Section
4.1(b) and/or Section 4.4(b), (i) a letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon delivery of the Certificates to the Exchange Agent and
shall be in such form and have such other provisions as Marine and Pride may
reasonably specify), and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for the consideration set forth in Article 4. Upon
surrender of a Certificate for cancellation to the Exchange Agent, together with
such letter of transmittal, duly executed, and such other documents as may
reasonably be required by the Exchange Agent, the holder of such Certificate
shall be entitled to receive in exchange therefor a Company
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Certificate representing that number of shares of Company Common Stock which
such holder has the right to receive pursuant to the provisions of this Article
4, and the Certificate so surrendered shall forthwith be canceled. In the event
of a transfer of ownership of Marine Common Stock not registered in the transfer
records of Marine or of Pride Common Stock not registered in the transfer
records of Pride, a Company Certificate representing the proper number of shares
of Company Common Stock may be issued to a person other than the person in whose
name the Certificate so surrendered is registered if such Certificate shall be
properly endorsed or otherwise be in proper form for transfer and the person
requesting such issuance shall pay any transfer or other non-income taxes
required by reason of the issuance of shares of Company Common Stock to a person
other than the registered holder of such Certificate or establish to the
satisfaction of the Company that such tax has been paid or is not applicable.
Until surrendered as contemplated by this Section 4.5, each Certificate shall be
deemed at any time after the Pride Merger Effective Time to represent only the
right to receive upon such surrender Company Certificates representing the
number of shares of Company Common Stock into which the shares of Pride Common
Stock formerly represented by such Certificate (including shares of Pride Common
Stock issuable in respect of Marine Common Stock as a result of the Marine
Merger) have been converted. No interest will be paid or will accrue on any cash
payable to holders of Certificates pursuant to the provisions of this Article 4.
(c) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions with respect to Company Common Stock with a
record date after the Pride Merger Effective Time shall be paid to the holder of
any unsurrendered Certificate with respect to the shares of Company Common Stock
represented thereby and all such dividends and other distributions shall be paid
by the Company to the Exchange Agent and shall be included in the Exchange Fund,
in each case until the surrender of such Certificate in accordance with this
Article 4. Subject to the effect of applicable escheat or similar laws,
following surrender of any such Certificate there shall be paid to the holder of
the Company Certificate representing shares of Company Common Stock issued in
exchange therefor, without interest, (i) at the time of such surrender, the
amount of dividends or other distributions with a record date after the Pride
Merger Effective Time theretofore paid with respect to such shares of Company
Common Stock and (ii) at the appropriate payment date, the amount of dividends
or other distributions with a record date after the Pride Merger Effective Time
but prior to such surrender and with a payment date subsequent to such surrender
payable with respect to such shares of Company Common Stock. The Company shall
make available to the Exchange Agent cash for these purposes.
(d) No Further Ownership Rights in Marine Common Stock and Pride
Common Stock. All shares of Company Common Stock issued upon the surrender for
exchange of Certificates in accordance with the terms of this Article 4
(including any cash paid pursuant to this Article 4) shall be deemed to have
been issued (and paid) in full satisfaction of all rights pertaining to the
shares of Pride Common Stock (including shares of Pride Common Stock issuable in
respect of Marine Common Stock as a result of the Marine Merger) theretofore
represented by such Certificates,
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subject, however, to the Pride Merger Surviving Entity's obligation to pay any
dividends or make any other distributions with a record date prior to the Pride
Merger Effective Time which may have been authorized or made by Marine on such
shares of Marine Common Stock or by Pride on such shares of Pride Common Stock,
as the case may be, which remain unpaid at the Pride Merger Effective Time.
(e) Termination of Exchange Fund. Any portion of the Exchange
Fund which remains undistributed to the holders of the Certificates for six
months after the Pride Merger Effective Time shall be delivered to the Company
upon demand, and any holders of the Certificates who have not theretofore
complied with this Article 4 shall thereafter look only to the Company for
payment of their claim for Pride Merger Consideration and any dividends or
distributions with respect to Company Common Stock.
(f) No Liability. None of the Company, Marine, Pride, Merger Sub
or the Exchange Agent shall be liable to any person in respect of any shares of
Company Common Stock (or dividends or distributions with respect thereto) or
cash from the Exchange Fund in each case delivered to a public official pursuant
to any applicable abandoned property, escheat or similar law. If any Certificate
shall not have been surrendered prior to seven years after the Pride Merger
Effective Time (or immediately prior to such earlier date on which any Pride
Merger Consideration, any cash payable to the holder of such Certificate
pursuant to this Article 4 or any dividends or distributions payable to the
holder of such Certificate would otherwise escheat to or become the property of
any governmental body or authority), any Pride Merger Consideration, cash,
dividends or distributions in respect of such Certificate shall, to the extent
permitted by applicable law, become the property of the Company, free and clear
of all claims or interest of any person previously entitled thereto.
(g) Investment of Exchange Fund. The Exchange Agent shall invest
any cash included in the Exchange Fund, as directed by the Company, on a daily
basis. Any interest and other income resulting from such investments shall be
paid to the Company; provided, however, that no such investment or loss shall
affect the amounts payable to any holder of a Certificate.
(h) Exchanges by Affiliates. Notwithstanding anything in this
Agreement to the contrary, any Company Common Stock and Company Certificates
therefor issued to affiliates of Marine as a result of the Mergers shall be
subject to the restrictions on transfer described in Section 7.13 and Exhibits
7.13(a) and 7.13(b)(1), and such shares shall bear restrictive legends as
described in Exhibit 7.13(a)(1). Any Company Common Stock and Certificates
therefor issued to affiliates of Pride as a result of the Pride Merger shall be
subject to the restrictions on transfer described in Section 7.13(b) and Exhibit
7.13(b)(2).
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(i) Lost Certificates. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Company, the posting by such person of a bond in such reasonable amount as
the Company may direct as indemnity against any claim that may be made against
it with respect to such Certificate, the Exchange Agent will issue in exchange
for such lost, stolen or destroyed Certificate the Pride Merger Consideration
and, if applicable, any unpaid dividends and distributions on shares of Company
Common Stock deliverable in respect thereof, pursuant to this Agreement.
Section 4.6 Rule 16b-3 Approval. Each of the Company, Marine,
Merger Sub and Pride agree that their respective board of directors or the
executive compensation committee of their board of directors shall, at or prior
to the Marine Merger Effective Time, adopt resolutions specifically approving,
for purposes of Rule 16b-3 ("Rule 16b-3") of the United States Securities and
Exchange Commission (the "SEC") under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the receipt, pursuant to this Agreement, of
Company Common Stock and of options to acquire Company Common Stock, by
executive officers or directors of each of Marine and Pride who become executive
officers or directors of the Company subject to Rule 16b-3.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF MARINE
Except as set forth in the disclosure letter delivered to Pride
by Marine at or prior to the execution hereof (the "Marine Disclosure Letter"),
Marine represents and warrants to Pride and the Company the following:
Section 5.1 Existence; Good Standing; Corporate Authority.
Marine is a corporation duly incorporated, validly existing and in good standing
under the laws of Texas. Marine is duly qualified to do business and, to the
extent such concept or similar concept exists in the relevant jurisdiction, is
in good standing under the laws of any jurisdiction in which the character of
the properties owned or leased by it therein or in which the transaction of its
business makes such qualification necessary, except where the failure to be so
qualified does not and is not reasonably likely to have, individually or in the
aggregate, a Marine Material Adverse Effect (as defined in Section 10.9(c)).
Marine has all requisite corporate power and authority to own, operate and lease
its properties and to carry on its business as now conducted. The copies of
Marine's restated articles of incorporation and bylaws previously made available
to Pride are true and correct and contain all amendments as of the date hereof.
Section 5.2 Authorization, Validity and Effect of Agreements.
Marine has the requisite corporate power and authority to execute and deliver
this Agreement, the Pride Stock
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Option Agreement and all other agreements and documents contemplated hereby and
thereby to which it is a party. The consummation by Marine of the transactions
contemplated hereby and by the Pride Stock Option Agreement have been duly
authorized by all requisite corporate action on behalf of Marine, other than the
approvals referred to in Section 5.19. This Agreement and the Pride Stock Option
Agreement constitute valid and legally binding obligations of Marine,
enforceable against Marine in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to creditors' rights and general principles of equity. Marine has
taken all action necessary to render the restrictions set forth in Part 13 of
the TBCA inapplicable to this Agreement and the transactions contemplated
hereby. No other state takeover or business combination statute applies to the
transactions contemplated by this Agreement or the Pride Stock Option Agreement.
Section 5.3 Capitalization. As of the date of this Agreement,
the authorized capital stock of Marine consists of 200,000,000 shares of common
stock, par value $.01 per share, and 20,000,000 shares of preferred stock, par
value $.01 per share, of which 200,000 shares have been designated Junior
Participating Preferred Stock ("Junior Preferred Stock"). As of May 18, 2001,
58,697,281 shares of Marine Common Stock and no shares of Junior Preferred Stock
were outstanding. At the same date, there were 3,576,359 shares of Marine Common
Stock reserved for issuance upon exercise of outstanding Marine Stock Options
(as defined in Section 7.16). All such issued and outstanding shares of Marine
Common Stock are duly authorized, validly issued, fully paid, nonassessable and
free of preemptive rights. One right to purchase Junior Preferred Stock (each, a
"Marine Right") issued pursuant to the Rights Agreement, dated as of November
15, 1996, (the "Marine Rights Agreement"), as amended, between Marine and
American Stock Transfer & Trust Company is associated with and attached to each
outstanding share of Marine Common Stock. As of the date of this Agreement,
except for the Pride Stock Option Agreement, the Marine Rights and as set forth
in this Section 5.3, there are no outstanding shares of capital stock and there
are no options, warrants, calls, subscriptions, convertible securities or other
rights, agreements or commitments which obligate Marine or any of its
Subsidiaries to issue, transfer or sell any shares of capital stock or other
voting securities of Marine or any of its Subsidiaries. Marine has no
outstanding bonds, debentures, notes or other obligations the holders of which
have the right to vote (or which are convertible into or exercisable for
securities having the right to vote) with the shareholders of Marine on any
matter.
Section 5.4 Significant Subsidiaries. For purposes of this
Agreement, "Significant Subsidiary" shall mean significant subsidiary as defined
in Rule 1-02 of Regulation S-X of the SEC under the Exchange Act. Each of
Marine's Significant Subsidiaries is a corporation or other legal entity duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization, has the corporate power and
authority to own, operate and lease its properties and to carry on its business
as it is now being conducted, and is duly qualified to do business and is in
good standing (where applicable) in each jurisdiction in which the ownership,
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operation or lease of its property or the conduct of its business requires such
qualification, except for jurisdictions in which such failure to be so qualified
or to be in good standing does not and is not reasonably likely to have a Marine
Material Adverse Effect. As of the date of this Agreement, all of the
outstanding shares of capital stock of, or other ownership interests in, each of
Marine's Significant Subsidiaries are duly authorized, validly issued, fully
paid and nonassessable and are owned, directly or indirectly, by Marine free and
clear of all mortgages, deeds of trust, liens, security interests, pledges,
leases, conditional sale contracts, charges, privileges, easements, rights of
way, reservations, options, rights of first refusal and other encumbrances
("Liens").
Section 5.5 Compliance with Laws; Permits. Except for such
matters as, individually or in the aggregate, do not or are not reasonably
likely to have a Marine Material Adverse Effect and except for matters arising
under Environmental Laws which are treated exclusively in Section 5.13:
(a) Neither Marine nor any Subsidiary of Marine is in violation
of any applicable law, rule, regulation, code, governmental determination,
order, treaty, convention, governmental certification requirement or other
public limitation, U.S. or non-U.S. (collectively, the "Marine Applicable
Laws"), relating to the ownership or operation of any of their respective
assets, and no claim is pending or, to the knowledge of Marine, threatened with
respect to any such matters. No condition exists that is not disclosed in the
Marine Disclosure Letter and which does or is reasonably likely to constitute a
violation of or deficiency under any Marine Applicable Law relating to the
ownership or operation of the assets of Marine or any Subsidiary of Marine.
(b) Marine and each Subsidiary of Marine hold all permits,
licenses, certifications, variations, exemptions, orders, franchises and
approvals of all governmental or regulatory authorities necessary for the
conduct of their respective businesses (the "Marine Permits"). All Marine
Permits are in full force and effect and there exists no default thereunder or
breach thereof, and Marine has no notice or actual knowledge that such Marine
Permits will not be renewed in the ordinary course after the Marine Merger
Effective Time. No governmental authority has given, or to the knowledge of
Marine threatened to give, any action to terminate, cancel or reform any Marine
Permit.
(c) Each drilling rig or other drilling unit owned by Marine or
a subsidiary of Marine which is subject to classification is in class according
to the rules and regulations of the applicable classifying body and is duly and
lawfully documented under the laws of its flag jurisdiction.
(d) Marine and each Subsidiary of Marine possess all permits,
licenses, operating authorities, orders, exemptions, franchises, variances,
consents, approvals or other authorizations required for the present ownership
and operation of all its real property or leaseholds ("Marine Real Property")
except where the failure to possess any of the same does not and is not
reasonably likely
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to have a Marine Material Adverse Effect. There exists no material default or
breach with respect to, and no party or governmental authority has taken or, to
the knowledge of Marine, threatened to take, any action to terminate, cancel or
reform any such permit, license, operating authority, order, exemption,
franchise, variance, consent, approval or other authorization pertaining to
Marine Real Property.
Section 5.6 No Conflict. (a) Neither the execution and delivery
by Marine of this Agreement, the Pride Stock Option Agreement nor the
consummation by Marine of the transactions contemplated hereby or thereby in
accordance with their respective terms will (i) subject to the approvals
referred to in Section 5.19, conflict with or result in a breach of any
provisions of the restated articles of incorporation or bylaws of Marine, (ii)
violate, or conflict with, or result in a breach of any provision of, or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or result in the termination or in a right of
termination or cancellation of, or give rise to a right of purchase under, or
accelerate the performance required by, or result in the creation of any Lien
upon any of the properties of Marine or its Subsidiaries under, or result in
being declared void, voidable, or without further binding effect, or otherwise
result in a detriment to Marine or any of its Subsidiaries under, any of the
terms, conditions or provisions of, any note, bond, mortgage, indenture, deed of
trust, license, franchise, permit, lease, contract, agreement, joint venture or
other instrument or obligation to which Marine or any of its Subsidiaries is a
party, or by which Marine or any of its Subsidiaries or any of their properties
is bound or affected or (iii) subject to the filings and other matters referred
to in Section 5.6(c), contravene or conflict with or constitute a violation of
any provision of any law, rule, regulation, judgment, order or decree binding
upon or applicable to Marine or any of its Subsidiaries, except for such matters
described in clause (ii) or (iii) as do not and are not reasonably likely to
have, individually or in the aggregate, a Marine Material Adverse Effect.
(b) Neither the execution and delivery by Marine of this
Agreement, the Pride Stock Option Agreement nor the consummation by Marine of
the transactions contemplated hereby and thereby in accordance with their
respective terms will result in any "change of control" or similar event or
circumstance under the terms of any Marine Material Contract or under any
contract or plan under which any officers or directors of Marine or any of its
Subsidiaries are entitled to payments or benefits, which gives rise to rights or
benefits not otherwise available absent such change of control or similar event.
(c) Neither the execution and delivery by Marine of this
Agreement, the Pride Stock Option Agreement nor the consummation by Marine of
the transactions contemplated hereby and thereby in accordance with their
respective terms will require any consent, approval or authorization of, or
filing or registration with, any governmental or regulatory authority, other
than (i) the filing of the Marine Certificate of Merger, (ii) the filing of the
Texas Articles of Merger, (iii) filings required under the U.S.
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
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amended (the "HSR Act"), the Exchange Act, the Securities Act of 1933, as
amended (the "Securities Act"), or applicable state securities and "Blue Sky"
laws, applicable non-U.S. competition, antitrust or premerger notification laws,
and (iv) the filing of a listing application with the NYSE with respect to any
Marine Common Stock issued upon exercise of the Pride Stock Option ((i), (ii),
(iii) and (iv) collectively, the "Marine Regulatory Filings"), except for any
consent, approval or authorization the failure of which to obtain and for any
filing or registration the failure of which to make does not and is not
reasonably likely to have a Marine Material Adverse Effect or substantially
impair or delay the consummation of the transactions contemplated hereby.
Section 5.7 SEC Documents. Marine has timely filed with the SEC
all documents required to be so filed by it in the preceding twelve months
pursuant to Sections 13(a), 14(a) and 15(d) of the Exchange Act. Marine and its
Subsidiaries have filed with the SEC all documents required to be so filed by
them in the preceding three fiscal years and during 2001 pursuant to Section
13(a) of the Exchange Act without regard to Rule 12b-25. Marine has made
available to Pride each registration statement, report, proxy statement or
information statement (other than preliminary materials) it has so filed, each
in the form (including exhibits and any amendments thereto) filed with the SEC
(collectively, the "Marine Reports"). As of its respective date, each Marine
Report (i) complied in all material respects in accordance with the applicable
requirements of the Exchange Act and the rules and regulations thereunder and
(ii) did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading except for such statements, if any, as have been modified by
subsequent filings with the SEC prior to the date hereof. Each of the
consolidated balance sheets included in or incorporated by reference into Marine
Reports (including the related notes and schedules) fairly presents in all
material respects the consolidated financial position of Marine and its
Subsidiaries as of its date, and each of the consolidated statements of
operations, cash flows and changes in shareholders' equity included in or
incorporated by reference into Marine Reports (including any related notes and
schedules) fairly presents in all material respects the results of operations,
cash flows or changes in shareholders' equity, as the case may be, of Marine and
its Subsidiaries for the periods set forth therein (subject, in the case of
unaudited statements, to (x) such exceptions as may be permitted by Form 10-Q
and Regulation S-X of the SEC and (y) normal year-end audit adjustments), in
each case in accordance with generally accepted accounting principles
consistently applied during the periods involved, except as may be noted
therein. Except as and to the extent set forth on the most recent consolidated
balance sheet of Marine and its Subsidiaries included in Marine Reports,
including all notes thereto, as of the date of such balance sheet, neither
Marine nor any of its Subsidiaries has any liabilities or obligations of any
nature (whether accrued, absolute, contingent or otherwise) that would be
required to be reflected on, or reserved against in, a balance sheet of Marine
or in the notes thereto prepared in accordance with generally accepted
accounting principles consistently applied, other than liabilities or
obligations which do not and are not reasonably likely to have, individually or
in the aggregate, a Marine Material Adverse Effect.
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Section 5.8 Litigation. Except as would not have a Marine
Material Adverse Effect, Section 5.8 of the Marine Disclosure Letter contains an
accurate summary of each litigation matter pending or threatened against Marine
or any of its Subsidiaries that is not summarized in the Marine Reports. Except
as described in Marine Reports filed on or prior to the date of this Agreement,
there are no actions, suits or proceedings pending against Marine or any of its
Subsidiaries or, to Marine's knowledge, threatened against Marine or any of its
Subsidiaries, at law or in equity, before or by any U.S. federal, state or
non-U.S. court, commission, board, bureau, agency or instrumentality, that are
reasonably likely to have, individually or in the aggregate, a Marine Material
Adverse Effect.
Section 5.9 Absence of Certain Changes. From December 31, 2000
to the date of this Agreement, there has not been (i) any event or occurrence
that has had or is reasonably likely to have a Marine Material Adverse Effect,
(ii) any material change by Marine or any of its Subsidiaries, when taken as a
whole, in any of its accounting methods, principles or practices or any of its
tax methods, practices or elections, (iii) any declaration, setting aside or
payment of any dividend or distribution in respect of any capital stock of
Marine or any redemption, purchase or other acquisition of any of its securities
or (iv) any increase in or establishment of any bonus, insurance, severance,
deferred compensation, pension, retirement, profit sharing, stock option, stock
purchase or other employee benefit plan, except in the ordinary course of
business.
Section 5.10 Taxes. Except for such matters as, individually or
in the aggregate, do not or are not reasonably likely to have a Marine Material
Adverse Effect, and except as disclosed in the Marine Disclosure Letter (it
being understood that inclusion of a matter in the Marine Disclosure Letter does
not necessarily mean that such matter is or is reasonably likely to have a
Marine Material Adverse Effect):
(a) Each of Marine and its Subsidiaries has filed all Tax
Returns that it was required to file. All such Tax Returns were correct and
complete in all respects. All Taxes owed by any of Marine and its Subsidiaries
(whether or not shown on any Tax Return) have been paid. None of Marine and its
Subsidiaries currently is the beneficiary of any extension of time within which
to file any Tax Return. No claim has ever been made by an authority in a
jurisdiction where any of Marine and its Subsidiaries does not file Tax Returns
that it is or may be subject to taxation by that jurisdiction. There are no
Liens on any of the assets of any of Marine and its Subsidiaries that arose in
connection with any failure (or alleged failure) to pay any Tax.
(b) Each of Marine and its Subsidiaries has withheld and paid
all Taxes required to have been withheld and paid in connection with amounts
paid or owing to any employee, independent contractor, creditor, shareholder, or
other third party.
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(c) No officer or employee responsible for Tax matters of any of
Marine and its Subsidiaries expects any authority to assess any additional Taxes
for any period for which Tax Returns have been filed. There is no dispute or
claim concerning any Tax liability of any of Marine and its Subsidiaries either
(i) claimed or raised by any authority in writing or (ii) as to which any of the
officers or employees responsible for Tax matters of Marine and its Subsidiaries
has knowledge based upon personal contact with any agent of such authority.
Section 5.10 of the Marine Disclosure Letter lists all federal, state, local,
and foreign income Tax Returns filed with respect to any of Marine and its
Subsidiaries for taxable periods ended on or after December 31, 1998, indicates
those Tax Returns that have been audited, and indicates those Tax Returns that
currently are the subject of audit or have been noticed for audit.
(d) None of Marine and its Subsidiaries has waived any statute
of limitations in respect of Taxes or agreed to any extension of time with
respect to a Tax assessment or deficiency.
(e) None of Marine and its Subsidiaries has filed a consent
under Code Section 341(f) concerning collapsible corporations.
(f) A valid and timely Code Section 338 election was made with
respect to each nonUnited States entity treated as a corporation under the Code
which was acquired after December 31, 1985 by Marine or any of its Subsidiaries
and for which such an election was permissible.
(g) None of Marine and its Subsidiaries are parties to a gain
recognition agreement under U.S. Treasury Reg. Section 1.367(a)-8.
(h) None of Marine and its Subsidiaries are parties to, or have
a request pending for, any advance pricing agreements under Internal Revenue
Service Revenue Procedure 96-53.
(i) None of Marine and its Subsidiaries has paid, or is
obligated to make any payments, in connection with the transactions contemplated
by this Agreement that could reasonably be expected to be non-deductible under
Code Section 280G.
(j) Marine has not been a United States real property holding
corporation within the meaning of Code Section 897(c)(2) during the previous
five years.
(k) Marine has disclosed on its federal income Tax Returns all
positions taken therein that could give rise to a substantial understatement of
federal income Tax within the meaning of Code Section 6662.
(l) None of Marine and its Subsidiaries is a party to any Tax
allocation or Tax sharing agreement.
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(m) None of Marine and its Subsidiaries (i) has been a member of
an Affiliated Group filing a consolidated federal income Tax Return (other than
a group the common parent of which was Marine) since January 1, 1987, or (ii)
has any liability for the Taxes of any Person (other than any of Marine and its
Subsidiaries) under U.S. Treas. Reg. Section 1.1502-6 (or any similar provision
of state, local, or foreign law), as a transferee or successor, by contract, or
otherwise.
(n) Section 5.10(n) of the Marine Disclosure Letter sets forth
the following information with respect to each of Marine and its Subsidiaries as
of the most recent practicable date (as well as on an estimated pro forma basis
as of the Closing giving effect to the consummation of the transactions
contemplated hereby) for both United States income tax purposes and foreign tax
purposes where applicable: (i) the amount of any net operating loss, net capital
loss, unused investment or other credit, unused foreign tax, or excess
charitable contribution allocable to Marine or Subsidiary; and (ii) the amount
of any deferred gain or loss allocable to Marine or Subsidiary arising out of
any Deferred Intercompany Transaction.
(o) The unpaid Taxes of Marine and its Subsidiaries (i) did not,
as of the date of the most recent balance sheet included in the most recent
Marine Report containing historical financial statements, exceed the reserve for
Tax liability (other than any reserve for deferred Taxes established to reflect
timing differences between book and Tax income) set forth on the face of such
most recent balance sheet (rather than in any notes thereto) and (ii) do not
exceed that reserve as adjusted for the passage of time through the Closing Date
in accordance with the past custom and practice of Marine and its Subsidiaries
in filing their Tax Returns.
(p) Neither Marine nor any of the Marine Subsidiaries knows of
any fact, or has taken any action or has failed to take any action, that is
reasonably likely to (i) prevent the Mergers from qualifying as reorganizations
within the meaning of Section 368(a) of the Code, (ii) cause the holders who
exchange Marine Common Stock solely for Pride Common Stock pursuant to the
Marine Merger to recognize taxable gain with respect to the Marine Merger, (iii)
cause the Pride shareholders, including the former holders of Marine Common
Stock, who exchange Pride Common Stock solely for Company Common Stock pursuant
to the Pride Merger to recognize taxable gain with respect to the Pride Merger,
or (iv) cause income to be recognized or Tax to be accelerated or be due as a
consequence of the Mergers. Neither Pride nor any of its Subsidiaries has agreed
to pay, or will pay, directly or indirectly, any consideration for Marine Common
Stock other than Pride Common Stock. Neither the Company nor any of its
Subsidiaries has agreed to pay, or will pay, directly or indirectly, any
consideration other than Company Common Stock for Pride Common Stock, including
that issued in the Marine Merger.
(q) For purposes of this Section 5.10 and Section 6.10, the
following terms have the meanings given them below:
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(1) "Affiliate" has the meaning set forth in Rule 12b-2
of the regulations promulgated under the Exchange Act.
(2) "Affiliated Group" means any affiliated group within
the meaning of Code Section 1504(a), or any similar group defined under
a similar provision of state, local or foreign law, determined without
regard to the exceptions in Code Section 1504(b)such that a foreign
corporation shall be considered an "includable corporation".
(3) "Deferred Intercompany Transaction" has the meaning
set forth in Reg. Section 1.1502-13.
(4) "Tax" means any federal, state, local, or foreign
income, gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental (including
taxes under Code Section 59A), customs duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or
other tax of any kind whatsoever, including any interest, penalty, or
addition thereto, whether disputed or not.
(5) "Tax Return" means any return, declaration, report,
claim for refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any
amendment thereof.
Section 5.11 Employee Benefit Plans. (a) Section 5.11 of the
Marine Disclosure Letter contains a list of all Marine Benefit Plans. The term
"Marine Benefit Plans" means all material employee benefit plans and other
material benefit arrangements, including all "employee benefit plans" as defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), whether or not U.S.-based plans, and all other employee
benefit, bonus, incentive, deferred compensation, stock option (or other
equity-based), severance, employment, change in control, welfare (including
post-retirement medical and life insurance) and fringe benefit plans, practices
or agreements, whether or not subject to ERISA or U.S.-based and whether written
or oral, sponsored, maintained or contributed to or required to be contributed
to by Marine or any of its Subsidiaries, to which Marine or any of its
Subsidiaries is a party or is required to provide benefits under applicable law
or in which any person who is currently, has been or, prior to the Marine Merger
Effective Time, is expected to become an employee of Marine is a participant.
Upon the written request of Pride, Marine will provide to Pride true and
complete copies of Marine Benefit Plans and, if applicable, the most recent
trust agreements, summary plan descriptions, funding statements, annual reports
and actuarial reports, if applicable, for each such plan. Marine has also
previously provided to Pride with respect to each such plan, true and correct
copies of correspondence with governmental entities and Forms 5500 for the past
three calendar years and during 2001 to the date of this Agreement.
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(b) Except as for such matters as, individually or in the
aggregate, do not or are not reasonably likely to have a Marine Material Adverse
Effect:
(1) all applicable reporting and disclosure requirements
have been met with respect to Marine Benefit Plans;
(2) there has been no "reportable event," as that term
is defined in Section 4043 of ERISA, with respect to Marine Benefit
Plans subject to Title IV of ERISA for which the 30-day reporting
requirement has not been waived;
(3) to the extent applicable, Marine Benefit Plans
comply and have complied with the requirements of ERISA, the Code, other
applicable law, with the regulations of any applicable jurisdiction, and
with the operative documents for each such plan;
(4) any Marine Benefit Plan intended to be qualified
under Section 401(a) of the Code has received a favorable determination
letter from the IRS;
(5) Marine Benefit Plans have been maintained and
operated in accordance with their terms, and, to Marine's knowledge,
there are no breaches of fiduciary duty in connection with Marine
Benefit Plans;
(6) there are no pending or, to Marine's knowledge,
threatened claims against or otherwise involving any Marine Benefit
Plan, and no suit, action or other litigation (excluding claims for
benefits incurred in the ordinary course of Marine Benefit Plan
activities) has been brought against or with respect to any such Marine
Benefit Plan;
(7) there are no pending audits or investigations by any
governmental entity involving any Marine Benefit Plan;
(8) all material contributions required to be made as of
the date hereof to Marine Benefit Plans have been made or provided for;
(9) Marine has not engaged in a transaction with respect
to any Marine Benefit Plan for which it could be subject (either
directly or indirectly) to a liability for either a civil penalty
assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section
4975 of the Code;
(10) with respect to Marine Benefit Plans or any
"employee pension benefit plans," as defined in Section 3(2) of ERISA,
that are subject to Title IV of ERISA and have
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been maintained or contributed to within six years prior to the Marine
Merger Effective Time by Marine, its Subsidiaries or any trade or
business (whether or not incorporated) which is under common control, or
which is treated as a single employer, with Marine or any of its
Subsidiaries under Section 414(b), (c), (m) or (o) of the Code (a
"Marine ERISA Affiliate"), (i) neither Marine nor any of its
Subsidiaries has incurred any direct or indirect liability under Title
IV of ERISA in connection with any termination thereof or withdrawal
therefrom, and (ii) there does not exist any accumulated funding
deficiency within the meaning of Section 412 of the Code or Section 302
of ERISA, whether or not waived; and
(11) All individuals who performed any compensatory
services for Marine or any Subsidiary of Marine, whether as an employee,
independent contractor or "leased employee" (as defined in Section
414(n) of the Code) are, and have been, properly classified for purposes
of withholding taxes and eligibility to participate in, and coverage
under, any Marine Benefit Plan.
(c) Neither Marine nor any of its Subsidiaries nor any Marine
ERISA Affiliate contributes to, or has an obligation to contribute to, and has
not within six years prior to the Marine Merger Effective Time contributed to,
or had an obligation to contribute to, a "multiemployer plan" within the meaning
of Section 3(37) of ERISA, a "multiple employer welfare association" within the
meaning of Section 3(40) of ERISA, or a "voluntary employees' beneficiary
association" within the meaning of Section 501(c)(9) of the Code, and the
execution of, and performance of the transactions contemplated by this
Agreement, other than Section 7.16, will not (either alone or upon the
occurrence of any additional or subsequent events) constitute an event under any
benefit plan, policy, arrangement or agreement or any trust or loan (in
connection therewith) that will or may result in any payment (whether of
severance pay or otherwise), acceleration, forgiveness of indebtedness, vesting,
distribution, increase in benefits or obligations to fund benefits with respect
to any employee of Marine or any Subsidiary thereof.
(d) No Marine Benefit Plan provides medical, surgical,
hospitalization, death or similar benefits (whether or not insured) for
employees or former employees of Marine or any Subsidiary of Marine for periods
extending beyond their retirement date or other termination of service other
than (i) coverage mandated by applicable law, (ii) death benefits under any
"pension plan" or (iii) benefits the full cost of which is borne by the current
or former employee (or his beneficiary). Each Marine Benefit Plan may be
unilaterally amended or terminated by Marine without liability, except as to
benefits accrued or awarded thereunder prior to amendment or termination.
Section 5.12 Labor Matters. (a) As of the date of this
Agreement, (i) neither Marine nor any of its Subsidiaries is a party to, or
bound by, any collective bargaining agreement or similar contract, agreement or
understanding with a labor union or similar labor organization
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(A) covering any U.S. employees or (B) covering, in any single instance, 10% or
more of the employees of Marine and its Subsidiaries taken as a whole, and (ii)
to Marine's knowledge, there are no organizational efforts with respect to the
formation of a collective bargaining unit presently being made or threatened (x)
involving any U.S. employees or (y) involving, in any single instance, 10% or
more of the employees of Marine and its Subsidiaries taken as a whole.
(b) Except for such matters as are disclosed in the Marine
Reports and matters that do not and are not reasonably likely to have a Marine
Material Adverse Effect, (i) neither Marine nor any Subsidiary of Marine has
received any written complaint of any unfair labor practice or other unlawful
employment practice or any written notice of any material violation of any
federal, state or local statutes, laws, ordinances, rules, regulations, orders
or directives with respect to the employment of individuals by, or the
employment practices of, Marine or any Subsidiary of Marine or the work
conditions or the terms and conditions of employment and wages and hours of
their respective businesses and (ii) there are no unfair labor practice charges
or other employee related complaints against Marine or any Subsidiary of Marine
pending or, to the knowledge of Marine threatened, before any governmental
authority by or concerning the employees working in their respective businesses.
Section 5.13 Environmental Matters. (a) Marine and each
Subsidiary of Marine has been and is in compliance with all applicable final and
binding orders of any court, governmental authority or arbitration board or
tribunal and any applicable law, ordinance, rule, regulation or other legal
requirement (including common law) related to human health and the environment
("Environmental Laws") except for such matters as do not and are not reasonably
likely to have, individually or in the aggregate, a Marine Material Adverse
Effect. There are no past or present facts, conditions or circumstances that
interfere with the conduct of any of their respective businesses in the manner
now conducted or which interfere with continued compliance with any
Environmental Law except for any non-compliance or interference that is not
reasonably likely to have, individually or in the aggregate, a Marine Material
Adverse Effect.
(b) Except for such matters as do not and are not reasonably
likely to have, individually or in the aggregate, a Marine Material Adverse
Effect, no judicial or administrative proceedings or governmental investigations
are pending or, to the knowledge of Marine, threatened against Marine or its
Subsidiaries that allege the violation of or seek to impose liability pursuant
to any Environmental Law, and there are no past or present facts, conditions or
circumstances at, on or arising out of, or otherwise associated with, any
current or, to the knowledge of Marine or its Subsidiaries, former businesses,
assets or properties of Marine or any Subsidiary of Marine, including but not
limited to on-site or off-site disposal, release or spill of any material,
substance or waste classified, characterized or otherwise regulated as
hazardous, toxic, pollutant, contaminant or words of similar meaning under
Environmental Laws, including petroleum or petroleum products or byproducts
("Hazardous Materials") which violate Environmental Law or are reasonably likely
to
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give rise to (i) costs, expenses, liabilities or obligations for any cleanup,
remediation, disposal or corrective action under any Environmental Law, (ii)
claims arising for personal injury, property damage or damage to natural
resources, or (iii) civil, criminal or administrative fines, penalties or
injunctive relief.
(c) Neither Marine nor any of its Subsidiaries has (i) received
any notice of noncompliance with, violation of, or liability or potential
liability under any Environmental Law or (ii) entered into any consent decree or
order or is subject to any order of any court or governmental authority or
tribunal under any Environmental Law or relating to the cleanup of any Hazardous
Materials, except for any such matters as do not and are not reasonably likely
to have a Marine Material Adverse Effect.
Section 5.14 Intellectual Property. Marine and its Subsidiaries
own or possess adequate licenses or other valid rights to use all patents,
patent rights, trademarks, trademark rights and proprietary information used or
held for use in connection with their respective businesses as currently being
conducted, except where the failure to own or possess such licenses and other
rights does not and is not reasonably likely to have, individually or in the
aggregate, a Marine Material Adverse Effect, and there are no assertions or
claims challenging the validity of any of the foregoing that are reasonably
likely to have, individually or in the aggregate, a Marine Material Adverse
Effect. To the knowledge of Marine, the conduct of Marine's and its
Subsidiaries' respective businesses as currently conducted does not conflict
with any patents, patent rights, licenses, trademarks, trademark rights, trade
names, trade name rights or copyrights of others that are reasonably likely to
have, individually or in the aggregate, a Marine Material Adverse Effect. To the
knowledge of Marine, there is no material infringement of any proprietary right
owned by or licensed by or to Marine or any of its Subsidiaries that is
reasonably likely to have individually or in the aggregate, a Marine Material
Adverse Effect.
Section 5.15 Decrees, Etc. Except for such matters as do not and
are not reasonably likely to have, individually or in the aggregate, a Marine
Material Adverse Effect, (i) no order, writ, fine, injunction, decree, judgment,
award or determination of any court or governmental authority has been issued or
entered against Marine or any Subsidiary of Marine that continues to be in
effect that affects the ownership or operation of any of their respective
assets, and (ii) no criminal order, writ, fine, injunction, decree, judgment or
determination of any court or governmental authority has been issued against
Marine or any Subsidiary of Marine.
Section 5.16 Insurance. (a) Except for such matters as do not
and are not reasonably likely to have, individually or in the aggregate, a
Marine Material Adverse Effect, Marine and its Subsidiaries maintain insurance
coverage with financially responsible insurance companies in such amounts and
against such losses as are customary in the offshore drilling business as
conducted by Marine prior to the date hereof.
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(b) Except for such matters as do not and are not reasonably
likely to have, individually or in the aggregate, a Marine Material Adverse
Effect, no event relating specifically to Marine or its Subsidiaries (as opposed
to events affecting the drilling service industry in general) has occurred that
is reasonably likely, after the date of this Agreement, to result in an upward
adjustment in premiums under any insurance policies they maintain. Excluding
insurance policies that have expired and been replaced in the ordinary course of
business, no excess liability, hull or protection and indemnity insurance policy
has been canceled by the insurer within one year prior to the date hereof, and
to Marine's knowledge, no threat in writing has been made to cancel (excluding
cancellation upon expiration or failure to renew) any such insurance policy of
Marine or any Subsidiary of Marine during the period of one year prior to the
date hereof. Prior to the date hereof, no event has occurred, including the
failure by Marine or any Subsidiary of Marine to give any notice or information
or by giving any inaccurate or erroneous notice or information, which materially
limits or impairs the rights of Marine or any Subsidiary of Marine under any
such excess liability, hull or protection and indemnity insurance policies.
Section 5.17 No Brokers. Marine has not entered into any
contract, arrangement or understanding with any person or firm which may result
in the obligation of Marine, Pride or the Company to pay any finder's fees,
brokerage or other like payments in connection with the negotiations leading to
this Agreement or the consummation of the transactions contemplated hereby,
except that Marine has retained Xxxxxx Xxxxxxx & Co. Incorporated as its
financial advisor, the arrangements with which have been disclosed in writing to
Pride prior to the date hereof.
Section 5.18 Opinion of Financial Advisor. The board of
directors of Marine has received the opinion of Xxxxxx Xxxxxxx & Co.
Incorporated to the effect that, as of the date of this Agreement, the Marine
Merger Consideration is fair to the shareholders of Marine from a financial
point of view.
Section 5.19 Vote Required. The only votes of the holders of any
class or series of Marine capital stock necessary to approve any transaction
contemplated by this Agreement are the affirmative vote in favor of the adoption
of this Agreement of the holders of at least a majority of the outstanding
shares of Marine Common Stock.
Section 5.20 Ownership of Drilling Rigs. As of the date hereof,
Marine or a Subsidiary of Marine has good and indefeasible title to the drilling
rigs listed in Marine's most recent annual report on Form 10-K, in each case
free and clear of all Liens except for (i) defects or irregularities of title or
encumbrances of a nature that do not materially impair the ownership or
operation of these assets and which have not had and are not reasonably likely
to have a Marine Material Adverse Effect, (ii) Liens that secure obligations not
yet due and payable or, if such obligations are due and have not been paid,
Liens securing such obligations that are being diligently contested in good
faith and by appropriate proceedings (any such contests involving an amount in
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excess of $5.0 million being described in Marine Disclosure Letter), (iii) Liens
for taxes, assessments or other governmental charges or levies not yet due or
which are being contested in good faith, (iv) Liens in connection with workmen's
compensation, unemployment insurance or other social security, old age pension
or public liability obligations not yet due or which are being contested in good
faith, (v) operators', vendors', suppliers of necessaries to Marine's drilling
rigs, carriers', warehousemen's, repairmen's, mechanics', workmen's,
materialmen's, construction or shipyard liens (during repair or upgrade periods)
or other similar Liens arising by operation of law in the ordinary course of
business or statutory landlord's liens, each of which is in respect of
obligations that have not been outstanding more than 90 days (so long as no
action has been taken to file or enforce such Liens within said 90-day period)
or which are being contested in good faith and (vi) other Liens disclosed in
Marine Disclosure Letter (the Liens described in clauses (i), (ii), (iii), (iv),
(v) and (vi), collectively, "Marine Permitted Liens"). No such asset is leased
under an operating lease from a lessor that, to Marine's knowledge, has incurred
non-recourse indebtedness to finance the acquisition or construction of such
asset.
Section 5.21 Undisclosed Liabilities. Neither Marine nor any of
its Subsidiaries has any liabilities or obligations of any nature, whether or
not fixed, accrued, contingent or otherwise, except liabilities and obligations
that (i) are disclosed in Marine Reports, (ii) are referred to in the Marine
Disclosure Letter or (iii) do not and are not reasonably likely to have,
individually or in the aggregate, a Marine Material Adverse Effect.
Section 5.22 Certain Contracts. (a) Section 5.22 of Marine
Disclosure Letter contains a list of all of the following contracts or
agreements (other than those listed as an exhibit to Marine's Annual Report on
Form 10-K for the year ended December 31, 2000) to which Marine or any
Subsidiary of Marine is a party or by which any of them is bound as of the date
of this Agreement: (i) any non-competition agreement that purports to limit the
manner in which, or the localities in which, all or any portion of their
respective businesses is conducted; (ii) any drilling rig construction or
conversion contract with respect to which the drilling rig has not been
delivered and paid for, (iii) any drilling contracts of one year or greater
remaining duration or drilling contracts of a shorter duration which if extended
at the election of Marine's customer would have a remaining duration of one year
or more; (iv) any contract or agreement for the borrowing of money with a
borrowing capacity or outstanding indebtedness of $5.0 million or more; (v) any
contract for the acquisition or disposition of a "business" (as such term is
defined in Article 11-01(d) of Regulation S-X of the SEC or (vi) any "material
contract" (as such term is defined in Item 601(b)(10) of Regulation S-K of the
SEC) (all contracts or agreements of the types described in clauses (i) through
(vi) being referred to herein as "Marine Material Contracts").
(b) As of the date of this Agreement, each Marine Material
Contract is, to the knowledge of Marine, in full force and effect, and Marine
and each of its Subsidiaries have in all material respects performed all
obligations required to be performed by them to date under each
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Marine Material Contract, except where such failure to be binding or in full
force and effect or such failure to perform does not and is not reasonably
likely to create, individually or in the aggregate, a Marine Material Adverse
Effect. Except for such matters as do not and are not reasonably likely to have
a Marine Material Adverse Effect, neither Marine nor any of its Subsidiaries (x)
knows of, or has received written notice of, any breach of or violation or
default under (nor, to the knowledge of Marine, does there exist any condition
which with the passage of time or the giving of notice or both would result in
such a violation or default under) any Marine Material Contract or (y) has
received written notice of the desire of the other party or parties to any such
Marine Material Contract to exercise any rights such party has to cancel,
terminate or repudiate such contract or exercise remedies thereunder. Each
Marine Material Contract is enforceable by Marine or a Subsidiary of Marine in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to creditors' rights
and general principles of equity, except where such unenforceability is not
reasonably likely to create, individually or in the aggregate, a Marine Material
Adverse Effect.
Section 5.23 Capital Expenditure Program. As of the date of this
Agreement, Section 5.23 of the Marine Disclosure Letter accurately sets forth in
all material respects, for each of Marine's sustaining, life extension and
newbuild capital expenditure programs, the capital expenditures for all such
programs that were forecasted to be incurred in 2001 on an annual basis.
Section 5.24 Improper Payments. No bribes, kickbacks or other
improper payments have been made by Marine or any Subsidiary of Marine or agent
of any of them in connection with the conduct of their respective businesses or
the operation of their respective assets, and neither Marine, any Subsidiary of
Marine nor any agent of any of them has received any such payments from vendors,
suppliers or other persons, where any such payment made or received is
reasonably likely to have, individually or in the aggregate, a Marine Material
Adverse Effect.
Section 5.25 Amendment to Marine Rights Agreement. Marine has
amended or taken other action under Marine Rights Agreement so that none of the
execution and delivery of this Agreement, the execution and delivery of the
Pride Stock Option Agreement, the conversion of shares of Marine Common Stock
into the right to receive shares of Company Common Stock in accordance with this
Agreement, the consummation of the Mergers, the issuance of Marine Common Stock
upon exercise of the Pride Stock Option or any other transactions contemplated
hereby or by the Pride Stock Option Agreement, will cause: (i) the Marine Rights
to become exercisable under the Marine Rights Agreement; (ii) the Company, Pride
or any of Pride's shareholders or Subsidiaries to be deemed an "Acquiring
Person" (as defined in Marine Rights Agreement); (iii) any such event to be an
event requiring an adjustment of the purchase price of the Marine Rights under
Section 12(a)(ii) of the Marine Rights Agreement; (iv) Section 14 of the Marine
Rights Agreement to be or become applicable to any such event; or (v) a "Shares
Acquisition Date" or a "Distribution Date" (each as defined in Marine Rights
Agreement) to occur upon any such event, and so that the Marine
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Rights will expire immediately prior to the Marine Merger Effective Time. Marine
has delivered to Pride a true and complete copy of Marine Rights Agreement, as
amended to date.
Section 5.26 Pooling of Interests. To the knowledge of Marine as
of the date of this Agreement, neither it nor any of its Subsidiaries has taken,
or agreed to take, any action or failed to take any action which action or
failure (without giving effect to any actions or failures to act by Pride or any
of its Subsidiaries) that is known to Marine as of the date of this Agreement to
prevent the treatment of the Mergers contemplated herein as (i) a pooling of
interests for accounting purposes under the requirements of Opinion No. 16
(Business Combinations) of the Accounting Principles Board of the American
Institute of Certified Public Accountants, the Financial Accounting Standards
Board and the rules of the SEC, or (ii) reorganizations within the meaning of
Section 368(a) of the Code.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PRIDE
Except as set forth in the disclosure letter delivered to Marine
by Pride at or prior to the execution hereof (the "Pride Disclosure Letter"),
Pride represents and warrants to Marine and the Company the following:
Section 6.1 Existence; Good Standing; Corporate Authority. Pride
is a corporation duly incorporated, validly existing and in good standing under
the laws of Louisiana. Pride is duly qualified to do business and, to the extent
such concept or similar concept exists in the relevant jurisdiction, is in good
standing under the laws of any jurisdiction in which the character of the
properties owned or leased by it therein or in which the transaction of its
business makes such qualification necessary, except where the failure to be so
qualified does not and is not reasonably likely to have, individually or in the
aggregate, a Pride Material Adverse Effect (as defined in Section 10.9). Pride
has all requisite corporate power and authority to own, operate and lease its
properties and to carry on its business as now conducted. The copies of Pride's
certificate of incorporation and bylaws previously made available to Marine are
true and correct and contain all amendments as of the date hereof.
Section 6.2 Authorization, Validity and Effect of Agreements.
Pride has the requisite corporate power and authority to execute and deliver
this Agreement, the Marine Stock Option Agreement and all other agreements and
documents contemplated hereby and thereby to which it is a party. The
consummation by Pride of the transactions contemplated hereby and by the Marine
Stock Option Agreement have been duly authorized by all requisite corporate
action on behalf of Pride, other than the approvals referred to in Section 6.19.
This Agreement and the Marine Stock Option Agreement constitute valid and
legally binding obligations of Pride, enforceable against
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Pride in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to creditors' rights and general principles of equity. Pride has taken
all action necessary to render the restrictions set forth in R.S. 12:133 and
12:135-140.2 of the LBCL inapplicable to this Agreement and the transactions
contemplated hereby. No other state takeover or business combination statute
applies to the transactions contemplated by this Agreement or the Marine Stock
Option Agreement.
Section 6.3 Capitalization. As of the date of this Agreement,
the authorized capital stock of Pride consists of 200,000,000 shares of common
stock, no par value per share, and 50,000,000 shares of preferred stock, no par
value per share, of which 2,000,000 shares have been designated Series A Junior
Participating Preferred Stock ("Series A Preferred Stock"). As of May 22, 2001,
73,597,802 shares of Pride Common Stock and no shares of Series A Preferred
Stock were outstanding. Section 6.3 of the Pride Disclosure Letter sets forth
the number of shares of Pride Common Stock reserved for issuance as of May 18,
2001. All such issued and outstanding shares of Pride Common Stock are duly
authorized, validly issued, fully paid, nonassessable and free of preemptive
rights. One right to purchase Junior Participating Preferred Stock (each, a
"Pride Right") issued pursuant to the Rights Agreement, dated as of September 9,
1998 (the "Pride Rights Agreement"), as amended, between Pride and American
Stock Transfer & Trust Company is associated with and attached to each
outstanding share of Pride Common Stock. As of the date of this Agreement,
except for the Marine Stock Option Agreement, the Pride Rights, the Put and
Exchange Agreement between Pride and First Reserve Fund VIII, L.P., a Delaware
limited partnership, and as set forth in this Section 6.3, there are no
outstanding shares of capital stock and there are no options, warrants, calls,
subscriptions, convertible securities or other rights, agreements or commitments
which obligate Pride or any of its Subsidiaries to issue, transfer or sell any
shares of capital stock or other voting securities of Pride or any of its
Subsidiaries, except as described in the notes to the financial statements of
Pride included in its Form 10-Q report for the quarter ended March 31, 2001
filed with the SEC. Pride has no outstanding bonds, debentures, notes or other
obligations the holders of which have the right to vote (or which are
convertible into or exercisable for securities having the right to vote) with
the shareholders of Pride on any matter, except as described in the notes to the
financial statements of Pride included in its Form 10-Q report for the quarter
ended March 31, 2001 filed with the SEC.
Section 6.4 Significant Subsidiaries. Each of Pride's
Significant Subsidiaries is a corporation or other legal entity duly organized,
validly existing and, to the extent such concept or similar concept exists in
the relevant jurisdiction, in good standing under the laws of its jurisdiction
of incorporation or organization, has the corporate or other entity power and
authority to own, operate and lease its properties and to carry on its business
as it is now being conducted, and is duly qualified to do business and is in
good standing (where applicable) in each jurisdiction in which the ownership,
operation or lease of its property or the conduct of its business requires such
qualification, except for jurisdictions in which such failure to be so qualified
or to be in good standing does not and
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is not reasonably likely to have a Pride Material Adverse Effect. As of the date
of this Agreement, all of the outstanding shares of capital stock of, or other
ownership interests in, each of Pride's Significant Subsidiaries are duly
authorized, validly issued, fully paid and nonassessable and are owned, directly
or indirectly, by Pride free and clear of all Liens.
Section 6.5 Compliance with Laws; Permits. Except for such
matters as, individually or in the aggregate, do not or are not reasonably
likely to have a Pride Material Adverse Effect and except for matters arising
under Environmental Laws which are treated exclusively in Section 6.13:
(a) Neither Pride nor any Subsidiary of Pride is in violation of
any applicable law, rule, regulation, code, governmental determination, order,
treaty, convention, governmental certification requirement or other public
limitation, U.S. or non-U.S. (collectively, the "Pride Applicable Laws"),
relating to the ownership or operation of any of their respective assets, and no
claim is pending or, to the knowledge of Pride, threatened with respect to any
such matters. No condition exists that is not disclosed in the Pride Disclosure
Letter and which does or is reasonably likely to constitute a violation of or
deficiency under any Pride Applicable Law relating to the ownership or operation
of the assets of Pride or any Subsidiary of Pride.
(b) Pride and each Subsidiary of Pride hold all permits,
licenses, certifications, variations, exemptions, orders, franchises and
approvals of all governmental or regulatory authorities necessary for the
conduct of their respective businesses (the "Pride Permits"). All Pride Permits
are in full force and effect and there exists no default thereunder or breach
thereof, and Pride has no notice or actual knowledge that such Pride Permits
will not be renewed in the ordinary course after the Marine Merger Effective
Time. No governmental authority has given, or to the knowledge of Pride
threatened to give, any action to terminate, cancel or reform any Pride Permit.
(c) Each drilling rig, drillship or other drilling unit owned by
Pride or a subsidiary of Pride which is subject to classification is in class
according to the rules and regulations of the applicable classifying body and is
duly and lawfully documented under the laws of its flag jurisdiction.
(d) Pride and each Subsidiary of Pride possess all permits,
licenses, operating authorities, orders, exemptions, franchises, variances,
consents, approvals or other authorizations required for the present ownership
and operation of all its real property or leaseholds ("Pride Real Property")
except where the failure to possess any of the same does not and is not
reasonably likely to have a Pride Material Adverse Effect. There exists no
material default or breach with respect to, and no party or governmental
authority has taken or, to the knowledge of Pride, threatened to take, any
action to terminate, cancel or reform any such permit, license, operating
authority, order, exemption, franchise, variance, consent, approval or other
authorization pertaining to Pride Real Property.
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Section 6.6 No Conflict. (a) Neither the execution and delivery
by Pride of this Agreement, the Marine Stock Option Agreement nor the
consummation by Pride of the transactions contemplated hereby or thereby in
accordance with their respective terms will (i) subject to the approvals
referred to in Section 6.19, conflict with or result in a breach of any
provisions of the restated articles of incorporation or bylaws of Pride, (ii)
violate, or conflict with, or result in a breach of any provision of, or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or result in the termination or in a right of
termination or cancellation of, or give rise to a right of purchase under, or
accelerate the performance required by, or result in the creation of any Lien
upon any of the properties of Pride or its Subsidiaries under, or result in
being declared void, voidable, or without further binding effect, or otherwise
result in a detriment to Pride or any of its Subsidiaries under, any of the
terms, conditions or provisions of, any note, bond, mortgage, indenture, deed of
trust, license, franchise, permit, lease, contract, agreement, joint venture or
other instrument or obligation to which Pride or any of its Subsidiaries is a
party, or by which Pride or any of its Subsidiaries or any of their properties
is bound or affected or (iii) subject to the filings and other matters referred
to in Section 6.6(c), contravene or conflict with or constitute a violation of
any provision of any law, rule, regulation, judgment, order or decree binding
upon or applicable to Pride or any of its Subsidiaries, except, for such matters
described in clause (ii) or (iii) as do not and are not reasonably likely to
have, individually or in the aggregate, a Pride Material Adverse Effect.
(b) Neither the execution and delivery by Pride of this
Agreement nor the consummation by Pride of the transactions contemplated hereby
in accordance with the terms hereof will result in any "change of control" under
the indentures and supplemental indentures pursuant to which any outstanding
indebtedness of Pride has been issued. Except as disclosed in the Pride
Disclosure Letter, neither the execution and delivery by Pride of this Agreement
nor the consummation by Pride of the transactions contemplated hereby in
accordance with the terms hereof will result in any "change of control" or
similar event or circumstance under the terms of any Pride Material Contract or
under any contract or plan under which any officers or directors of Pride or any
of its Subsidiaries are entitled to payments or benefits, which gives rise to
rights or benefits not otherwise available absent such change of control or
similar event.
(c) Neither the execution and delivery by Pride of this
Agreement, the Marine Stock Option Agreement nor the consummation by Pride of
the transactions contemplated hereby and thereby in accordance with their
respective terms will require any consent, approval or authorization of, or
filing or registration with, any governmental or regulatory authority, other
than (i) the filing of the Marine Certificate of Merger, (ii) the filing of the
Pride Certificate of Merger, (iii) the filing of the Louisiana Certificate of
Merger, (iv) filings required under the HSR Act, the Exchange Act, the
Securities Act or applicable state securities and "Blue Sky" laws, applicable
non-U.S. competition, antitrust or premerger notification laws, and (v) the
filing of a listing application with the NYSE with respect to any Pride Common
Stock issued upon exercise of the Marine Stock Option
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((i), (ii), (iii), (iv) and (v) collectively, the "Pride Regulatory Filings"),
except for any consent, approval or authorization the failure of which to obtain
and for any filing or registration the failure of which to make does not and is
not reasonably likely to have a Pride Material Adverse Effect or substantially
impair or delay the consummation of the transactions contemplated hereby.
Section 6.7 SEC Documents. Pride has timely filed with the SEC
all documents required to be so filed by it in the preceding twelve months
pursuant to Sections 13(a), 14(a) and 15(d) of the Exchange Act. Pride and its
Subsidiaries have filed with the SEC all documents required to be so filed by
them in the preceding three fiscal years and during 2001 pursuant to Sections
13(a), 14(a) and 15(d) of the Exchange Act. Pride has made available to Marine
each registration statement, report, proxy statement or information statement
(other than preliminary materials) it has so filed, each in the form (including
exhibits and any amendments thereto) filed with the SEC (collectively, the
"Pride Reports"). As of its respective date, each Pride Report (i) complied in
all material respects in accordance with the applicable requirements of the
Exchange Act and the rules and regulations thereunder and (ii) did not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made therein,
in the light of the circumstances under which they were made, not misleading
except for such statements, if any, as have been modified by subsequent filings
with the SEC prior to the date hereof. Each of the consolidated balance sheets
included in or incorporated by reference into Pride Reports (including the
related notes and schedules) fairly presents in all material respects the
consolidated financial position of Pride and its Subsidiaries as of its date,
and each of the consolidated statements of operations, cash flows and changes in
shareholders' equity included in or incorporated by reference into Pride Reports
(including any related notes and schedules) fairly presents in all material
respects the results of operations, cash flows or changes in shareholders'
equity, as the case may be, of Pride and its Subsidiaries for the periods set
forth therein (subject, in the case of unaudited statements, to (x) such
exceptions as may be permitted by Form 10-Q and Regulation S-X of the SEC and
(y) normal year-end audit adjustments), in each case in accordance with
generally accepted accounting principles consistently applied during the periods
involved, except as may be noted therein. Except as and to the extent set forth
on the most recent consolidated balance sheet of Pride and its Subsidiaries
included in Pride Reports, including all notes thereto, as of the date of such
balance sheet, neither Pride nor any of its Subsidiaries has any liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
that would be required to be reflected on, or reserved against in, a balance
sheet of Pride or in the notes thereto prepared in accordance with generally
accepted accounting principles consistently applied, other than liabilities or
obligations which do not and are not reasonably likely to have, individually or
in the aggregate, a Pride Material Adverse Effect.
Section 6.8 Litigation. Except as would not have a Pride
Material Adverse Effect, Section 6.8 of the Pride Disclosure Letter contains an
accurate summary of each litigation matter pending or threatened against Pride
or any of its Subsidiaries that is not summarized in the Pride
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Reports. Except as described in Pride Reports filed on or prior to the date of
this Agreement, there are no actions, suits or proceedings pending against Pride
or any of its Subsidiaries or, to Pride's knowledge, threatened against Pride or
any of its Subsidiaries, at law or in equity, before or by any U.S. federal,
state or non-U.S. court, commission, board, bureau, agency or instrumentality,
that are reasonably likely to have, individually or in the aggregate, a Pride
Material Adverse Effect.
Section 6.9 Absence of Certain Changes. From December 31, 2000
to the date of this Agreement, there has not been (i) any event or occurrence
that has had or is reasonably likely to have a Pride Material Adverse Effect,
(ii) any material change by Pride or any of its Subsidiaries, when taken as a
whole, in any of its accounting methods, principles or practices or any of its
tax methods, practices or elections, (iii) any declaration, setting aside or
payment of any dividend or distribution in respect of any capital stock of Pride
or any redemption, purchase or other acquisition of any of its securities, or
(iv) any increase in or establishment of any bonus, insurance, severance,
deferred compensation, pension, retirement, profit sharing, stock option, stock
purchase or other employee benefit plan, except in the ordinary course of
business.
Section 6.10 Taxes. Except for such matters as, individually or
in the aggregate, do not or are not reasonably likely to have a Pride Material
Adverse Effect, and except as disclosed in the Pride Disclosure Letter (it being
understood that inclusion of a matter in the Pride Disclosure Letter does not
necessarily mean that such matter is or is reasonably likely to have a Pride
Material Adverse Effect):
(a) Each of Pride and its Subsidiaries has filed all Tax Returns
that it was required to file. All such Tax Returns were correct and complete in
all respects. All Taxes owed by any of Pride and its Subsidiaries (whether or
not shown on any Tax Return) have been paid. None of Pride and its Subsidiaries
currently is the beneficiary of any extension of time within which to file any
Tax Return. No claim has ever been made by an authority in a jurisdiction where
any of Pride and its Subsidiaries does not file Tax Returns that it is or may be
subject to taxation by that jurisdiction. There are no Liens on any of the
assets of any of Pride and its Subsidiaries that arose in connection with any
failure (or alleged failure) to pay any Tax.
(b) Each of Pride and its Subsidiaries has withheld and paid all
Taxes required to have been withheld and paid in connection with amounts paid or
owing to any employee, independent contractor, creditor, shareholder, or other
third party.
(c) No officer or employee responsible for Tax matters of any of
Pride and its Subsidiaries expects any authority to assess any additional Taxes
for any period for which Tax Returns have been filed. There is no dispute or
claim concerning any Tax liability of any of Pride and its Subsidiaries either
(i) claimed or raised by any authority in writing or (ii) as to which any of the
officers or employees responsible for Tax matters of Pride and its Subsidiaries
has knowledge
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based upon personal contact with any agent of such authority. Section 6.10 of
the Pride Disclosure Letter lists all federal, state, local, and foreign income
Tax Returns filed with respect to any of Pride and its Subsidiaries for taxable
periods ended on or after December 31, 1998, indicates those Tax Returns that
have been audited, and indicates those Tax Returns that currently are the
subject of audit or have been noticed for audit.
(d) None of Pride and its Subsidiaries has waived any statute of
limitations in respect of Taxes or agreed to any extension of time with respect
to a Tax assessment or deficiency.
(e) None of Pride and its Subsidiaries has filed a consent under
Code Section 341(f) concerning collapsible corporations.
(f) A valid and timely Code Section 338 election was made with
respect to each nonUnited States entity treated as a corporation under the Code
which was acquired after December 31, 1985 by Pride or any of its Subsidiaries
and for which such an election was permissible.
(g) None of Pride and its Subsidiaries are parties to a gain
recognition agreement under U.S. Treasury Reg. Section 1.367(a)-8.
(h) None of Pride and its Subsidiaries are parties to, or have a
request pending for, any advance pricing agreements under Internal Revenue
Service Revenue Procedure 96-53.
(i) None of Pride and its Subsidiaries has paid or is obligated
to make any payments in connection with the transactions contemplated by this
Agreement that could be reasonably expected to be non-deductible under Code
Section 280G.
(j) Pride has not been a United States real property holding
corporation within the meaning of Code Section 897(c)(2) during the previous
five years.
(k) Pride has disclosed on its federal income Tax Returns all
positions taken therein that could give rise to a substantial understatement of
federal income Tax within the meaning of Code Section 6662.
(l) None of Pride and its Subsidiaries is a party to any Tax
allocation or Tax sharing agreement.
(m) None of Pride and its Subsidiaries (i) has been a member of
an Affiliated Group filing a consolidated federal income Tax Return (other than
a group the common parent of which was Pride) since January 1, 1987, or (ii) has
any liability for the Taxes of any Person (other
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than any of Pride and its Subsidiaries) under U.S. Treas. Reg. Section 1.1502-6
(or any similar provision of state, local, or foreign law), as a transferee or
successor, by contract, or otherwise.
(n) Section 6.10(n) of the Pride Disclosure Letter sets forth
the following information with respect to each of Pride and its Subsidiaries as
of the most recent practicable date (as well as on an estimated pro forma basis
as of the Closing giving effect to the consummation of the transactions
contemplated hereby) for both United States income tax purposes and foreign tax
purposes where applicable: (i) the amount of any net operating loss, net capital
loss, unused investment or other credit, unused foreign tax, or excess
charitable contribution allocable to Pride or any Subsidiary; and (ii) the
amount of any deferred gain or loss allocable to Pride or Subsidiary arising out
of any Deferred Intercompany Transaction.
(o) The unpaid Taxes of Pride and its Subsidiaries (i) did not,
as of the date of the most recent balance sheet included in the most recent
Pride Report containing historical financial statements, exceed the reserve for
Tax liability (other than any reserve for deferred Taxes established to reflect
timing differences between book and Tax income) set forth on the face of such
most recent balance sheet (rather than in any notes thereto) and (ii) do not
exceed that reserve as adjusted for the passage of time through the Closing Date
in accordance with the past custom and practice of Pride and its Subsidiaries in
filing their Tax Returns.
(p) Neither Pride nor any of the Pride Subsidiaries knows of any
fact, or has taken any action or has failed to take any action, that is
reasonably likely to (i) prevent the Mergers from qualifying as reorganizations
within the meaning of Section 368(a) of the Code, (ii) cause the holders who
exchange Marine Common Stock solely for Pride Common Stock pursuant to the
Marine Merger to recognize taxable gain with respect to the Marine Merger, (iii)
cause the Pride shareholders, including the former holders of Marine Common
Stock, who exchange Pride Common Stock solely for Company Common Stock pursuant
to the Pride Merger to recognize taxable gain with respect to the Pride Merger,
or (iv) cause income to be recognized or Tax to be accelerated or be due as a
consequence of the Mergers. Neither Pride nor any of its Subsidiaries has agreed
to pay, or will pay, directly or indirectly, any consideration for Marine Common
Stock other than Pride Common Stock. Neither the Company nor any of its
Subsidiaries has agreed to pay, or will pay, directly or indirectly, any
consideration other than Company Common Stock for Pride Common Stock, including
that issued in the Marine Merger.
Section 6.11 Employee Benefit Plans. (a) Section 6.11 of the
Pride Disclosure Letter contains a list of all Pride Benefit Plans. The term
"Pride Benefit Plans" means all material employee benefit plans and other
material benefit arrangements, including all "employee benefit plans" as defined
in Section 3(3) of ERISA, whether or not U.S.-based plans, and all other
employee benefit, bonus, incentive, deferred compensation, stock option (or
other equity-based), severance, employment, change in control, welfare
(including post-retirement medical and life insurance) and
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fringe benefit plans, practices or agreements, whether or not subject to ERISA
or U.S.-based and whether written or oral, sponsored, maintained or contributed
to or required to be contributed to by Pride or any of its Subsidiaries, to
which Pride or any of its Subsidiaries is a party or is required to provide
benefits under applicable law or in which any person who is currently, has been
or, prior to the Marine Merger Effective Time, is expected to become an employee
of Pride is a participant. Upon written request from Marine, Pride will provide
to Marine true and complete copies of Pride Benefit Plans and, if applicable,
the most recent trust agreements, summary plan descriptions, funding statements,
annual reports and actuarial reports, if applicable, for each such plan. Pride
has also previously provided to Marine with respect to each such plan, true and
correct copies of correspondence with governmental entities and Forms 5500 for
the past three calendar years and during 2001 to the date of this Agreement.
(b) Except as for such matters as, individually or in the
aggregate, do not or are not reasonably likely to have a Pride Material Adverse
Effect:
(1) all applicable reporting and disclosure requirements
have been met with respect to Pride Benefit Plans;
(2) there has been no "reportable event," as that term
is defined in Section 4043 of ERISA, with respect to Pride Benefit Plans
subject to Title IV of ERISA for which the 30-day reporting requirement
has not been waived;
(3) to the extent applicable, Pride Benefit Plans comply
and have complied with the requirements of ERISA, the Code, other
applicable law, with the regulations of any applicable jurisdiction, and
with the operative documents for each such plan;
(4) any Pride Benefit Plan intended to be qualified
under Section 401(a) of the Code has received a favorable determination
letter from the IRS;
(5) Pride Benefit Plans have been maintained and
operated in accordance with their terms, and, to Pride's knowledge,
there are no breaches of fiduciary duty in connection with Pride Benefit
Plans;
(6) there are no pending or, to Pride's knowledge,
threatened claims against or otherwise involving any Pride Benefit Plan,
and no suit, action or other litigation (excluding claims for benefits
incurred in the ordinary course of Pride Benefit Plan activities) has
been brought against or with respect to any such Pride Benefit Plan;
(7) there are no pending audits or investigations by any
governmental entity involving any Pride Benefit Plan;
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(8) all material contributions required to be made as of
the date hereof to Pride Benefit Plans have been made or provided for;
(9) Pride has not engaged in a transaction with respect
to any Pride Benefit Plan for which it could be subject (either directly
or indirectly) to a liability for either a civil penalty assessed
pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of
the Code;
(10) with respect to Pride Benefit Plans or any
"employee pension benefit plans," as defined in Section 3(2) of ERISA,
that are subject to Title IV of ERISA and have been maintained or
contributed to within six years prior to the Marine Merger Effective
Time by Pride, its Subsidiaries or any trade or business (whether or not
incorporated) which is under common control, or which is treated as a
single employer, with Pride or any of its Subsidiaries under Section
414(b), (c), (m) or (o) of the Code (a "Pride ERISA Affiliate"), (i)
neither Pride nor any of its Subsidiaries has incurred any direct or
indirect liability under Title IV of ERISA in connection with any
termination thereof or withdrawal therefrom, and (ii) there does not
exist any accumulated funding deficiency within the meaning of Section
412 of the Code or Section 302 of ERISA, whether or not waived; and
(11) All individuals who performed any compensatory
services for Pride or any Subsidiary of Pride, whether as an employee,
independent contractor or "leased employee" (as defined in Section
414(n) of the Code) are, and have been, properly classified for purposes
of withholding taxes and eligibility to participate in, and coverage
under, any Pride Benefit Plan.
(c) Neither Pride nor any of its Subsidiaries nor any Pride
ERISA Affiliate contributes to, or has an obligation to contribute to, and has
not within six years prior to the Marine Merger Effective Time contributed to,
or had an obligation to contribute to, a "multiemployer plan" within the meaning
of Section 3(37) of ERISA, a "multiple employer welfare association" within the
meaning of Section 3(40) of ERISA, or a "voluntary employees' beneficiary
association" within the meaning of Section 501(c)(9) of the Code, and the
execution of, and performance of the transactions contemplated by, this
Agreement, other than Section 7.17, will not (either alone or upon the
occurrence of any additional or subsequent events) constitute an event under any
benefit plan, policy, arrangement or agreement or any trust or loan (in
connection therewith) that will or may result in any payment (whether of
severance pay or otherwise), acceleration, forgiveness of indebtedness, vesting,
distribution, increase in benefits or obligations to fund benefits with respect
to any employee of Pride or any Subsidiary thereof.
(d) No Pride Benefit Plan provides medical, surgical,
hospitalization, death or similar benefits (whether or not insured) for
employees or former employees of Pride or any
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Subsidiary of Pride for periods extending beyond their retirement date or other
termination of service other than (i) coverage mandated by applicable law, (ii)
death benefits under any "pension plan" or (iii) benefits the full cost of which
is borne by the current or former employee (or his beneficiary). Each Pride
Benefit Plan may be unilaterally amended or terminated by Pride without
liability, except as to benefits accrued or awarded thereunder prior to
amendment or termination.
Section 6.12 Labor Matters. (a) As of the date of this
Agreement, (i) neither Pride nor any of its Subsidiaries is a party to, or bound
by, any collective bargaining agreement or similar contract, agreement or
understanding with a labor union or similar labor organization (A) covering any
U.S. employees or (B) covering, in any single instance, 10% or more of the
employees of Pride and its Subsidiaries taken as a whole, and (ii) to Pride's
knowledge, there are no organizational efforts with respect to the formation of
a collective bargaining unit presently being made or threatened (x) involving
any U.S. employees or (y) involving, in any single instance, 10% or more of the
employees of Pride and its Subsidiaries taken as a whole.
(b) Except for such matters as are disclosed in the Pride
Reports and matters that do not and are not reasonably likely to have a Pride
Material Adverse Effect, (i) neither Pride nor any Subsidiary of Pride has
received any written complaint of any unfair labor practice or other unlawful
employment practice or any written notice of any material violation of any
federal, state or local statutes, laws, ordinances, rules, regulations, orders
or directives with respect to the employment of individuals by, or the
employment practices of, Pride or any Subsidiary of Pride or the work conditions
or the terms and conditions of employment and wages and hours of their
respective businesses and (ii) there are no unfair labor practice charges or
other employee related complaints against Pride or any Subsidiary of Pride
pending or, to the knowledge of Pride threatened, before any governmental
authority by or concerning the employees working in their respective businesses.
Section 6.13 Environmental Matters. (a) Pride and each
Subsidiary of Pride has been and is in compliance with all Environmental Laws
except for such matters as do not and are not reasonably likely to have,
individually or in the aggregate, a Pride Material Adverse Effect. There are no
past or present facts, conditions or circumstances that interfere with the
conduct of any of their respective businesses in the manner now conducted or
which interfere with continued compliance with any Environmental Law except for
any non-compliance or interference that is not reasonably likely to have,
individually or in the aggregate, a Pride Material Adverse Effect.
(b) Except for such matters as do not and are not reasonably
likely to have, individually or in the aggregate, a Pride Material Adverse
Effect, no judicial or administrative proceedings or governmental investigations
are pending or, to the knowledge of Pride, threatened against Pride or its
Subsidiaries that allege the violation of or seek to impose liability pursuant
to any Environmental Law, and there are no past or present facts, conditions or
circumstances at, on or arising out of, or otherwise associated with, any
current or, to the knowledge of Pride or its
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Subsidiaries, former businesses, assets or properties of Pride or any Subsidiary
of Pride, including but not limited to on-site or off-site disposal, release or
spill of any Hazardous Materials which violate Environmental Law or are
reasonably likely to give rise to (i) costs, expenses, liabilities or
obligations for any cleanup, remediation, disposal or corrective action under
any Environmental Law, (ii) claims arising for personal injury, property damage
or damage to natural resources, or (iii) civil, criminal or administrative
fines, penalties or injunctive relief.
(c) Neither Pride nor any of its Subsidiaries has (i) received
any notice of noncompliance with, violation of, or liability or potential
liability under any Environmental Law or (ii) entered into any consent decree or
order or is subject to any order of any court or governmental authority or
tribunal under any Environmental Law or relating to the cleanup of any Hazardous
Materials, except for any such matters as do not and are not reasonably likely
to have a Pride Material Adverse Effect.
Section 6.14 Intellectual Property. Pride and its Subsidiaries
own or possess adequate licenses or other valid rights to use all patents,
patent rights, trademarks, trademark rights and proprietary information used or
held for use in connection with their respective businesses as currently being
conducted, except where the failure to own or possess such licenses and other
rights does not and is not reasonably likely to have, individually or in the
aggregate, a Pride Material Adverse Effect, and there are no assertions or
claims challenging the validity of any of the foregoing that are reasonably
likely to have, individually or in the aggregate, a Pride Material Adverse
Effect. To the knowledge of Pride, the conduct of Pride's and its Subsidiaries'
respective businesses as currently conducted does not conflict with any patents,
patent rights, licenses, trademarks, trademark rights, trade names, trade name
rights or copyrights of others that are reasonably likely to have, individually
or in the aggregate, a Pride Material Adverse Effect. To the knowledge of Pride,
there is no material infringement of any proprietary right owned by or licensed
by or to Pride or any of its Subsidiaries that is reasonably likely to have,
individually or in the aggregate, a Pride Material Adverse Effect.
Section 6.15 Decrees, Etc. Except for such matters as do not and
are not reasonably likely to have, individually or in the aggregate, a Pride
Material Adverse Effect, (i) no order, writ, fine, injunction, decree, judgment,
award or determination of any court or governmental authority has been issued or
entered against Pride or any Subsidiary of Pride that continues to be in effect
that affects the ownership or operation of any of their respective assets, and
(ii) no criminal order, writ, fine, injunction, decree, judgment or
determination of any court or governmental authority has been issued against
Pride or any Subsidiary of Pride.
Section 6.16 Insurance. (a) Except for such matters as do not
and are not reasonably likely to have, individually or in the aggregate, a Pride
Material Adverse Effect, Pride and its Subsidiaries maintain insurance coverage
with financially responsible insurance companies in such
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amounts and against such losses as are customary in the international and
domestic drilling business conducted by Pride and its Subsidiaries prior to the
date hereof.
(b) Except for such matters as do not and are not reasonably
likely to have, individually or in the aggregate, a Pride Material Adverse
Effect, no event relating specifically to Pride or its Subsidiaries (as opposed
to events affecting the drilling service industry in general) has occurred that
is reasonably likely, after the date of this Agreement, to result in an upward
adjustment in premiums under any insurance policies they maintain. Excluding
insurance policies that have expired and been replaced in the ordinary course of
business, no excess liability, hull or protection and indemnity insurance policy
has been canceled by the insurer within one year prior to the date hereof, and
to Pride's knowledge, no threat in writing has been made to cancel (excluding
cancellation upon expiration or failure to renew) any such insurance policy of
Pride or any Subsidiary of Pride during the period of one year prior to the date
hereof. Prior to the date hereof, no event has occurred, including the failure
by Pride or any Subsidiary of Pride to give any notice or information or by
giving any inaccurate or erroneous notice or information, which materially
limits or impairs the rights of Pride or any Subsidiary of Pride under any such
excess liability, hull or protection and indemnity insurance policies.
Section 6.17 No Brokers. Pride has not entered into any
contract, arrangement or understanding with any person or firm which may result
in the obligation of Pride, Marine or the Company to pay any finder's fees,
brokerage or other like payments in connection with the negotiations leading to
this Agreement or the consummation of the transactions contemplated hereby,
except that Pride has retained Xxxxxxx Xxxxx Xxxxxx Inc. as its financial
advisor, the arrangements with which have been disclosed in writing to Marine
prior to the date hereof.
Section 6.18 Opinion of Financial Advisor. The board of
directors of Pride has received the opinion of Xxxxxxx Xxxxx Barney Inc. to the
effect that, as of the date of this Agreement, the Pride Exchange Ratio is fair
to the shareholders of Pride from a financial point of view.
Section 6.19 Vote Required. The only votes of the holders of any
class or series of Pride capital stock necessary to approve any transaction
contemplated by this Agreement are the affirmative vote in favor of the issuance
of shares of Pride Common Stock pursuant to the Marine Merger (the "Pride
Issuance") and the adoption of this Agreement of the holders of at least a
majority of the Pride Common Stock represented at the Pride Meeting (as
hereafter defined) at which a quorum is present.
Section 6.20 Ownership of Drilling Rigs and Drillships. As of
the date hereof, Pride or a Subsidiary of Pride has good and indefeasible title
to the drilling rigs listed in Pride's most recent annual report on Form 10-K,
in each case free and clear of all Liens except for (i) defects or
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irregularities of title or encumbrances of a nature that do not materially
impair the ownership or operation of these assets and which have not had and are
not reasonably likely to have a Pride Material Adverse Effect, (ii) Liens that
secure obligations not yet due and payable or, if such obligations are due and
have not been paid, Liens securing such obligations that are being diligently
contested in good faith and by appropriate proceedings (any such contests
involving an amount in excess of $5.0 million being described in Pride
Disclosure Letter), (iii) Liens for taxes, assessments or other governmental
charges or levies not yet due or which are being contested in good faith, (iv)
Liens in connection with workmen's compensation, unemployment insurance or other
social security, old age pension or public liability obligations not yet due or
which are being contested in good faith, (v) operators', vendors', suppliers of
necessaries to Pride's drilling rigs, carriers', warehousemen's, repairmen's,
mechanics', workmen's, materialmen's, construction or shipyard liens (during
repair or upgrade periods) or other similar Liens arising by operation of law in
the ordinary course of business or statutory landlord's liens, each of which is
in respect of obligations that have not been outstanding more than 90 days (so
long as no action has been taken to file or enforce such Liens within said
90-day period) or which are being contested in good faith and (vi) other Liens
disclosed in Pride Disclosure Letter (the Liens described in clauses (i), (ii),
(iii), (iv), (v) and (vi), collectively, "Pride Permitted Liens"). No such asset
is leased under an operating lease from a lessor that, to Pride's knowledge, has
incurred non-recourse indebtedness to finance the acquisition or construction of
such asset.
Section 6.21 Undisclosed Liabilities. Neither Pride nor any of
its Subsidiaries has any liabilities or obligations of any nature, whether or
not fixed, accrued, contingent or otherwise, except liabilities and obligations
that (i) are disclosed in Pride Reports, (ii) are referred to in the Pride
Disclosure Letter or (iii) do not and are not reasonably likely to have,
individually or in the aggregate, a Pride Material Adverse Effect.
Section 6.22 Certain Contracts. (a) Section 6.22 of Pride
Disclosure Letter contains a list of all of the following contracts or
agreements (other than those listed as an exhibit to Pride's Annual Report on
Form 10-K for the year ended December 31, 2000) to which Pride or any Subsidiary
of Pride is a party or by which any of them is bound as of the date of this
Agreement: (i) any non-competition agreement that purports to limit the manner
in which, or the localities in which, all or any portion of their respective
businesses is conducted, other than any such limitation that is not material to
Pride and its Subsidiaries, taken as a whole; (ii) any drilling rig construction
or conversion contract with respect to which the drilling rig has not been
delivered and paid for; (iii) any drilling contracts of one year or greater
remaining duration or drilling contracts of a shorter duration which if extended
at the election of Pride's customer would have a remaining duration of one year
or more; (iv) any contract or agreement for the borrowing of money with a
borrowing capacity or outstanding indebtedness of $5.0 million or more; (v) any
contract for the acquisition or disposition of a "business" (as such term is
defined in Article 11-01(d) of Regulation S-X of the SEC; or (vi) any "material
contract" (as such term is defined in Item 601(b)(10) of Regulation S-K of
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the SEC) (all contracts or agreements of the types described in clauses (i)
through (vi) being referred to herein as "Pride Material Contracts").
(b) As of the date of this Agreement, each Pride Material
Contract is, to the knowledge of Pride, in full force and effect, and Pride and
each of its Subsidiaries have in all material respects performed all obligations
required to be performed by them to date under each Pride Material Contract,
except where such failure to be binding or in full force and effect or such
failure to perform does not and is not reasonably likely to create, individually
or in the aggregate, a Pride Material Adverse Effect. Except for such matters as
do not and are not reasonably likely to have a Pride Material Adverse Effect,
neither Pride nor any of its Subsidiaries (x) knows of, or has received written
notice of, any breach of or violation or default under (nor, to the knowledge of
Pride, does there exist any condition which with the passage of time or the
giving of notice or both would result in such a violation or default under) any
Pride Material Contract or (y) has received written notice of the desire of the
other party or parties to any such Pride Material Contract to exercise any
rights such party has to cancel, terminate or repudiate such contract or
exercise remedies thereunder. Each Pride Material Contract is enforceable by
Pride or a Subsidiary of Pride in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to creditors' rights and general principles of equity, except
where such unenforceability is not reasonably likely to create, individually or
in the aggregate, a Pride Material Adverse Effect.
Section 6.23 Capital Expenditure Program. As of the date of this
Agreement, Section 6.23 of the Pride Disclosure Letter accurately sets forth in
all material respects, for each of Pride's sustaining, life extension and
newbuild capital expenditure programs, the capital expenditures for all such
programs that were forecasted to be incurred in 2001 on an annual basis.
Section 6.24 Improper Payments. No bribes, kickbacks or other
improper payments have been made by Pride or any Subsidiary of Pride or agent of
any of them in connection with the conduct of their respective businesses or the
operation of their respective assets, and neither Pride, any Subsidiary of Pride
nor any agent of any of them has received any such payments from vendors,
suppliers or other persons, where any such payment made or received is
reasonably likely to have, individually or in the aggregate, a Pride Material
Adverse Effect.
Section 6.25 Amendment to Pride Rights Agreement. Pride has
amended or taken other action under the Pride Rights Agreement so that none of
the execution and delivery of this Agreement, the execution and delivery of the
Marine Stock Option Agreement, the conversion of shares of Pride Common Stock
into the right to receive shares of Company Common Stock in accordance with this
Agreement, the consummation of the Mergers, the issuance of Pride Common Stock
upon exercise of the Marine Stock Option or any other transactions contemplated
hereby or by the Marine Stock Option Agreement, will cause: (i) Pride Rights to
become exercisable under the Pride Rights Agreement; (ii) the Company, Pride or
any of Pride's shareholders or Subsidiaries to
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be deemed an "Acquiring Person" (as defined in the Pride Rights Agreement);
(iii) any such event to be an event requiring an adjustment of the purchase
price of the Pride Rights under Section 11(a)(ii) of the Pride Rights Agreement;
(iv) Section 13 of the Pride Rights Agreement to be or become applicable to any
such event; or (v) a "Stock Acquisition Date" or a "Distribution Date" (each as
defined in Pride Rights Agreement) to occur upon any such event, and so that the
Pride Rights will expire immediately prior to the Marine Merger Effective Time.
Pride has delivered to Marine a true and complete copy of the Pride Rights
Agreement, as amended to date.
Section 6.26 Pooling of Interests. To the knowledge of Pride as
of the date of this Agreement, neither it nor any of its Subsidiaries has taken,
or agreed to take, any action or failed to take any action which action or
failure (without giving effect to any actions or failures to act by Marine or
any of its Subsidiaries) that is known to Pride as of the date of this Agreement
to prevent the treatment of the Mergers contemplated herein as (i) a pooling of
interests for accounting purposes under the requirements of Opinion No. 16
(Business Combinations) of the Accounting Principles Board of the American
Institute of Certified Public Accountants, the Financial Accounting Standards
Board and the rules of the SEC, or (ii) reorganizations within the meaning of
Section 368(a) of the Code.
Section 6.27. Representations and Warranties Relating to the
Company and Merger Sub. (a) Each of the Company and Merger Sub is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Neither the Company nor Merger Sub owns any properties (other
than the initial cash subscription for shares) or has commenced any business or
operations. Pride has delivered to Marine true and correct copies of the
certificate of incorporation and bylaws of each of the Company and Merger Sub.
(b) The Company has an authorized capital stock consisting of (i)
400,000,000 shares of Company Common Stock, 20 shares of which were issued and
outstanding on the date hereof and immediately prior to the Pride Merger
Effective Time, and (ii) 50,000,000 shares of preferred stock, par value $.01
per share, none of which were issued and outstanding as of the date hereof and
immediately prior to the Pride Merger Effective Time. As of the date hereof and
immediately prior to the Marine Merger Effective Time, all of the issued and
outstanding shares of capital stock of Merger Sub are owned by Pride. As of the
date hereof and immediately prior to the Pride Merger Effective Time, all of the
issued and outstanding shares of capital stock of the Company are owned by
Pride.
(c) Each of the Company and Merger Sub has the corporate power and
authority and has taken all corporate action necessary to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. This
Agreement has been (i) duly and validly authorized by the board of directors and
sole stockholder of each of the Company and Merger Sub and (ii) duly and validly
executed and delivered by the Company and Merger Sub and constitutes the valid
and binding
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obligation of each of the Company and Merger Sub, enforceable in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other Laws relating to or affecting creditors'
rights generally or by equitable principles.
(d) Each of the Company and Merger Sub has been formed solely to
consummate the Pride Merger and Marine Merger, respectively, and each of the
Company and Merger Sub has not conducted and will not conduct any business
activities or other operations of any kind other than the issuance of shares of
their capital stock to Pride, prior to the Pride Merger Effective Time and
Marine Merger Effective Time, respectively.
ARTICLE 7
COVENANTS AND AGREEMENTS
Section 7.1 Conduct of Marine's Business. Prior to the Marine
Merger Effective Time, and except (i) as set forth in the Marine Disclosure
Letter, (ii) as expressly contemplated by any other provision of this Agreement
(iii), as contemplated by the Pride Stock Option Agreement, (iii) as required by
Applicable Laws (provided that Marine has provided Pride with advance notice of
the proposed action to the extent practicable), or (iv) as otherwise consented
to by Pride in writing, Marine:
(a) shall, and shall cause each of its Subsidiaries to, conduct
its operations according to their usual, regular and ordinary course in
substantially the same manner as heretofore conducted;
(b) shall use its commercially reasonable best efforts, and
shall cause each of its Subsidiaries to use its commercially reasonable best
efforts, to preserve intact their business organizations and goodwill (except
that any of its Subsidiaries may be merged with or into, or be consolidated with
any of its Subsidiaries or may be liquidated into Marine or any of its
Subsidiaries), keep available the services of their respective officers and
employees and maintain satisfactory relationships with those persons having
business relationships with them;
(c) shall not amend its articles of incorporation or bylaws;
(d) shall promptly notify Pride of any material change in its
condition (financial or otherwise) or business or any termination, cancellation,
repudiation or material breach of any Marine Material Contract (or
communications indicating that the same may be contemplated) or any material
litigation or material governmental complaints, investigations or hearings (or
communications indicating that the same may be contemplated), or the breach in
any material respect of any representation or warranty contained herein;
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(e) shall promptly deliver to Pride true and correct copies of
any report, statement or schedule filed with the SEC subsequent to the date of
this Agreement;
(f) shall not,
(1) except pursuant to the exercise of options,
warrants, conversion rights and other contractual rights existing on the
date hereof and disclosed pursuant to this Agreement (including Marine
Rights issued pursuant to the Marine Rights Agreement) or pursuant to
the exercise of stock options and stock awards granted after the date
hereof and expressly permitted under this Agreement or in connection
with transactions permitted by Section 7.1(i), issue any shares of its
capital stock, effect any stock split or otherwise change its
capitalization as it existed on the date hereof,
(2) grant, confer or award any option, warrant,
conversion right or other right not existing on the date hereof to
acquire any shares of its capital stock, except the issuance of Marine
Rights with permitted issuances of Marine Common Stock,
(3) amend or otherwise modify any option, warrant,
conversion right or other right to acquire any shares of its capital
stock existing on the date hereof,
(4) with respect to any of its former, present or future
employees, increase any compensation or benefits, or enter into, amend
or extend (or permit the extension of) any employment or consulting
agreement, except in each case in the ordinary course of business
consistent with past practice,
(5) with respect to any of its former, present or future
officers or directors, increase any compensation or benefits or enter
into, amend or extend (or permit the extension of) any employment or
consulting agreement,
(6) adopt any new employee benefit plan or agreement
(including any stock option, stock benefit or stock purchase plan) or
amend (except as required by law) any existing employee benefit plan in
any material respect, except for changes which are less favorable to
participants in such plans,
(7) except as approved by good faith action of the board
of directors of Marine after Marine has provided Pride with advance
written notice of the proposed action and consulted in advance with
Pride regarding such action, terminate any executive officer
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without cause or permit circumstances to exist that would give any
executive officer a right to terminate employment if the termination
would entitle such executive officer to receive enhanced separation
payments upon consummation of the Mergers, or
(8) permit any holder of an option to acquire Marine
Common Stock outstanding on the date hereof to have shares withheld upon
exercise, for tax purposes, in excess of the number of shares needed to
satisfy the minimum statutory withholding requirements for federal and
state withholding;
(g) shall not (i) declare, set aside or pay any dividend or make
any other distribution or payment with respect to any shares of its capital
stock or (ii) redeem, purchase or otherwise acquire any shares of its capital
stock or capital stock of any of its Subsidiaries, or make any commitment for
any such action;
(h) shall not, and shall not permit any of its Subsidiaries to,
sell, lease or otherwise dispose of any of its assets (including capital stock
of Subsidiaries) which are material to Marine, individually or in the aggregate,
except for sales of surplus equipment or sales of other assets in the ordinary
course of business;
(i) shall not, and shall not permit any of its Subsidiaries to,
except pursuant to contractual commitments in effect on the date hereof and
disclosed in the Marine Disclosure Letter, acquire or agree to acquire by
merging or consolidating with, or by purchasing an equity interest in or a
substantial portion of the assets of, or by any other manner, any business or
any corporation, partnership, association or other business organization or
division thereof, in each case (i) for an aggregate consideration for all such
acquisitions in excess of $1 million (excluding acquisitions approved in writing
by Pride) or (ii) where a filing under the HSR Act or any non-U.S. competition,
antitrust or premerger notification laws is required;
(j) shall not, except as may be required as a result of a change
in generally accepted accounting principles, change any of the material
accounting principles or practices used by it;
(k) shall, and shall cause any of its Subsidiaries to, use
reasonable efforts to maintain with financially responsible insurance companies
insurance in such amounts and against such risks and losses as are customary for
such party;
(l) shall not, and shall not permit any of its Subsidiaries to,
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(1) make or rescind any material election relating to
taxes, including elections for any and all joint ventures, partnerships,
limited liability companies, working interests or other investments
where it has the capacity to make such binding election,
(2) settle or compromise any material claim, action,
suit, litigation, proceeding, arbitration, investigation, audit or
controversy relating to taxes, or
(3) change in any material respect any of its methods of
reporting any item for tax purposes from those employed in the
preparation of its tax returns for the most recent taxable year for
which a return has been filed, except as may be required by applicable
law;
(m) shall not, and shall not permit any of its Subsidiaries to,
(1) incur any indebtedness for borrowed money or
guarantee any such indebtedness or issue or sell any debt securities or
warrants or rights to acquire any debt securities of Marine or any of
its Subsidiaries or guarantee any debt securities of others,
(2) except in the ordinary course of business, enter
into any material lease (whether such lease is an operating or capital
lease) or create any material mortgages, Liens, security interests or
other encumbrances on its property in connection with any indebtedness
thereof (other than the Marine Permitted Liens), or
(3) make or commit to make aggregate capital
expenditures in excess of $1 million per month for each month from the
date of this Agreement to the Marine Merger Effective Time over the
capital expenditures forecast disclosed in the Marine Disclosure Letter
for such month, excluding capital expenditures covered by insurance (A)
for any partial loss not covered by loss of hire insurance, not in
excess of $1 million per occurrence or series of related occurrences and
(B) for any vessel for which Marine has bound loss of hire insurance,
provided, however, that capital expenditures in connection with the
total loss (actual or constructive) of any vessel shall require the
consent of Pride;
(n) shall not, and shall cause its Subsidiaries not to, purchase
or otherwise acquire any Pride Common Stock;
(o) subject to Section 7.7, shall not take any action that is
reasonably likely to delay materially or adversely affect the ability of any of
the parties hereto to obtain any consent, authorization, order or approval of
any governmental commission, board or other regulatory body or the expiration of
any applicable waiting period required to consummate the transactions
contemplated by this Agreement;
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(p) unless in the good faith opinion of the board of directors
of Marine after consultation with its outside legal counsel the following would
be inconsistent with its fiduciary duties, (i) shall not terminate, amend,
modify or waive any provision of any agreement containing a standstill covenant
to which it is a party and (ii) during such period shall enforce, to the fullest
extent permitted under applicable law, the provisions of such agreement,
including by obtaining injunctions to prevent any breaches of such agreements
and to enforce specifically the terms and provisions thereof in any court of the
United States of America or any state having jurisdiction; and
(q) shall not (i) agree in writing or otherwise to take any of
the foregoing actions or (ii) permit any of its Subsidiaries to agree in writing
or otherwise to take any of the foregoing actions that refer to Subsidiaries.
Section 7.2 Conduct of Pride's Business. Prior to the Marine
Merger Effective Time, and except (i) as set forth in the Pride Disclosure
Letter, (ii) as expressly contemplated by any other provision of this Agreement,
(iii) as contemplated by the Marine Stock Option Agreement, (iv) as required by
Applicable Laws (provided that Pride has provided Marine with advance notice of
the proposed action to the extent practicable), or (v) as otherwise consented to
by Marine in writing, Pride:
(a) shall, and shall cause each of its Subsidiaries to, conduct
its operations according to their usual, regular and ordinary course in
substantially the same manner as heretofore conducted;
(b) shall use its commercially reasonable best efforts, and
shall cause each of its Subsidiaries to use its commercially reasonable best
efforts, to preserve intact their business organizations and goodwill (except
that any of its Subsidiaries may be merged with or into, or be consolidated with
any of its Subsidiaries or may be liquidated into Pride or any of its
Subsidiaries), keep available the services of their respective officers and
employees and maintain satisfactory relationships with those persons having
business relationships with them;
(c) shall not amend its articles of incorporation or bylaws;
(d) shall promptly notify Marine of any material change in its
condition (financial or otherwise) or business or any termination, cancellation,
repudiation or material breach of any Pride Material Contract (or communications
indicating that the same may be contemplated) or any material litigation or
material governmental complaints, investigations or hearings (or communications
indicating that the same may be contemplated), or the breach in any material
respect of any representation or warranty contained herein;
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(e) shall promptly deliver to Marine true and correct copies of
any report, statement or schedule filed with the SEC subsequent to the date of
this Agreement;
(f) shall not,
(1) except pursuant to the exercise of options,
warrants, conversion rights and other contractual rights existing on the
date hereof and disclosed pursuant to this Agreement (including Pride
Rights issued pursuant to the Pride Rights Agreement) or pursuant to the
exercise of stock options and stock awards granted after the date hereof
and expressly permitted under this Agreement or in connection with
transactions permitted by Section 7.2(i), issue any shares of its
capital stock, effect any stock split or otherwise change its
capitalization as it existed on the date hereof,
(2) grant, confer or award any option, warrant,
conversion right or other right not existing on the date hereof to
acquire any shares of its capital stock, except the issuance of Pride
Rights with permitted issuances of Pride Common Stock,
(3) amend or otherwise modify any option, warrant,
conversion right or other right to acquire any shares of its capital
stock existing on the date hereof,
(4) with respect to any of its former, present or future
employees, increase any compensation or benefits, or enter into, amend
or extend (or permit the extension of) any employment or consulting
agreement, except in each case in the ordinary course of business
consistent with past practice,
(5) with respect to any of its former, present or future
officers or directors, increase any compensation or benefits or enter
into, amend or extend (or permit the extension of) any employment or
consulting agreement,
(6) adopt any new employee benefit plan or agreement
(including any stock option, stock benefit or stock purchase plan) or
amend (except as required by law) any existing employee benefit plan in
any material respect, except for changes which are less favorable to
participants in such plans,
(7) except as approved by good faith action of the board
of directors of Pride after Pride has provided Marine with advance
written notice of the proposed action and consulted in advance with
Marine regarding such action, terminate any executive officer without
cause or permit circumstances to exist that would give any executive
officer a right to terminate employment if the termination would entitle
such executive officer to receive enhanced separation payments upon
consummation of the Mergers, or
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(8) permit any holder of an option to acquire Pride
Common Stock outstanding on the date hereof to have shares withheld upon
exercise, for tax purposes, in excess of the number of shares needed to
satisfy the minimum statutory withholding requirements for federal and
state withholding;
(g) shall not (i) declare, set aside or pay any dividend or make
any other distribution or payment with respect to any shares of its capital
stock or (ii) redeem, purchase or otherwise acquire any shares of its capital
stock or capital stock of any of its Subsidiaries, or make any commitment for
any such action;
(h) shall not, and shall not permit any of its Subsidiaries to,
sell, lease or otherwise dispose of any of its assets (including capital stock
of Subsidiaries) which are material to Pride individually or in the aggregate,
except for sales of surplus equipment or sales of other assets in the ordinary
course of business;
(i) shall not, and shall not permit any of its Subsidiaries to,
except pursuant to contractual commitments in effect on the date hereof and
disclosed in the Pride Disclosure Letter, acquire or agree to acquire by merging
or consolidating with, or by purchasing an equity interest in or a substantial
portion of the assets of, or by any other manner, any business or any
corporation, partnership, association or other business organization or division
thereof, in each case (i) for an aggregate consideration for all such
acquisitions in excess of $1 million (excluding acquisitions approved in writing
by Marine) or (ii) where a filing under the HSR Act or any non-U.S. competition,
antitrust or premerger notification laws is required;
(j) shall not, except as may be required as a result of a change
in generally accepted accounting principles, change any of the material
accounting principles or practices used by it;
(k) shall, and shall cause any of its Subsidiaries to, use
reasonable efforts to maintain with financially responsible insurance companies
insurance in such amounts and against such risks and losses as are customary for
such party;
(l) shall not, and shall not permit any of its Subsidiaries to,
(1) make or rescind any material election relating to
taxes, including elections for any and all joint ventures, partnerships,
limited liability companies, working interests or other investments
where it has the capacity to make such binding election,
(2) settle or compromise any material claim, action,
suit, litigation, proceeding, arbitration, investigation, audit or
controversy relating to taxes, or
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(3) change in any material respect any of its methods of
reporting any item for tax purposes from those employed in the
preparation of its tax returns for the most recent taxable year for
which a return has been filed, except as may be required by applicable
law;
(m) shall not, and shall not permit any of its Subsidiaries to,
(1) incur any indebtedness for borrowed money or
guarantee any such indebtedness or issue or sell any debt securities or
warrants or rights to acquire any debt securities of Pride or any of its
Subsidiaries or guarantee any debt securities of others,
(2) except in the ordinary course of business, enter
into any material lease (whether such lease is an operating or capital
lease) or create any material mortgages, Liens, security interests or
other encumbrances on its property in connection with any indebtedness
thereof (other than the Pride Permitted Liens), or
(3) make or commit to make aggregate capital
expenditures in excess of $1 million per month for each month from the
date of this Agreement to the Marine Merger Effective Time over the
capital expenditures forecast disclosed in the Pride Disclosure Letter
for such month, excluding capital expenditures covered by insurance (A)
for any partial loss not covered by loss of hire insurance, not in
excess of $1 million per occurrence or series of related occurrences and
(B) for any vessel for which the Pride has bound loss of hire insurance,
provided, however, that capital expenditures in connection with the
total loss (actual or constructive) of any vessel shall require the
consent of Pride.
(n) shall not, and shall cause its Subsidiaries not to, purchase
or otherwise acquire any Marine Common Stock;
(o) subject to Section 7.7, shall not take any action that is
reasonably likely to delay materially or adversely affect the ability of any of
the parties hereto to obtain any consent, authorization, order or approval of
any governmental commission, board or other regulatory body or the expiration of
any applicable waiting period required to consummate the transactions
contemplated by this Agreement;
(p) unless in the good faith opinion of the board of directors
of Pride after consultation with its outside legal counsel the following would
be inconsistent with its fiduciary duties, (i) shall not terminate, amend,
modify or waive any provision of any agreement containing a standstill covenant
to which it is a party; and (ii) during such period shall enforce, to the
fullest extent permitted under applicable law, the provisions of such agreement,
including by obtaining injunctions to prevent any breaches of such agreements
and to enforce specifically the terms and provisions thereof in any court of the
United States of America or any state having jurisdiction;
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(q) shall not (i) agree in writing or otherwise to take any of
the foregoing actions or (ii) permit any of its Subsidiaries to agree in writing
or otherwise to take any of the foregoing actions that refer to Subsidiaries;
(r) shall not, and shall not permit the Company to amend the
certificate of incorporation or bylaws of the Company;
(s) shall not, and shall not permit either Merger Sub or the
Company to issue any shares of capital stock, rights, options or warrants to
purchase shares of capital stock of either the Company or Merger Sub except to
Pride;
(t) shall not permit either Merger Sub or the Company to engage
in any business activities (other than as contemplated by this Agreement), or
liquidate, merge or consolidate with any other corporation or permit any other
corporation to merge into or consolidate with either Merger Sub or the Company;
and
(u) shall cause Merger Sub and the Company to take any actions
required to be taken by them under this Agreement and to refrain from taking any
actions that they are prohibited from taking under this Agreement.
Section 7.3 No Solicitation by Marine. (a) Marine agrees that
(i) neither it nor any of its Subsidiaries shall, and it shall not authorize or
permit any of its officers, directors, employees, agents or representatives
(including, without limitation, any investment banker, attorney or accountant
retained by it or any of its Subsidiaries) to, and on becoming aware of it will
stop such person from continuing to, directly or indirectly, solicit, initiate
or encourage (including by way of furnishing nonpublic information), or take any
action designed to facilitate, directly or indirectly, any inquiry, proposal or
offer (including, without limitation, any proposal or offer to its shareholders)
with respect to a tender or exchange offer, merger, consolidation, business
combination, purchase or similar transaction or series of transactions (other
than the transactions contemplated by this Agreement) involving, individually or
in the aggregate, 15% or more of the assets, net revenues, EBITDA, or net income
of Marine and its Subsidiaries on a consolidated basis or 15% or more of any
class of capital stock of Marine (any such proposal, offer or transaction being
hereinafter referred to as a "Marine Acquisition Proposal") or cooperate with or
assist, participate or engage in any discussions or negotiations concerning a
Marine Acquisition Proposal; and (ii) it will immediately cease and cause to be
terminated any existing negotiations with any parties conducted heretofore with
respect to any of the foregoing; provided that nothing contained in this
Agreement shall prevent Marine or its board of directors from (A) complying with
Rule 14e-2 promulgated under the Exchange Act with regard to a Marine
Acquisition Proposal or (B) prior to the Cutoff Date, providing information
(pursuant to a confidentiality and standstill agreement in reasonably customary
form with terms at least as favorable to Marine with respect to confidentiality
as the Agreement dated
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April 2, 2001, between Marine and Pride (the "Confidentiality Agreement") and
which does not contain terms that prevent Marine from complying with its
obligations under this Section 7.3) to or engaging in any negotiations or
discussions with any person or entity who has made an unsolicited bona fide
written Marine Acquisition Proposal with respect to all the outstanding capital
stock of Marine or all or substantially all the assets of Marine and its
Subsidiaries on a consolidated basis that, in the good faith judgment of the
board of directors of Marine, taking into account the likelihood of financing
and consummation, and based on the advice of a financial advisor of recognized
national reputation, is superior to the Mergers (a "Marine Superior Proposal"),
to the extent the board of directors of Marine, after consultation with its
outside legal counsel, determines that the failure to do so would be
inconsistent with its fiduciary obligations.
(b) Prior to taking any action referred to in Section 7.3(a), if
Marine intends to participate in any such discussions or negotiations or provide
any such information to any such third party, Marine shall give prompt prior
oral and written notice to Pride of each such action. Marine will immediately
notify Pride orally and in writing of any such requests for such information or
the receipt of any Marine Acquisition Proposal or any inquiry with respect to or
that could lead to a Marine Acquisition Proposal, including the identity of the
person or group engaging in such discussions or negotiations, requesting such
information or making such Marine Acquisition Proposal, and the material terms
and conditions of any Marine Acquisition Proposal. Marine will (i) keep Pride
fully informed of the status and details (including any changes or proposed
changes to such status or details) on a timely basis of any such requests,
Marine Acquisition Proposals or inquiries and (ii) provide to Pride as soon as
practicable after receipt or delivery thereof with copies of all correspondence
and other written material sent or provided to Marine from any third party in
connection with any Marine Acquisition Proposal or sent or provided by Marine to
any third party in connection with any Marine Acquisition Proposal. Any written
notice under this Section 7.3 shall be given by facsimile with receipt confirmed
or personal delivery, and any oral notice under this Section 7.3 shall be given
to Xxxx X. Xxxxx, or such other person identified by Marine to Pride in writing.
(c) Nothing in this Section 7.3 shall permit Marine to enter
into any agreement with respect to a Marine Acquisition Proposal during the term
of this Agreement, it being agreed that during the term of this Agreement
(except pursuant to Section 9.3(c)), Marine shall not enter into any agreement
with any person that provides for, or in any way facilitates, a Marine
Acquisition Proposal, other than a confidentiality and standstill agreement in
reasonably customary form with confidentiality terms at least as favorable to
Marine as the Confidentiality Agreement and which does not contain terms that
prevent Marine from complying with its obligations under this Section.
(d) For purposes hereof, the "Cutoff Date," when used with
respect to Marine, means the date the condition set forth in Section 8.1(a) is
satisfied.
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Section 7.4 No Solicitation by Pride. (a) Pride agrees that (i)
neither it nor any of its Subsidiaries shall, and it shall not authorize or
permit any of its officers, directors, employees, agents or representatives
(including, without limitation, any investment banker, attorney or accountant
retained by it or any of its Subsidiaries) to, and on becoming aware of it will
stop such person from continuing to, directly or indirectly, solicit, initiate
or encourage (including by way of furnishing nonpublic information), or take any
action designed to facilitate, directly or indirectly, any inquiry, proposal or
offer (including, without limitation, any proposal or offer to its shareholders)
with respect to a tender or exchange offer, merger, consolidation, business
combination, purchase or similar transaction or series of transactions (other
than the transactions contemplated by this Agreement) involving, individually or
in the aggregate, 15% or more of the assets, net revenues, EBITDA or net income
of Pride and its Subsidiaries on a consolidated basis or 15% or more of any
class of capital stock of Pride (any such proposal, offer or transaction being
hereinafter referred to as a "Pride Acquisition Proposal") or cooperate with or
assist, participate or engage in any discussions or negotiations concerning a
Pride Acquisition Proposal; and (ii) it will immediately cease and cause to be
terminated any existing negotiations with any parties conducted heretofore with
respect to any of the foregoing; provided that nothing contained in this
Agreement shall prevent Pride or its board of directors from (A) complying with
Rule 14e-2 promulgated under the Exchange Act with regard to a Pride Acquisition
Proposal or (B) prior to the Cutoff Date, providing information (pursuant to a
confidentiality and standstill agreement in reasonably customary form with terms
at least as favorable to Pride with respect to confidentiality as the
Confidentiality Agreement and which does not contain terms that prevent Pride
from complying with its obligations under this Section 7.4) to or engaging in
any negotiations or discussions with any person or entity who has made an
unsolicited bona fide written Pride Acquisition Proposal with respect to all the
outstanding capital stock of Pride or all or substantially all the assets of
Pride and its Subsidiaries on a consolidated basis that, in the good faith
judgment of the board of directors of Pride, taking into account the likelihood
of financing and consummation and based on the advice of a financial advisor of
recognized national reputation, is superior to the Mergers (a "Pride Superior
Proposal"), to the extent the board of directors of Pride, after consultation
with its outside legal counsel, determines that the failure to do so would be
inconsistent with its fiduciary obligations.
(b) Prior to taking any action referred to in Section 7.4(a), if
Pride intends to participate in any such discussions or negotiations or provide
any such information to any such third party, Pride shall give prompt prior oral
and written notice to Marine of each such action. Pride will immediately notify
Marine orally and in writing of any such requests for such information or the
receipt of any Pride Acquisition Proposal or any inquiry with respect to or that
could lead to a Pride Acquisition Proposal, including the identity of the person
or group engaging in such discussions or negotiations, requesting such
information or making such Pride Acquisition Proposal, and the material terms
and conditions of any Pride Acquisition Proposal. Pride will (i) keep Marine
fully informed of the status and details (including any changes or proposed
changes to such status or details) on a timely basis of any such requests,
Marine Acquisition Proposals or inquiries and (ii)
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provide to Marine as soon as practicable after receipt or delivery thereof with
copies of all correspondence and other written material sent or provided to
Pride from any third party in connection with any Pride Acquisition Proposal or
sent or provided by Pride to any third party in connection with any Pride
Acquisition Proposal. Any written notice under this Section 7.4 shall be given
by facsimile with receipt confirmed or personal delivery, and any oral notice
under this Section 7.4 shall be given to Xxx Xxxx, or such other person
identified by Pride to Marine in writing.
(c) Nothing in this Section 7.4 shall permit Pride to enter into
any agreement with respect to a Pride Acquisition Proposal during the term of
this Agreement, it being agreed that during the term of this Agreement (except
pursuant to Section 9.4(c)), Pride shall not enter into any agreement with any
person that provides for, or in any way facilitates, a Pride Acquisition
Proposal, other than a confidentiality and standstill agreement in reasonably
customary form with terms at least as favorable to Pride as the Confidentiality
Agreement and which does not contain terms that prevent Pride from complying
with its obligations under this Section 7.4.
(d) For purposes hereof, the "Cutoff Date," when used with
respect to Pride means the date the condition set forth in Section 8.1(b) is
satisfied.
Section 7.5 Rights Agreements. (a) Except for actions
contemplated by this Agreement that are taken by Marine simultaneously with its
entering into a binding definitive agreement pursuant to Section 9.3(c), the
board of directors of Marine shall not take any other action to (i) terminate
the Marine Rights Agreement, (ii) redeem the Marine Rights, (iii) amend the
Marine Rights Agreement in a manner adverse to Pride or the Company, or (iv)
cause any person not to be or become an "Acquiring Person."
(b) Except for actions contemplated by this Agreement that are
taken by Pride simultaneously with its entering into a binding definitive
agreement pursuant to Section 9.4(c), the board of directors of Pride shall not
take any other action to (i) terminate the Pride Rights Agreement, (ii) redeem
the Pride Rights, (iii) amend the Pride Rights Agreement in a manner adverse to
Marine or the Company or (iv) cause any person not to be or become an "Acquiring
Person."
Section 7.6 Meetings of Shareholders. (a) Each of Marine and
Pride shall take all action necessary, in accordance with applicable law, its
articles of incorporation and bylaws to convene a meeting of its shareholders as
promptly as practicable to consider and vote upon the adoption of this Agreement
and approval of the Marine Merger in the case of Marine and the Pride Merger and
the Pride Issuance in the case of Pride. The meeting of Marine's shareholder is
herein referred to as the "Marine Meeting," the meeting of Pride's shareholders
is referred to as the "Pride Meeting," and both such meetings are referred to as
the "Meetings." Marine and Pride shall coordinate and cooperate with respect to
the timing of the Meetings and shall use their respective reasonable best
efforts to hold the Meetings on the same day. Notwithstanding any other
provision
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of this Agreement, unless this Agreement is terminated in accordance with the
terms hereof, Marine and Pride shall each (to the extent permitted or limited by
the laws of its state of incorporation), submit this Agreement to its respective
shareholders, whether or not the board of directors of Marine or Pride, as the
case may be, withdraws, modifies or changes its recommendation and declaration
regarding the foregoing matters.
(b) Marine through its board of directors, has adopted
resolutions declaring the Marine Merger to be advisable and in the best interest
of Marine's shareholders and shall recommend that this Agreement and the Marine
Merger be approved and adopted by Marine shareholders, and shall use its
reasonable best efforts to solicit from Marine's shareholders proxies in favor
thereof; provided, however, that the board of directors of Marine may at any
time prior to the Marine Merger Effective Time upon five business days' prior
written notice to Pride, withdraw, modify or change any recommendation and
declaration regarding such matters or recommend and declare advisable any Marine
Superior Proposal, if in the good faith opinion of Marine's board of directors
after consultation with its outside legal counsel the failure to so withdraw,
modify or change its recommendation and declaration or to so recommend and
declare advisable any Marine Superior Proposal would be inconsistent with its
fiduciary obligations.
(c) Pride through its board of directors, has adopted
resolutions declaring the Pride Issuance and the Pride Merger to be advisable
and in the best interest of Pride's shareholders and shall recommend that the
Pride Issuance, this Agreement and the Pride Merger be approved and adopted by
Pride shareholders, and shall use its reasonable best efforts to solicit from
Pride's shareholders proxies in favor thereof; provided, however, that the board
of directors of Pride may at any time prior to the Marine Merger Effective Time
upon five business days' prior written notice to Marine, withdraw, modify or
change any recommendation and declaration regarding such matters or recommend
and declare advisable any Pride Superior Proposal, if in the good faith opinion
of Pride's board of directors after consultation with its outside legal counsel
the failure to so withdraw, modify or change its recommendation and declaration
or to so recommend and declare advisable any Pride Superior Proposal would be
inconsistent with its fiduciary obligations.
(d) The Company has caused this Agreement, the Mergers and the
other transactions contemplated hereby to be approved and adopted by its board
of directors and only stockholder at or prior to the execution and delivery of
this Agreement by the Company. If so required by law or the Company's
certificate of incorporation or bylaws, the Company shall cause any amendment to
this Agreement executed by Marine and Pride to be likewise promptly approved and
adopted by the Company's board of directors and stockholders and promptly
executed and delivered by the Company.
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Section 7.7 Filings; Commercially Reasonable Best Efforts, Etc.
(a) Subject to the terms and conditions herein provided, each of Marine and
Pride shall:
(1) make their respective required filings under the HSR
Act to be made pursuant to this Section 7.7 (and shall share equally all
filing fees incident thereto), which filings shall be made not more than
15 business days from the date hereof, and thereafter shall promptly
make any other required submissions under the HSR Act;
(2) use their commercially reasonable best efforts to
cooperate with one another in (i) determining which filings are required
to be made prior to the Marine Merger Effective Time with, and which
consents, approvals, permits or authorizations are required to be
obtained prior to the Marine Merger Effective Time from, governmental or
regulatory authorities of the United States, the several states, and
non-U.S. jurisdictions in connection with the execution and delivery of
this Agreement and the consummation of the Mergers and the transactions
contemplated hereby; and (ii) timely making all such filings and timely
seeking all such consents, approvals, permits or authorizations without
causing a Marine Material Adverse Effect or a Pride Material Adverse
Effect;
(3) promptly notify each other of any communication
concerning this Agreement or the transactions contemplated hereby to
that party from any governmental authority and permit the other party to
review in advance any proposed communication concerning this Agreement
or the transactions contemplated hereby to any governmental entity;
(4) not agree to participate in any meeting or
discussion with any governmental authority in respect of any filings,
investigation or other inquiry concerning this Agreement or the
transactions contemplated hereby unless it consults with the other party
in advance and, to the extent permitted by such governmental authority,
gives the other party the opportunity to attend and participate thereat;
(5) furnish the other party with copies of all
correspondence, filings and communications (and memoranda setting forth
the substance thereof) between them and their affiliates and their
respective representatives on the one hand, and any government or
regulatory authority or members or their respective staffs on the other
hand, with respect to this Agreement and the transactions contemplated
hereby, except for copies of their respective filings under the HSR Act;
and
(6) furnish the other party with such necessary
information and reasonable assistance as such other party and its
affiliates may reasonably request in connection with their preparation
of necessary filings, registrations or submissions of information to any
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governmental or regulatory authorities, including, without limitation,
any filings necessary or appropriate under the provisions of the HSR
Act.
(b) Without limiting Section 7.7(a), but subject to Section
7.7(c), Marine and Pride each shall:
(i) each use commercially reasonable best efforts to
avoid the entry of, or to have vacated, terminated or modified, any
decree, order or judgment that would restrain, prevent or delay the
Closing; and
(ii) each use commercially reasonable best efforts to
take any and all steps necessary to obtain any consents or eliminate any
impediments to the Mergers.
(c) Nothing in this Agreement shall require any of the Company,
Marine or Pride to (i) dispose of any of its assets or to limit its freedom of
action with respect to any of its businesses, (ii) consent to any disposition of
its assets or limits on its freedom of action with respect to any of its
businesses, whether prior to or after the Marine Merger Effective Time, (iii)
commit or agree to any of the foregoing, (iv) obtain any consents, approvals,
permits or authorizations or to remove any impediments to the Mergers relating
to antitrust laws or (v) avoid the entry of, or to effect the dissolution of,
any injunction, temporary restraining order or other order in any suit or
proceeding relating to antitrust laws, other than matters described in the
immediately preceding clauses (i) through and including (v) which in each such
case may be conditioned upon the consummation of the Mergers and the
transactions contemplated hereby and which, in the reasonable judgment of each
of Marine and Pride, in each such case do not and are not reasonably likely to
individually or in the aggregate either have a (i) Marine Material Adverse
Effect; (ii) Pride Material Adverse Effect; or (iii) Company Material Adverse
Effect (as defined in Section 10.9(c)) following the Mergers.
(d) The Company, Marine and Pride intend that the Mergers will
each qualify as a reorganization within the meaning of Section 368(a) of the
Code. The Company, Marine and Pride shall each use their respective commercially
reasonable best efforts to cause each of the Mergers to qualify as
reorganizations within the meaning of Section 368(a) of the Code, and shall not
take actions, cause actions to be taken, or fail to take actions that (i) could
reasonably be expected to prevent either of the Mergers from qualifying as a
reorganization within the meaning of Section 368(a) of the Code, or (ii) could
reasonably be expected to cause the Marine shareholders who exchange their
Marine Common Stock for Pride Common Stock pursuant to the Marine Merger or
Pride shareholders, including the former holders of Marine Common Stock, who
exchange their Pride Common Stock for Company Common Stock pursuant to the Pride
Merger to recognize taxable gain with respect to the Marine Merger or Pride
Merger, as the case may be, pursuant to Section 368(a) of the Code.
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(e) The Company, Marine and Pride intend that the Mergers will
each qualify as a pooling of interests transaction as described in Section 5.26
and Section 6.26. Each of Marine and Pride shall not take any action and shall
not fail to take any action which action or failure to take action would
prevent, or would be reasonably likely to prevent, the Mergers from qualifying
for pooling of interest accounting treatment.
(f) Prior to the Marine Merger Effective Time, Marine, Merger
Sub and Pride shall file: (i) with the Secretary of State of Delaware the Marine
Certificate of Merger and (ii) with the Secretary of State of Texas the Texas
Articles of Merger.
(g) Promptly after the Marine Merger Effective Time, the Company
and Pride shall file: (i) with the Secretary of State of Delaware the Pride
Certificate of Merger and (ii) with the Secretary of State of Louisiana the
Louisiana Certificate of Merger.
Section 7.8 Inspection. From the date hereof to the Marine
Merger Effective Time, each of Marine and Pride shall allow all designated
officers, attorneys, accountants and other representatives of Marine or Pride as
the case may be, access, at all reasonable times, upon reasonable notice, to the
records and files, correspondence, audits, audit work papers, tax returns
(foreign and domestic) and related work papers, environmental compliance
correspondence, permits and files, rigs, ships and other assets, as well as to
all information relating to commitments, contracts, titles and financial
position, or otherwise pertaining to the business and affairs of Marine and
Pride and their respective Subsidiaries, including inspection of such assets;
provided, however, that no investigation pursuant to this Section 7.8 shall
affect any representation or warranty given by any party hereunder, and
provided, further that notwithstanding the provision of information or
investigation by any party, no party shall be deemed to make any representation
or warranty except as expressly set forth in this Agreement. Notwithstanding the
foregoing, no party shall be required to provide any information which it
reasonably believes it may not provide to the other party by reason of
applicable law, rules or regulations, which constitutes information protected by
attorney/client privilege, or which it is required to keep confidential by
reason of contract or agreement with third parties. The parties hereto shall
make reasonable and appropriate substitute disclosure arrangements under
circumstances in which the restrictions of the preceding sentence apply. Each of
Marine and Pride agrees that it shall not, and shall cause its respective
representatives not to, use any information obtained pursuant to this Section
7.8 for any purpose unrelated to the consummation of the transactions
contemplated by this Agreement. All non-public information obtained pursuant to
this Section 7.8 shall be governed by the Confidentiality Agreement.
Section 7.9 Publicity. The parties will consult with each other
and will mutually agree upon any press releases or public announcements
pertaining to this Agreement or the transactions contemplated hereby and shall
not issue any such press releases or make any such public announcements prior to
such consultation and agreement, except as may be required by applicable
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law or by obligations pursuant to any listing agreement with any national
securities exchange, in which case the party proposing to issue such press
release or make such public announcement shall use its best efforts to consult
in good faith with the other party before issuing any such press releases or
making any such public announcements.
Section 7.10 Registration Statement on Form S-4. (a) Each of
Marine and Pride shall cooperate and promptly prepare and Pride and the Company
shall file with the SEC as soon as practicable a Registration Statement on Form
S-4 (the "Form S-4") under the Securities Act, with respect to the Pride Common
Stock and Company Common Stock issuable in the Mergers upon exercise or
conversion of options, warrants or convertible securities which following the
Mergers will be exercisable for, or convertible into, Company Common Stock. A
portion of the Form S-4 shall also serve as the joint proxy statement with
respect to the respective meetings of the shareholders of Marine and Pride in
connection with the transactions contemplated by this Agreement (the "Proxy
Statement/Prospectus"). The respective parties will cause the Proxy
Statement/Prospectus and the Form S-4 to comply as to form in all material
respects with the applicable provisions of the Securities Act, the Exchange Act
and the rules and regulations thereunder. Marine and Pride shall each use
commercially reasonable best efforts, and shall cooperate with one another, so
as to have the Form S-4 declared effective by the SEC as promptly as
practicable. Pride shall use commercially reasonable best efforts to obtain,
prior to the effective date of the Form S-4, all necessary state securities law
or "Blue Sky" permits or approvals required to carry out the transactions
contemplated by this Agreement and the parties shall share equally all expenses
incident thereto (including all SEC and other filing fees and all printing and
mailing expenses associated with the Form S-4 and the Proxy
Statement/Prospectus). Pride will advise Marine, promptly after it receives
notice thereof, of the time when the Form S-4 has been declared effective or any
supplement or amendment has been filed, the issuance of any stop order, the
suspension of the qualification of the Pride Common Stock issuable in connection
with the Marine Merger for offering or sale in any jurisdiction or any request
by the SEC for amendment of the Proxy Statement/Prospectus or the Form S-4 or
comments thereon and responses thereto or requests by the SEC for additional
information. Each of the parties shall also promptly provide each other party
copies of all written correspondence received from the SEC and summaries of all
oral comments received from the SEC in connection with the transactions
contemplated by this Agreement. Each of the parties shall promptly provide each
other party with drafts of all correspondence intended to be sent to the SEC in
connection with the transactions contemplated by this Agreement and allow each
such party the opportunity to comment thereon prior to delivery to the SEC.
(b) Marine and Pride shall each use its best efforts to cause
the Proxy Statement/Prospectus to be mailed to its shareholders as promptly as
practicable after the Form S-4 is declared effective under the Securities Act.
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(c) Each of Marine and Pride shall ensure that the information
provided by it for inclusion or incorporation by reference in the Proxy
Statement/Prospectus and each amendment or supplement thereto, at the time of
mailing thereof and at the time of the respective meetings of shareholders of
Marine and Pride or, in the case of information provided by it for inclusion or
incorporation by reference in the Form S-4 or any amendment or supplement
thereto, at the time it becomes effective, (i) will not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading and (ii) will comply as
to form in all material respects with the provisions of the Securities Act and
the Exchange Act.
(d) The filing fees payable to the SEC with respect to the Form
S-4 or any amendment thereto shall be paid by Marine and Pride. Marine and Pride
shall each contribute to such filing fee expense in proportion to the number of
shares of Company Common Stock estimated to be issuable as of the date of such
filing, on a fully diluted basis, to their respective security holders.
Section 7.11 Listing Applications. (a) Pride shall promptly
prepare and submit to the New York Stock Exchange (the "NYSE") a listing
application covering the Pride Common Stock covered by the Form S-4 and shall
use its commercially reasonable best efforts to obtain, prior to the Marine
Merger Effective Time, approval for the listing on the NYSE of such Pride Common
Stock, subject to official notice of issuance.
(b) Pride shall cause the Company to promptly prepare and submit
to the NYSE a listing application covering the Company Common Stock and shall
use (and cause the Company to use) its commercially reasonable best efforts to
obtain, prior to the Marine Merger Effective Time, approval for the listing on
the NYSE of such Company Common Stock, subject to official notice of issuance.
(c) The listing fees payable to the NYSE with respect to the
listing applications or any amendments thereto shall be paid on behalf of the
Pride and/or Company by Marine and Pride. Marine and Pride shall each contribute
to such listing fee expense in proportion to the number of shares of Company
Common Stock estimated to be issuable as of the date of such filings, on a fully
diluted basis, to their respective security holders at the Pride Merger
Effective Time.
Section 7.12 "Comfort" Letters of Accountants. (a) Marine shall
use commercially reasonable best efforts to cause to be delivered to Pride
"comfort" letters of KPMG LLP, Marine's independent public accountants, dated
the effective date of the Form S-4 and the Closing Date, respectively, and
addressed to Pride with regard to certain financial information regarding Marine
included in the Form S-4, in form reasonably satisfactory to Pride and customary
in scope and substance for "comfort" letters delivered by independent public
accountants in connection with registration statements similar to the Form S-4.
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(b) Pride shall use commercially reasonable best efforts to
cause to be delivered to Marine "comfort" letters of PricewaterhouseCoopers LLP,
Pride's independent public accountants, dated the effective date of the Form S-4
and the Closing Date, respectively, and addressed to Marine with regard to
certain financial information regarding Pride included in the Form S-4, in form
reasonably satisfactory to Marine and customary in scope and substance for
"comfort" letters delivered by independent public accountants in connection with
registration statements similar to the Form S-4.
Section 7.13 Agreements of Affiliates. (a) At least five
business days prior to the Marine Merger Effective Time, each of Marine and
Pride shall cause to be prepared and delivered to each other a list identifying
all persons who each believes, at the date of the meeting of the of their
respective shareholders to consider and vote upon the adoption of this
Agreement, may be deemed to be "affiliates" of Marine or Pride, as the case may
be, as that term is used in paragraphs (c) and (d) of Rule 145 under the
Securities Act (the "Rule 145 Affiliates"). Each of Marine and Pride shall use
their respective commercially reasonable best efforts to cause each person who
is identified as its Rule 145 Affiliate in such list to deliver to the Company,
at or prior to the Marine Merger Effective Time, a written agreement, in the
form of Exhibit 7.13(a)(1) in the case of Marine affiliates and in the form of
Exhibit 7.13(a)(2) in the case of Pride affiliates. The Company shall be
entitled to place restrictive legends on any Company Common Stock issued to such
Rule 145 Affiliates pursuant to the Mergers.
(b) Marine shall use its commercially reasonable best efforts to
obtain, within 15 days after the date of this Agreement, a letter agreement in
substantially the form of Exhibit 7.13(b)(1) from each person listed in Section
7.13(b)(1) of the Marine Disclosure Letter. Pride shall use its commercially
reasonable best efforts to obtain, within 15 days after the date of this
Agreement, a letter agreement in substantially the form of Exhibit 7.13(b)(2)
from each person listed in Section 7.13(b)(2) of the Pride Disclosure Letter.
Section 7.14 Expenses. Whether or not the Mergers are
consummated, all costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such expenses, except as expressly provided herein or as otherwise agreed in
writing by the parties.
Section 7.15 Indemnification and Insurance. (a) (i) From and
after the Marine Merger Effective Time, Pride and (ii) from and after the Pride
Merger Effective Time, the Company and Pride shall indemnify, defend and hold
harmless to the fullest extent permitted under applicable law each person who
is, or has been at any time prior to the Effective Time, an officer or director
of the Company, Marine or Pride (or any Subsidiary or division thereof) and each
person who served at the request of the Company, Marine or Pride as a director,
officer, trustee or fiduciary of another corporation, partnership, joint
venture, trust, pension or other employee benefit plan or enterprise
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(individually, an "Indemnified Party" and, collectively, the "Indemnified
Parties") against all losses, claims, damages, liabilities, costs or expenses
(including attorneys' fees), judgments, fines, penalties and amounts paid in
settlement in connection with any claim, action, suit, proceeding or
investigation arising out of or pertaining to acts or omissions, or alleged acts
or omissions, by them in their capacities as such, whether commenced, asserted
or claimed before or after the Effective Time. In the event of any such claim,
action, suit, proceeding or investigation (an "Action"), (i) the Company and
Pride shall pay, as incurred, the fees and expenses of counsel selected by the
Indemnified Party, which counsel shall be reasonably acceptable to the Company,
in advance of the final disposition of any such Action to the fullest extent
permitted by applicable law and, if required, upon receipt of any undertaking
required by applicable law, and (ii) the Company will cooperate in the defense
of any such matter; provided, however, the Pride Merger Surviving Entity shall
not be liable for any settlement effected without its written consent (which
consent shall not be unreasonably withheld or delayed), and provided further,
that the Company and Pride shall not be obligated pursuant to this Section 7.15
to pay the fees and disbursements of more than one counsel for all Indemnified
Parties in any single Action, unless, in the good faith judgment of any of the
Indemnified Parties, there is or may be a conflict of interests between two or
more of such Indemnified Parties, in which case there may be separate counsel
for each similarly situated group.
(b) The parties agree that all rights to indemnification and any
provisions relating to advances of expenses incurred in defense of any action or
suit, whether contained in this Agreement or in the charter, bylaws or other
organizational documents of Marine, Pride or any of their respective
Subsidiaries shall survive the Mergers with respect to matters occurring through
and including the Effective Time.
(c) For a period of six years after the Effective Time, the
Company shall cause to be maintained officers' and directors' liability
insurance covering the Indemnified Parties who are, or at any time prior to the
Effective Time, covered by either Marine's or Pride's existing officers' and
directors' liability insurance policies on terms substantially no less
advantageous to the Indemnified Parties than such existing insurance, provided,
however, that the Company shall not be required to pay annual premiums in excess
of 150% of the sum of the last annual premium paid by each of Marine and Pride
prior to the date hereof (the amount of each such premium being set forth in
Section 7.15(c) of the Marine Disclosure Letter and Pride Disclosure Letter),
but in such case shall purchase as much coverage as reasonably practicable for
such amount.
(d) The rights of each Indemnified Party hereunder shall be in
addition to any other rights such Indemnified Party may have under the
certificate of incorporation or bylaws of the Company or any of its
Subsidiaries, under applicable law or otherwise. The provisions of this Section
7.15 shall survive the consummation of the Mergers and expressly are intended to
benefit each of the Indemnified Parties.
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(e) In the event the Company or any of its respective successors
or assigns (i) consolidates with or merges into any other person and shall not
be the continuing or surviving corporation or entity in such consolidation or
merger or (ii) transfers all or substantially all of its properties and assets
to any person, then and in either such case, proper provision shall be made so
that the successors and assigns of the Company as the case may be, shall assume
the obligations set forth in this Section 7.15.
Section 7.16 Marine Employee Stock Options, Incentives and
Benefit Plans. (a) At the Marine Merger Effective Time, each outstanding option
to purchase Marine Common Stock (a "Marine Stock Option") granted under Marine's
plans identified in Section 5.11 of the Marine Disclosure Letter as being the
only compensation or benefit plans or agreements pursuant to which Marine Common
Stock may be issued (collectively, the "Marine Stock Option Plans"), whether
vested or unvested, shall be deemed assumed by Pride and shall thereafter be
deemed to constitute an option to acquire the same number of shares of Pride
Common Stock, on the same terms and conditions as were applicable under such
Marine Stock Option immediately prior to the Marine Merger Effective Time (in
accordance with the past practice of Marine with respect to interpretation and
application of such terms and conditions). In addition, Marine shall prior to
the Marine Merger Effective Time make any amendments to the terms of its stock
option or compensation plans or arrangements that are necessary to give effect
to the transactions contemplated by this Section.
(b) Pride shall take all corporate action necessary to reserve
for issuance a sufficient number of shares of Pride Common Stock for delivery
pursuant to this Section.
(c) At the Marine Merger Effective Time, each award or account
(excluding restricted stock, awards and Marine Stock Options) then outstanding
and not issued in violation of this Agreement (a "Marine Award") that has been
established, made or granted under any employee incentive or benefit plans,
programs or arrangements and non-employee director plans maintained by Marine on
or prior the date hereof which provide for grants of equity-based awards or
equity- based accounts shall be amended or converted into a similar instrument
of Pride, in each case with such adjustments to the terms and conditions of such
Marine Awards as are appropriate to preserve the value inherent in such Marine
Awards with no detrimental effects on the holders thereof. The other terms and
conditions of each Marine Award, and the plans or agreements under which they
were issued, shall continue to apply in accordance with their terms and
conditions, including any provisions for acceleration. Marine represents that
(i) there are no Marine Awards or Marine Stock Options other than those
reflected in Section 5.11 of the Marine Disclosure Letter and (ii) all employee
incentive or benefit plans, programs or arrangements and non-employee director
plans under which any Marine Award has been established, made or granted and all
Marine Stock Option Plans are disclosed in Section 5.11 of the Marine Disclosure
Letter.
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Section 7.17 Pride Employee Stock Options, Incentives and
Benefit Plans. (a) At the Pride Merger Effective Time, each outstanding option
to purchase Pride Common Stock (a "Pride Stock Option") granted under Pride's
plans identified in Section 6.11 of the Pride Disclosure Letter as being the
only compensation or benefit plans or agreements pursuant to which Pride Common
Stock may be issued, whether vested or unvested, and all Marine Stock Options
assumed by Pride pursuant to Section 7.16, shall be deemed assumed by the
Company and shall thereafter be deemed to constitute an option to acquire the
same number of shares of Company Common Stock, on the same terms and conditions
as were applicable under such Pride Stock Option or assumed Marine Stock Options
immediately prior to the Pride Merger Effective Time (in accordance with the
past practice of Pride with respect to interpretation and application of such
terms and conditions of Pride Stock Options). In addition, Pride shall prior to
the Marine Merger Effective Time make any amendments to the terms of its stock
option or compensation plans or arrangements that are necessary to give effect
to the transactions contemplated by this Section.
(b) Pride shall take and cause the Company to take all corporate
action necessary to reserve for issuance a sufficient number of shares of
Company Common Stock for delivery pursuant to this Section.
(c) At the Pride Merger Effective Time, each award or account
(excluding restricted stock, awards and Pride Stock Options) then outstanding
and not issued in violation of this Agreement (a "Pride Award") that has been
established, made or granted under any employee incentive or benefit plans,
programs or arrangements and non-employee director plans maintained by Pride on
or prior the date hereof which provide for grants of equity-based awards or
equity-based accounts, and all Marine Awards converted into awards with respect
to Pride Common Stock, shall be amended or converted into a similar instrument
of the Company, in each case with such adjustments to the terms and conditions
of such Pride Awards or converted into Marine Awards as are appropriate to
preserve the value inherent in such awards with no detrimental effects on the
holders thereof. The other terms and conditions of each Pride Award, and the
plans or agreements under which they were issued, shall continue to apply in
accordance with their terms and conditions, including any provisions for
acceleration. Pride represents that (i) there are no Pride Awards or Pride Stock
Options other than those reflected in Section 6.11 of the Pride Disclosure
Letter and (ii) all employee incentive or benefit plans, programs or
arrangements and non-employee director plans under which any Pride Award has
been established, made or granted and all Pride Stock Option Plans are disclosed
in Section 6.11 of the Pride Disclosure Letter.
Section 7.18 Company Covenants Concerning Incentive Compensation
and Benefits. (a) At the Marine Merger Effective Time, or promptly thereafter,
the Company shall file with the SEC a registration statement on an appropriate
form or a post-effective amendment to the Form S-4 with respect to the Company
Common Stock subject to options and other equity-based awards
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issued pursuant to this Agreement, as well as comply with applicable state
securities registration laws, for so long as such options or other equity-based
awards remain outstanding.
(b) The Company, Marine and Pride each agree that all employees
of Marine and its Subsidiaries immediately prior to the Marine Merger Effective
Time and all employees of Pride and its Subsidiaries immediately prior to the
Pride Merger Effective Time shall be employed by the Company or its Subsidiaries
immediately after the Pride Merger Effective Time, it being understood that
neither the Company nor Merger Sub shall not have any obligations to continue
employing such employees for any length of time thereafter. The Company, Marine
and Pride further agree that the Marine Benefit Plans and the Pride Benefit
Plans in effect at the date of this Agreement shall, to the extent practicable,
remain in effect until otherwise determined after the Pride Merger Effective
Time. To the extent any such Marine Benefit Plan or Pride Benefit Plan is not
continued, the Company will maintain for a period of one year after the Pride
Merger Effective Time benefit plans that are not less favorable, in the
aggregate, to the employees covered, respectively, by the Marine Benefit Plans
and the Pride Benefit Plans, except to the extent compliance with this sentence
would be unduly burdensome, or would materially increase the cost thereof in the
aggregate.
Section 7.19 Company Assumption of Indenture Indebtedness. Prior
to or at the Pride Merger Effective Time, Pride and each of its Subsidiaries
shall use all commercially reasonable efforts to prevent the occurrence, as a
result of the Mergers and the other transactions contemplated by this Agreement,
of a change in control or any other event that constitutes a default (or an
event that, with notice or lapse of time or both, would become a default) under
any indebtedness of Pride. At the Pride Merger Effective Time, the Company
shall, with respect to indebtedness of Pride the terms of which require the
Company to assume such indebtedness in order to avoid default thereunder
(collectively, the "Assumed Indebtedness"), execute and deliver such
supplemental indentures or other instruments as shall be required under the
indentures and other agreements governing such Assumed Indebtedness, expressly
assuming the obligations of Pride with respect to the due and punctual payment
of the principal of (and premium, if any) and interest if any, on, and
conversion obligations under all Assumed Indebtedness.
Section 7.20 Pooling Letters. (a) Marine shall use its
commercially reasonable best efforts to obtain a letter from KPMG LLP and
addressed to Marine, a complete copy of which shall be delivered to Pride, in
which KPMG LLP concurs with the conclusion of the management of Marine that, as
of the date of such letter, no conditions exist related to Marine and its
Subsidiaries that would preclude the Company from accounting for the Marine
Merger as a pooling of interests as described in Section 5.26. Such letter shall
be dated as of the effective date of the Form S-4. Marine shall also use its
commercially reasonable best efforts to obtain a letter from KPMG LLP and
addressed to Marine, a complete copy of which shall be delivered to Pride at or
before the Marine Merger Effective Time, in which KPMG LLP reconfirms the
matters set forth in its earlier letter as of the Marine Merger Effective Time.
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(b) Pride shall use its commercially reasonable best efforts to
obtain a letter from PricewaterhouseCoopers LLP and addressed to Pride, a
complete copy of which shall have been delivered to Marine, in which
PricewaterhouseCoopers LLP concurs with the conclusion of the management of
Pride that, as of the date of such letter, no conditions exist related to Pride
and its Subsidiaries that would preclude the Company from accounting for the
Marine Merger and Pride Merger as a pooling of interests as described in Section
6.26. Such letter shall be dated as of the effective date of the Form S-4. Pride
shall also use its commercially reasonable best efforts to obtain a letter from
PricewaterhouseCoopers LLP and addressed to Pride, a complete copy of which
shall be delivered to Marine at or before the Marine Merger Effective Time, in
which PricewaterhouseCoopers LLP reconfirms the matters set forth in its earlier
letter as of the Marine Merger Effective Time.
ARTICLE 8
CONDITIONS
Section 8.1 Conditions to Each Party's Obligation to Effect the
Mergers. The respective obligation of each party to effect the Mergers shall be
subject to the fulfillment at or prior to the Closing Date of the following
conditions:
(a) This Agreement shall have been adopted and approved by the
requisite vote of the shareholders of Marine in accordance with applicable law;
(b) This Agreement and the Pride Issuance shall have been
adopted and approved by the requisite vote of the shareholders of Pride in
accordance with applicable law;
(c) Any waiting period applicable to the consummation of the
Mergers under the HSR Act shall have expired or been terminated;
(d) No statute, rule, regulation executive order, decree, ruling
or cease and desist order shall have enacted, entered promulgated or enforced by
any U.S. federal or state or foreign governmental authority which prohibits the
consummation of the Mergers substantially on the terms contemplated hereby;
provided, however, that, prior to invoking this condition, each party agrees to
comply with Section 7.7, and with respect to other matters not covered by
Section 7.7, to use its commercially reasonable best efforts to have any such
decree, order or injunction lifted or vacated;
(e) None of the parties hereto shall be subject to any decree,
order or injunction of a United States federal or state or foreign court of
competent jurisdiction which prohibits the consummation of the Mergers;
provided, however, that, prior to invoking this condition, each party agrees to
comply with Section 7.7, and with respect to other matters not covered by
Section 7.7, to
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use its commercially reasonable best efforts to have any such decree, order or
injunction lifted or vacated;
(f) The Form S-4 shall have become effective and no stop order
with respect thereto shall be in effect; and
(g) The Company Common Stock registered under the Form S-4 to be
issued in connection with the Mergers shall have been authorized for listing on
the NYSE, subject to official notice of issuance.
Section 8.2 Conditions to Obligation of Marine to Effect the
Marine Merger. The obligation of Marine to effect the Marine Merger shall be
subject to the fulfillment at or prior to the Closing Date of the following
conditions:
(a) Pride shall have performed, in all material respects, its
covenants and agreements contained in this Agreement required to be performed on
or prior to the Closing Date, and the representations and warranties of Pride
contained in this Agreement (i) that are qualified as to materiality or Pride
Material Adverse Effect shall be true and correct in all respects as of the
Closing Date, except to the extent such representations and warranties expressly
relate to an earlier date (in which case as of such earlier date), and (ii)
those not so qualified shall be true and correct in all respects as of the
Closing Date, except to the extent such representations and warranties expressly
relate to an earlier date (in which case as of such earlier date), except for
such breaches of representations and inaccuracies in warranties in this clause
(ii) that do not and are not reasonably likely to have, individually or in the
aggregate, a Pride Material Adverse Effect, and Marine shall have received a
certificate of Pride executed on its behalf by its President or one of its Vice
Presidents, dated the Closing Date, certifying to such effect.
(b) Marine shall have received the opinion of Xxxxxx & Xxxxxx,
L.L.P. in form and substance reasonably satisfactory to Marine and dated the
Closing Date to the effect that, for United States federal income tax purposes
(i) the Marine Merger and the Pride Merger will each qualify as a reorganization
under Section 368(a) of the Code, (ii) no gain or loss will be recognized by the
shareholders of Marine who exchange Marine Common Stock solely for Pride Common
Stock pursuant to the Marine Merger, and who then exchange such Pride Common
Stock solely for Company Common Stock pursuant to the Pride Merger, and (iii) no
gain or loss will be recognized by Marine or Pride on the transfer of its
respective assets in the Mergers. In rendering such opinion, Xxxxxx & Xxxxxx,
L.L.P. shall be entitled to receive and rely upon representations of officers of
Marine, the Company, and Pride substantially in the form of Exhibits 8.2 and
8.3, dated as of the Closing Date.
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(c) At any time after the date of this Agreement, there shall
not have been any event or occurrence, or series of events or occurrences, that
has had or is reasonably likely to have, individually or in the aggregate with
all other events or occurrences since the date of this Agreement, a Pride
Material Adverse Effect.
Section 8.3 Conditions to Obligation of Pride to Effect the
Pride Merger. The obligations of Pride to effect the Pride Merger shall be
subject to the fulfillment at or prior to the Closing Date of the following
conditions:
(a) Marine shall have performed, in all material respects, its
covenants and agreements contained in this Agreement required to be performed on
or prior to the Closing Date, and the representations and warranties of Marine
contained in this Agreement (i) that are qualified as to materiality or Marine
Material Adverse Effect shall be true and correct in all respects as of the
Closing Date, except to the extent such representations and warranties expressly
relate to an earlier date (in which case as of such earlier date), and (ii)
those not so qualified shall be true and correct in all respects as of the
Closing Date, except to the extent such representations and warranties expressly
relate to an earlier date (in which case as of such earlier date), except for
such breaches of representations and inaccuracies in warranties in this clause
(ii) that do not and are not reasonably likely to have, individually or in the
aggregate, Pride Material Adverse Effect, and Pride shall have received a
certificate of Marine executed on its behalf by its President or one of its Vice
Presidents, dated the Closing Date, certifying to such effect.
(b) Pride shall have received the opinion of Xxxxx Xxxxx L.L.P.
in form and substance reasonably satisfactory to Pride and dated the Closing
Date to the effect that, for United States federal income tax purposes, (i) the
Marine Merger and the Pride Merger will each qualify as a reorganization under
Section 368(a) of the Code, (ii) no gain or loss will be recognized by the
shareholders of Pride, including the shareholders of Marine who received Pride
Common Stock in the Marine Merger, and who then exchange such Pride Common Stock
solely for Company Common Stock pursuant to the Pride Merger, and (iii) no gain
or loss will be recognized by Marine or Pride on the transfer of its respective
assets in the Mergers. In rendering such opinion, Xxxxx Xxxxx L.L.P. shall be
entitled to receive and rely upon representations of officers of Pride, the
Company, and Marine substantially in the form of Exhibits 8.2 and 8.3, dated as
of the Closing Date.
(c) At any time after the date of this Agreement, there shall
not have been any event or occurrence, or series of events or occurrences, that
has had or is reasonably likely to have, individually or in the aggregate with
all other events or occurrences since the date of this Agreement, a Marine
Material Adverse Effect.
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ARTICLE 9
TERMINATION
Section 9.1 Termination by Mutual Consent. This Agreement may be
terminated at any time prior to the Marine Merger Effective Time by the mutual
written consent of Marine and Pride.
Section 9.2 Termination by Marine or Pride. This Agreement may
be terminated at any time prior to the Marine Merger Effective Time by action of
the board of directors of Marine or of Pride if:
(a) the Mergers shall not have been consummated by December 31,
2001; provided, however, that the right to terminate this Agreement pursuant to
this clause (a) shall not be available to any party whose failure to perform or
observe in any material respect any of its obligations under this Agreement in
any manner shall have been the cause of, or resulted in, the failure of the
Mergers to occur on or before such date;
(b) a meeting (including adjournments and postponements) of the
shareholders of Marine for the purpose of obtaining the approval required by
Section 8.1(a) shall have been held and such shareholder approval shall not have
been obtained;
(c) a meeting (including adjournments and postponements) of the
shareholders of Pride for the purpose of obtaining the approval required by
Section 8.1(b) shall have been held and such shareholder approval shall not have
been obtained; or
(d) a U.S. federal, state or non-U.S. court of competent
jurisdiction or U.S. federal, state or non-U.S. governmental, regulatory or
administrative agency or commission shall have issued an order, decree or ruling
or taken any other action permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement and such order,
decree, ruling or other action shall have become final and nonappealable;
provided, however, that the party seeking to terminate this Agreement pursuant
to this clause (d) shall have complied with Section 7.7 and, with respect to
other matters not covered by Section 7.7, shall have used its commercially
reasonable best efforts to remove such injunction, order or decree.
Section 9.3 Termination by Marine. This Agreement may be
terminated at any time prior to the Marine Merger Effective Time by action of
the board of directors of Marine, after consultation with its outside legal
advisors, if:
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(a) there has been a breach by Pride of any representation,
warranty, covenant or agreement set forth in this Agreement or if any
representation or warranty of Pride shall have become untrue, in either case
such that the conditions set forth in Section 8.2(a) would not be satisfied, and
any such breach is not curable, or, if curable, is not cured within 30 days
after written notice of such breach is given to Pride by Marine; provided,
however, that the right to terminate this Agreement pursuant to Section 9.3(a)
shall not be available to Marine if it, at such time, is in breach of any
representation, warranty, covenant or agreement set forth in this Agreement such
that the condition set forth in Section 8.3(a) shall not be satisfied;
(b) the board of directors of Pride shall have withdrawn or
materially modified, in a manner adverse to Marine, its approval or
recommendation of this Agreement or the Pride Merger or recommended a Pride
Acquisition Proposal, or resolved to do so; or
(c) prior to the Cutoff Date, (i) the board of directors of
Marine has received a Marine Superior Proposal, (ii) in light of such Marine
Superior Proposal the board of directors of Marine shall have determined in good
faith, (A) after consultation with its outside legal advisors, that proceeding
with the Marine Merger would be inconsistent with its fiduciary obligations and
(B) that there is a substantial likelihood that the adoption by Marine's
shareholders of this Agreement will not be obtained by reason of the existence
of such Marine Superior Proposal, (iii) Marine has complied in all material
respects with Section 7.3, (iv) Marine has previously paid the fee due under
Section 9.5(a)(i), (v) the board of directors of Marine concurrently approves,
and Marine concurrently enters into, a binding definitive written agreement
providing for the implementation of such Marine Superior Proposal and (vi) Pride
is not at such time entitled to terminate this Agreement pursuant to Section
9.4(a); provided, however, that the Company may not effect such termination
pursuant to this Section 9.3(c) unless and until (x) Pride receives at least ten
business days' prior written notice from Marine of its intention to effect such
termination pursuant to this Section 9.3(c); and (y) during such ten business
day period, Marine shall, and shall cause its respective financial and legal
advisors to, consider any adjustment in the terms and conditions of this
Agreement that Pride may propose.
Section 9.4 Termination by Pride. This Agreement may be
terminated at any time prior to the Marine Merger Effective Time by action of
the board of directors of Pride after consultation with its outside legal
advisors, if:
(a) there has been a breach by Marine of any representation,
warranty, covenant or agreement set forth in this Agreement or if any
representation or warranty of Marine shall have become untrue, in either case
such that the conditions set forth in Section 8.3(a) would not be satisfied, and
such breach is not curable, or, if curable, is not cured within 30 days after
written notice of such breach is given by Pride to Marine; provided, however,
that the right to terminate this Agreement pursuant to Section 9.4(a) shall not
be available to Pride if it, at such time, is in breach
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of any representation, warranty, covenant or agreement set forth in this
Agreement such that the conditions set forth in Section 8.2(a) shall not be
satisfied; or
(b) the board of directors of Marine shall have withdrawn or
materially modified, in a manner adverse to Pride, its approval or
recommendation of this Agreement or the Marine Merger or recommended a Marine
Acquisition Proposal, or resolved to do so; or
(c) prior to the Cutoff Date, (i) the board of directors of
Pride has received a Pride Superior Proposal, (ii) in light of such Pride
Superior Proposal the board of directors of Pride shall have determined in good
faith, (A) after consultation with its outside legal advisors, that proceeding
with the Pride Merger would be inconsistent with its fiduciary obligations and
(B) that there is a substantial likelihood that the adoption by Pride's
shareholders of this Agreement will not be obtained by reason of the existence
of such Pride Superior Proposal, (iii) Pride has complied in all material
respects with Section 7.4, (iv) Pride has previously paid the fee due under
Section 9.5(b)(i), (v) the board of directors of Pride concurrently approves,
and Pride concurrently enters into, a binding definitive written agreement
providing for the implementation of such Pride Superior Proposal and (vi) Marine
is not at such time entitled to terminate this Agreement pursuant to Section
9.3(a); provided, however, that Pride may not effect such termination pursuant
to this Section 9.4(c) unless and until (x) Marine receives at least ten
business days' prior written notice from Pride of its intention to effect such
termination pursuant to this Section 9.4(c); and (y) during such ten business
day period, Pride shall, and shall cause its respective financial and legal
advisors to, consider any adjustment in the terms and conditions of this
Agreement that Marine may propose.
Section 9.5 Effect of Termination.
(a) (i) If this Agreement is terminated:
(A) by Marine or Pride pursuant to Section
9.2(b) [failure to obtain Marine shareholder approval] after the
public announcement of a Marine Acquisition Proposal, whether or
not the Marine Acquisition Proposal is still pending or has been
consummated; or
(B) by Pride pursuant to Section 9.4(b)
[withdrawal of Marine board recommendation to shareholders]; or
(C) by Marine pursuant to Section 9.3(c)
[fiduciary out];
then Marine shall pay Pride a fee of $50.0 million at the time
of such termination in cash by wire transfer to an account
designated by Pride.
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(ii) If this Agreement is terminated by Marine pursuant
to Section 9.3(c) and in accordance with the terms thereof, no fee
additional to the fee specified in Section 9.3(c) shall be payable by
Marine to Pride.
(b) (i) If this Agreement is terminated:
(A) by Pride or Marine pursuant to Section
9.2(c) [failure to obtain Pride shareholder approval] after the
public announcement of a Pride Acquisition Proposal, whether or
not the Pride Acquisition Proposal is still pending or has been
consummated; or
(B) by Marine pursuant to Section 9.3(b)
[withdrawal of Pride board recommendation to shareholders]; or
(C) by Pride pursuant to Section 9.4(c)
[fiduciary out];
then Pride shall pay Marine a fee of $50.0 million at the time
of such termination in cash by wire transfer to an account
designated by Marine.
(ii) If this Agreement is terminated by Pride pursuant
to Section 9.4(c) and in accordance with the terms thereof, no fee
additional to the fee specified in Section 9.4(c) shall be payable by
Pride to Marine.
(c) If this Agreement is terminated by Marine or Pride pursuant
to Section 9.2(b) other than in circumstances covered by Section 9.5(a), then
Marine shall pay to Pride a fee of $5.0 million to reimburse Pride for its costs
and expenses incurred in connection with this transaction. If this Agreement is
terminated by Pride or Marine pursuant to Section 9.2(c), other than in
circumstances covered by Section 9.5(b), then Pride shall pay to Marine a fee of
$5.0 million to reimburse Marine for its costs and expenses incurred in
connection with this transaction.
(d) In the event of termination of this Agreement and the
abandonment of the Merger pursuant to this Article 9, all obligations of the
parties hereto shall terminate, except the obligations of the parties pursuant
to this Section 9.5, and Section 7.14 and except for the provisions of Sections
10.3, 10.4, 10.6, 10.8, 10.9, 10.11, 10.12 and 10.13, provided that nothing
herein shall relieve any party from any liability for any willful and material
breach by such party of any of its representations, warranties, covenants or
agreements set forth in this Agreement and all rights and remedies of such
nonbreaching party under this Agreement in the case of such a willful and
material breach, at law or in equity, shall be preserved.
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Section 9.6 Extension; Waiver. At any time prior to the Marine
Merger Effective Time, each party may, to the extent legally allowed, (a) extend
the time for the performance of any of the obligations or other acts of the
other parties hereto, (b) waive any inaccuracies in the representations and
warranties made to such party contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the agreements or
conditions for the benefit of such party contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such party.
ARTICLE 10
GENERAL PROVISIONS
Section 10.1 Nonsurvival of Representations, Warranties and
Agreements. None of the representations, warranties and agreements in this
Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Pride Merger; provided, however, that the agreements contained in
Article 4 and in Sections 3.3, 3.4, 7.13, 7.14, 7.15, 7.16, 7.17, 7.18 and this
Article 10 and the agreements delivered pursuant to this Agreement shall survive
the Pride Merger. The Confidentiality Agreement shall survive any termination of
this Agreement, and the provisions of such Confidentiality Agreement shall apply
to all information and material delivered by any party hereunder.
Section 10.2 Notices. Except as otherwise provided herein, any
notice required to be given hereunder shall be sufficient if in writing, and
sent by facsimile transmission or by courier service (with proof of service),
hand delivery or certified or registered mail (return receipt requested and
first-class postage prepaid), addressed as follows:
(a) if to Marine or the Company:
Marine Drilling Companies, Inc.
One Xxxxx Xxxxx Xxxxxx Xxxxxxxxx,
Xxxxx 000
Xxxxx Xxxx, Xxxxx 00000
Attention: Xxx Xxxx
Facsimile: (000) 000-0000
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with a copy to:
Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
(b) if to Pride or the Company:
Pride International, Inc.
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxx Xxxxx L.L.P.
Xxx Xxxxx Xxxxx
000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: L. Xxxxxxx Xxxxxx
Facsimile: (000) 000-0000
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed.
Section 10.3 Assignment; Binding Effect; Benefit. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other parties. Subject to the preceding
sentence, this Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns. Notwithstanding
anything contained in this Agreement to the contrary, except for the provisions
of Article 4 and Section 7.15 and except as provided in any agreements delivered
pursuant hereto (collectively, the "Third-Party Provisions"), nothing in this
Agreement, expressed or implied, is intended to confer on any person other than
the parties hereto or their respective heirs, successors, executors,
administrators and assigns any rights, remedies, obligations or liabilities
under or by reason of this Agreement. The Third-Party Provisions may be enforced
by the beneficiaries thereof.
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Section 10.4 Entire Agreement. This Agreement, the exhibits to
this Agreement, the Marine Disclosure Letter, the Pride Disclosure Letter and
any documents delivered by the parties in connection herewith constitute the
entire agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings among the parties with respect
thereto, except that the Confidentiality Agreement shall continue in effect. No
addition to or modification of any provision of this Agreement shall be binding
upon any party hereto unless made in writing and signed by all parties hereto.
Section 10.5 Amendments. This Agreement may be amended by the
parties hereto, by action taken or authorized by their boards of directors, at
any time before or after approval of matters presented in connection with the
Mergers by the shareholders of Marine or Pride but after any such shareholder
approval, no amendment shall be made which by law requires the further approval
of shareholders without obtaining such further approval. This Agreement may not
be amended except by an instrument in writing signed on behalf of each of the
parties hereto.
Section 10.6 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Texas without regard
to its rules of conflict of laws.
Section 10.7 Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a number
of copies hereof each signed by less than all, but together signed by all of the
parties hereto.
Section 10.8 Headings. Headings of the Articles and Sections of
this Agreement are for the convenience of the parties only and shall be given no
substantive or interpretative effect whatsoever.
Section 10.9 Interpretation. In this Agreement:
(a) Unless the context otherwise requires, words describing the
singular number shall include the plural and vice versa, words denoting any
gender shall include all genders, and words denoting natural persons shall
include corporations and partnerships and vice versa.
(b) The phrase "to the knowledge of" and similar phrases
relating to knowledge of Marine or Pride, as the case may be, shall mean the
actual knowledge of its executive officers and directors.
(c) "Material Adverse Effect" with respect to Marine or Pride
shall mean a material adverse effect on or change in (a) the business, assets,
condition (financial or otherwise) or
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operations of a party (including the Pride Merger Surviving Entity when used
with respect to Pride) and its Subsidiaries on a consolidated basis, except for
such changes or effects in general economic, capital market, regulatory or
political conditions or changes that affect generally the marine drilling
services industry or changes arising out of the announcement of this Agreement,
or (b) the ability of the party to consummate the transactions contemplated by
this Agreement or fulfill the conditions to closing. "Company Material Adverse
Effect," "Marine Material Adverse Effect" and "Pride Material Adverse Effect"
mean a Material Adverse Effect with respect to the Company, Marine and Pride,
respectively.
(d) The term "Subsidiary," when used with respect to any party,
means any corporation or other organization (including a limited liability
company), whether incorporated or unincorporated, domestic or foreign, of which
such party directly or indirectly owns or controls (i) at least a majority of
the securities or other interests having by their terms ordinary voting power to
elect a majority of the board of directors or others performing similar
functions with respect to such corporation or other organization or any
organization of which such party is a general partner or (ii) any form of equity
interest or an interest of any other character that is convertible into an
equity interest in such corporation or organization and such party has working
control over the management of such corporation or organization.
Section 10.10 Waivers. Except as provided in this Agreement, no
action taken pursuant to this Agreement, including, without limitation, any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representations,
warranties, covenants or agreements contained in this Agreement. The waiver by
any party hereto of a breach of any provision hereunder shall not operate or be
construed as a waiver of any prior or subsequent breach of the same or any other
provision hereunder.
Section 10.11 Incorporation of Exhibits. The Marine Disclosure
Letter, the Pride Disclosure Letter and all exhibits attached hereto and
referred to herein are hereby incorporated herein and made a part hereof for all
purposes as if fully set forth herein.
Section 10.12 Severability. Any term or provision of this
Agreement which is invalid or unenforceable in any jurisdiction shall, as to
that jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
Section 10.13 Enforcement of Agreement. (a) The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with its specific
terms or was otherwise breached. It is accordingly agreed that the
75
85
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which they are entitled at law or in
equity.
(b) Each of the parties hereto (i) consents to submit itself to
the personal jurisdiction of any Texas state court sitting in Xxxxxx County,
Texas or any Federal court located in the Southern District of Texas, Houston,
Division in the event any dispute arises out of this Agreement or any of the
transactions contemplated herein, (ii) agrees that it will not attempt to deny
or defeat such personal jurisdiction by motion or other request for leave from
any such court, and (iii) agrees that it will not bring any action relating to
this Agreement or any of the transactions contemplated herein in any court other
than any Texas state court or any Federal court sitting in the Southern District
of Texas, Houston Division, and (iv) waives any right to trial by jury with
respect to any action related to or arising out of this Agreement or any of the
transactions contemplated herein.
[Signature page follows]
76
86
MARINE DRILLING COMPANIES, INC. PRIDE INTERNATIONAL, INC.
By: /s/ XXX XXXX By: /s/ XXXX X. XXXXX
------------------------------------- -------------------------------------
Xxx Xxxx Xxxx X. Xxxxx
President and Chief Executive Officer President and Chief Executive Officer
PM MERGER, INC.
By: /s/ XXXX X. XXXXX
-------------------------------------
XXXX X. XXXXX
-------------------------------------
President and Chief Executive Officer
AM MERGER, INC.
By: /s/ XXXX X. XXXXX
-------------------------------------
XXXX X. XXXXX
-------------------------------------
President and Chief Executive Officer
77
87
EXHIBIT 3.3
DIRECTORS OF THE COMPANY
Marine nominees: Pride nominees:
--------------- --------------
Xxxxxx X. Xxxxxxxxx, Chairman Xxxx X. Xxxxx
Xxxxx X. X. Xxxxx Xxxxx X. Xxxxxxx M.
J. C. Xxxxxx Xxxxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxx Xxxxx X. XxXxxxx
88
EXHIBIT 3.4
OFFICERS OF THE COMPANY
Name: Title:
---- -----
Xxxx X. Xxxxx President and Chief Executive Officer
Xxxxx X. Xxxxx Senior Vice President and
Chief Operating Officer
Xxxx XxXxxx Chief Financial Officer
89
EXHIBIT 7.13(a)(1)
Form of Affiliate Letter
[Marine Drilling Companies, Inc.]
[Date]
Marine Drilling Companies, Inc.
One Xxxxx Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxx Xxxx, Xxxxx 00000
Pride International, Inc.
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
PM Merger, Inc.
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may be deemed
to be an "affiliate" of Marine Drilling Companies, Inc., a Texas corporation
("Marine"), as the term "affiliate" is defined for purposes of paragraphs (c)
and (d) of Rule 145 of the rules and regulations (the "Rules and Regulations")
of the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Securities Act"). Pursuant to the terms
of the Agreement and Plan of Merger dated as of May 23, 2001 (the "Agreement"),
among Pride International, Inc., a Louisiana corporation ("Pride"), Marine, PM
Merger, Inc., a Delaware corporation and wholly-owned subsidiary of Pride (the
"Company"), and AM Merger, Inc., a Delaware corporation and wholly-owned
subsidiary of Pride ("Merger Sub"), Marine will be merged with and into Merger
Sub (the "Marine Merger") and immediately thereafter Pride will be merged with
and into the Company (the "Pride Merger" and together with the Marine Merger,
the "Mergers")
As a result of the Marine Merger, I may receive shares of common stock,
par value $.01 per share, of Pride ("Pride Common Stock") in exchange for shares
owned by me of (i) common stock, par value $.01 per share, of Marine, or (ii)
upon the exercise of options for such shares.
As a result of the Pride Merger, I may receive shares of common stock,
par value $.01 per share, of the Company ("Company Common Stock") in exchange
for shares owned by me of (i) Pride Common Stock, or (ii) upon the exercise of
options for such shares.
90
1. I represent, warrant and covenant to Marine and the Company that as
of the date I receive any Pride Common Stock or Company Common Stock as a result
of the Mergers:
A. I shall not make any sale, transfer or other disposition of
Pride Common Stock or Company Common Stock in violation of the
Securities Act or the Rules and Regulations.
B. I have carefully read this letter and the Agreement and
discussed the requirements of such documents and other applicable
limitations upon my ability to sell, transfer or otherwise dispose of
Pride Common Stock or Company Common Stock to the extent I felt
necessary, with my counsel.
C. I have been advised that the issuance of Pride Common Stock to
me pursuant to the Marine Merger will be registered with the Commission
under the Securities Act on a Registration Statement on Form S-4.
However, I have also been advised that, at the time the Mergers are
submitted for a vote of the stockholders of Marine, I may be deemed to
be an affiliate of Marine, I may not sell, transfer or otherwise dispose
of Pride Common Stock or Company Common Stock issued to me in the
Mergers unless (i) such sale, transfer or other disposition has been
registered under the Securities Act, (ii) such sale, transfer or other
disposition is made in conformity with Rule 145 (as such rule may be
hereafter from time to time amended) promulgated by the Commission under
the Securities Act, or (iii) in the opinion of counsel reasonably
acceptable to Company or Pride, or as described in a "no action" or
interpretive letter obtained by me from the staff of the Commission,
such sale, transfer or other disposition is otherwise exempt from
registration under the Securities Act.
D. I understand that neither Pride nor the Company is under any
obligation to register the sale, transfer or other disposition of Pride
Common Stock or Company Common Stock by me or on my behalf under the
Securities Act or to take any other action necessary in order to make
compliance with an exemption from such registration available.
E. I also understand that stop transfer instructions will be
given to Pride's and the Company's transfer agents with respect to Pride
Common Stock and Company Common Stock, respectively, and that there will
be placed on the certificates for Pride Common Stock and Company Common
Stock issued to me, or any substitutions therefor, a legend stating in
substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES
ACT OF 1933 APPLIES AND MAY ONLY BE SOLD, PLEDGED OR OTHERWISE
TRANSFERRED IN COMPLIANCE WITH THE REQUIREMENTS OF RULE 145 OR
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR IN ACCORDANCE
WITH AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OF 1933."
2
91
F. I also understand that unless the transfer by me of my Pride
Common Stock or Company Common Stock has been registered under the
Securities Act or is a sale made in conformity with the provisions of
Rule 145, each of Pride and the Company reserves the right to put the
following legend on the certificates issued to my transferee:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND WERE ACQUIRED
FROM A PERSON WHO RECEIVED SUCH SHARES IN A TRANSACTION TO WHICH
RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933 APPLIES.
THE SHARES HAVE BEEN ACQUIRED BY THE HOLDER NOT WITH A VIEW TO,
OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION THEREOF WITHIN
THE MEANING OF THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR IN ACCORDANCE WITH AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933."
G. I also understand and agree that the representations,
warranties, covenants and agreements I have made herein are for the
benefit of Marine, Pride and the Company and will be relied upon by such
entities and their respective counsel and accountants.
2. By acceptance of this letter by each of Pride and the Company, each
of them hereby agrees with me as follows:
A. For so long as and to the extent necessary to permit me to
sell Pride Common Stock or Company Common Stock pursuant to Rule 145
and, to the extent applicable, Rule 144 under the Securities Act, Pride
and Company shall (a) use their reasonable efforts to (i) file, on a
timely basis, all reports and data required to be filed with the
Commission by it pursuant to Section 13 of the Securities Exchange Act
of 1934, as amended, and (ii) furnish to me upon request a written
statement as to whether each of Pride and the Company has complied with
such reporting requirements during the 12 months preceding any proposed
sale (or for such shorter period that each of Pride and the Company has
been required to file such reports) of Pride Common Stock or Company
Common Stock by me under Rule 145, and (b) otherwise use its reasonable
efforts to permit such sales pursuant to Rule 145 and Rule 144.
B. It is understood and agreed that the legends set forth in
paragraphs E and F above will be removed by delivery of substitute
certificates without such legend if such legend is not required for
purposes of the Securities Act. It is understood and agreed that such
legends and the stop orders referred to above will be removed if (i) one
year shall have elapsed from the date I acquire Pride Common Stock or
Company Common Stock received
3
92
in the Marine Merger and the Pride Merger, respectively, and the
provisions of Rule 145(d)(2) are then available to me, (ii) two years
shall have elapsed from the date I acquire the Pride Common Stock or
Company Common Stock received in the Marine Merger and Pride Merger,
respectively, and the provisions of Rule 145(d)(3) are then available to
me, or (iii) each of Pride and the Company has received either an
opinion of counsel, which opinion and counsel shall be reasonably
satisfactory to each of Pride and the Company, or a "no action" letter
obtained by me from the staff of the Commission, to the effect that the
restrictions imposed by Rule 145 under the Act no longer apply to me.
Execution of this letter should not be considered an admission on my
part that I am an "affiliate" of Marine as described in the first paragraph of
this letter or as a waiver of any rights I may have to object to any claim that
I am an affiliate on or after the date of this letter.
Very truly yours,
-----------------------------------
[Insert Name of Affiliate]
Accepted this _____ day of
____________________, 2001___ by
PM MERGER, INC. PRIDE INTERNATIONAL, INC.
By: By:
-------------------------------- ------------------------------
Name: Name:
Title: Title:
MARINE DRILLING COMPANIES, INC.
By:
--------------------------------
Name:
Title:
4
93
EXHIBIT 7.13(b)(1)
LETTER RELATING TO POOLING
(MARINE DRILLING COMPANIES, INC.)
[Date]
Marine Drilling Companies, Inc.
One Xxxxx Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxx Xxxx, Xxxxx 00000
Pride International, Inc.
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Ladies and Gentlemen:
Pursuant to the terms of the Agreement and Plan of Merger dated as of
May 23, 2001 (the "Agreement"), among Pride International, Inc., a Louisiana
corporation ("Pride"), Marine Drilling Companies, Inc., a Texas corporation
("Marine"), PM Merger, Inc., a Delaware corporation and wholly-owned subsidiary
of Pride (the "Company"), and AM Merger, Inc., a Delaware corporation and
wholly-owned subsidiary of Pride ("Merger Sub"), Marine will be merged with and
into Merger Sub (the "Marine Merger") and immediately thereafter Pride will be
merged with and into the Company (the "Pride Merger" and together with the
Marine Merger, the "Merger").
I represent, warrant and covenant with and to Marine and the Company
that:
1. I understand that the Merger is intended to be accounted for using
the "pooling-of- interests" method and that such treatment for financial
accounting purposes is dependent upon the accuracy of certain of the
representations and warranties, and my compliance with certain of the covenants
and agreements, set forth herein. Accordingly, I will not sell, transfer or
otherwise dispose of my interests in, or acquire or sell any options or other
securities relating to securities of Marine, Pride or the Company that would be
intended to reduce my risk relative to, any shares of common stock of either
Marine, Pride or the Company beneficially owned by me during the period
commencing on the 30th day prior to the effectiveness of the Marine Merger and
ending at such time as the Company publicly releases a report (the "Combined
Financial Results Report") covering at least 30 days of combined operations of
Marine, Pride and the Company after the Merger. The Company shall notify the
undersigned of the publication of such results.
2. I also understand that stop transfer instructions will be given to
the transfer agents of Marine, Pride and the Company in order to prevent any
breach of the covenants and agreements made by me in paragraph 1, although such
stop transfer instructions will be promptly rescinded upon the publication of
the Combined Financial Results Report.
94
Letter Relating to Pooling
Marine Drilling Companies, Inc.
Pride International, Inc.
3. I also understand and agree that this letter agreement shall apply to
all shares of the capital stock of Marine, Pride and the Company that are deemed
to be beneficially owned by me pursuant to applicable federal securities laws.
Very truly yours,
___________________________________
Name:
ACCEPTED THIS THE ____ DAY OF
________________, 2001 BY
MARINE DRILLING COMPANIES, INC.
By: ______________________________________
Name:
Title:
PRIDE INTERNATIONAL, INC.
By: ______________________________________
Name:
Title:
95
EXHIBIT 7.13(b)(2)
LETTER RELATING TO POOLING
(PRIDE INTERNATIONAL, INC.)
[Date]
Pride International, Inc.
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Marine Drilling Companies, Inc.
One Xxxxx Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxx Xxxx, Xxxxx 00000
Ladies and Gentlemen:
Pursuant to the terms of the Agreement and Plan of Merger dated as of
May 23, 2001 (the "Agreement"), among Marine Drilling Companies, Inc., a Texas
corporation ("Marine"), Pride International, Inc., a Louisiana corporation
("Pride"), PM Merger, Inc., a Delaware corporation and wholly-owned subsidiary
of Pride (the "Company"), and AM Merger, Inc., a Delaware corporation and
wholly-owned subsidiary of Pride ("Merger Sub"), Marine will be merged with and
into Merger Sub (the "Marine Merger") and immediately thereafter Pride will be
merged with and into the Company (the "Pride Merger" and together with the
Marine Merger, the "Merger").
I represent, warrant and covenant with and to Pride and the Company
that:
1. I understand that the Merger is intended to be accounted for using
the "pooling-of- interests" method and that such treatment for financial
accounting purposes is dependent upon the accuracy of certain of the
representations and warranties, and my compliance with certain of the covenants
and agreements, set forth herein. Accordingly, I will not sell, transfer or
otherwise dispose of my interests in, or acquire or sell any options or other
securities relating to securities of Pride or the Company that would be intended
to reduce my risk relative to, any shares of common stock of either Pride or the
Company beneficially owned by me during the period commencing on the 30th day
prior to the effectiveness of the Merger and ending at such time as the Company
publicly releases a report (the "Combined Financial Results Report") covering at
least 30 days of combined operations of Pride, Marine and the Company after the
Merger. The Company shall notify the undersigned of the publication of such
results.
2. I also understand that stop transfer instructions will be given to
the transfer agents of Pride and the Company in order to prevent any breach of
the covenants and agreements made by me in paragraph 1, although such stop
transfer instructions will be promptly rescinded upon the publication of the
Combined Financial Results Report.
96
Letter Relating to Pooling
Pride International, Inc.
Marine Drilling Companies, Inc.
Page 2
3. I also understand and agree that this letter agreement shall apply to
all shares of the capital stock of Pride and the Company that are deemed to be
beneficially owned by me pursuant to applicable federal securities laws.
Very truly yours,
__________________________________
Name:
ACCEPTED THIS THE ____ DAY OF
________________, 2001 BY
PRIDE INTERNATIONAL, INC.
By: __________________________________
Name:
Title:
MARINE DRILLING COMPANIES, INC.
By: __________________________________
Name:
Title:
97
EXHIBIT 8.2 TO THE MERGER AGREEMENT
Marine drilling companies, inc.
OFFICER'S CERTIFICATE
This Certificate is being provided by the undersigned officer of
Marine Drilling Companies, Inc., a Texas corporation ("Marine"), to Xxxxxx &
Xxxxxx, L.L.P. and Xxxxx Xxxxx L.L.P. (collectively, "Counsel"), in connection
with opinions to be delivered by Counsel regarding certain U.S. federal income
tax consequences of the merger (the "Marine Merger") of Marine with and into AM
Merger, Inc., a Delaware corporation ("New Marine") pursuant to the Agreement
and Plan of Merger (the "Merger Agreement") dated as of May 23, 2001 by and
among Pride International, Inc., a Louisiana corporation ("Old Pride"), Pride
International, Inc., a Delaware corporation ("New Pride"), Marine, and New
Marine. the undersigned recognizes that Counsel will rely on this Certificate in
delivering such opinions. The undersigned hereby certifies as follows:(1)
1. I am the [title] of Marine. I am familiar with the transactions
contemplated by, and the terms and provisions of, the Merger Agreement, have
personal knowledge of the matters covered by the following representations, and
am authorized to make the following representations on behalf of Marine.
2. The fair market value of the Old Pride stock received by each
Marine shareholder will be approximately equal to the fair market value of the
Marine stock surrendered in the Marine Merger.
3. Prior to and in connection with the Marine Merger, no outstanding
stock of Marine has been or will be (a) acquired by Marine or any person related
to Marine, or (b) the subject of any redemption or distribution by Marine which
would be treated as property received in the Marine Merger.
For purposes of this Certificate, a person will be treated as
related to Marine if there is overlapping stock ownership of at least 50%
between Marine and such person, as described in and subject to the rules of
section 304(c) of the Code.
4. New Marine will acquire at least 90 percent of the fair market
value of the net assets and at least 70 percent of the fair market value of the
gross assets held by marine immediately prior to the Marine Merger. For purposes
of this representation, amounts used to pay reorganization expenses and all
redemptions and distributions (except for regular, normal dividends) made by
Marine immediately preceding the transfer will be included as assets of Marine
held immediately prior to the Marine Merger.
--------
(1) Terms used but not defined herein shall have the meaning assigned to them in
the Merger Agreement. Section references not otherwise identified are to
sections of the Internal Revenue Code of 1986, as amended (the "Code").
-1-
98
5. The liabilities of Marine assumed by New Marine plus the
liabilities, if any, to which the transferred assets are subject were incurred
by Marine in the ordinary course of its business and are associated with the
assets transferred.
6. Marine and its shareholders will pay their respective expenses,
if any, incurred in connection with the Marine Merger.
7. There is no intercorporate indebtedness existing between Pride
and Marine or between New Marine and Marine.
8. Marine is not an investment company.
For purposes of this representation, an investment company is a
regulated investment company (as defined in the Code), a real estate investment
trust (as defined in the Code), or a corporation 50% or more of the value of
whose total assets are stock and securities and 80% or more of the value of
whose total assets are assets held for investment. For this purpose, (a) in
making the 50% and 80% determinations just described, stock and securities in
any subsidiary corporation shall be disregarded and the parent corporation shall
be deemed to own its ratable share of the subsidiary's assets, and a corporation
shall be considered a subsidiary if the parent owns 50% or more of the combined
voting power of all classes of stock entitled to vote, or 50% or more of the
total value shares of all classes of stock outstanding, and (b) in determining
total assets there shall be excluded cash and cash items (including
receivables), government securities, and any assets acquired for purposes of
ceasing to be an investment company.
9. Marine is not under the jurisdiction of a court in a title 11 or
similar case within the meaning of section 368(a)(3)(A) of the Code.
10. The fair market value of the assets of Marine transferred to New
Marine will equal or exceed the sum of the liabilities assumed by New Marine
plus the amount of liabilities, if any, to which the transferred assets are
subject.
11. None of the compensation received by any employees or
independent contractors of Marine and its Subsidiaries who are shareholders of
Marine will be separate consideration for, or allocable to, any of their shares
of Marine stock; none of the shares of Old Pride or New Pride stock received by
any such employees or independent contractors will be separate consideration
for, or allocable to, any employment or services agreement; and the compensation
paid to any such employees or independent contractors will be for services
actually rendered and will be commensurate with amounts paid to third parties
bargaining at arm's-length for similar services.
MARINE DRILLING COMPANIES, INC
Dated: _________________________________________
Name:
Title:
-2-
99
EXHIBIT 8.3 TO THE MERGER AGREEMENT
PRIDE INTERNATIONAL, INC.
OFFICER'S CERTIFICATE
This Certificate is being provided by the undersigned officer of
Pride International, Inc., a Louisiana corporation ("Old Pride"), to Xxxxxx &
Xxxxxx, L.L.P. and Xxxxx Xxxxx L.L.P. (collectively, "Counsel"), in connection
with opinions to be delivered by Counsel regarding certain U.S. federal income
tax consequences of the merger (the "Marine Merger") of Marine Drilling
Companies, Inc., a Texas corporation ("Marine"), with and into AM Merger, Inc.,
a Delaware corporation ("New Marine") and the merger (the "Pride Merger" and,
together with the Marine Merger, the "Mergers") of Old Pride with and into Pride
International, Inc., a Delaware corporation ("New Pride" and, collectively with
Old Pride, "Pride") pursuant to the Agreement and Plan of Merger (the "Merger
Agreement") dated as of May 23, 2001 by and among Old Pride, New Pride, Marine,
and New Marine. The undersigned recognizes that Counsel will rely on this
Certificate in delivering such opinions. The undersigned hereby certifies as
follows:(1)
OFFICER'S POSITION
1. I am the [title] of Pride. I am familiar with the transactions
contemplated by, and the terms and provisions of, the Merger Agreement, have
personal knowledge of the matters covered by the following representations, and
am authorized to make the following representations on behalf of Old Pride, New
Pride, and New Marine.
2. I understand that the Marine Merger will take place before the
Pride Merger and have taken this into account, where relevant, in the
representations which follow.
PRIDE MERGER
3. The fair market value of the New Pride stock received by each Old
Pride shareholder will be approximately equal to the fair market value of the
Old Pride stock surrendered in the Pride Merger.
4. No member of the Pride group has acquired (or has any plan or
intention to acquire), directly or through any transaction, agreement or
arrangement with any other person, any Pride stock as part of a plan which
includes the Mergers, other than pursuant to the Merger Agreement.
--------
(1) Terms used but not defined herein shall have the meaning assigned to them in
the Merger Agreement. Section references not otherwise identified are to
sections of the Internal Revenue Code of 1986, as amended (the "Code").
References to "regs." are to Treasury regulations promulgated under the Code.
Headings are for convenience only and do not limit the scope of any
representation to matters relating to the heading under which the representation
appears.
-1-
100
For purposes of this Certificate, the term "Pride group" means Pride
and one or more chains of corporations connected through stock ownership with
Pride if Pride directly owns stock meeting the requirements of the next sentence
in at least one of the other corporations and if stock meeting the requirements
of the next sentence in each of the corporations (except Pride) is owned
directly by one or more of the other corporations. Stock meets the requirements
of this sentence if the stock so owned possesses at least 80% of the total
voting power of the stock of the corporation and has a value equal to at least
80% of the total value of the stock of the corporation, except that the term
"stock" does not include preferred stock which is described in section
1504(a)(4) of the Code. In addition, for purposes of this Certificate, a person
other than a member of the Pride group will be treated as related to Pride if
there is overlapping stock ownership of at least 50% between Pride and such
person, as described in and subject to the rules of section 304(c) of the Code.
5. Immediately following consummation of the Pride Merger, the
shareholders of Old Pride will own all of the outstanding New Pride stock and
will own such stock solely by reason of their ownership of Old Pride stock
immediately prior to the Pride Merger.
6. New Pride has no plan or intention to issue additional shares of
its stock following the Pride Merger, except that New Pride intends to continue
the Direct Stock Purchase Plan which is described in footnote 12 of Pride's Form
10-K for 2000.
7. Immediately following consummation of the Pride Merger, New Pride
will possess the same assets and liabilities, except for assets used to pay
expenses incurred in connection with the Pride Merger, as those possessed by Old
Pride immediately prior to the Pride Merger. Assets used to pay expenses and all
redemptions and distributions (except for regular, normal dividends) made by Old
Pride immediately preceding the Pride Merger will, in the aggregate, constitute
less than one percent of the net assets of Old Pride.
8. At the time of the Pride Merger, Old Pride will not have
outstanding any warrants, options, convertible securities, or any other type of
right pursuant to which any person could acquire stock in Old Pride, except as
described or referred to in section 6.3 of the Merger Agreement.
9. New Pride has no plan or intention to reacquire any of its stock
issued in the Pride Merger.
10. New Pride has no plan or intention to sell or otherwise dispose
of any of the assets of Old Pride acquired in the Pride Merger, except for
dispositions made in the ordinary course of business.
11. The liabilities of Old Pride assumed by New Pride plus the
liabilities, if any, to which the transferred assets are subject were incurred
by Old Pride in the ordinary course of its business and are associated with the
assets transferred.
12. Following the Pride Merger, New Pride will continue the historic
business of Old Pride or use a significant portion of Old Pride's historic
business assets in a business.
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101
13. The shareholders will pay their respective expenses, if any,
incurred in connection with the Pride Merger.
14. There is no intercorporate indebtedness existing between Old
Pride and New Pride.
15. Pride is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of section 368(a)(3)(A) of the Code.
16. The fair market value of the assets of Old Pride transferred to
New Pride will equal or exceed the sum of the liabilities assumed by New Pride
plus the amount of liabilities, if any, to which the transferred assets are
subject.
Marine Merger
17. The fair market value of the Old Pride stock received by each
Marine shareholder will be approximately equal to the fair market value of the
Marine stock surrendered in the Marine Merger.
18. No member of the Pride group has acquired (or has any plan or
intention to acquire), directly or through any transaction, agreement or
arrangement with any other person, any Marine stock as part of a plan which
includes the Mergers, other than pursuant to the Merger Agreement.
19. New Marine will acquire at least 90 percent of the fair market
value of the net assets and at least 70 percent of the fair market value of the
gross assets held by Marine immediately prior to the Marine Merger. For purposes
of this representation, amounts used to pay reorganization expenses and all
redemptions and distributions (except for regular, normal dividends) made by
Marine immediately preceding the Marine Merger will be included as assets of
Marine held immediately prior to the Marine Merger.
20. Prior to the Marine Merger, Pride will be in control of New
Marine.
For purposes of this Certificate, control means the direct ownership
of stock possessing at least 80% of the total combined voting power of all
classes of stock entitled to vote and at least 80% of the total number of shares
of each other class of stock of the corporation.
21. Following the Marine Merger, New Marine will not issue
additional shares of its stock that would result in Pride losing control of New
Marine.
22. Pride has no plan or intention to reacquire any of its stock
issued in the Marine Merger, except as contemplated by the Pride Merger.
23. Pride has no plan or intention to liquidate New Marine; to merge
New Marine with and into another corporation; to sell or otherwise dispose of
the stock of New Marine; or to cause New Marine to sell or otherwise dispose of
any of the assets of Marine acquired in the Marine Merger, except for
dispositions made in the ordinary course of business,
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102
transfers or successive transfers made to one or more corporations of which the
transferor corporation is in control, or transfers to partnerships which are
permitted by reg. 1.368-2(f).
24. Following the Marine Merger, New Marine will continue the
historic business of Marine or use a significant portion of Marine's historic
business assets in a business.
25. Pride and New Marine will pay their respective expenses, if any,
incurred in connection with the Marine Merger.
26. There is no intercorporate indebtedness existing between Pride
and Marine or between New Marine and Marine.
27. Neither Pride nor New Marine is an investment company.
For purposes of this Certificate, an investment company is a
regulated investment company (as defined in the Code), a real estate investment
trust (as defined in the Code), or a corporation 50% or more of the value of
whose total assets are stock and securities and 80% or more of the value of
whose total assets are assets held for investment. For this purpose, (a) in
making the 50% and 80% determinations just described, stock and securities in
any subsidiary corporation shall be disregarded and the parent corporation shall
be deemed to own its ratable share of the subsidiary's assets, and a corporation
shall be considered a subsidiary if the parent owns 50% or more of the combined
voting power of all classes of stock entitled to vote, or 50% or more of the
total value shares of all classes of stock outstanding, and (b) in determining
total assets there shall be excluded cash and cash items (including
receivables), government securities, and any assets acquired for purposes of
ceasing to be an investment company.
28. New Marine is not under the jurisdiction of a court in a Title
11 or similar case within the meaning of section 368(a)(3)(A) of the Code.
29. No stock of New Marine will be issued in the Marine Merger.
Other Matters
30. The Merger Agreement and the documents referred to therein
represent the full and complete agreement among Pride and Marine regarding the
Mergers and related transactions and there are no other material written or oral
agreements regarding the Mergers.
31. Neither Pride nor any of its affiliates will knowingly take or
omit to take any action (whether before, on or after the date hereof) that would
cause the Mergers to fail to qualify as reorganizations within the meaning of
section 368(a) of the Code.
32. Pride and New Marine will characterize the Mergers as
reorganizations within the meaning of section 368(a) of the Code in all tax
returns and other filings.
The representations in this Certificate are made as of the date
hereof and as of each of the Effective Times. This Certificate is furnished to
you solely for use in connection with the Mergers and is not to be relied upon
by any other person, quoted in whole or in part, or otherwise referred to
(except in a list of closing documents) without our express written consent.
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103
PRIDE INTERNATIONAL, INC.
Dated: ____________________________________
Name:
Title:
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