EXHIBIT 4.26
GUARANTY AGREEMENT IN FAVOR OF THE UNITED STATES
This Guaranty Agreement (the "Guaranty Agreement") is dated this 9th day
of April, 1999 by Pride International, Inc. (the "Guarantor"), to the United
States of America, represented by the Secretary of Transportation, acting by and
through the Maritime Administrator (the "Secretary").
RECITALS:
A. WHEREAS, Petrodrill Four Limited and Petrodrill Five Limited, British
Virgin Islands international business companies (each a "Shipowner" and
collectively the "Shipowners") are indirectly owned in part by the Guarantor;
and
B. WHEREAS, the Shipowners, in connection with the financing of the cost
of the construction of the AMETHYST 4 and AMETHYST 5 (collectively, the
"Vessels"), on the date hereof, borrowed certain funds and created and
authorized the issuance of obligations designated "United States Government
Guaranteed Export Ship Financing Obligations, AMETHYST 4 Series" and "United
States Government Guaranteed Export Ship Financing Obligations, AMETHYST 5
Series" (the "Obligations"), consisting on the date hereof of $ 299,808,000
aggregate principal amount of the Obligations, bearing interest at the rate
specified therein and issued under trust indentures (the "Indentures") between
the Shipowners and FMB Trust Company, National Association, a national banking
association, (the "Indenture Trustee") as trustee, dated as of the date hereof,
said Obligations constituting the legal, valid and binding obligations of the
Shipowner; and
C. WHEREAS, each Shipowner, on the date hereof, accepted the Secretary's
Commitment to Guarantee Obligations (the "Commitment") pursuant to Title XI of
the Merchant Marine Act, 1936, as amended (the "Act"), whereby the Secretary
authorized a guarantee to be endorsed upon each of the Obligations (the
"Guarantees"); and
D. WHEREAS, each Shipowner has, in consideration of the issuance of the
Guarantees by the Secretary of the payment of the unpaid interest on, and the
unpaid balance of the principal of the Obligations issued by the Shipowners
pursuant to the terms and provisions of the Security Agreements dated the date
hereof, between the Shipowner and the Secretary (the "Security Agreements"),
granted a security interest in its Chartering Contract with Petroleo Brasileiro
S.A. ("Petrobras") to the Secretary.
E. WHEREAS, the AMETHYST 4 and AMETHYST 5 are expected to be delivered to
Petrobras on approximately June 9, 2000, and August 9, 2000, respectively,
approximately 392 and 434 days beyond the delivery date under their respective
Chartering Contracts (collectively "the Contracts").
F. WHEREAS, Petrobras has a contractual right to impose penalties if the
Vessels are not timely delivered (the "Late Arrival Penalties").
G. WHEREAS, under the expected delivery schedule, the maximum aggregate
Late Arrival Penalties would be approximately $31,550,000.
H. WHEREAS, Petrobras has informed the Shipowners that its policy has been
to negotiate with its contractors on the form and timing of any penalties to
reduce their impact and that in the past Petrobras has negotiated installment
plans or discounted the penalties from the end of the relevant Contract.
I. WHEREAS, Petrobras has confirmed that it has no reason to expect that
it will not apply the same policy to the Late Arrival Penalties under the
Contracts, subject to the approval of its Board of Directors.
J. WHEREAS, the Secretary is concerned that there may be ad valorem taxes
imposed by the Federative Republic of Brazil on the Vessels when they are
delivered to Petrobras ("Ad Valorem Taxes").
K. WHEREAS, the Secretary has required this Guaranty Agreement from the
Guarantor in conjunction with the consideration offered by or on behalf of the
Shipowners as a condition of the Secretary's decision to enter into the
Commitments to issue the Guarantees, and the Guarantor has agreed to enter into
this Guaranty Agreement for the purpose of guaranteeing the Shipowners' payment
of Late Arrival Penalties and Ad Valorem Taxes up to an aggregate amount of
$20,500,000.
NOW THEREFORE, in consideration of the premises, and of other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the Guarantor hereby agrees as follows:
1. DEFINITIONS. Unless otherwise specifically defined herein, the
capitalized terms used herein which are defined in Schedule X to the Security
Agreements, dated the date hereof and any reference therein to other instruments
shall have the respective meanings stated in Schedule X of the Security
Agreements or such other instruments.
2. GUARANTEE.
a) Whenever a Shipowner has been billed for any Late Arrival
Penalties or Ad Valorem Taxes (said Late Arrival Penalties or Ad Valorem Taxes,
collectively, the "Aggregate Amounts"), but is not permitted by the provisions
of the Title XI Reserve Fund and Financial Agreement (the "Financial Agreement")
to pay any or all of the Aggregate Amounts, the Guarantor hereby absolutely,
irrevocably and unconditionally promises to pay those portions of any Aggregate
Amounts which cannot be paid by the Shipowner by virtue of the provisions of the
Financial Agreement; PROVIDED, HOWEVER, that the maximum Aggregate Amount which
the Guarantor is obligated to pay hereunder for both Shipowners shall not exceed
Twenty Million Five Hundred Thousand Dollars ($20,500,000). The Guarantor shall
pay the Aggregate
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Amounts required hereunder, in immediately available funds, to the relevant
billing entity or its designee within the later of (i) ten (10) business days of
the Shipowner's receipt of each bill for Late Arrival Penalties and Ad Valorem
Taxes , (ii) if applicable, within ten (10) business days of a final ruling by
Petrobras on any appeal by the Shipowner to Petrobras against the imposition of
Late Arrival Penalties pursuant to Section 8.7 of the Chartering Contract, or
(iii) if the Shipowner's duty to pay such a bill has been continuously stayed by
a court of competent jurisdiction, within ten (10) business days of the issuance
of a final, unappealable order by a court of competent jurisdiction ordering the
Shipowner to pay such a bill. In the event the Guarantor fails to pay the
Aggregate Amounts in the manner and amounts required hereunder, the Secretary
shall have the right to compel the Guarantor to pay such Aggregate Amounts
directly to the Secretary for distribution, as the Secretary may decide, either
to relevant billing entity or to the Secretary to be retained and set off
against any indebtedness owed the Secretary by the Shipowner. The Shipowners
shall not be required to repay the Guarantor for any amounts paid hereunder
until permitted by the provisions of the Financial Agreements.
b) The Guarantor hereby consents and agrees that its obligations
under this Guaranty Agreement will not be discharged by any act or omission to
act of any kind by the Secretary or any other person or any other circumstances
whatsoever (including, but not limited to, any extension, rearrangement or
renewal with respect to any indebtedness or other obligation of the Shipowners
with or without notice to the Guarantor, any waiver of any right of the
Secretary under the terms of the Secretary's Note, the Security Agreement, the
Mortgage or this Guaranty Agreement, any release of security, any transfer or
assignment of rights or obligations accruing to the Secretary under the
Secretary's Note, the Security Agreement, the Mortgage or this Guaranty
Agreement, any corporate reorganization, dissolution, merger, acquisition of or
by or other alteration of the corporate existence or structure of the Shipowners
or the Guarantor, discharge of either Shipowner in bankruptcy, the invalidity,
illegality or unenforceability of the Secretary's Note, the Security Agreement,
the Mortgage or this Guaranty Agreement or the absence of any action to enforce
the obligations of either Shipowner) which might constitute a legal or equitable
discharge of the Guarantor; it being the intention of the Guarantor that this
Guaranty Agreement be absolute, continuing and unconditional and the guarantee
hereunder shall only be discharged by the payment in full of all sums so
guaranteed hereunder in an Aggregate Amount not to exceed Twenty Million Five
Hundred Thousand Dollars ($20,500,000).
c) The Guarantor hereby irrevocably and unconditionally waives: (i)
notice of any of the matters referred to in this Guaranty Agreement and any
action by the Secretary in reliance thereon; (ii) all notices which may be
required by statute, rule of law or otherwise to preserve any rights against the
Guarantor hereunder, including without limitations, any demand, protest, proof
of notice of non-payment of all sums payable under the Secretary's Note or to
Petrobras or any notice of any failure on the part of either Shipowner to
perform or comply with any covenant, term or obligations of any agreement to
which it is a party; (iii) any requirement for the enforcement, assertion or
exercise of any right, remedy, power or privilege under or with respect to this
Guaranty Agreement; (iv) any requirement of diligence; (v) any requirement that
the Shipowner be joined as a party to any proceedings for the enforcement of any
provision of this Guaranty Agreement or that the
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Secretary proceed against any other guarantor executing or any other guaranty
agreement; (vi) any and all defenses to payment hereunder, except the defense of
payment already made, and agree to confess without contesting liability
hereunder for any judgment entered hereon; (vii) presentment, demand, protest,
notice of protest and dishonor, notice of intent to accelerate and notice of
acceptance; or (viii) the right to require the Secretary to pursue any remedy in
the Secretary's power whatsoever.
d) The Guarantor hereby agrees that this Guaranty Agreement shall
continue to be effective or shall be reinstated, as the case may be, if at any
time payment of any sum hereby guaranteed is rescinded or must be otherwise
restored or returned by the Secretary or Petrobras, upon the insolvency,
bankruptcy or reorganization of the Shipowner, or otherwise, all as though such
payment had not been made. The Guarantor further agrees that if the maturity of
any obligations guaranteed herein be accelerated by bankruptcy or otherwise,
such maturity shall also be deemed accelerated for the purpose of this Guaranty
Agreement without demand or notice to the Guarantor.
e) Any amount payable hereunder shall not be subject to any
reduction by reason of any counterclaim, set-off, deduction, abatement or
otherwise.
f) The Guarantor shall pay all reasonable costs and expenses
(including, without limitation, attorneys' fees and expenses) incurred in
connection with the enforcement of the obligations of the Guarantor under this
Guaranty Agreement.
g) The Contracts may be amended, modified or endorsed without the
consent of the Guarantor.
h) The Secretary may enforce the Guarantor's obligations hereunder
without in any way first pursuing or exhausting any other rights or remedies
which the Secretary may have against the Shipowners or any other person, firm or
corporation or against any security the Secretary may hold.
3. SECRETARY'S RIGHTS. The Guarantor authorizes the Secretary, without
notice or demand and without affecting the Guarantor's liability hereunder, to
take and hold security from any entity (other than the Guarantor) to secure the
payment of this Guaranty Agreement and/or any of the obligations guaranteed
herein and exchange, enforce, waive and release any such security; and to apply
such security and direct the order or manner of sale thereof as the Secretary in
his discretion may determine; and to obtain a guarantee of any of the
obligations guaranteed herein from any one or more persons, corporations or
entities whomsoever (other than the Guarantor) and at any time or times to
enforce, waive, rearrange, modify, limit or release such other persons,
corporations or entities from their obligations under such guarantees.
4. PRIMARY LIABILITY. It is expressly agreed that the liability of the
Guarantor for the payment of the obligations guaranteed herein shall be primary
and not secondary. The liability of the Guarantor for payment of sums due
hereunder is joint and several with the liability of Maritima
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Petroleo e Engerharia Ltda. under its Payment Undertaking in favor of the
Secretary with respect to the Late Arrival Penalties and Ad Valorem Taxes;
PROVIDED that the maximum amount the Guarantor is obligated to pay hereunder
shall not exceed Twenty Million Five Hundred Thousand Dollars ($20,500,000).
5. REPRESENTATIONS AND WARRANTIES. The Guarantor represents and warrants
as follows:
a) The Guarantor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Louisiana and has full power
and authority (corporate, legal and other) to execute, deliver and carry out the
terms of this Guaranty Agreement;
b) This Guaranty Agreement has been duly authorized, executed and
delivered by the Guarantor and constitutes the legal, valid and binding
obligation of the Guarantor enforceable against the Guarantor in accordance with
its terms;
c) The execution, delivery and performance the Guarantor of this
Guaranty Agreement does not require the approval or consent of its shareholders
or of any governmental authority and does not contravene the Guarantor's
Certificate of Incorporation or any mortgage, indenture or other agreement
binding upon it, or any law, regulation, order, judgment or decree applicable to
the Guarantor; and
d) The Guarantor's guarantee pursuant to this Guaranty Agreement may
be expected to benefit, directly or indirectly, the Guarantor.
e) The Guarantor has fully adequate financial resources, funds, and
assets to satisfy its obligations under this Guaranty Agreement.
6. CONTINUING GUARANTEE. This Guaranty Agreement is a continuing guarantee
of payment and collectibility and shall:
a) Remain in full force and effect so long as either Shipowner may
be liable for the payment of Late Arrival Penalties and Ad Valorem Taxes and
shall terminate upon the Secretary's receipt of (i) written notice from
Petrobras to both Shipowners that any and all liabilities for Late Arrival
Penalties have been satisfied under the Contracts, and (ii) that evidence
satisfactory to the Secretary that no Ad Valorem Taxes are or will be due, but
if due, such taxes have been paid, provided, however, that this Guaranty shall
terminate at such time as the Guarantor or the Shipowners provide a Letter of
Credit in an amount equal to the amount hereunder guaranteed, which together
with any other agreements with the issuer relating to the Letter of Credit are
in form and substance satisfactory to the Secretary, and further provided that
the Shipowners may not collateralize this Letter of Credit or repay the issuer
with respect to any draws made under the Letter of Credit or incur any fees
unless such payments would be allowed as dividends under the Shipowners'
Financial Agreements
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b) Be binding upon the Guarantor, its successors and assigns such
taxes; and
c) Be executed and issued for the sole and exclusive benefit of the
United States, and no other party shall be permitted to claim any benefit,
direct or indirect, therefrom. This Guaranty Agreement is nonassignable, any
assignment thereof shall be null and void and have no legal effect whatsoever.
d) Inure to the benefit of, and be enforceable by the Secretary, his
successors and assigns.
7. DEFAULT. A default under the terms of this Guaranty Agreement shall be
deemed to occur if the Guarantor fails to make any payments guaranteed
hereunder.
8. NOTICES. All communications may be made or delivered in person or by
certified or registered mail, postage prepaid, addressed to the Guarantor or the
Secretary as provided below or to such other address as the Guarantor or the
Secretary may hereafter specify in a written notice to the other and all notices
or other communications shall be in writing so addressed and shall be effective
upon receipt by the addressee thereof:
Guarantor: Pride International Inc.
5847 San Felipe
Suite 3300
Houston, TX 77057
Attention: Chief Financial Officer
With a copy to: Sher & Blackwell
1850 M Street, NW
Suite 900
Washington, DC 20036
Attention: Jeffrey F. Lawrence/Anne E. Mickey
Secretary: SECRETARY OF TRANSPORTATION
c/o Maritime Administrator
Maritime Administration
U.S. Department of Transportation
400 Seventh Street, SW
Washington, DC 20590
Attention: Chief, Division of Ship Financing Contracts
9. AMENDMENTS AND SUPPLEMENTS. No agreement shall be effective to change
or modify, supplement, amend or discharge in whole or in part this Guaranty
Agreement unless such agreement is in writing, signed by the Guarantor and the
Secretary.
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10. GOVERNING LAW. This Guaranty Agreement shall be governed by the
federal law of the United States of America or in the absence of applicable
federal law by the laws of the District of Columbia.
11. CONFIDENTIALITY. Neither party shall, without the prior written
consent of the other, disclose to any third party (including Petrobras) the
terms and conditions of this Guaranty Agreement except as required by law or
governmental requirements, and then only with notice of such to the other party
12. COUNTERPARTS. This Guaranty Agreement may be executed in one or more
counterparts. All such counterparts shall be deemed to be originals and shall
together constitute but one and the same instrument.
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IN WITNESS WHEREOF, this Guaranty Agreement has been executed on the day
and year first above written.
PRIDE INTERNATIONAL, INC.
(Seal)
By: /s/ EARL W. MCNIEL
_____________________
Name: Earl W. McNiel
Title: Vice President
Attest:
/s/ ROBERT W. RANDALL
_________________________
Name: Robert W. Randall
Title: Secretary
ACKNOWLEDGED BY:
UNITED STATES OF AMERICA
SECRETARY OF TRANSPORTATION
By: MARITIME ADMINISTRATOR
(Seal)
By: /s/ JOEL C. RICHARD
_________________________________
Secretary
Maritime Administration
ATTEST:
/s/ LARRY MAIN
_________________________
Assistant Secretary
Maritime Administration
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