TAX SHARING AGREEMENT BETWEEN PRIDE INTERNATIONAL, INC. AND SEAHAWK DRILLING, INC

Exhibit 10.1

EXECUTION COPY

TAX SHARING AGREEMENT

BETWEEN

PRIDE INTERNATIONAL, INC.
AND
SEAHAWK DRILLING, INC.

TABLE OF CONTENTS

TAX SHARING AGREEMENT

          THIS TAX SHARING AGREEMENT (this “Agreement”) is entered into as of August 4, 2009, between Pride International, Inc., a Delaware corporation (“Pride”), and Seahawk Drilling, Inc., a Delaware corporation (“Seahawk”). Unless otherwise indicated, all “Section” references in this Agreement are to sections of this Agreement.

RECITALS

          WHEREAS, Seahawk is a wholly owned Subsidiary of Pride; and

          WHEREAS, the Board of Directors of Pride has determined that it would be appropriate and desirable for Pride to separate the Seahawk Group from the Pride Group, as contemplated by the Master Separation Agreement (the “Separation”); and

          WHEREAS, in furtherance thereof, the Board of Directors of Pride has determined that, in connection with the Separation, it would be appropriate and desirable for (i) Seahawk to contribute certain assets and liabilities to Deepwater USA, Inc. (“DeepCo”) and to distribute its entire interest in the stock of DeepCo to Pride in what is intended to qualify as a tax-free transaction described under Sections 368(a)(1)(D) and 355 of the Code (the “Internal Distribution”), and (ii) Pride to distribute its entire interest in the stock of Seahawk on a pro rata basis to holders of Pride Common Stock in what is intended to qualify as a tax-free transaction described under Section 355 of the Code (the “External Distribution”); and

          WHEREAS, the Board of Directors of Seahawk has also approved such transactions; and

          WHEREAS, the parties set forth in a Master Separation Agreement the principal arrangements between them regarding the separation of the Seahawk Group from the Pride Group; and

          WHEREAS, the parties desire to provide for and agree upon the allocation between the parties of Taxes and Tax Benefits arising prior to, as a result of, and subsequent to the External Distribution, and provide for and agree upon other matters relating to Taxes.

          NOW, THEREFORE, in consideration of the foregoing and the covenants and agreements set forth below, the parties hereto agree as follows:

           SECTION 1. Definition of Terms. For purposes of this Agreement (including the recitals hereof), the following terms have the following meanings:

     “Affiliate” means with respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such first Person.

          “Agreement” has the meaning set forth in the preamble hereof.

          “Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time, or any successor law.

          “Control” means, with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through ownership of securities or partnership, membership, limited liability company, or other ownership interests, by contract or otherwise and the terms “Controlling” and “Controlled” have meanings correlative to the foregoing.

          “Deepwater Drilling Business” has the meaning set forth in the Ruling Request.

          “DeepCo” has the meaning set forth in the recitals hereof.

          “Disclosing Party” has the meaning set forth in Section 6.3.

          “Distribution Date” means the date on which the External Distribution occurs.

          “Distribution Taxes” has the meaning set forth in Section 2.2(b).

          “Due Date” has the meaning set forth in Section 4.4.

          “Effective Time” means the time at which the External Distribution is effected on the Distribution Date.

          “External Distribution” has the meaning set forth in the recitals hereof.

          “Group” means the Pride Group or the Seahawk Group, as the context requires.

          “Internal Distribution” has the meaning set forth in the recitals hereof.

          “IRS” means the Internal Revenue Service.

          “IRS Submissions” means the Ruling Request, each supplemental submission and any other correspondence or supplemental materials submitted to the IRS in connection with obtaining the Ruling.

          “Joint Return” means any Tax Return, for any Tax Year, that includes Tax Items of both the Pride Business and the Seahawk Business, determined without regard to Tax Items carried forward to such Tax Year.

          “Losses” means any and all damages, losses, deficiencies, liabilities, obligations, Taxes, penalties, judgments, settlements, claims, payments, fines, interest, costs and expenses (including, without limitation, the fees and expenses of any and all actions and demands, assessments, judgments, settlements and compromises relating

thereto and the costs and expenses of attorneys’, accountants’, consultants’ and other professionals’ fees and expenses incurred in the investigation or defense thereof or the enforcement of rights hereunder), including direct and consequential damages.

          “Management Business” has the meaning set forth in the Ruling Request.

          “Master Separation Agreement” means the Master Separation Agreement entered into as of the date set forth above, between Pride and Seahawk.

          “Non-Preparer” means the party that is not responsible for the preparation and filing of the Joint Return or Separate Return, as applicable, pursuant to Sections 3.1(a) or 3.2.

          “Payment Date” means (x) with respect to any U.S. federal income tax return, the due date for any required installment of estimated taxes determined under Code Section 6655, the due date (determined without regard to extensions) for filing the return determined under Code Section 6072, and the date the return is filed, and (y) with respect to any other Tax Return, the corresponding dates determined under the applicable Tax Law.

          “Permitted Financial Institution” means any domestic commercial bank having capital and surplus in excess of $5.0 billion and whose long-term debt is rated “A” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency).

          “Person” means any individual, corporation, company, partnership, trust, incorporated or unincorporated association, joint venture or other entity of any kind.

          “Preparer” means the party that is responsible for the preparation and filing of the Joint Return or Separate Return, as applicable, pursuant to Sections 3.1(a) or 3.2.

          “Pride” has the meaning set forth in the preamble hereof.

          “Pride Business” means, with respect to any Tax Year (or portion thereof), the assets, activities and related liabilities of Pride and its Subsidiaries during such Tax Year (or portion thereof), but not including the assets, activities and related liabilities constituting a part of the Seahawk Business for such Tax Year (or portion thereof).

          “Pride Common Stock” means the Pride common stock, par value $.01 per share, and any series or class of stock into which the Pride common stock is redesignated, reclassified, converted or exchanged following the Effective Time.

          “Pride Group” means Pride and each Subsidiary of Pride (but only while such Subsidiary is a Subsidiary of Pride) other than any Person that is a member of the Seahawk Group (but only during the period such Person is a member of the Seahawk Group).

          “Receiving Party” has the meaning set forth in Section 6.3.

          “Requesting Party” has the meaning set forth in Section 5.2.

          “Ruling” means PLR 112185-09, which was issued to Pride on May 4, 2009, as supplemented by PLR 129247-09, which was issued to Pride on July 9, 2009.

          “Ruling Request” means the requests for rulings, dated March 2, 2009, and June 12, 2009, filed by Pride with the IRS in connection with the Distribution and any other correspondence or supplemental materials submitted to the IRS in connection with obtaining the Ruling.

          “Seahawk” has the meaning set forth in the preamble hereof.

          “Seahawk Business” means:

               (a) with respect to any Tax Year (or portion thereof) that ended on or before December 31, 2008, (i) the assets, activities and related liabilities of Pride and its Subsidiaries, to the extent such assets and activities were situated in the Gulf of Mexico during such Tax Year (or portion thereof) and (ii) any other assets, activities and related liabilities of Seahawk and the Seahawk Subsidiaries, regardless of where such assets and activities were situated during such Tax Year (or portion thereof); but not including , in each case (i) and (ii) above, any assets, activities and related liabilities of Pride, Seahawk and their respective Subsidiaries, to the extent such assets and activities were or related to the deepwater services management contracts with respect to the Thunderhorse , Mad Dog and Holstein rigs;

               (b) with respect to any Tax Year (or portion thereof) that begins after December 31, 2008, and ends on or before the Distribution Date, (i) the assets, activities and related liabilities of Pride and its Subsidiaries, to the extent such assets and activities were situated in the Gulf of Mexico during such Tax Year (or portion thereof) and (ii) any other assets, activities and related liabilities of Seahawk and the Seahawk Subsidiaries, regardless of where such assets and activities were situated during such Tax Year (or portion thereof); but not including , in each case (i) and (ii) above, any assets (other than the stock of DeepCo), activities and related liabilities of Pride, Seahawk and their respective Subsidiaries, to the extent such assets and activities were or related to (iii) the deepwater services management contracts with respect to the Thunderhorse , Mad Dog and Holstein rigs; (iv) drillships or semisubmersible rigs or (v) the Pride Tennessee and Pride Wisconsin rigs;

               (c) with respect to any Tax Year (or portion thereof) that begins after the Distribution Date, the assets, activities and related liabilities of Seahawk and the Seahawk Subsidiaries during such Tax Year (or portion thereof).

          “Seahawk Group” means (x) with respect to any Tax Year (or portion thereof) ending at or before the Effective Time, Seahawk and each of its Subsidiaries at the Effective Time; and (y) with respect to any Tax Year (or portion thereof) that begins

after the Effective Time, Seahawk and each Subsidiary of Seahawk (but only while such Subsidiary is a Subsidiary of Seahawk).

          “Seahawk Subsidiaries” means Gulf of Mexico Personnel Services S. De R.L. De C.V.; Mexico Drilling Limited LLC; Mexico Offshore Management S. De R.L. De C.V.; Pride Central America, LLC; Pride Drilling, LLC; Pride Internacional de Mexico LLC; Pride Mexico Holdings, LLC; Redfish Holdings S. De R.L. De C.V.; Seahawk Drilling LLC and each Person that becomes a Subsidiary of Seahawk after the Distribution Date.

          “Separate Return” means any Tax Return that is not a Joint Return.

          “Separation” has the meaning set forth in the recitals hereof.

          “Subsidiary” when used with respect to any Person, means (i)(A) a corporation a majority in voting power of whose share capital or capital stock with voting power, under ordinary circumstances, to elect directors is at the time, directly or indirectly, owned by such Person, by one or more Subsidiaries of such Person, or by such Person and one or more Subsidiaries of such Person, whether or not such power is subject to a voting agreement or similar encumbrance, (B) a partnership or limited liability company in which such Person or a Subsidiary of such Person is, at the date of determination, (1) in the case of a partnership, a general partner of such partnership with the power affirmatively to direct the policies and management of such partnership or (2) in the case of a limited liability company, the managing member or, in the absence of a managing member, a member with the power affirmatively to direct the policies and management of such limited liability company, or (C) any other Person (other than a corporation) in which such Person, one or more Subsidiaries of such Person or such Person and one or more Subsidiaries of such Person, directly or indirectly, at the date of determination thereof, has or have (1) the power to elect or direct the election of a majority of the members of the governing body of such Person, whether or not such power is subject to a voting agreement or similar encumbrance, or (2) in the absence of such a governing body, at least a majority ownership interest or (ii) any other Person of which an aggregate of 50% or more of the equity interests are, at the time, directly or indirectly, owned by such Person and/or one or more Subsidiaries of such Person.

          “Supplemental IRS Submissions” means any request for a Supplemental Ruling, each supplemental submission and any other correspondence or supplemental materials submitted to the IRS in connection with obtaining any Supplemental Ruling.

          “Supplemental Ruling” means any private letter ruling obtained by Pride or Seahawk from the IRS which supplements or otherwise modifies the Ruling.

          “Supplemental Tax Opinion” means, with respect to a specified action, an opinion (other than the Tax Opinion) from Tax Counsel to the effect that such action will not preclude (i) the Internal Distribution from qualifying as a tax-free transaction described under Sections 368(a)(1)(D) and 355 of the Code to Seahawk and Pride and (ii) the External Distribution from qualifying as a tax-free transaction described under

Section 355 of the Code to Pride and the holders of Pride Common Stock (except, in the case of the holders of Pride Common Stock, with respect to cash received in lieu of fractional shares). No opinion relied upon by Seahawk to satisfy the requirements of Section 8.3 shall be considered a “Supplemental Tax Opinion” unless such opinion is, in addition to the requirements above, an unqualified “will” opinion reasonably satisfactory to Pride, which opinion may rely upon a Supplemental Ruling and may rely upon, and may assume the accuracy of, any representations given in any Supplemental Ruling Submission and any customary representations contained in an officer’s certificate delivered by an officer of Pride or Seahawk to Tax Counsel.

          “Tax” or “Taxes” means any income, gross income, gross receipts, profits, capital stock, franchise, withholding, payroll, social security, workers compensation, unemployment, disability, property, ad valorem, stamp, excise, severance, occupation, service, sales, use, license, lease, transfer, import, export, value added, alternative minimum, estimated or other similar tax (including any fee, assessment, or other charge in the nature of or in lieu of any tax) imposed by any Tax Authority and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing.

          “Tax Authority” means, with respect to any Tax, the governmental entity or political subdivision, agency, commission or authority thereof that imposes such Tax, and the agency, commission or authority (if any) charged with the assessment, determination or collection of such Tax for such entity or subdivision.

          “Tax Benefit” means a Tax Item that decreases the Tax liability of a taxpayer, including a credit, loss or other deduction, but not including deductions attributable to or arising from the Pride Business or the Seahawk Business, as applicable, to the extent that the aggregate of such deductions in a Tax Year does not exceed the income attributable to or arising from such business in such Tax Year.

          “Tax Contest” means an audit, review, examination, or any other administrative or judicial proceeding with the purpose or effect of redetermining Taxes of any member of either Group (including any administrative or judicial review of any claim for refund).

          “Tax Counsel” means (i) with respect to the Tax Opinion delivered to Pride, Baker Botts L.L.P. or (ii) with respect to a Supplemental Tax Opinion delivered to Pride or to Seahawk, a nationally recognized law firm or accounting firm reasonably acceptable to Pride to provide such Supplemental Tax Opinion.

          “Tax Item” means, with respect to any Tax, any item of income, gain, loss, deduction, credit or other attribute that may have the effect of increasing or decreasing any Tax.

          “Tax Law” means the law of any governmental entity or political subdivision thereof, and any controlling judicial or administrative interpretations of such law, relating to any Tax.

          “Tax Materials” means (i) the Ruling and each Supplemental Ruling issued by the IRS in connection with the Internal Distribution and the External Distribution, (ii) each IRS Submission and Supplemental IRS Submission, (iii) the representation letters delivered to Tax Counsel in connection with the delivery of the Tax Opinion, and (iv) any other materials delivered or deliverable by Pride, Seahawk and others in connection with the rendering by Tax Counsel of the Tax Opinions or the issuance by the IRS of any Ruling or Supplemental Ruling.

          “Tax Opinion” means the opinion to be delivered by Tax Counsel to Pride in connection with the Internal Distribution and the External Distribution to the effect that (i) the Internal Distribution will qualify as a tax-free transaction described under Sections 368(a)(1)(D) and 355 of the Code to Seahawk and Pride and (ii) the External Distribution will qualify as a tax-free transaction described under Section 355 of the Code to Pride and the holders of Pride Common Stock (except, in the case of the holders of Pride Common Stock, with respect to cash received in lieu of fractional shares).

          “Tax Records” means Tax Return, Tax Return work papers, documentation relating to any Tax Contests, and any other books of account or records required to be maintained under applicable Tax Laws (including but not limited to Section 6001 of the Code) or under any record retention agreement with any Tax Authority.

          “Tax Return” means any report of Taxes due (including estimated Taxes), any claims for refund of Taxes paid, any information return with respect to Taxes, or any other similar report, statement, declaration, or document required to be filed (by paper, electronically or otherwise) under any applicable Tax Law, including any attachments, exhibits, or other materials submitted with any of the foregoing, and including any amendments or supplements to any of the foregoing.

          “Tax Year” means with respect to any Tax, the year, or shorter period, if applicable, for which the Tax is reported as provided under applicable Tax Law.

          “Treasury Regulations” means the regulations promulgated from time to time under the Code as in effect for the relevant Tax Year.

           SECTION 2. Allocation of Tax Liabilities and Tax Benefits.

          2.1 Liability for and the Payment of Taxes. Except as provided in Section 3.1(b) (Provision of Information and Assistance), Section 3.2(c) (Provision of Information), and Section 7 (Tax Contests), and in accordance with Section 4:

                (a)  Seahawk Liabilities and Payments. For any Tax Year (or portion thereof), Seahawk shall, subject to the rules for Tax Benefits in Section 2.1(c):

                    (i) be liable for and pay the Taxes (determined without regard to Tax Benefits) allocated to it pursuant to Section 2.2, reduced by any Tax

Benefits allocated to Pride or Seahawk that are allowable under applicable Tax Law, either to the applicable Tax Authority or to Pride as required by Section 4, and

                    (ii) pay Pride for:

                         (A) any Tax Benefits arising in a Tax Year that begins on or before the Distribution Date allocated to Pride pursuant to Section 2.2 that Seahawk uses to reduce Taxes payable by it pursuant to clause (i) of this Section 2.1(a) in any Tax Year that begins after the Distribution Date,

                         (B) any Tax Benefits arising in a Tax Year that begins after the Distribution Date allocated to Pride pursuant to Section 2.2 that Seahawk uses to reduce Taxes payable by it pursuant to clause (i) of this Section 2.1(a) in any Tax Year that begins on or before the Distribution Date, and

                         (C) any Tax Benefits arising in a Tax Year that begins on or before the Distribution Date allocated to Pride pursuant to Section 2.2 arising or used as a result of a Tax Contest or other dispute which is resolved after the Distribution Date that Seahawk uses to reduce Taxes payable by it pursuant to clause (i) of this Section 2.1(a) in any Tax Year that begins on or before the Distribution Date.

                (b)  Pride Liabilities and Payments. For any Tax Year (or portion thereof), Pride shall, subject to the rules for Tax Benefits in Section 2.1(c):

                    (i) be liable for and pay the Taxes (determined without regard to Tax Benefits) allocated to it pursuant to Section 2.2, reduced by any Tax Benefits allocated to Pride or Seahawk that are allowable under applicable Tax Law, either to the applicable Tax Authority or to Seahawk as required by Section 4, and

                    (ii) pay Seahawk for:

                         (A) any Tax Benefits arising in a Tax Year that begins on or before the Distribution Date allocated to Seahawk pursuant to Section 2.2 that Pride uses to reduce Taxes payable by it pursuant to clause (i) of this Section 2.1(b) in any Tax Year that begins after the Distribution Date,

                         (B) any Tax Benefits arising in a Tax Year that begins after the Distribution Date allocated to Seahawk pursuant to Section 2.2 that Pride uses to reduce Taxes payable by it pursuant to clause (i) of this Section 2.1(b) in any Tax Year that begins on or before the Distribution Date, and

                         (C) any Tax Benefits arising in a Tax Year that begins on or before the Distribution Date allocated to Seahawk pursuant to Section 2.2 arising or used as a result of a Tax Contest or other dispute which is resolved after the Distribution Date that Pride uses to reduce Taxes payable by it pursuant to clause (i) of this Section 2.1(b) in any Tax Year that begins on or before the Distribution Date.

               (c)  Rules for Tax Benefits. For purpose of this Section 2:

                    (i) For any Tax Year that begins on or before the Distribution Date, (y) Seahawk shall, pursuant to Section 2.1(a)(i), reduce Taxes allocated to it by Tax Benefits allocated to Pride only to the extent such Tax Benefits are not taken into account by Pride pursuant to Section 2.1(b)(i) in the same Tax Year, and (z) Pride shall reduce, pursuant to Section 2.1(b)(i), Taxes allocated to it by Tax Benefits allocated to Seahawk only to the extent such Tax Benefits are not taken into account by Seahawk pursuant to Section 2.1(a)(i) in the same Tax Year.

                    (ii) For any Tax Year that begins on or before the Distribution Date, (y) Seahawk shall not take into account any Tax Benefit under Section 2.1(a)(i) unless the utilization of such Tax Benefit would be allowable under applicable Tax Law after taking into account only those Tax Items allocated to Seahawk during such Tax Year (or portion thereof), and (z) Pride shall not take into account any Tax Benefit under Section 2.1(b)(i) unless the utilization of such Tax Benefit would be allowable under applicable Tax Law after taking into account only those Tax Items allocated to Pride during such Tax Year (or portion thereof).

                    (iii) For any Tax Year that begins after the Distribution Date in which either party has available for use both Tax Benefits allocated to it and Tax Benefits allocated to the other party, if the applicable Tax Law does not provide for the priority and order in which such Tax Benefits shall be used, the Tax Benefits allocable to it and to the other party shall be deemed used pro rata in proportion to the total of such Tax Benefits available for use by it.

                    (iv) Payment for Tax Benefits described in either Section 2.1(a)(ii)(B) or Section 2.1(a)(ii)(C) shall be made only when and to the extent that the use of such Tax Benefit does not increase the Taxes of Seahawk or reduce the Tax Benefits otherwise usable by Seahawk during the applicable Tax Year, and payment for Tax Benefits described in either Section 2.1(b)(ii)(B) or Section 2.1(b)(ii)(C) shall be made only when and to the extent that the use of such Tax Benefit does not increase the Taxes of Pride or reduce the Tax Benefits otherwise usable by Pride during the applicable Tax Year.

          2.2 Allocation Rules. For purposes of Section 2.1:

               (a)  General Rule. Except as otherwise provided in this Section 2.2, Taxes (determined without regard to Tax Benefits) for any Tax Year (or portion thereof) shall be allocated between Seahawk and Pride in proportion to the net taxable income or other applicable items attributable to or arising from the respective Seahawk Business and Pride Business (as so defined for such Tax Year or portion thereof) that contribute to such Taxes, and Tax Benefits for any Tax Year (or portion thereof) shall be allocated between Seahawk and Pride in proportion to the losses, credits, or other applicable items attributable to or arising from the respective Seahawk Business and Pride Business (as so defined for such Tax Year or portion thereof) that contribute to such Tax Benefits.

               (b)  Taxes Resulting from the Internal Distribution or the External Distribution. Taxes and Tax Items resulting from the Internal Distribution and Taxes and Tax Items resulting from the External Distribution (collectively, “Distribution Taxes”) will be allocated as follows:

                    (i)  Distribution Taxes Allocable to Pride . Distribution Taxes shall be allocated to Pride to the extent that such Distribution Taxes result primarily from one or more of the following:

                         (A) from the Pride Group ceasing to be engaged in the Management Business or the Deepwater Drilling Business; or

                         (B) from an action or failure to act by the Pride Group that causes Section 355(e) of the Code to apply to either the Internal Distribution or the External Distribution, or that causes Section 355(f) of the Code to apply to the Internal Distribution.

                    (ii)  Distribution Taxes Allocable to Seahawk . Distribution Taxes shall be allocated to Seahawk to the extent that such Distribution Taxes result primarily from Seahawk’s taking any of the actions prohibited in Section 8.3.

                    (iii)  Joint Responsibility for Distribution Taxes . Any Distribution Taxes not allocated under Section 2.2(b)(i) or Section 2.2(b)(ii) shall be allocated fifty percent (50%) to Pride and fifty percent (50%) to Seahawk.

           SECTION 3. Preparation and Filing of Tax Returns.

          3.1 Joint Returns.

               (a)  Preparation of Joint Returns. Pride shall be responsible for preparing and filing (or causing to be prepared and filed) and shall be considered the Preparer of all Joint Returns, except that Seahawk shall be responsible for preparing and filing (or causing to be prepared and filed) and shall be considered the Preparer of all

Joint Returns filed or required to be filed with the Mexican Tax Authority by any Seahawk Subsidiary.

               (b)  Provision of Information and Assistance.

                    (i)  Information with Respect to Joint Returns. The Non-Preparer shall provide the Preparer with all information in its possession necessary for the Preparer to properly and timely file all Joint Returns for which such Preparer is responsible pursuant to Section 3.1(a). The Non-Preparer shall provide such information no later than thirty days prior to the extended due date of such Joint Return. If the Non-Preparer is in possession of information and the Non-Preparer fails to provide such information within the time period provided in this Section 3.1(b)(i) and in the form reasonably requested by the Preparer to permit the timely filing of any Joint Return for which the Preparer is responsible pursuant to Section 3.1(a), then notwithstanding any other provision of this Agreement, the Non-Preparer shall be liable for, and shall indemnify and hold harmless each member of the Preparer’s Group from and against, any penalties, interest, or other payment obligation assessed against any member of either Group by reason of any resulting delay in filing such return. If the Non-Preparer provides information within the time period provided in this Section 3.1(b)(i) in the form reasonably requested by the Preparer to permit the timely filing of a Joint Return for which such Preparer is responsible pursuant to Section 3.1(a), then notwithstanding any other provision of this Agreement, the Preparer shall be liable for, and shall indemnify and hold harmless each member of the Non-Preparer’s Group from and against, any penalties, interest, or other payments assessed against any member of either Group by reason of any delay in filing such return.

                    (ii)  Information with Respect to Estimated Payments and Extension Payments. The Non-Preparer shall provide the Preparer with all information relating to members of the Non-Preparer’s Group that the Preparer needs to determine the amount of Taxes due on any Payment Date with respect to a Joint Return for which such Preparer is responsible pursuant to Section 3.1(a). The Non-Preparer shall provide such information no later than thirty days before such Payment Date. In the event that the Non-Preparer fails to provide information within the time period provided in this Section 3.1(b)(ii) in the form reasonably requested by the Preparer to permit the timely payment of such Taxes, the indemnification principles of Section 3.1(b)(i) shall apply with respect to any penalties, interest, or other payments assessed against any member of either Group by reason of any resulting delay in paying such Taxes.

                    (iii)  Assistance. At the request of the Preparer, the Non-Preparer shall take (at its own cost and expense), and shall cause the members of the Non-Preparer’s Group to take (at their own cost and expense), any reasonable action ( e.g. , filing a ruling request with the relevant Tax Authority or executing a power of attorney) that is reasonably necessary in order for the Preparer or any other member of the Preparer’s Group to prepare, file, amend or take any other action with respect to a Joint Return for which the Preparer is responsible pursuant to Section 3.1(a). In the event that the Non-Preparer fails to take, or cause to be taken, any such requested action, the indemnification principles of Section 3.1(b)(i) shall apply with respect to any penalties,

interest, or other payments assessed against any member of either Group by reason of a failure to take any such requested action.

          3.2 Separate Returns.

               (a)  Tax Returns to be Prepared by Pride. Pride shall be responsible for preparing and filing (or causing to be prepared and filed) all Separate Returns that include Tax Items of the Pride Group, determined without regard to Tax Items carried forward to such Tax Year.

               (b)  Tax Returns to be Prepared by Seahawk. Seahawk shall be responsible for preparing and filing (or causing to be prepared and filed) all Separate Returns that include Tax Items of the Seahawk Group, determined without regard to Tax Items carried forward to such Tax Year.

               (c)  Provision of Information. Pride shall provide to Seahawk, and Seahawk shall provide to Pride, any information about members of the Pride Group or the Seahawk Group, respectively, which the party receiving such information reasonably needs to properly and timely file all Separate Returns pursuant to Sections 3.2(a) or (b). Such information shall be provided within the time prescribed by Section 3.1(b) for the provision of information for Joint Returns. In the event that Pride or Seahawk fails to provide information within the time period provided in Section 3.1(b) and in the form reasonably requested by the other party to permit the timely filing of a Separate Return, the indemnification principles of Section 3.1(b)(i) shall apply with respect to any penalties, interest, or other payments assessed against any member of the Pride Group or the Seahawk Group by reason of any resulting delay in filing such return.

          3.3 Special Rules Relating to the Preparation of Tax Returns.

               (a)  General Rule. Except as otherwise provided in this Agreement, the party responsible for filing (or causing to be filed) a Tax Return pursuant to Sections 3.1 or 3.2 shall have the exclusive right, in its sole discretion, with respect to such Tax Return to determine (i) the manner in which such Tax Return shall be prepared and filed, including the elections, methods of accounting, positions, conventions and principles of taxation to be used and the manner in which any Tax Item shall be reported, (ii) whether any extensions may be requested, (iii) whether an amended Tax Return shall be filed, (iv) whether any claims for refund shall be made, (v) whether any refunds shall be paid by way of refund or credited against any liability for the related Tax and (vi) whether to retain outside firms to prepare or review such Tax Return. Notwithstanding the preceding sentence, if the Seahawk Group pays any Tax to a Tax Authority other than the IRS that may be claimed as a foreign Tax credit for U.S. federal income tax purposes in a Tax Return for which Pride is the party responsible for filing (or causing to be filed), Pride shall amend such Tax Returns and file such claims for credit or refund that Seahawk may reasonably request.

               (b)  Seahawk Tax Returns. With respect to any Separate Return for which Seahawk is responsible pursuant to Section 3.2(b):

                    (i) Seahawk may not take (and shall cause the members of the Seahawk Group not to take) any positions that it knows, or reasonably should know, would adversely affect any member of the Pride Group; and

                    (ii) Seahawk and other members of the Seahawk Group must (x) allocate Tax Items between such Separate Return for which Seahawk is responsible pursuant to Section 3.2(b) and any related Joint Return for which Pride is responsible pursuant to Section 3.1(a) that are filed with respect to the same Tax Year in a manner that is consistent with the reporting of such Tax Items on the related Joint Return for which Pride is responsible pursuant to Section 3.1(a) and (y) make any applicable elections required under applicable Tax Law (including, without limitation, under Treasury Regulations Section 1.1502-76(b)(2)) necessary to effect such allocation.

               (c)  Election to File Consolidated, Combined or Unitary Tax Returns. Pride shall have the sole discretion of filing any Tax Return on a consolidated, combined or unitary basis, if such Tax Return would include at least one member of each Group and the filing of such Tax Return is elective under the relevant Tax Law.

               (d)  Carrybacks of Tax Benefits. Seahawk shall not carry back and utilize as a Tax Benefit in a Tax Year that begins on or before the Distribution Date any Tax Item arising in a Tax Year that begins after the Distribution Date, provided, that, if the carryback of such Tax Item is required by applicable Tax Law (for example, pursuant to Section 904(c) of the Code), and if Pride would be the Preparer of any Tax Return (or Tax Returns) amended to include the carried-back Tax Item, Pride shall amend such Tax Return (or Tax Returns) and file such claims for credit or refund that Seahawk may reasonably request. With respect to any foreign Taxes claimed on any such amended Tax Return, Pride shall only elect the benefits of the foreign Tax credit under Section 901 of the Code and shall not elect to deduct such foreign Taxes.

               (e)  Withholding and Reporting. With respect to stock of Pride delivered to any Person, Pride and Seahawk shall cooperate (and shall cause their Affiliates to cooperate) so as to permit Pride to discharge any applicable Tax withholding and Tax reporting obligations, including the appointment of Seahawk or one or more of its Affiliates as the withholding and reporting agent if Pride or one or more of its Affiliates is not otherwise required or permitted to withhold and report under applicable Tax Law.

               (f)  Standard of Performance. Pride and Seahawk shall prepare the Joint Returns for which each is responsible pursuant to this Section 3 with the same general degree of care as it uses in preparing Separate Returns. Notwithstanding the preceding sentence, Pride shall not be liable for any additional Taxes that result from a redetermination in a Tax Contest and for which Seahawk is otherwise liable under Section 2, regardless of whether such Taxes arise as a result of Pride’s failure to exercise such degree of care.

          3.4 Reliance on Exchanged Information. If a member of the Seahawk Group supplies information to a member of the Pride Group, or a member of the Pride Group supplies information to a member of the Seahawk Group, and an officer of the requesting member intends to sign a statement or other document under penalties of perjury in reliance upon the accuracy of such information, then a duly authorized officer of the member supplying such information shall certify, to the best of such officer’s knowledge, the accuracy and completeness of the information so supplied.

          3.5 Allocation of Tax Items. Pride shall determine in accordance with applicable Tax Laws the allocation of any applicable Tax Items ( e.g. , net operating loss, n