Exhibit 1.1
LOEWS CORPORATION
(a Delaware corporation)
$1,000,000,000 aggregate principal amount
3-1/8% Exchangeable Subordinated Notes due 2007
UNDERWRITING AGREEMENT
September 16, 1997
To the Representatives named in Schedule I hereto
of the Underwriters named in Schedule II hereto
Ladies and Gentlemen:
Loews Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell to the underwriters named in Schedule
II hereto (the "Underwriters"), for whom you are acting as
representatives (the "Representatives"), the principal amount of
its securities identified in Schedule I hereto (the "Securities"),
which may be senior or subordinated debt securities (the "Debt
Securities") or any combination thereof.
The Debt Securities will be issued in one or more series as
senior indebtedness (the "Senior Debt Securities") under an
indenture, dated as of March 1, 1986, between the Company and The
Chase Manhattan Bank (National Association), as trustee (the
"Trustee"), as supplemented by a first supplemental indenture,
dated March 30, 1993, between the Company and the Trustee and a
second supplemental indenture, dated as of February 18, 1997,
between the Company and the Trustee (such Indenture, as
supplemented, is referred to as the "Senior Indenture"), or as
subordinated indebtedness (the "Subordinated Debt Securities")
under an indenture, dated as of December 1, 1985, between the
Company and the Trustee, as supplemented by a first supplemental
indenture, dated as of February 18, 1997, between the Company and
the Trustee, a second supplemental indenture, dated as of February
18, 1997, between the Company and the Trustee and a third
supplemental indenture, dated as of September 19, 1997, between
the Company and the Trustee (such Indenture, as supplemented, is
referred to as the "Subordinated Indenture," and collectively with
the Senior Indenture, the "Indentures," and each, an "Indenture").
Each series of Debt Securities may vary, as applicable, as to
title, aggregate principal amount, rank, interest rate or formula
and timing of payments thereof, stated maturity date, redemption
and/or repayment provisions, sinking fund requirements, conversion
provisions (and terms of the related Underlying Securities) and
any other variable terms established by or pursuant to the
applicable Indenture.
As used herein, "Securities" means the Senior Debt Securities
or Subordinated Debt Securities, or any combination thereof,
initially issuable by the Company and, if Securities are
convertible or exchangeable, "Underlying Securities" means the
securities (of the Company or another issuer) issuable upon
conversion or exchange of the Senior Debt Securities or
Subordinated Debt Securities, as applicable.
Schedule I hereto specifies the number or aggregate principal
amount, as the case may be, of Securities to be initially issued
(the "Initial Underwritten Securities"), whether such offering is
on a fixed or variable price basis and, if on a fixed price basis,
the initial offering price, the price at which the Initial
Underwritten Securities are to be purchased by the Underwriters,
the form, time, date and place of delivery and payment of the
Initial Underwritten Securities and any other material variable
terms of the Initial Underwritten Securities, as well as the
material variable terms of any related Underlying Securities. In
addition, if applicable, such Underwriting Agreement shall specify
whether the Company has agreed to grant to the Underwriters an
option to purchase additional Securities to cover overallotments,
if any, and the number or aggregate principal amount, as the case
may be, of Securities subject to such option (the "Option
Underwritten Securities"). As used herein, the term "Underwritten
Securities" shall include the Initial Underwritten Securities and
all or any portion of any Option Underwritten Securities.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3
(No. 333-22113) for the registration of the Securities under the
Securities Act of 1933, as amended (the "Act"), and the offering
thereof from time to time in accordance with Rule 415 of the rules
and regulations of the Commission under the Act (the "Act
Regulations"), and the Company has filed such post-effective
amendments thereto as may be required prior to the execution of
this Underwriting Agreement. Such registration statement (as so
amended, if applicable) has been declared effective by the
Commission and each Indenture has been duly qualified under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"). Such registration statement (as so amended, if
applicable), including the information, if any, deemed to be a
part thereof pursuant to Rule 430A(b) of the Act Regulations (the
"Rule 430A Information") or Rule 434(d) of the Act Regulations
(the "Rule 434 Information"), is referred to herein as the
"Registration Statement"; and the final prospectus and the final
prospectus supplement relating to the offering of the Underwritten
Securities, in the form first furnished to the Underwriters by the
Company for use in connection with the offering of the
Underwritten Securities, are collectively referred to herein as
the "Final Prospectus"; provided, however, that all references to
the "Registration Statement" and the "Final Prospectus" shall also
be deemed to include all documents incorporated therein by
reference pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), prior to the execution of this
Underwriting Agreement; provided further, that if the Company
files a registration statement with the Commission pursuant to
Rule 462(b) of the Act Regulations (the "Rule 462 Registration
Statement"), then, after such filing, all references to
"Registration Statement" shall also be deemed to include the Rule
462 Registration Statement; and provided further, that if the
Company elects to rely upon
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Rule 434 of the Act Regulations, then all references to "Final
Prospectus" shall also be deemed to include the final or
preliminary prospectus and the applicable term sheet or
abbreviated term sheet (the "Term Sheet"), as the case may be, in
the form first furnished to the Underwriters by the Company in
reliance upon Rule 434 of the Act Regulations, and all references
in this Underwriting Agreement to the date of the Final Prospectus
shall mean the date of the Term Sheet. A "Preliminary Prospectus"
shall be deemed to refer to any prospectus used before the
registration statement became effective and any prospectus that
omitted, as applicable, the Rule 430A Information, the Rule 434
Information or other information to be included upon pricing in a
form of prospectus filed with the Commission pursuant to Rule
424(b) of the Act Regulations, that was used after such
effectiveness and prior to the execution and delivery of this
Underwriting Agreement. For purposes of this Underwriting
Agreement, all references to the Registration Statement, Final
Prospectus, Term Sheet or Preliminary Prospectus or to any
amendment or supplement to any of the foregoing shall be deemed to
include any copy filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval system
("EDGAR"). Notwithstanding anything to the contrary in this
Underwriting Agreement, if any revised Term Sheet, Preliminary
Prospectus or Final Prospectus, as the case may be, shall be
provided to the Underwriters by the Company for use in connection
with the offering of the Securities which differs from the
prospectus on file at the Commission at the time the Registration
Statement becomes effective (whether or not such revised
prospectus is required to be filed by the Company pursuant to Rule
424(b) of the Act Regulations), the terms "Term Sheet,"
"Preliminary Prospectus" or "Final Prospectus," as the case may
be, shall refer to such revised "Term Sheet," "Preliminary
Prospectus" or "Final Prospectus" from and after the time it is
first provided to the Underwriters for such use. Any reference
herein to the terms "amend," "amendment" or "supplement" with
respect to the Registration Statement, Term Sheet, any Preliminary
Prospectus or the Final Prospectus, unless otherwise expressly
provided therein, shall be deemed to refer to and include the
filing of any document under the Exchange Act after the date of
this Underwriting Agreement, or the issue date of the Preliminary
Prospectus or the Final Prospectus, as the case may be, deemed to
be incorporated therein by reference.
All references in this Underwriting Agreement to financial
statements and schedules and other information which is
"contained," "included" or "stated" (or other references of like
import) in the Registration Statement, Final Prospectus or
Preliminary Prospectus shall be deemed to mean and include all
such financial statements and schedules and other information
which is incorporated by reference in the Registration Statement,
Final Prospectus or Preliminary Prospectus, as the case may be;
and all references in this Underwriting Agreement to amendments or
supplements to the Registration Statement, Final Prospectus or
Preliminary Prospectus shall be deemed to mean and include the
filing of any document under the Exchange Act which is
incorporated by reference in the Registration Statement, Final
Prospectus or Preliminary Prospectus, as the case may be.
1A. Representations and Warranties of the Company. The
Company represents and warrants to each Underwriter as of the date
hereof and as of the Closing Date that:
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(a) The Company meets the requirements for use of Form S-3
under the Act.
(b) This Underwriting Agreement has been duly authorized,
executed and delivered by the Company. The Indenture is
substantially in the form filed as an exhibit to the Registration
Statement at the time the Registration Statement became effective
(other than insofar as the Indenture has been modified by a
supplemental Indenture), and, has been duly authorized, executed
and delivered by the Company and constitutes a legal, valid and
binding agreement of the Company, enforceable against the Company
in accordance with its terms, except that (A) the enforceability
thereof may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect,
relating to creditors' rights generally and (B) the remedy of
specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
An Amendment to the Registration Rights Agreement, dated October
16, 1995, between the Company and Diamond Offshore Drilling, Inc.
("Diamond Offshore"), in the form of Exhibit A hereto, has been
duly authorized by the Company and, as of the Closing Date, will
be duly executed and delivered by the Company (as so amended, such
Registration Rights Agreement is referred to as the "Amended
Registration Rights Agreement").
(c) Each of the Registration Statement and any Rule 462(b)
Registration Statement has become effective under the Act and no
stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been
issued under the Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are
contemplated by the Commission, and any request on the part of the
Commission for additional information has been complied with. In
addition, each Indenture has been duly qualified under the Trust
Indenture Act.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments
thereto (including the filing of the Company's most recent Annual
Report on Form 10-K with the Commission (the "Annual Report on
Form 10-K")) became effective and as of the date hereof, the
Registration Statement, any Rule 462(b) Registration Statement and
any amendments and supplements thereto complied and will comply in
all material respects with the requirements of the Act and the Act
Regulations and the Trust Indenture Act and the rules and
regulations of the Commission under the Trust Indenture Act (the
"Trust Indenture Act Regulations") and did not and will not
contain 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 not misleading. At the date of the Final
Prospectus, at the Closing Date and at each Date of Delivery, if
any, the Final Prospectus and any amendments and supplements
thereto did not and will not include an untrue statement
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of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If the
Company elects to rely upon Rule 434 of the Act Regulations, the
Company will comply with the requirements of Rule 434.
Notwithstanding the foregoing, the representations and warranties
in this subsection (c) shall not apply to (i) statements in or
omissions from the Registration Statement or the Final Prospectus
made in reliance upon and in conformity with information furnished
to the Company in writing by or on behalf of any Underwriter
expressly for use in the Registration Statement or the Final
Prospectus or (ii) that part of the Registration Statement which
shall constitute the Statement of Eligibility and Qualification
(Form T-1) under the Trust Indenture Act of the Trustee.
Each preliminary prospectus and prospectus filed as part of
the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the Act,
complied when so filed in all material respects with the Act
Regulations and each Preliminary Prospectus and the Final
Prospectus delivered to the Underwriters for use in connection
with the offering of Underwritten Securities will, at the time of
such delivery, be identical to any electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
(d) The documents incorporated or deemed to be incorporated
by reference in the Registration Statement and the Final
Prospectus as of the date hereof, when they became effective or at
the time they were or hereafter are filed with the Commission,
complied and will comply in all material respects with the
requirements of the Exchange Act and the rules and regulations of
the Commission thereunder (the "Exchange Act Regulations").
(e) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the
State of Delaware and has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Final Prospectus and to enter into and perform
its obligations under, or as contemplated under, this Underwriting
Agreement. The Company is duly qualified as a foreign corporation
to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of material property or the
conduct of material business, except where the failure to so
qualify or be in good standing would not result in a material
adverse change in the condition (financial or other), earnings,
business or properties of the Company and its subsidiaries, taken
as a whole, whether or not arising from transactions in the
ordinary course of business (a "Material Adverse Effect").
(f) The Underwritten Securities have been duly authorized by
the Company for issuance and sale pursuant to this Underwriting
Agreement. Such Underwritten
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Securities, when issued and authenticated in the manner provided
for in the applicable Indenture and delivered against payment of
the consideration therefor specified in this Underwriting
Agreement, will constitute valid and legally binding obligations
of the Company, enforceable against the Company in accordance with
their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights generally
or by general equitable principles, and except further as
enforcement thereof may be limited by (A) governmental authority
to limit, delay or prohibit the making of payments outside the
United States and (B) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought. Such Underwritten
Securities will be in the form contemplated by, and each
registered holder thereof is entitled to the benefits of, the
applicable Indenture.
(g) The Underwritten Securities being sold pursuant to this
Underwriting Agreement and each applicable Indenture, as of the
date of the Final Prospectus, will conform in all material
respects to the statements relating thereto contained in the Final
Prospectus. The Underwritten Securities will be in substantially
the form filed or incorporated by reference, as the case may be,
as an exhibit to the Registration Statement.
(h) The execution and delivery of this Underwriting
Agreement, each applicable Indenture, the Amended Registration
Rights Agreement, and any other agreement or instrument entered
into or issued or to be entered into or issued by the Company in
connection with the transactions contemplated hereby or thereby or
in the Registration Statement and the Final Prospectus and the
consummation of the transaction contemplated herein and in the
Registration Statement and the Final Prospectus (including the
issuance and sale of the Underwritten Securities and the use of
the proceeds from the sale of the Underwritten Securities as
described under the caption "Use of Proceeds") and compliance by
the Company with its obligations hereunder and thereunder have
been duly authorized by all necessary corporate action and will
not conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of
its subsidiaries pursuant to, any agreements or instruments, nor
will such action result in any violation of the provisions of the
charter or by-laws of the Company or any of its subsidiaries or
any applicable law, administrative regulation or administrative or
court decree which, in the aggregate, could reasonably be expected
to result in a Material Adverse Effect.
(i) The statements set forth in the Final Prospectus under
the captions "Description of Senior Debt Securities", "Description
of Subordinated Debt Securities", "Description of Preferred
Stock", "Description of Common Stock", "Description of the Notes"
and "Description of Diamond Offshore Capital Stock",
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insofar as they purport to constitute a summary of the terms of
the Securities, are accurate, complete and fair.
(j) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or
affiliate located in Cuba within the meaning of Section 517.075,
Florida Statutes.
1B. Representations and Warranties of Diamond Offshore.
Diamond Offshore represents and warrants to each Underwriter as of
the date hereof and as of the Closing Date that:
(a) Diamond Offshore's annual report on Form 10-K for
the fiscal year ended December 31, 1996 (the "Form 10-K"),
its definitive proxy statement on Schedule 14A filed with the
Commission on April 1, 1997, its quarterly reports on Form
10-Q for the quarters ended March 31, 1997 and June 30, 1997
and any current reports on Form 8-K filed by Diamond Offshore
subsequent to the Form 10-K are hereinafter referred to
collectively as the "Exchange Act Reports". The Exchange Act
Reports, when they were filed with the Commission, conformed
in all material respects to the applicable requirements of
the Exchange Act and the applicable rules and regulations of
the Commission thereunder, and did not, and on the date of
the Final Prospectus, will not, contain an untrue statement
of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. To
the extent that any statement made or omitted in the
Registration Statement, the Final Prospectus or any amendment
or supplement thereto are made or omitted in reliance upon
and in conformity with written information furnished to the
Company by Diamond Offshore expressly for use therein, such
Registration Statement did, and the Final Prospectus and any
further amendments or supplements to the Registration
Statement and the Final Prospectus will, when they become
effective or are filed with the Commission, as the case may
be, conform in all material respects to the requirements of
the Act and the Act Regulations and not contain any untrue
statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading.
(b) Diamond Offshore has been duly incorporated and is
an existing corporation in good standing under the laws of
the State of Delaware, with power and authority (corporate
and other) to own its properties and conduct its business as
described in the Final Prospectus; and Diamond Offshore is
duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business
requires such qualification, except where the failure of
Diamond Offshore to be so qualified would not have a material
adverse effect on the business, operations or financial
condition of Diamond Offshore and its subsidiaries, taken as
a whole.
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(c) Each subsidiary of Diamond Offshore has been duly
incorporated and is an existing corporation in good standing
under the laws of the jurisdiction of its incorporation, with
power and authority (corporate and other) to own its
properties and conduct its business as described in the Final
Prospectus; and each subsidiary of Diamond Offshore is duly
qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires
such qualification, except where the failure of such
subsidiary to be so qualified would not have a material
adverse effect on the business, operations or financial
condition of Diamond Offshore and its subsidiaries, taken as
a whole; all of the issued and outstanding capital stock of
each subsidiary of Diamond Offshore has been duly authorized
and validly issued and is fully paid and nonassessable,
except where the failure of such capital stock to have been
so authorized and issued would not have a material adverse
effect on the business, operations or financial condition of
Diamond Offshore and its subsidiaries, taken as a whole; and
the capital stock of each subsidiary owned by Diamond
Offshore, directly or through subsidiaries, is owned free
from liens, encumbrances and defects, except where the
failure of Diamond Offshore to so own such capital stock
would not have a material adverse effect on the business,
operations, properties or financial condition of Diamond
Offshore and its subsidiaries, taken as a whole.
(d) The Amended Registration Rights Agreement has been
duly authorized by Diamond Offshore and, on the Closing Date,
will be duly executed and delivered by Diamond Offshore.
(e) The Underlying Securities deliverable upon exchange
of the Underwritten Securities and all other outstanding
shares of capital stock of Diamond Offshore have been duly
authorized and are validly issued, fully paid and
nonassessable; the Underlying Securities conform to the
description thereof contained in the Final Prospectus and,
when delivered in accordance with the terms of the related
Underwritten Securities, will conform to the description
thereof contained in the Final Prospectus as the same may be
amended or supplemented; and the stockholders of Diamond
Offshore have no preemptive rights with respect to the
Underlying Securities.
(f) Except as disclosed in the Final Prospectus, there
are no contracts, agreements or understandings between
Diamond Offshore and any person that would give rise to a
valid claim against Diamond Offshore or any Underwriter for a
brokerage commission, finder's fee or other like payment
relating to the issuance of the Underwritten Securities or
the exchange thereof for the Underlying Securities.
(g) Except for the Amended Registration Rights
Agreement, there are no currently effective contracts,
agreements or understandings between Diamond
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Offshore and any person granting such person the right to
require Diamond Offshore to file a registration statement
under the Act with respect to any securities of Diamond
Offshore owned or to be owned by such person or to require
Diamond Offshore to include such securities in any securities
being registered pursuant to any registration statement filed
by Diamond Offshore under the Act.
(h) The outstanding shares of common stock of Diamond
Offshore, including the Underlying Securities, are listed on
the New York Stock Exchange.
(i) No consent, approval, authorization, or order of,
or filing with, any governmental agency or body or any court
is required to be obtained by Diamond Offshore for the
consummation of the transactions contemplated by this
Underwriting Agreement or in connection with the exchange of
the Underwritten Securities for the Underlying Securities,
except such as have been (or, under the Amended Registration
Rights Agreement, will have been) obtained and made under the
Act and such as may be required under state securities laws.
(j) The execution, delivery and performance of the
Amended Registration Rights Agreement and this Underwriting
Agreement and compliance with the terms and provisions
thereof will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which Diamond
Offshore or any of its subsidiaries is a party or by which
Diamond Offshore or any of its subsidiaries is bound, or to
which any of the property or assets of Diamond Offshore or
any of its subsidiaries is subject, nor will such action
result in any violation of the provisions of the charter or
bylaws of Diamond Offshore or any of its subsidiaries or any
statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over Diamond
Offshore or any of its subsidiaries or the property of
Diamond Offshore or any of its subsidiaries except, in each
case other than with respect to such charter or bylaws, which
conflict, breach or default or violation would not impair
Diamond Offshore's or any of its subsidiaries' ability to
perform the obligations hereunder or have any material
adverse effect upon the consummation of the transactions
contemplated hereby or any Underwriter.
(k) This Underwriting Agreement has been duly
authorized, executed and delivered by Diamond Offshore.
(l) Except as disclosed in the Exchange Act Reports or
the Final Prospectus and except for Permitted Liens, as such
term is defined below, Diamond Offshore and its subsidiaries
have good and marketable title to all offshore drilling rigs
described as being owned by them in the Exchange Act Reports
or the Final Prospectus, and good and marketable title to all
real property and all other properties and assets owned by
them, in each case free from liens, encumbrances and defects
that would materially
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affect the value thereof, taken as a whole, or materially
interfere with the use made or to be made thereof by them;
and except as disclosed in the Exchange Act Reports or the
Final Prospectus, Diamond Offshore and its subsidiaries hold
any leased real or personal property under valid and
enforceable leases with no exceptions to such validity or
enforceability that would materially interfere with the use
made or to be made thereof by them. "Permitted Liens" means
(i) liens for taxes not yet due or liens that have not been
filed for taxes that are being contested in good faith and by
appropriate proceedings diligently prosecuted; (ii)
carriers', warehousemen's, mechanics', materialmen's,
repairmen's, maritime, statutory or other like liens arising
in the ordinary course of business that are not overdue for
more than 30 days or that are being contested in good faith
and by appropriate proceedings diligently prosecuted; (iii)
pledges or deposits in connection with workmen's
compensation, unemployment insurance and other social
security legislation; and (iv) deposits to secure the
performance of bids, contracts in the ordinary course of
business (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds and performance bonds,
and other obligations of a like nature that are incurred in
the ordinary course of business.
(m) Diamond Offshore and its subsidiaries possess
adequate certificates, authorities or permits issued by
appropriate governmental agencies or bodies necessary to
conduct the business now operated by them in all material
respects and have not received any notice of proceedings
relating to the revocation or modification of any such
certificate, authority or permit that, if determined
adversely to Diamond Offshore or any of its subsidiaries,
would individually or in the aggregate have a material
adverse effect on Diamond Offshore and its subsidiaries taken
as a whole.
(n) No labor dispute with the employees of Diamond
Offshore or any subsidiary exists or, to the knowledge of
Diamond Offshore, is imminent that would reasonably be
expected to have a material adverse effect on Diamond
Offshore and its subsidiaries taken as a whole.
(o) Diamond Offshore and its subsidiaries own, possess
or can acquire on reasonable terms, adequate trademarks,
trade names and other rights to inventions, know-how,
patents, copyrights, confidential information and other
intellectual property (collectively, "intellectual property
rights") necessary to conduct the business now operated by
them, or presently employed by them, and have not received
any notice of infringement of or conflict with asserted
rights of others with respect to any intellectual property
rights that, if determined adversely to Diamond Offshore or
any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on Diamond Offshore
and its subsidiaries taken as a whole.
(p) Except as disclosed in the Exchange Act Reports or
the Final Prospectus, neither Diamond Offshore nor any of its
subsidiaries is in violation of any statute, any rule,
regulation, decision or order of any governmental agency or
body or any court,
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domestic or foreign, relating to the use, disposal or release
of hazardous or toxic substances or relating to the
protection or restoration of the environment or human
exposure to hazardous or toxic substances (collectively,
"environmental laws"), owns or operates any real property
contaminated with any substance that is subject to any
environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is
subject to any claim relating to any environmental laws,
which violation, contamination, liability or claim would
individually or in the aggregate have a material adverse
effect on Diamond Offshore and its subsidiaries taken as a
whole; and Diamond Offshore is not aware of any pending
investigation which might lead to such a claim.
(q) There are no pending actions, suits or proceedings
against or affecting Diamond Offshore, any of its
subsidiaries or any of their respective properties except as
disclosed in the Exchange Act Reports or the Final
Prospectus, or as individually or in the aggregate do not now
have and, to the best knowledge of Diamond Offshore, are not
reasonably expected in the future to have a material adverse
effect on the condition (financial or other), business,
properties or results of operations of Diamond Offshore and
its subsidiaries taken as a whole, or would materially and
adversely affect the ability of Diamond Offshore to perform
its obligations under the Amended Registration Rights
Agreement or this Underwriting Agreement, or which are
otherwise material in the context of the sale of the
Underwritten Securities; and no such actions, suits or
proceedings are, to Diamond Offshore's knowledge, threatened
or contemplated.
(r) The financial statements included in the Exchange
Act Reports present fairly in all material respects the
financial position of Diamond Offshore and its consolidated
subsidiaries as of the dates shown and their results of
operations and cash flows for the periods shown, and such
financial statements have been prepared in conformity with
generally accepted accounting principles in the United States
applied on a consistent basis; any schedules included in the
Exchange Act Reports present fairly the information required
to be stated therein; and if pro forma financial statements
are included in the Exchange Act Reports, the assumptions
used in preparing the pro forma financial statements included
in the Exchange Act Reports provide a reasonable basis for
presenting the significant effects directly attributable to
the transactions or events described therein, the related pro
forma adjustments give appropriate effect to those
assumptions in all material respects, and the pro forma
columns therein reflect the proper application in all
material respects of those adjustments to the corresponding
historical financial statement amounts.
(s) Except as disclosed in the Exchange Act Reports,
since the date of the latest audited financial statements
included in the Exchange Act Reports there has been no
material adverse change, nor any development or event
involving a prospective material adverse change, in the
condition (financial or other), business, properties or
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results of operations of Diamond Offshore and its
subsidiaries taken as a whole, and there has been no dividend
or distribution of any kind declared, paid or made by Diamond
Offshore on any class of its capital stock.
(t) Diamond Offshore is not and, after giving effect to
the transactions contemplated by this Underwriting Agreement,
will not be (i) an "investment company" or a company
"controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, or (ii) a
"holding company" or a "subsidiary company" or an "affiliate"
of a holding company within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
(u) Neither Diamond Offshore nor any of its affiliates
does business with the government of Cuba or with any person
or affiliate located in Cuba within the meaning of Section
517.075, Florida Statutes.
(v) No consent or approval of any federal governmental
agency with respect to any federal maritime law matter is
required in connection with performance by Diamond Offshore
of its obligations under this Underwriting Agreement, and the
execution, delivery, and performance by Diamond Offshore and
the consummation of the transactions contemplated thereby
will not violate any existing federal maritime laws,
including, without limitation, the Shipping Act, 1916, as
amended, and the rules and regulations of the Maritime
Administration (MarAd) and the United States Coast Guard.
2. Purchase and Sale. Subject to the terms and conditions
and in reliance upon the representations and warranties set forth
herein, the Company agrees to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from
the Company, at the purchase price set forth in Schedule I hereto
the principal amount of the Underwritten Securities set forth
opposite such Underwriter's name in Schedule II hereto, except
that, if Schedule I hereto provides for the sale of Securities
pursuant to delayed delivery arrangements, the respective
principal amounts of Underwritten Securities to be purchased by
the Underwriters shall be as set forth in Schedule II hereto less
the respective amounts of Contract Securities (as hereinafter
defined) determined as provided below. Securities to be purchased
by the Underwriters are herein sometimes called the "Underwritten
Securities" and Securities to be purchased pursuant to Delayed
Delivery Contracts as hereinafter provided are herein called
"Contract Securities."
In addition, subject to the terms and conditions herein set
forth, the Company may grant, if so provided in Schedule I, an
option to the Underwriters, severally and not jointly, to purchase
up to the number or aggregate principal amount, as the case may
be, of the Option Underwritten Securities set forth therein at a
price per Option Underwritten Security equal to the price per
Initial Underwritten Security, less an amount equal to any
dividends or distributions declared by the Company and paid or
payable on the Initial Underwritten
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Securities but not payable on the Option Underwritten Securities.
Such option, if granted, will expire 30 days after the date of
this Underwriting Agreement, and may be exercised in whole or in
part from time to time only for the purpose of covering over-
allotments which may be made in connection with the offering and
distribution of the Initial Underwritten Securities upon notice by
the Representatives to the Company setting forth the number or
aggregate principal amount, as the case may be, of Option
Underwritten Securities as to which the several Underwriters are
then exercising the option and the time, date and place of payment
and delivery for such Option Underwritten Securities. Any such
time and date of payment and delivery shall be determined by the
Representatives, but shall not be later than seven full business
days after the exercise of said option, nor in any event prior to
the Closing Date, unless otherwise agreed upon by the
Representatives and the Company. If the option is exercised as to
all or any portion of the Option Underwritten Securities, each of
the Underwriters, severally and not jointly, will purchase that
amount which shall bear the same proportion to the total principal
amount of Option Underwritten Securities as the principal amount
of Securities set forth opposite the name of such Underwriter
bears to the aggregate principal amount of Securities set forth in
Schedule II hereto, except to the extent that you determine that
such reduction shall be otherwise than in such proportion and so
advise the Company in writing.
If so provided in Schedule I hereto, the Underwriters are
authorized to solicit offers to purchase Securities from the
Company pursuant to delayed delivery contracts ("Delayed Delivery
Contracts"), substantially in the form of Schedule III hereto but
with such changes therein as the Company may authorize or approve.
The Underwriters will endeavor to make such arrangements and, as
compensation therefor, the Company will pay to the
Representatives, for the account of the Underwriters, on the
Closing Date, the percentage set forth in Schedule I hereto of the
principal amount of the Securities for which Delayed Delivery
Contracts are made. Delayed Delivery Contracts are to be with
institutional investors, including commercial and savings banks,
insurance companies, pension funds, investment companies and
educational and charitable institutions. The Company will enter
into Delayed Delivery Contracts in all cases where sales of
Contract Securities arranged by the Underwriters have been
approved by the Company but, except as the Company may otherwise
agree, each such Delayed Delivery Contract must be for not less
than the minimum principal amount set forth in Schedule I hereto
and the aggregate principal amount of Contract Securities may not
exceed the maximum aggregate principal amount set forth in
Schedule I hereto. The Underwriters will not have any
responsibility in respect of the validity or performance of
Delayed Delivery Contracts. The principal amount of Securities to
be purchased by each Underwriter as set forth in Schedule II
hereto shall be reduced by an amount which shall bear the same
proportion to the total principal amount of Contract Securities as
the principal amount of Securities set forth opposite the name of
such Underwriter bears to the aggregate principal amount of
Securities set forth in Schedule II hereto, except to the extent
that you determine that such reduction shall be otherwise than in
such proportion and so advise the Company in writing; provided,
however, that, subject to Section 9 hereof, the total principal
amount of Securities to be purchased by all Underwriters shall be
the aggregate principal
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amount of Securities set forth in Schedule II hereto less the
aggregate principal amount of Contract Securities.
3. Delivery and Payment. Delivery of and payment for the
Underwritten Securities shall be made at the office, on the date
and at the time specified in Schedule I hereto, which date and
time may be postponed by agreement between the Representatives and
the Company or as provided in Section 9 hereof (such date and time
of delivery and payment for the Underwritten Securities being
herein called the "Closing Date"). In addition, in the event that
the Underwriters have exercised their option, if any, to purchase
any or all of the Option Underwritten Securities, payment of the
purchase price for, and delivery of such Option Underwritten
Securities, shall be made at the location set forth on Schedule I,
or at such other place as shall be agreed upon by the
Representatives and the Company, as specified in the notice from
the Representatives to the Company.
Payment shall be made to the Company by wire transfer of
immediately available funds to a bank account designated by the
Company, against delivery to the Representatives for the
respective accounts of the Underwriters of the Underwritten
Securities to be purchased by them. It is understood that each
Underwriter has authorized the Representatives, for its account,
to accept delivery of, receipt for, and make payment of the
purchase price for, the Underwritten Securities which it has
severally agreed to purchase. The Representatives, individually
and not as representative of the Underwriters, may (but shall not
be obligated to) make payment of the purchase price for the
Underwritten Securities to be purchased by any Underwriter whose
funds have not been received by the Closing Date, as the case may
be, but such payment shall not relieve such Underwriter from its
obligations hereunder.
Certificates for the Underwritten Securities shall be
registered in such names and in such denominations as the
Representatives may request not less than two full business days
in advance of the Closing Date. The Company agrees to have the
Underwritten Securities available for inspection, checking and
packaging by the Representatives in New York, New York, not later
than 1:00 p.m. on the business day prior to the Closing Date.
4. Agreements. (a) The Company agrees with the several
Underwriters that:
(i) Until the earlier of (X) the termination of the
offering of the Underwritten Securities, and (Y) six months
from the date of this Underwriting Agreement, the Company
will not file any amendment (other than amendments resulting
from the filing of the documents incorporated by reference
pursuant to Item 12 of Form S-3 under the Act) of the
Registration Statement or the Final Prospectus unless the
Company has furnished you a copy for your review prior to
filing and will not file any such proposed amendment or
supplement to which you reasonably object. The Company will
cause the Final Prospectus to be filed with the Commission
pursuant to Rule 424. The Company will promptly advise the
Representatives (A) when the Final Prospectus shall have been
filed with the Commission pursuant to
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Rule 424, (B) when any amendment to the Registration
Statement relating to the Underwritten Securities shall have
become effective, (C) of any request by the Commission for
any amendment of the Registration Statement or amendment of
or supplement to the Final Prospectus or for any additional
information, (D) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding
for that purpose and (E) of the receipt by the Company of any
notification with respect to the suspension of the
qualification of the Underwritten Securities for sale in any
jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Company will use its best
efforts to prevent the issuance of any such stop order and,
if issued, to obtain as soon as possible the withdrawal
thereof.
(ii) If, at any time when a prospectus relating to the
Underwritten Securities is required to be delivered under the
Act, any event occurs as a result of which, the Final
Prospectus as then amended or supplemented would include any
untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the
light of the circumstances under which they were made not
misleading, or if it shall be necessary to amend or
supplement the Final Prospectus to comply with the Act or the
Exchange Act or the respective rules thereunder, the Company
promptly will prepare and file with the Commission, subject
to the first sentence of paragraph (a)(i) of this Section 4,
an amendment or supplement which will correct such statement
or omission or an amendment which will effect such
compliance.
(iii) The Company will comply with the Act and the Act
Regulations and the Exchange Act and the Exchange Act
Regulations so as to permit the completion of the
distribution of the Underwritten Securities as contemplated
in this Underwriting Agreement and in the Registration
Statement and the Final Prospectus. If at any time when the
Final Prospectus is required by the Act or the Exchange Act
to be delivered in connection with sales of the Underwritten
Securities, any event shall occur or condition shall exist as
a result of which it is necessary, in the opinion of counsel
for the Underwriters or for the Company, to amend the
Registration Statement in order that the Registration
Statement will not contain 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 not
misleading or to amend or supplement the Final Prospectus in
order that the Final Prospectus will not include an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, or if it shall be
necessary, in the opinion of such counsel, at any such time
to amend the Registration Statement or amend or supplement
the Final Prospectus in order to comply with the requirements
of the Act or the Act Regulations, the Company will promptly
prepare and file with the Commission, subject to Section
4(a)(i),
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such amendment or supplement as may be necessary to correct
such statement or omission or to make the Registration
Statement or the Final Prospectus comply with such
requirements, and the Company will furnish to the
Underwriters, without charge, such number of copies of such
amendment or supplement as the Underwriters may reasonably
request.
(iv) The Company will make generally available to its
securityholders and to the Representatives not later than 90
days after the end of the 12-month period beginning at the
end of the current fiscal quarter of the Company an earnings
statement or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the Act
and Rule 158 under the Act.
(v) The Company will furnish to the Representatives and
counsel for the Underwriters, without charge, copies of the
Registration Statement (including exhibits thereto or
incorporated by reference therein and documents incorporated
or deemed to be incorporated by reference therein), and each
amendment to the Registration Statement which shall become
effective on or prior to the Closing Date and, so long as
delivery of a prospectus by an Underwriter or dealer may be
required by the Act, as many copies of any Preliminary
Prospectus and the Final Prospectus and any amendments
thereof and supplements thereto as the Representatives may
reasonably request and the Company hereby consents to the use
of such copies for purposes permitted by the Act. The
Company will pay the expenses of printing or other production
of all documents relating to the offering. The Final
Prospectus and copies of the Registration Statement and each
amendment thereto furnished to the Underwriters will be
identical to any electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
(vi) The Company will arrange for the qualification of
the Underwritten Securities for sale under the laws of such
jurisdictions as the Representatives may reasonably
designate, will maintain such qualifications in effect so
long as required for the distribution of the Underwritten
Securities and will arrange for the determination of the
legality of the Underwritten Securities for purchase by
institutional investors; provided, however, the Company shall
not be obligated to file any general consent to service of
process under the laws of any such jurisdiction, subject
itself to taxation as doing business in any such
jurisdiction, or qualify to do business as a foreign
corporation in any such jurisdiction. The Company will pay
all reasonable expenses (including fees and disbursements of
counsel) in connection with such qualification (such
expenses, fees and disbursements not to exceed in the
aggregate $5,000).
(vii) The Company, during the period when the Final
Prospectus is required to be delivered under the Act or the
Exchange Act, will file all documents
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required to be filed with the Commission pursuant to Section
13, 14 or 15 of the Exchange Act within the time periods
required by the Exchange Act and the Exchange Act
Regulations.
(viii) During the period beginning from the date of the
Final Prospectus and continuing to and including the date 90
days after the date of the Final Prospectus, neither the
Company nor its subsidiaries will offer, sell, contract to
sell or otherwise dispose of any shares of the Underlying
Securities or any securities of Diamond Offshore or the
Company which are substantially similar to the Underwritten
Securities or the Underlying Securities or which are
convertible into or exchangeable for the Underlying
Securities or securities which are substantially similar to
the Underwritten Securities or shares of the Underlying
Securities (the "lock-up restriction") without the prior
written consent of the Representatives (other than (i)
pursuant to employee stock option plans existing, or on the
conversion or exchange of convertible or exchangeable
securities outstanding, on the date of the Final Prospectus
or (ii) the issuance of securities registered on Form S-4
issued in connection with an acquisition, merger or similar
transaction, in which event an acquiror of such securities
who is, or would by virtue of such acquisition be, an
affiliate of the issuer, agrees to the foregoing lock-up
restriction for the remainder of the 90-day period), except
for the Underwritten Securities offered in connection with
the offering.
(ix) The Company will keep available at all times such
number of shares of Underlying Securities sufficient to
enable the Company to satisfy its obligations under the terms
of the Underwritten Securities.
(x) The Company will use reasonable efforts to cause
its ownership of shares of the common stock, par value $.01
per share, of Diamond Offshore ("Diamond Offshore Common
Stock") not to be less than 50% of the issued and outstanding
shares of Diamond Offshore Common Stock at the Closing Date.
(b) Diamond Offshore agrees with the several Underwriters
that:
(i) Diamond Offshore shall cooperate with the Company
to effect compliance with the covenants and agreements set
forth in Sections (4)(a)(i),(ii) and (iii).
(ii) Until the termination of the offering of the
Underwritten Securities and the Underlying Securities,
Diamond Offshore will file all documents required to be filed
with the Commission pursuant to Sections 13, 14 or 15 of the
Exchange Act within the time periods required by the Exchange
Act and the Exchange Act Regulations.
(iii) During the period beginning from the date of the
Final Prospectus and
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continuing to and including the date 90 days after the date
of the Final Prospectus, neither Diamond Offshore nor its
subsidiaries will offer, sell, contract to sell or otherwise
dispose of any shares of the Underlying Securities or any
securities of Diamond Offshore or the Company which are
substantially similar to the Underwritten Securities or the
Underlying Securities or which are convertible into or
exchangeable for the Underlying Securities or securities
which are substantially similar to the Underwritten
Securities or shares of the Underlying Securities (the "lock-
up restriction") without the prior written consent of the
Representatives (other than (i) pursuant to employee stock
option plans existing, or on the conversion or exchange of
convertible or exchangeable securities outstanding, on the
date of the Final Prospectus or (ii) the issuance of
securities registered on Form S-4 issued in connection with
an acquisition, merger or similar transaction, in which event
an acquiror of such securities who is, or would by virtue of
such acquisition be, an affiliate of the issuer, agrees to
the foregoing lock-up restriction for the remainder of the
90-day period), except for the Underwritten Securities
offered in connection with the offering.
(iv) Diamond Offshore hereby covenants with the
Underwriters that it shall comply with all its obligations
under the Amended Registration Rights Agreement, including
without limitation all provisions relating to the timely
filing with (and the declaration of effectiveness by) the
Commission of a shelf registration statement in respect of
the Underlying Securities.
5. Offering by the Underwriters. It is understood that the
several Underwriters propose to offer the Underwritten Securities
for sale to the public as set forth in the Final Prospectus.
6. Payment of Expenses. The Company agrees with the
Underwriters that it will pay or cause the payment on its behalf
of all expenses incident to the performance of its obligations
under this Underwriting Agreement, including (a) the preparation,
printing, filing and mailing of the Registration Statement as
originally filed and of each amendment thereto; (b) the printing
of this Underwriting Agreement, any applicable Indentures and any
blue sky and legal investment surveys and any other documents in
connection with the offering, purchase, sale and delivery of the
Underwritten Securities; (c) the preparation, issuance, and
delivery to the Underwriters of the certificates for the
Underwritten Securities and any related Underlying Securities, any
certificates for the Underwritten Securities or such Underlying
Securities, to the Underwriters, including any transfer taxes and
any stamp or other duties payable upon the sale, issuance or
delivery of the Underwritten Securities to the Underwriters; (d)
the fees and disbursements of the Company's counsel and
accountants; (e) the qualification of the Securities under state
securities laws in accordance with this Underwriting Agreement,
including filing fees and the fee and disbursements of your
counsel in connection therewith and in connection with the
preparation of the blue sky and legal investment surveys in
accordance with Section 4(a)(vi); (f) the printing and delivery to
you of copies of the Registration Statement as
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originally filed and of each amendment thereto, of the Preliminary
Prospectuses, and of the Final Prospectus and any amendments or
supplements thereto; (g) the costs of preparing the Securities;
(h) the fees, if any, of the National Association of Securities
Dealers, Inc. and the New York Stock Exchange; (i) the fees and
expenses of the Trustee, including the fees and disbursements of
counsel for the Trustee in connection with the Indenture; (j) if
the Company determines to request rating of the Underwritten
Securities by particular rating agencies, any fees payable in
connection with such rating of the Underwritten Securities by such
rating agencies; and (k) the fees and expenses incurred, if any,
in connection with the listing of the Underwritten Securities.
Diamond Offshore agrees with the Underwriters that it will pay or
cause the payment on its behalf of all expenses incident to the
performance of its obligations under this Underwriting Agreement.
It is understood that the Company and Diamond Offshore have
separately agreed between themselves as to their respective
responsibilities to pay expenses in the Amended Registration
Rights Agreement. The Underwriters agree to make a payment to the
Company in lieu of reimbursement of expenses incurred in
connection with the offering and sale of the Underwritten
Securities.
7. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwritten
Securities shall be subject to the accuracy of the representations
and warranties on the part of the Company and Diamond Offshore
contained herein as of the date hereof, as of the date of the
effectiveness of any amendment to the Registration Statement filed
prior to the Closing Date (including the filing of any document
incorporated by reference therein), as of the date of the filing
by Diamond Offshore of any document under the Exchange Act and the
Exchange Act Regulations, and as of the Closing Date, to the
accuracy of the statements of the Company and Diamond Offshore
made in any certificates pursuant to the provisions hereof, to the
performance by each of the Company and Diamond Offshore of its
obligations hereunder and to the following additional conditions:
(a) The Registration Statement, including any Rule
462(b) Registration Statement, has become effective under the
Act and no stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, shall
have been issued and no proceedings for that purpose shall
have been instituted or threatened, and any request on the
part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel
to the Underwriters. A prospectus containing information
relating to the description of the Underwritten Securities
and any related Underlying Securities, the specific method of
distribution and similar matters shall have been filed with
the Commission in accordance with Rule 424(b) (or any
required post-effective amendment providing such information
shall have been filed and declared effective in accordance
with the requirements of Rule 430A), or, if the Company has
elected to rely upon Rule 434 of the Act Regulations, a Term
Sheet including the Rule 434 Information shall have been
filed with the Commission in accordance with Rule 424(b)(7).
(b) The Company shall have furnished to the
Representatives the opinion of Barry
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Hirsch, General Counsel for the Company, dated the Closing
Date, to the effect that:
(i) the Company has been duly incorporated and is
validly existing as a corporation in good standing under
the laws of Delaware, with full corporate power and
authority to own, lease and operate its properties and
conduct its business as described in the Final
Prospectus and to enter into and perform its obligations
under, or as contemplated under, the Underwriting
Agreement, and is duly qualified to do business as a
foreign corporation and is in good standing under the
laws of each jurisdiction which requires such
qualification wherein it owns or leases material
properties or conducts material business where the
failure to be in good standing or so qualified would
result in a Material Adverse Effect;
(ii) each of Lorillard, Inc., CNA Financial
Corporation and Diamond Offshore (each a "Subsidiary"
and together the "Subsidiaries") has been duly
incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction in
which it is chartered or organized, with full corporate
power and authority to own its properties and conduct
its business as described in the Final Prospectus, and
is duly qualified to do business as a foreign
corporation and is in good standing under the laws of
each jurisdiction which requires such qualification
wherein it owns or leases material properties or
conducts material business where the failure to be in
good standing or so qualified would have a Material
Adverse Effect;
(iii) all the outstanding shares of capital stock of
each Subsidiary that are owned by the Company have been
duly and validly authorized and issued and are fully
paid and nonassessable, and, except as otherwise set
forth in the Final Prospectus, all outstanding shares of
capital stock of the Subsidiaries are owned by the
Company either directly or through wholly owned
subsidiaries free and clear of any perfected security
interest and, to the knowledge of such counsel, after
due inquiry, any other security interests, claims, liens
or encumbrances;
(iv) the Underwritten Securities conform in all
material respects to the description thereof contained
in the Final Prospectus;
(v) the Underwritten Securities have been duly
authorized by the Company for issuance and sale pursuant
to the Underwriting Agreement. The Underwritten
Securities, when issued and authenticated in the manner
provided for in the applicable Indenture and delivered
against payment of the consideration therefor specified
in the Underwriting Agreement, will constitute valid and
legally binding obligations of the Company, enforceable
against the Company in accordance with their terms,
except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors'
rights generally or by general equitable principles, and
except
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further as enforcement thereof may be limited by
governmental authority to limit, delay or prohibit the
making of payments outside the United States. The
Underwritten Securities are in the form contemplated by,
and each registered holder thereof is entitled to the
benefits of, the applicable Indenture;
(vi) the applicable Indenture has been duly
authorized, executed and delivered by the Company and
(assuming due authorization, execution and delivery
thereof by the applicable Trustee) constitutes a valid
and legally binding agreement of the Company,
enforceable against the Company in accordance with its
terms, except as the enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors'
rights generally or by general equitable principles;
(vii) the Amended Registration Rights Agreement has
been duly authorized, executed and delivered by the
Company;
(viii) there is no pending or, to the best knowledge
of such counsel, threatened action, suit or proceeding
before any court or governmental agency, authority or
body or any arbitrator involving the Company or any of
its subsidiaries, of a character required to be
disclosed in the Registration Statement which is not
adequately disclosed in the Final Prospectus, and there
is no franchise, contract or other document of a
character required to be described in the Registration
Statement or Final Prospectus, or to be filed as an
exhibit, which is not described or filed as required;
and the statements included or incorporated in the Final
Prospectus describing any legal proceedings or material
contracts or agreements relating to the Company fairly
summarize such matters in all material respects;
(ix) the Registration Statement and any amendments
thereto have become effective under the Act; to the best
knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement, as amended,
has been issued, no proceedings for that purpose have
been instituted or threatened, and the Registration
Statement, the Final Prospectus and each amendment
thereof or supplement thereto as of their respective
effective or issue dates (other than the financial
statements and other financial and statistical
information contained therein as to which such counsel
need express no opinion) complied as to form in all
material respects with the applicable requirements of
the Act and the Exchange Act and the respective rules
thereunder; and such counsel has no reason to believe
that the Registration Statement, or any amendment
thereof, at the time it became effective and at the date
of this Underwriting Agreement, contained any untrue
statement of a material fact or omitted to state any
material fact required to be stated therein or necessary
to make the statements therein not misleading or that
the Final Prospectus, as amended or supplemented, as of
its date and as of the date hereof, includes any untrue
statement of a material fact or omits to state a
material
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fact necessary to make the statements therein, in light
of the circumstances under which they were made, not
misleading;
(x) this Underwriting Agreement has been duly
authorized, executed and delivered by the Company;
(xi) no consent, approval, authorization or order
of any court or governmental agency or body is required
for the consummation by the Company of the transactions
contemplated herein or in the Delayed Delivery
Contracts, except such as have been obtained under the
Act and such as may be required under the blue sky laws
of any jurisdiction in connection with the purchase and
distribution of the Underwritten Securities by the
Underwriters and such other approvals (specified in such
opinion) as have been obtained;
(xii) neither the issue and sale of the Underwritten
Securities, nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of
the terms hereof or of any Delayed Delivery Contracts
will conflict with, result in a breach of, or constitute
a default under the Restated Certificate of
Incorporation or By-laws of the Company or the terms of
any indenture or other agreement or instrument known to
such counsel and to which the Company is a party or
bound, or any order or regulation known to such counsel
to be applicable to the Company of any court, regulatory
body, administrative agency, governmental body or
arbitrator having jurisdiction over the Company; and
(xiii) the Company is not now, and upon the sale of
the Underwritten Securities to be sold by it hereunder
and application of the net proceeds from such sale as
described in the Final Prospectus under "Use of
Proceeds" will not be, an "investment company" within
the meaning of the Investment Company Act of 1940, as
amended.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction
other than the corporate laws of the State of Delaware and the
laws of the State of New York or the United States, to the extent
deemed proper and specified in such opinion, upon the opinion of
other counsel of good standing believed to be reliable and who are
satisfactory to counsel for the Underwriters and (B) as to matters
of fact, to the extent deemed proper, on certificates of
responsible officers of the Company and public officials.
(c)(I) The Representatives shall have received an opinion,
dated such Closing Date, of Weil, Gotshal & Manges LLP, counsel to
Diamond Offshore, to the effect that:
(i) Diamond Offshore is a corporation duly organized,
validly existing and in
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good standing under the laws of the State of Delaware, and
has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as
described in the Final Prospectus;
(ii) all of the outstanding shares of Diamond Offshore
Common Stock (including the Underlying Securities) have been
duly authorized and validly issued, are fully paid and non-
assessable, are free of any preemptive rights pursuant to law
or Diamond Offshore's Restated Certificate of Incorporation
and conform as to legal matters in all material respects to
the description thereof contained in the Final Prospectus;
(iii) Diamond Offshore has all requisite corporate power
and authority to execute and deliver each of the Underwriting
Agreement and the Amended Registration Rights Agreement and
to perform its obligations thereunder. The execution,
delivery and performance of each of the Underwriting
Agreement and the Amended Registration Rights Agreement have
been duly authorized by all necessary corporate action on the
part of Diamond Offshore. Each of the Underwriting Agreement
and the Amended Registration Rights Agreement has been duly
executed and delivered by Diamond Offshore;
(iv) the execution, delivery and performance by Diamond
Offshore of each of the Underwriting Agreement and the
Amended Registration Rights Agreement and the compliance by
Diamond Offshore with the provisions of each of the
Underwriting Agreement and the Amended Registration Rights
Agreement and the consummation of the transactions
contemplated thereby will not conflict with, constitute a
default under or result in a breach or violation of (a) any
of the terms, conditions or provisions of the Restated
Certificate of Incorporation or Amended By-Laws, as amended,
of Diamond Offshore, (b) any New York, Texas, Delaware
corporate or federal law or regulation (other than federal
and state securities or blue sky laws, as to which such
counsel need express no opinion in this sentence, and the
Shipping Act, 1916, as amended, as to which such counsel need
express no opinion), or (c) any judgment, writ, injunction,
decree, order or ruling of any federal or state court or
governmental authority binding on Diamond Offshore or any of
it properties which remains unsatisfied and unperformed on
the Closing Date and of which such counsel is aware, except
in each case other than with respect to clause (a), any such
conflict, default, breach or violation as would not impair
Diamond Offshore's ability to perform its obligations under
the Underwriting Agreement or the Amended Registration Rights
Agreement or have any material adverse effect upon the
consummation of the transactions contemplated by the
Underwriting Agreement or the Amended Registration Rights
Agreement;
(v) no consent, approval, waiver, license, order or
authorization or other
-23-
action by or filing with any New York, Texas, Delaware
corporate or federal governmental agency, body or court is
required in connection with the execution and delivery by
Diamond Offshore of the Underwriting Agreement or the Amended
Registration Rights Agreement, or for the consummation by
Diamond Offshore of the transactions contemplated thereby,
except for filings and other action required pursuant to
federal and state securities or blue sky laws, as to which
such counsel need express no opinion, or the Shipping Act,
1916, as amended, as to which such counsel need express no
opinion, and those already obtained and made under the Act or
the Delaware General Corporation Law ("DGCL");
(vi) Diamond Offshore is not (A) an "investment company"
or an entity "controlled" by an "investment company" under
the Investment Company Act, as amended, and the rules and
regulations promulgated by the Commission thereunder (the
"Investment Company Act") or (B) a "holding company" or a
"subsidiary company" or an "affiliate" of a holding company
within the meaning of the Public Utility Holding Company Act
of 1935, as amended, and the rules and regulations
promulgated by the Commission thereunder (the "Holding
Company Act") (in rendering such opinion, such counsel may
assume that the Company (x) is not and is not controlled by
an "investment company" under the Investment Company Act and
(y) is not a "holding company" or a "subsidiary company" or
an "affiliate" of a holding company under the Holding Company
Act);
(vii) the statements in the Final Prospectus under the
caption "Description of Diamond Offshore Capital Stock",
insofar as they constitute descriptions of Diamond Offshore
Common Stock or refer to statements of laws or legal
conclusions under the DGCL, constitute fair summaries thereof
in all material respects. The statements in the Final
Prospectus under the caption "The Company and Relationship
with Diamond Offshore", insofar as they constitute
descriptions of the Amended Registration Rights Agreement,
constitute fair summaries thereof in all material respects;
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other
representatives of the Company and Diamond Offshore, independent
public accountants for Diamond Offshore, representatives of the
Underwriters and representatives of counsel for the Underwriters,
at which conferences the contents of the Registration Statement
and the Final Prospectus and related matters were discussed, and,
although such counsel has not independently verified and is not
passing upon and assumes no responsibility for the accuracy,
completeness or fairness of such statements contained in the
Registration Statement or the Final Prospectus, such counsel shall
advise you, on the basis of the foregoing that no facts have come
to such counsel's attention which lead such counsel to believe
that
-24-
the Final Prospectus, as of the date of the Underwriting Agreement
or as of such Closing Date contained or contains an untrue
statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading (it
being understood that such counsel need only express such views in
respect of information relating to Diamond Offshore that is
included in the Final Prospectus and need express no opinion as to
the financial statements and related notes or the other financial,
statistical and accounting data stated or omitted in the Final
Prospectus);
(c)(II) The Representatives shall have received an opinion,
dated such Closing Date, of the Vice President and General Counsel
of Diamond Offshore, to the effect that:
(i) Diamond Offshore is duly qualified to transact
business as a foreign corporation in good standing in all
jurisdictions other than the State of Delaware in which its
ownership or lease of property or the conduct of its business
requires such qualification, except those jurisdictions where
the failure to be so qualified would not have a material
adverse effect on the business, operations or financial
condition of Diamond Offshore and its subsidiaries taken as a
whole;
(ii) all of the issued and outstanding shares of capital
stock of each subsidiary of Diamond Offshore listed on
Schedule III hereto (each, a "DO Subsidiary" and collectively
the "DO Subsidiaries") are owned, directly or indirectly, of
record and beneficially by Diamond Offshore, free and clear
of all liens, claims, limitations on voting rights, options,
security interests and other encumbrances and have been duly
authorized, validly issued, and are fully paid and
nonassessable, except to the extent that any such liens,
claims, limitations, options, security interests and other
encumbrances, individually or in the aggregate, would not
have a material adverse effect on the business, operations or
financial condition of Diamond Offshore and its subsidiaries,
taken as a whole;
(iii) each DO Subsidiary is a corporation, duly
organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation. Each DO
Subsidiary is duly qualified to transact business and is in
good standing as a foreign corporation in each state listed
by such DO Subsidiary's name on Schedule III hereto, such
states being the only states in which each DO Subsidiary is
required to be qualified, except where the failure to be so
qualified would not have a material adverse effect on the
business, operations or financial condition of Diamond
Offshore and its subsidiaries, taken as a whole;
(iv) no consent or approval of any federal governmental
agency with respect to any federal maritime law matter is
required in connection with performance by Diamond Offshore
of its obligations under the Underwriting Agreement or the
Amended Registration Rights Agreement; and the execution,
delivery, and
-25-
performance by Diamond Offshore and the consummation of the
transactions contemplated thereby will not violate any
existing federal maritime laws, including, without
limitation, the Shipping Act, 1916, as amended, and the rules
and regulations of the Maritime Administration (MarAd) and
the United States Coast Guard; and
(v) there is no pending or, to the best knowledge of
such counsel, threatened action, suit or proceeding before
any court or governmental agency, authority or body or any
arbitrator involving Diamond Offshore or any DO Subsidiary of
a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Final
Prospectus; and the statements included or incorporated in
the Final Prospectus describing any legal proceedings
relating to Diamond Offshore fairly summarize such matters in
all material respects.
In rendering such opinion, such Vice President and General
Counsel may rely as to the incorporation of Diamond Offshore, the
authorization, execution and delivery of the Underwriting
Agreement and the Amended Registration Rights Agreement and all
other matters acceptable to the Representatives upon an opinion of
counsel satisfactory to the Representatives, a copy of which shall
be delivered concurrently with the opinion of such Vice President
and General Counsel.
The Representatives shall have also received an opinion,
dated such Closing Date, of Nabarro Nathanson, special English
counsel to Diamond Offshore, to the effect that each of Diamond
Offshore Limited and Diamond Offshore (UK) Limited, each of which
is a subsidiary of Diamond Offshore incorporated under the laws of
the United Kingdom, (i) is duly incorporated and validly exists
under the laws of England and Wales and (ii) has all requisite
corporate power and authority to own, operate and lease its
properties and to carry on its business as now carried on.
(d) The Representatives shall have received from each of
Mayer, Brown & Platt, Andrews & Kurth L.L.P., and Sullivan &
Cromwell, counsel for the Underwriters, such opinions, dated the
Closing Date, with respect to the incorporation of the Company and
of Diamond Offshore, the validity of the Indenture, the Securities
and the Underlying Securities, the Registration Statement, the
Final Prospectus and other related matters as the Representatives
may reasonably require, and the Company and Diamond Offshore shall
have furnished to such counsel such documents as they request for
the purpose of enabling them to pass upon such matters.
(e) The Company shall have furnished to the Representatives
a certificate of a Co-Chairman of the Board, the President or a
Vice President, and the principal financial or accounting officer
of the Company, dated the Closing Date, to the effect that the
signers of such certificate have carefully examined the
Registration Statement, the Final Prospectus and this Underwriting
Agreement and that:
-26-
(i) the representations and warranties of the Company
in this Underwriting Agreement are true and correct in all
material respects on and as of the Closing Date with the same
effect as if made on the Closing Date and the Company has
complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or
prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement, as amended, has been issued and no
proceedings for that purpose have been instituted or, to the
Company's knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Company's quarterly report on Form
10-Q for the quarter ended June 30, 1997, there has been no
Material Adverse Effect, except as set forth in the Final
Prospectus.
(f) Diamond Offshore shall have furnished to the
Representatives a certificate, dated the Closing Date, of the
President, any Senior Vice President, the Treasurer or any Vice
President and a principal financial or accounting officer of
Diamond Offshore in which such officers, to the best of their
knowledge after reasonable investigation, shall state that the
representations and warranties of Diamond Offshore in this
Underwriting Agreement are true and correct, that Diamond Offshore
has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied hereunder at or prior to
such Closing Date, and that, subsequent to the date of the most
recent financial statements in the Exchange Act Reports, there has
been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of
operations of Diamond Offshore and its subsidiaries taken as a
whole except as set forth in or contemplated by the Final
Prospectus or as described in such certificate.
(g) At the Closing Date, the Company's independent
accountants shall have furnished to the Representatives a letter
or letters (which may refer to letters previously delivered to the
Representatives), dated as of the Closing Date, in form and
substance satisfactory to the Representatives, confirming that
they are independent accountants within the meaning of the Act and
the Exchange Act and the respective applicable published rules and
regulations thereunder, that the response to Item 10 of the
Registration Statement is correct insofar as it relates to them
and stating in effect that:
(i) in their opinion the audited financial statements
and financial statement schedules included or incorporated in
the Registration Statement and the Final Prospectus and
reported on by them comply in form in all material respects
with the applicable accounting requirements of the Act and
the Exchange Act and the related published rules and
regulations;
(ii) on the basis of a reading of the amounts included
or incorporated in the
-27-
Registration Statement and the Final Prospectus in response
to Item 301 of Regulation S-K and of the latest unaudited
financial statements made available by the Company and its
subsidiaries; carrying out certain specified procedures (but
not an examination in accordance with generally accepted
auditing standards) which would not necessarily reveal
matters of significance with respect to the comments set
forth in such letter; a reading of the minutes of the
meetings of the stockholders, directors and committees of the
Company and the Subsidiaries; and inquiries of certain
officials of the Company who have responsibility for
financial and accounting matters of the Company and its
subsidiaries as to transactions and events subsequent to the
date of the most recent audited financial statements
incorporated in the Registration Statement and the Final
Prospectus, nothing came to their attention which caused them
to believe that:
(1) the amounts in the unaudited Selected
Consolidated Financial Data and Capitalization, if any,
included in the Registration Statement and the Final
Prospectus and the amounts included or incorporated in
the Registration Statement and the Final Prospectus in
response to Item 301 of Regulation S-K, do not agree
with the corresponding amounts in the audited financial
statements from which such amounts were derived;
(2) any unaudited financial statements included or
incorporated in the Registration Statement and the Final
Prospectus do not comply as to form in all material
respects with applicable accounting requirements and
with the published rules and regulations of the
Commission with respect to financial statements included
or incorporated in quarterly reports on Form 10-Q under
the Exchange Act; and said unaudited financial
statements are not stated (except as permitted by Form
10-Q) in conformity with GAAP applied on a basis
substantially consistent with that of the audited
financial statements included or incorporated in the
Registration Statement and the Final Prospectus; or
(3) with respect to the period subsequent to the
date of the most recent financial statements included or
incorporated in the Registration Statement and the Final
Prospectus, there were any changes, at a specified date
not more than five business days prior to the date of
the letter, in the long-term debt of the Company and its
subsidiaries or capital stock of the Company or
decreases in the stockholders' equity of the Company and
its subsidiaries as compared with the amounts shown on
the most recent consolidated balance sheet included or
incorporated in the Registration Statement and the Final
Prospectus, or for the period from the date of the most
recent financial statements included or incorporated in
the Registration Statement and the Final Prospectus to
such specified date there were any decreases, as
compared with the corresponding period in the preceding
year, in total revenues, or in total or per share
amounts of income before income taxes or of net income,
of the Company and its subsidiaries, except in all
instances for changes or decreases set forth in such
letter, in which
-28-
case the letter shall be accompanied by an explanation
by the Company as to the significance thereof unless
said explanation is not deemed necessary by the
Representatives; and
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of
the Company) set forth in the Registration Statement and the
Final Prospectus and in Exhibit 12 to the Registration
Statement, including the information included or incorporated
in Items 1, 6, and 7 of the Company's annual report on Form
10-K, incorporated in the Registration Statement and the
Final Prospectus, or in "Management's Discussion and Analysis
of Financial Condition and Results of Operations" included or
incorporated in the Company's quarterly reports on Form 10-Q
or in any Form 8-K, incorporated in the Registration
Statement and the Final Prospectus, agrees with the
accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation.
References to the Registration Statement and the Final
Prospectus in this paragraph (g) are to such documents as
amended and supplemented at the date of the letter.
(h) At the Closing Date, Diamond Offshore's independent
accountants shall have furnished to the Representatives a letter
or letters (which may refer to letters previously delivered to the
Representatives), dated as of the Closing Date, with respect to
such matters and in such form as the Representatives reasonably
request.
In addition, except as provided in Schedule I hereto, at the
time this Underwriting Agreement is executed, each of the
Company's and Diamond Offshore's independent public accountants
shall have furnished to the Representatives a letter or letters,
dated the date of this Underwriting Agreement, in form and
substance satisfactory to the Representatives, to the effect set
forth above in paragraphs (g) and (h) of this Section 7.
(i) Since the respective dates as of which information is
given in the Final Prospectus as amended prior to the date of this
Underwriting Agreement there shall not have been any change in the
capital stock or long-term debt of the Company or Diamond Offshore
or any of their respective subsidiaries or any change, or any
development involving a prospective change, in or affecting the
general affairs, management, financial position, stockholders'
equity or results of operations of the Company, Diamond Offshore
and their respective subsidiaries, otherwise than as set forth or
contemplated in the Final Prospectus as amended prior to the date
of this Underwriting Agreement, the effect of which is in the
judgment of the Representatives so material and adverse as to make
it impracticable or inadvisable to proceed with the public
offering or the delivery of the Underwritten Securities on the
terms and in the manner contemplated in the Final Prospectus as
first amended or supplemented relating to the Underwritten
Securities;
-29-
(j) On or after the date of this Underwriting Agreement, no
downgrading shall have occurred in the rating accorded the
Company's or Diamond Offshore's debt securities or preferred stock
by any "nationally recognized statistical rating organization", as
that term is defined by the Commission for purposes of Rule
436(g)(2) under the Act;
(k) On or after the date of this Underwriting Agreement
there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a suspension or
material limitation in trading in the Company's or Diamond
Offshore's securities on the New York Stock Exchange; (iii) a
general moratorium on commercial banking activities declared by
either Federal or New York State authorities; or (iv) the outbreak
or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war,
if the effect of any such event specified in this clause (iv) in
the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of
the Underwritten Securities on the terms and in the manner
contemplated in the Final Prospectus as first amended or
supplemented relating to the Underwritten Securities;
(l) the Underwritten Securities shall have been approved for
listing, subject only to official notice of issuance, on the New
York Stock Exchange;
(m) the Amended Registration Rights Agreement shall have
been duly executed and delivered by each of the Company and
Diamond Offshore;
(n) In the event that the Underwriters are granted an over-
allotment option by the Company and the Underwriters exercise
their option to purchase all or any portion of the Option
Underwritten Securities, the representations and warranties of the
Company and of Diamond Offshore contained herein and the
statements in any certificates furnished by the Company or Diamond
Offshore hereunder shall be true and correct as of each Closing
Date, and, at the relevant Closing Date, the Representatives shall
have received:
(i) A certificate, dated such Closing Date, of a Co-
Chairman of the Board, the President or a Vice President of
the Company and the principal financial officer or accounting
officer of the Company, confirming that the certificate
delivered at the Closing Date pursuant to Section 7(e) hereof
remains true and correct as of such Closing Date.
(ii) A certificate, dated such Closing Date, of the
President, any Senior Vice President, the Treasurer or any
Vice President and a principal financial or accounting
officer of Diamond Offshore, confirming that the certificate
delivered at the Closing Date pursuant to Section 7(f) hereof
remains true and correct as of such Closing Date.
-30-
(iii) The opinion of the General Counsel for the Company,
dated the Closing Date, relating to the Option Underwritten
Securities and otherwise to the same effect as the opinion
required by Section 7(b) hereof.
(iv) The opinion of Weil, Gotshal & Manges LLP, dated
the Closing Date, relating to the Option Underwritten
Securities and otherwise to the same effect as the opinion
required by Section 7(c)(I) hereof.
(v) The opinion of the Vice President and General
Counsel of Diamond Offshore, dated the Closing Date, relating
to the Option Underwritten Securities and otherwise to the
same effect as the opinion required by Section 7(c)(II)
hereof.
(vi) The opinions of the counsel for the Underwriters,
dated the Closing Date, relating to the Option Underwritten
Securities and otherwise to the same effect as the opinions
required by Section 7(d) hereof.
(vii) A letter from the Company's independent
accountants, in form and substance satisfactory to the
Representatives and dated such Closing Date, substantially in
the same form and substance as the letter furnished to the
Representatives pursuant to Section 7(g) hereof, except that
the "specified date" on the letter furnished pursuant to this
paragraph shall be a date not more than three business days
prior to such Closing Date.
(viii) A letter from Diamond Offshore's independent
accountants, in form and substance satisfactory to the
Representatives and dated such Closing Date, substantially in
the same form and substance as the letter furnished to the
Representatives pursuant to Section 7(h) hereof, except that
the "specified date" on the letter furnished pursuant to this
paragraph shall be a date not more than three business days
prior to such Closing Date.
(o) Prior to the Closing Date, each of the Company and
Diamond Offshore shall have furnished to the Representatives such
further information, certificates and documents as the
Representatives may reasonably request.
(p) The Company shall have accepted Delayed Delivery
Contracts in any case where sales of Contract Securities arranged
by the Underwriters have been approved by the Company.
If any of the conditions specified in this Section 7 shall
not have been fulfilled in all material respects when and as
provided in this Underwriting Agreement, or if any of the opinions
and certificates mentioned above or elsewhere in this Underwriting
Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the
-31-
Representatives and their counsel, this Underwriting Agreement and
all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives.
Notice of such cancellation shall be given to the Company in
writing or by telephone or telecopy confirmed in writing.
8. Reimbursement of Underwriters' Expenses. If the sale of
the Underwritten Securities provided for herein is not consummated
because any condition to the obligations of the Underwriters set
forth in Section 7 hereof is not satisfied, or because of any
refusal, inability or failure on the part of the Company to
perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the Underwriters, or
because of the termination of this Underwriting Agreement under
Section 11, the Company will reimburse the Underwriters severally
upon demand for all out-of-pocket expenses (including reasonable
fees and disbursements of counsel) that shall have been incurred
by them in connection with the proposed purchase and sale of the
Underwritten Securities; such obligation of the Company to
reimburse the Underwriters shall serve as the exclusive remedy of
the Underwriters with respect to the Company.
9. Indemnification. (a) The Company will indemnify and
hold harmless each Underwriter against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may
become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Final Prospectus as amended or
supplemented and any other prospectus relating to the Securities,
or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by
such Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to
the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Final Prospectus as amended or
supplemented and any other prospectus relating to the Securities,
or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by
any Underwriter of Underwritten Securities through the
Representatives expressly for use in the Final Prospectus as
amended or supplemented relating to such Securities.
(b) Diamond Offshore will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary
Prospectus, any preliminary
-32-
prospectus supplement, the Registration Statement, the Final
Prospectus as amended or supplemented and any other prospectus
relating to the Securities, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission
or alleged omission was made (i) in any Exchange Act Report that
has been included in any current report on Form 8-K filed by the
Company and (ii) under the headings "Diamond Offshore", "Price
Range of Diamond Offshore Common Stock and Dividend Policy" and
"Description of Diamond Offshore Capital Stock" in any Preliminary
Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Final Prospectus as amended or
supplemented and any other prospectus relating to the Securities,
or any such amendment or supplement; and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by
such Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred.
(c) Each Underwriter will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to
which the Company may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained
in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Final Prospectus as
amended or supplemented and any other prospectus relating to the
Securities, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made
in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Final Prospectus as
amended or supplemented and any other prospectus relating to the
Securities, or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the
Company by such Underwriter through the Representatives expressly
for use therein; and will reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such
expenses are incurred.
(d) Promptly after receipt by an indemnified party under
subsection (a), (b) or (c) above of notice of the commencement of
any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which
it may have to any indemnified party otherwise than under such
subsection, except to the extent a defense or counterclaim has
been foreclosed. In case any such action shall be brought against
any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it
determines, jointly with any other
-33-
indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any
legal expenses of other counsel or any other expenses, in each
case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the prior
written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect
of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise
or judgment (i) includes an unconditional release of the
indemnified party from all liability arising out of such action or
claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act, by or on behalf of any
indemnified party.
(e) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified
party under subsection (a), (b) or (c) above in respect of any
losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such several proportions as are
appropriate to reflect the relative benefits received by each of
the Company and Diamond Offshore, severally, on the one hand and
the Underwriters of the Underwritten Securities on the other from
the offering of the Underwritten Securities to which such loss,
claim, damage or liability (or action in respect thereof) relates.
If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (d)
above and a defense or counterclaim has been foreclosed, then each
indemnifying party shall contribute to such amount paid or payable
by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative
fault of the Company and Diamond Offshore on the one hand and the
Underwriters of the Underwritten Securities on the other in
connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations.
The relative benefits received by the Company and Diamond
Offshore, severally, on the one hand and such Underwriters on the
other shall be deemed to be in the same proportion as the total
net proceeds from such offering (before deducting expenses)
received by each of the Company and Diamond Offshore, severally,
bear to the total underwriting discounts and commissions received
by such Underwriters. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied
by the Company and Diamond Offshore on the one hand or such
Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, Diamond Offshore
and the Underwriters
-34-
agree that it would not be just and equitable if contribution
pursuant to this subsection (e) were determined by pro rata
allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above
in this subsection (e). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in
this subsection (e) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this subsection (e), no
Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the applicable
Underwritten Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of
the Underwriters of Underwritten Securities in this subsection (e)
to contribute are several in proportion to their respective
underwriting obligations with respect to such Securities and not
joint.
(f) The obligations of the Company and Diamond Offshore
under this Section 9 shall be in addition to any liability which
the Company and Diamond Offshore may otherwise have and shall
extend, upon the same terms and conditions, to each person, if
any, who controls any Underwriter within the meaning of the Act;
and the obligations of the Underwriters under this Section 9 shall
be in addition to any liability which the respective Underwriters
may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to
each person, if any, who controls the Company within the meaning
of the Act.
10. Default by an Underwriter. If any one or more
Underwriters shall fail to purchase and pay for any of the
Underwritten Securities agreed to be purchased by such Underwriter
or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its obligations under
this Underwriting Agreement, the remaining Underwriters shall be
obligated severally to take up and pay for (in the respective
proportions which the amount of Underwritten Securities set forth
opposite their names in Schedule II hereto bears to the aggregate
amount of Underwritten Securities set forth opposite the names of
all the remaining Underwriters) the Underwritten Securities which
the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate
amount of Underwritten Securities which the defaulting Underwriter
or Underwriters agreed but failed to purchase shall exceed 10% of
the aggregate amount of Underwritten Securities set forth in
Schedule II hereto, the remaining Underwriters shall have the
right to purchase all, but shall not be under any obligation to
purchase any, of the Underwritten Securities, and if such
nondefaulting Underwriters do not purchase all the Underwritten
Securities, this Underwriting Agreement will terminate without
liability to any
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nondefaulting Underwriter or the Company. In the event of a
default by any Underwriter as set forth in this Section 10, the
Closing Date shall be postponed for such period, not exceeding
seven days, as the Representatives shall determine in order that
the required changes in the Registration Statement and the Final
Prospectus or in any other documents or arrangements may be
effected. Nothing contained in this Underwriting Agreement shall
relieve any defaulting Underwriter of its liability, if any, to
the Company and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
11. Termination and Liabilities. (a) This Underwriting
Agreement shall be subject to termination in the absolute
discretion of the Representatives, by notice given to the Company
prior to delivery of and payment for the Underwritten Securities,
if after the date of this Underwriting Agreement and prior to such
time there has occurred a development or event of the kind
specified in Section 7(i), 7(j) or 7(k).
(b) If this Underwriting Agreement is terminated pursuant to
this Section 11, such termination shall be without liability of
any party to any other party except as provided in Sections 6 and
8 hereof, and provided further that Sections 1A, 1B, 9 and 12
hereof shall survive such termination and remain in full force and
effect.
12. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities
and other statements of the Company or its officers and of the
Underwriters set forth in or made pursuant to this Underwriting
Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the
Company or any of the officers, directors or controlling persons
referred to in Section 9 hereof, and will survive delivery of and
payment for the Underwritten Securities.
13. Notices. All communications hereunder will be in
writing and effective only on receipt, and, if sent to the
Representatives, will be mailed, delivered, sent by or telegraphed
and confirmed to them, at the address specified in Schedule I
hereto; or, if sent to the Company, will be mailed, delivered or
confirmed telecopy at 667 Madison Avenue, New York, New York
10021, attention of the Corporate Secretary; or, if sent to
Diamond Offshore, will be mailed, delivered or confirmed telecopy
at 15415 Katy Freeway, Houston, Texas 77094, attention of the
Corporate Secretary.
14. Successors. This Underwriting Agreement will inure to
the benefit of and be binding upon the parties hereto and their
respective successors and the officers and directors and
controlling persons referred to in Section 8 hereof, and no other
person will have any right or obligation hereunder.
15. Applicable Law. This Underwriting Agreement will be
governed by and construed in accordance with the laws of the State
of New York.
16. Counterparts. This Underwriting Agreement may be signed
in various counterparts
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which together shall constitute one and the same instrument.
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If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate
hereof, whereupon this letter and your acceptance shall represent
a binding agreement among the Company, Diamond Offshore and the
Underwriter.
Very truly yours,
LOEWS CORPORATION
By: /s/ Peter W. Keegan
--------------------------
Its: Senior Vice President
--------------------------
DIAMOND OFFSHORE
DRILLING, INC.
By: /s/ Robert E. Rose
--------------------------
Its: President and CEO
--------------------------
The foregoing Agreement (including
all Schedules and Exhibits hereto)
is hereby confirmed and accepted as
of the date specified in Schedule I
hereto.
/s/ Goldman, Sachs & Co.
--------------------------
(Goldman, Sachs & Co.)
For itself and the other several
Underwriters, if any, named in
Schedule II to the foregoing
Agreement.
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SCHEDULE I
Underwriting Agreement dated September 16 , 1997
Representatives: Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
The Underwritten Securities shall have the following terms:
Title: 3-1/8% Exchangeable Subordinated Notes due 2007
Rank: Subordinated Debentures
Aggregate principal amount: $1,000,000,000 (plus up to
$150,000,000 aggregate principal
amount of Option Underwritten
Securities)
Currency of payment: U.S. Dollar
Interest rate or formula: 3-1/8% per annum
Interest payment dates: March 15 and September 15
Regular record dates: March 1 and September 1
Stated maturity date: September 15, 2007
Redemption: In whole or in part at option of Company, on or
after September 15, 2002
Exchange provisions: Exchangeable into shares of the
Underlying Securities at any time from
and including October 1, 1998 and prior
to the close of business on September 15,
2007, unless previously redeemed or
repurchased, at an exchange rate of
15.3757 shares per $1,000 principal
amount of Underwritten Securities,
subject to adjustment and to certain
Company rights.
Underlying Securities: Common stock, par value $.01 per share,
of Diamond Offshore.
Listing requirements: List the Underwritten Securities and the
Underlying Securities on the New York
Stock Exchange
Fixed or Variable Price Offering: Fixed Price Offering
If Fixed Price Offering, initial public
offering price per share: 100%
of the principal amount, plus accrued interest,
if any, from September 19, 1997.
Purchase price: 98.00% of principal amount, plus accrued
interest, if any, from September 19, 1997.
Form: Global Security
Closing date and location: September 19, 1997
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Delayed Delivery Arrangements: NONE.
Modification of items to be covered by the letter from the
Company's independent accountants delivered pursuant to Section
5(e) at the time this Underwriting Agreement is executed: NONE.
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SCHEDULE II
Principal Amount of
Underwriters Securities to be Purchased
Goldman, Sachs & Co.................... $1,000,000,000
Total................................ $1,000,000,000
SCHEDULE III
State of States
Subsidiary Incorporation Qualified
1. Diamond Offshore Company DE TX, LA
2. Diamond Offshore General Company DE TX
3. Diamond Offshore Guardian Company DE TX
4. Diamond Offshore Southern Company DE TX
5. Diamond Offshore Management DE TX, LA
...Company
6. Diamond Offshore (USA) Inc. DE TX, LA
7. Diamond Offshore Alaska Inc. DE TX
8. Diamond Offshore Atlantic Inc. DE TX
9. Diamond Offshore (Mexico) Company DE TX
10. Diamond Offshore Drilling Services, DE TX, LA
Inc.
11. Diamond Offshore International DE TX
Corporation
12. Diamond Offshore Enterprises, Inc. DE TX
13. Cumberland Maritime Corporation DE TX
14. Diamond Offshore Team Solutions, DE TX, LA
Inc.
15. Diamond Offshore Finance Company DE TX
16. Diamond Offshore Perforadora, Inc. DE TX
17. Diamond Offshore Development Company DE TX
18. Diamond Offshore (Indonesia), Inc. DE TX
19. Diamond Offshore Drilling (Overseas) DE TX
Inc. (f/k/a Diamond Offshore
Champion Inc.)
20. Diamond Offshore Exploration DE TX
(Bermuda) Limited
21. Arethusa Off-Shore Company DE TX, LA
22. Concord Drilling Limited DE TX
23. Saratoga Drilling Limited DE TX
24. Yorktown Drilling Limited DE TX
25. Scotian Drilling Limited DE TX
26. Heritage Drilling Limited DE TX
27. Sovereign Drilling Limited DE TX
28. Miss Kitty Drilling Limited DE TX
29. Neptune Drilling Limited DE TX
30. Whittington Drilling Limited DE TX
31. Yatzy Drilling Limited DE TX
32. Winner Drilling Limited DE TX
33. Lexington Drilling Limited DE TX
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EXHIBIT A
[FORM OF AMENDMENT TO REGISTRATION RIGHTS AGREEMENT]
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