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EXHIBIT 1.1
DIAMOND OFFSHORE DRILLING, INC.
DEBT SECURITIES
PREFERRED STOCK
WARRANTS
UNDERWRITING AGREEMENT
SECTION 1. Introductory.
Diamond Offshore Drilling, Inc., a Delaware corporation ("Company"),
proposes to issue and sell from time to time certain of its unsecured debt
securities, preferred stock and warrants to purchase debt securities and
warrants to purchase preferred stock (and any debt securities, preferred stock
or common stock, par value $.01 per share, of the Company ("Common Stock")
issuable upon conversion or exercise of such securities) registered under the
registration statement referred to in Section 2(a) ("Registered Securities").
The Registered Securities constituting debt securities will be issued under one
or more indentures or supplemental indentures (each, an "Indenture"), between
the Company and a trustee selected by the Company, in one or more series, which
series may vary as to interest rates, maturities, redemption provisions,
selling prices and other terms. The Registered Securities constituting
warrants will be issued under one or more Warrant Agreements (each, a "Warrant
Agreement"), between the Company and a warrant agent to be selected by the
Company, in one or more series which series may vary as to exercise price,
exercise date, expiration date and other terms. The Registered Securities
constituting preferred stock may be issued in one or more series, which series
may vary as to dividend rates, redemption provisions, selling prices and other
terms. Particular series or offerings of Registered Securities will be sold
pursuant to a Terms Agreement referred to in Section 3, for resale in
accordance with terms of offering determined at the time of sale.
The Registered Securities involved in any such offering are hereinafter
referred to as the "Firm Securities" and, together with any Optional Securities
(as defined in Section 3 below), the "Offered Securities". The firm or firms
which agree to purchase the Offered Securities are hereinafter referred to as
the "Underwriters" of such securities, and the representative or
representatives of the Underwriters, if any, specified in a Terms Agreement
referred to in Section 3 are hereinafter referred to as the "Representatives";
provided, however, that if the Terms Agreement does not specify any
representative of the Underwriters, the term "Representatives", as used in this
Agreement (other than in Sections 2(b), 5(c) and 6 and the second sentence of
Section 3), shall mean the Underwriters.
SECTION 2. Representations and Warranties of the Company.
The Company, as of the date of each Terms Agreement referred to in
Section 3, represents and warrants to, and agrees with, each Underwriter that:
(a) A registration statement (No. 333-19987), including a
prospectus, relating to the Registered Securities has been filed with the
Securities and Exchange Commission ("Commission") and has become effective.
Such registration statement, as amended at the time of any Terms Agreement
referred to in Section 3, is hereinafter referred to as the "Registration
Statement", and the prospectus included in such Registration Statement, as
supplemented as contemplated by Section 3 to reflect the terms of the Offered
Securities and the terms of the offering of the Offered Securities, as first
filed with the Commission pursuant to and in accordance with Rule 424(b) ("Rule
424(b)") under the Securities Act of 1933 ("Act"), including all material
incorporated by reference therein, is hereinafter referred to as the
"Prospectus". No document has been or will be prepared or distributed in
reliance on Rule 434 under the Act.
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(b) On the effective date of the registration statement relating
to the Registered Securities, such registration statement conformed in all
respects to the requirements of the Act, the Trust Indenture Act of 1939
("Trust Indenture Act") and the rules and regulations of the Commission ("Rules
and Regulations") and did not include 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, and on the date of each Terms
Agreement referred to in Section 3, the Registration Statement and the
Prospectus will conform in all respects to the requirements of the Act, the
Trust Indenture Act and the Rules and Regulations, and neither of such
documents will include 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, except that the foregoing does not apply to
statements in or omissions from any of such documents based upon written
information furnished to the Company by any Underwriter through the
Representatives, if any, specifically for use therein.
(c) The Company 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 Prospectus; and the Company 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 the Company
to be so qualified would not have a material adverse effect on the business
operations or financial condition of the Company and its subsidiaries, taken as
a whole.
(d) Each subsidiary of the Company 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 Prospectus; and each
subsidiary of the Company 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 the Company and its subsidiaries, taken as a whole; all
of the issued and outstanding capital stock of each subsidiary of the Company
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 the Company and its subsidiaries, taken as
a whole; and the capital stock of each subsidiary owned by the Company,
directly or through subsidiaries, is owned free from liens, encumbrances and
defects, except where the failure of the Company to so own such capital stock
would not have a material adverse effect on the business, operations,
properties or financial condition of the Company and its subsidiaries, taken as
a whole.
(e) If the Offered Securities are debt securities: The Indenture
has been duly authorized and has been duly qualified under the Trust Indenture
Act; the Firm Securities and any Optional Securities have been duly authorized;
and when the Offered Securities are delivered and paid for pursuant to the
Terms Agreement on each Closing Date (as defined below) or pursuant to Delayed
Delivery Contracts (as hereinafter defined), the Indenture will have been duly
executed and delivered, such Offered Securities will have been duly executed,
authenticated, issued and delivered and will conform to the description thereof
contained in the Prospectus and the Indenture and such Offered Securities will
constitute valid and legally binding obligations of the Company, enforceable in
accordance with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
(f) If the Offered Securities are warrants: The Warrant Agreement
has been duly authorized; the Firm Securities and any Optional Securities have
been duly authorized; and when the Offered Securities are delivered and paid
for pursuant to the Terms Agreement on each Closing Date (as defined below) or
pursuant to Delayed Delivery Contracts (as hereinafter defined), the Warrant
Agreement will have been duly executed and delivered, such Offered Securities
will have been duly executed, countersigned, issued and delivered and will
conform to the description thereof contained in the Prospectus and the Warrant
Agreement and such Offered Securities will constitute valid and legally binding
obligations of the Company, enforceable in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
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(g) If the Offered Securities are preferred stock: The Firm
Securities and any Optional Securities have been duly authorized and, when the
Offered Securities have been delivered and paid for in accordance with the
Terms Agreement on each Closing Date (as defined below), such Offered
Securities will have been validly issued, fully paid and nonassessable and will
conform to the description thereof contained in the Prospectus; and the
stockholders of the Company have no preemptive rights with respect to the
Offered Securities.
(h) If the Offered Securities are convertible or (if the Offered
Securities are warrants) exercisable: When the Offered Securities are delivered
and paid for pursuant to the Terms Agreement on each Closing Date, such Offered
Securities will be convertible into, or exercisable for, Common Stock,
preferred stock or debt securities of the Company, as the case may be, in
accordance with their terms (if the Offered Securities are preferred stock) or
the Indenture (if the Offered Securities are debt securities) or the Warrant
Agreement (if the Offered Securities are warrants); the shares of Common Stock,
preferred stock and debt securities, as the case may be, initially issuable
upon conversion or exercise of such Offered Securities have been duly
authorized and (if the conversion or exercise securities are Common Stock or
preferred stock) reserved for issuance upon such conversion or exercise; if the
conversion securities are Common Stock, such Common Stock initially issuable
upon conversion thereof, when issued upon such conversion, and upon receipt by
the Company of the conversion price therefor, will be validly issued and fully
paid and nonassessable; the outstanding shares of Common Stock have been duly
authorized and validly issued, are fully paid and nonassessable and conform to
the description thereof contained in the Prospectus; and the stockholders of
the Company have no preemptive rights with respect to the Common Stock or
preferred stock; if the conversion or exercise securities are preferred stock,
the preferred stock initially issuable upon conversion or exercise thereof,
when issued upon such conversion or exercise, and upon receipt by the Company
of the conversion or exercise price therefor, will have been validly issued and
fully paid and nonassessable and will conform to the description thereof
contained in the Prospectus; if the conversion or exercise securities are debt
securities, the debt securities initially issuable upon conversion or exercise
thereof, when issued upon such conversion or exercise, and upon receipt by the
Company of the conversion or exercise price therefor, will have been duly
executed, authenticated, issued and delivered and will conform to the
description thereof contained in the Prospectus and the Indenture; such
Indenture has been duly qualified under the Trust Indenture Act and will have
been duly executed and delivered; and the Indenture and such debt securities
will constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
(i) If the Offered Securities are convertible into Common Stock:
Except as disclosed in the Prospectus, there are no contracts, agreements or
understandings between the Company and any person that would give rise to a
valid claim against the Company or any Underwriter for a brokerage commission,
finder's fee or other like payment.
(j) If the Offered Securities are convertible into Common Stock:
Except for the Registration Rights Agreement dated October 10, 1995 between the
Company and Loews Corporation (the "Loews Registration Rights Agreement") there
are no contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of the
Company owned or to be owned by such person or to require the Company to
include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant to any
other registration statement filed by the Company under the Act.
(k) If the Offered Securities are convertible into Common Stock,
the outstanding shares of Common Stock are listed on The New York Stock
Exchange (the "Stock Exchange") and the Common Stock into which the Offered
Securities are convertible (if they are convertible) has been approved for
listing on the Stock Exchange, subject to notice of issuance. If the Offered
Securities are debt securities or preferred stock, they have been approved for
listing on the stock exchange indicated in the Terms Agreement, subject to
notice of issuance.
(l) No consent, approval, authorization, or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by the Terms Agreement (including
the provisions of this Agreement) in connection with the issuance and sale of
the Offered Securities by the Company, except
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such as have been obtained and made under the Act and, if the Offered
Securities are debt securities, the Trust Indenture Act and such as may be
required under state securities laws.
(m) The execution, delivery and performance of the Indenture (if
the Offered Securities are debt securities), the Warrant Agreement (if the
Offered Securities are warrants), the Terms Agreement (including the provisions
of this Agreement) and any Delayed Delivery Contracts and the issuance and sale
of the Offered Securities 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 the Company
or any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound, or to which any of the property or assets of the Company
or any of its subsidiaries is subject, nor will such action result in any
violation of the provisions of the charter or bylaws of the Company 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 the Company or any of
its subsidiaries or the property of the Company 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 the Company'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; and the Company has full power and authority to
authorize, issue and sell the Offered Securities as contemplated by the Terms
Agreement (including the provisions of this Agreement).
(n) The Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts have been duly authorized,
executed and delivered by the Company.
(o) Except as disclosed in the Prospectuses and except for
Permitted Liens, as such term is defined below, the Company and its
subsidiaries have good and marketable title to all offshore drilling rigs
described as being owned by them in the 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
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
Prospectus, the Company 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.
(p) The Company 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 the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the Company
and its subsidiaries taken as a whole.
(q) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that might
have a material adverse effect on the Company and its subsidiaries taken as a
whole.
(r) The Company 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
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with respect to any intellectual property rights that, if determined adversely
to the Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the Company and its subsidiaries
taken as a whole.
(s) Except as disclosed in the Prospectus, neither the Company 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, 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 the Company and its subsidiaries taken as a whole; and the Company is not
aware of any pending investigation which might lead to such a claim.
(t) There are no pending actions, suits or proceedings against or
affecting the Company, any of its subsidiaries or any of their respective
properties except as disclosed in the Prospectus, or as individually or in the
aggregate do not now have and, to the best knowledge of the Company, 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 the Company and its subsidiaries taken as a whole, or would materially and
adversely affect the ability of the Company to perform its obligations under
the Indenture (if the Offered Securities are debt securities), the Warrant
Agreement (if the Offered Securities are warrants), the Terms Agreement
(including the provisions of this Agreement) or any Delayed Delivery Contracts,
or which are otherwise material in the context of the sale of the Offered
Securities; and no such actions, suits or proceedings are, to the Company's
knowledge, threatened or contemplated.
(u) The financial statements included in the Registration
Statement and Prospectus present fairly in all material respects the financial
position of the Company 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 the generally
accepted accounting principles in the United States applied on a consistent
basis; any schedules included in the Registration Statement present fairly the
information required to be stated therein; and if pro forma financial
statements are included in the Registration Statement and Prospectus: the
assumptions used in preparing the pro forma financial statements included in
the Registration Statement and the Prospectus 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.
(v) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included in the Prospectus 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 the Company and its
subsidiaries taken as a whole, and there has been no dividend or distribution
of any kind declared, paid or made by the Company on any class of its capital
stock.
(w) The Company is not and, after giving effect to the offering
and sale of the Offered Securities and the application of the proceeds thereof
as described in the Prospectus, 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 (the "Investment Company Act"), 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 (the "Holding Company Act").
(x) 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 and the Company agrees
to comply with such Section if prior to the completion of the distribution of
the Offered Securities it commences doing such business.
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(y) No consent or approval of any federal governmental agency with
respect to any federal maritime law matter is required in connection with
performance by the Company of its obligations under the Terms Agreement
(including the provisions of this Agreement) or the issuance and sale of the
Offered Securities; and neither the issue, offer, sale or delivery by the
Company of the Offered Securities pursuant to the Terms Agreement (including
the provisions of this Agreement) or the execution, delivery, and performance
by the Company and the consummation of the transactions contemplated thereby
will 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.
SECTION 3. Purchase and Offering of Offered Securities.
The obligation of the Underwriters to purchase the Firm Securities will
be evidenced by an agreement or exchange of other written communications
("Terms Agreement") at the time the Company determines to sell the Firm
Securities. The Terms Agreement will incorporate by reference the provisions
of this Agreement, except as otherwise provided therein, and will specify the
firm or firms which will be Underwriters, the names of any Representatives, the
aggregate principal amount or number of Firm Securities to be purchased by each
Underwriter, the purchase price to be paid by the Underwriters and the terms of
the Firm Securities not already specified (in the Indenture, in the case of
Firm Securities that are debt securities or in the Warrant Agreement, in the
case of Firm Securities that are warrants), including, but not limited to,
interest rate (if debt securities), dividend rate (if preferred stock),
maturity (if debt securities), any redemption, conversion or exercise
provisions and any sinking fund requirements and whether any of the Firm
Securities may be sold to institutional investors pursuant to Delayed Delivery
Contracts (as defined below). The Terms Agreement will also specify the time
and date of delivery and payment (such time and date, or such other time not
later than seven full business days thereafter as the Underwriter first named
in the Terms Agreement (the "Lead Underwriter") and the Company agree as the
time for payment and delivery, being herein and in the Terms Agreement referred
to as the "First Closing Date"), the place of delivery and payment and any
details of the terms of offering that should be reflected in the prospectus
supplement relating to the offering of the Offered Securities. For purposes of
Rule 15c6-1 under the Securities Exchange Act of 1934, the First Closing Date
(if later than the otherwise applicable settlement date) shall be the date for
payment of funds and delivery of securities for all the Offered Securities sold
pursuant to the offering, other than Contract Securities for which payment of
funds and delivery of securities shall be as hereinafter provided. The
obligations of the Underwriters to purchase the Firm Securities will be several
and not joint. It is understood that the Underwriters propose to offer the
Offered Securities for sale as set forth in the Prospectus.
If the Firm Securities are debt securities and the Terms Agreement
specifies "Book-Entry Only" settlement or otherwise states that the provisions
of this paragraph shall apply, the Company will deliver against payment of the
purchase price the Firm Securities being purchased on such Closing Date in the
form of one or more permanent global Securities in definitive form (the "Global
Securities") deposited with the Trustee as custodian for The Depository Trust
Company ("DTC") and registered in the name of Cede & Co., as nominee for DTC.
Interests in any permanent Global Securities will be held only in book-entry
form through DTC, except in the limited circumstances described in the
Prospectus. Payment for the Firm Securities shall be made by the Underwriters
in Federal (same day) funds by official check or checks or wire transfer to an
account previously designated to the Lead Underwriter by the Company at a bank
acceptable to the Lead Underwriter, in each case drawn to the order of the
Company at the place of payment specified in the Terms Agreement on such
Closing Date, against delivery to the Trustee as custodian for DTC of the
Global Securities representing all of the Firm Securities.
The Company may specify in the Terms Agreement applicable to any
Offered Securities that the Company thereby grants to the Underwriters the
right to purchase at their election up to the aggregate principal amount of
debt securities, number of shares of preferred stock or number of warrants
("Optional Securities") set forth in such Terms Agreement, on the terms set
forth in the first paragraph of this Section 3. Any such election may be
exercised only by written notice from the Lead Underwriter to the Company,
given within the period specified in the Terms Agreement, setting forth the
aggregate principal amount or number of Optional Securities purchased and the
date on which such Optional Securities are to be delivered as determined by the
Lead Underwriter.
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The Company agrees to sell to the Underwriters the aggregate principal
amount or number of Optional Securities specified in such notice and the
Underwriters agree, severally and not jointly, to purchase such Optional
Securities. Such Optional Securities shall be purchased for the account of
each Underwriter in the same proportion as the aggregate principal amount or
number of Firm Securities set forth opposite such Underwriter's name in such
Terms Agreement bears to the aggregate principal amount or number of Firm
Securities (subject to adjustment by the Lead Underwriter to eliminate
fractions) and may be purchased by the Underwriters only for the purpose of
covering over-allotments made in connection with the sale of the Firm
Securities. No Optional Securities shall be sold or delivered unless the Firm
Securities previously have been, or simultaneously are, sold and delivered.
The right to purchase the Optional Securities or any portion thereof may be
exercised from time to time and to the extent not previously exercised may be
surrendered and terminated at any time upon notice by the Lead Underwriter to
the Company.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "Optional Closing Date", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "Closing Date"), shall be determined by the
Lead Underwriter but shall be not later than five full business days after
written notice of election to purchase Optional Securities is given. The
Company will deliver the Optional Securities being purchased on each Optional
Closing Date to the Representatives for the accounts of the several
Underwriters against payment of the purchase price therefor in the same manner
as the Firm Securities.
If the Terms Agreement provides for sales of Offered Securities
pursuant to delayed delivery contracts, the Company authorizes the Underwriters
to solicit offers to purchase Offered Securities pursuant to delayed delivery
contracts substantially in the form of Annex I attached hereto ("Delayed
Delivery Contracts") with such changes therein as the Company may authorize or
approve. 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. On the
Closing Date the Company will pay, as compensation, to the Representatives for
the accounts of the Underwriters, the fee set forth in such Terms Agreement in
respect of the principal amount, number, or number of shares of Offered
Securities to be sold pursuant to Delayed Delivery Contracts ("Contract
Securities"). The Underwriters will not have any responsibility in respect of
the validity or the performance of Delayed Delivery Contracts. If the Company
executes and delivers Delayed Delivery Contracts, the Contract Securities will
be deducted from the Offered Securities to be purchased by the several
Underwriters and the aggregate principal amount, number or number of shares of
Offered Securities to be purchased by each Underwriter will be reduced pro rata
in proportion to the principal amount, number or number of shares of Offered
Securities set forth opposite each Underwriter's name in such Terms Agreement,
except to the extent that the Lead Underwriter determines that such reduction
shall be otherwise than pro rata and so advise the Company. The Company will
advise the Lead Underwriter not later than the business day prior to the
Closing Date of the principal amount or number of shares of Contract
Securities.
SECTION 4. Certain Agreements of the Company.
The Company agrees with the several Underwriters that it will furnish
to counsel for the Underwriters, one signed copy of the registration statement
relating to the Registered Securities, including all exhibits, in the form it
became effective and of all amendments thereto and that, in connection with
each offering of Offered Securities:
(a) The Company will file the Prospectus with the Commission
pursuant to and in accordance with Rule 424(b)(2) (or, if applicable and if
consented to by the Lead Underwriter, subparagraph (5)) not later than the
second business day following the execution and delivery of the Terms
Agreement.
(b) The Company will advise the Lead Underwriter promptly of any
proposal to amend or supplement the Registration Statement or the Prospectus
and will afford the Lead Underwriter a reasonable opportunity to comment on any
such proposed amendment or supplement; and the Company will also advise the
Lead Underwriter promptly of the filing of any such amendment or supplement and
of the institution by the Commission of any stop order proceedings in respect
of the Registration Statement or of any part thereof and will use its best
efforts to prevent the issuance of any such stop order and to obtain as soon as
possible its lifting, if issued.
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(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with sales
by any Underwriter or dealer, any event occurs as a result of which the
Prospectus as then amended or supplemented would include an 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 is necessary at any time to amend the Prospectus
to comply with the Act, the Company promptly will notify the Lead Underwriter
of such event and will promptly prepare and file with the Commission, at its
own expense, an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance. Neither the Lead
Underwriter's consent to, nor the Underwriters' delivery of, any such amendment
or supplement shall constitute a waiver of any of the conditions set forth in
Section 5.
(d) As soon as practicable, but not later than 16 months, after
the date of each Terms Agreement, the Company will make generally available to
its securityholders an earnings statement covering a period of at least 12
months beginning after the later of (i) the effective date of the registration
statement relating to the Registered Securities, (ii) the effective date of the
most recent post-effective amendment to the Registration Statement to become
effective prior to the date of such Terms Agreement and (iii) the date of the
Company's most recent Annual Report on Form 10-K filed with the Commission
prior to the date of such Terms Agreement, which will satisfy the provisions of
Section 11(a) of the Act.
(e) The Company will furnish to the Representatives copies of the
Registration Statement, including all exhibits, any related preliminary
prospectus, any related preliminary prospectus supplement, the Prospectus and
all amendments and supplements to such documents, in each case as soon as
available and in such quantities as the Lead Underwriter reasonably requests.
The Company will pay the expenses of printing and distributing to the
Underwriters all such documents.
(f) The Company will arrange for the qualification of the Offered
Securities for sale and the determination of their eligibility for investment
under the laws of such jurisdictions as the Lead Underwriter designates and
will continue such qualifications in effect so long as required for the
distribution.
(g) During the period of five years after the date of any Terms
Agreement, the Company will furnish to the Representatives and, upon request,
to each of the other Underwriters, if any, as soon as practicable after the end
of each fiscal year, a copy of its annual report to stockholders for such year;
and the Company will furnish to the Representatives as soon as available, a
copy of each report and any definitive proxy statement of the Company filed
with the Commission under the Securities Exchange Act of 1934 or mailed to
stockholders.
(h) The Company will pay all expenses incident to the performance
of its obligations under the Terms Agreement (including the provisions of this
Agreement), for any filing fees or other expenses (including fees and
disbursements of counsel not to exceed $5,000) in connection with qualification
of the Offered Securities for sale and any determination of their eligibility
for investment under the laws of such jurisdictions as the Lead Underwriter may
designate and the printing of memoranda relating thereto, for any fees charged
by investment rating agencies for the rating of the Offered Securities (if they
are debt securities or preferred stock), for any applicable filing fee incident
to, and the reasonable fees and disbursements of counsel for the Underwriters
in connection with, the review by the National Association of Securities
Dealers, Inc. of the Registered Securities, for any travel expenses of the
Company's officers and employees and any other expenses of the Company in
connection with attending or hosting meetings with prospective purchasers of
Registered Securities and for expenses incurred in distributing the Prospectus,
any preliminary prospectuses, any preliminary prospectus supplements or any
other amendments or supplements to the Prospectus to the Underwriters. Except
as provided in the preceding sentence, the Underwriters will pay the expenses
incident to the performance of their obligations under this Agreement and will
reimburse the Company (if and to the extent incurred by the Company) for any
travel expenses of the Underwriters' representatives and any other expenses of
the Underwriters in connection with attending or hosting meetings with
prospective purchasers of the Offered Securities.
(i) If the Offered Securities are debt securities or preferred
stock, the Company will not offer, sell, contract to sell, pledge or otherwise
dispose of, directly or indirectly, or file with the Commission a registration
statement
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under the Act relating to United States dollar-denominated debt securities
issued or guaranteed by the Company and having a maturity of more than one year
from the date of issue (if the Offered Securities are debt securities) or any
series of preferred stock issued or guaranteed by the Company (if the Offered
Securities are preferred stock), or publicly disclose the intention to make any
such offer, sale, pledge, disposition or filing, without the prior written
consent of the Lead Underwriter for a period beginning at the time of execution
of the Terms Agreement and ending the number of days after the Closing Date
specified under "Blackout" in the Terms Agreement.
(j) If the Offered Securities are convertible into Common Stock,
the Company will not offer, sell, contract to sell, pledge or otherwise dispose
of, directly or indirectly, or file with the Commission a registration
statement under the Act relating to, any additional shares of its Common Stock
or securities convertible into or exchangeable or exercisable for any shares of
its Common Stock, or publicly disclose the intention to make any such offer,
sale, pledge, disposition or filing, without the prior written consent of the
Lead Underwriter for a period beginning at the time of execution of the Terms
Agreement and ending the number of days after the Closing Date specified under
"Blackout" in the Terms Agreement except grants of employee stock options
pursuant to the terms of a plan in effect on the date of the Terms Agreement,
issuances of Common Stock pursuant to the exercise of such options or the
exercise of any other employee stock options outstanding on the date of the
Terms Agreement or issuances of Common Stock pursuant to registration
statements on Form S-8 or successor forms thereto.
SECTION 5. Conditions of the Obligations of the Underwriters.
The obligations of the several Underwriters to purchase and pay for
Firm Securities on the First Closing Date and the Optional Securities to be
purchased on each Optional Closing Date will be subject to the accuracy of the
representations and warranties on the part of the Company herein, to the
accuracy of the statements of Company officers made pursuant to the provisions
hereof, to the performance by the Company of its obligations hereunder and to
the following additional conditions precedent:
(a) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of delivery
thereof, of Deloitte & Touche LLP or any successor firm (and any other firm of
independent public accountants who have audited financial statements that are
included in the Registration Statement and the Prospectus) confirming that they
are independent public accountants within the meaning of the Act and the
applicable published Rules and Regulations thereunder and stating to the effect
that:
(i) in their opinion the financial statements and any
financial statement schedules audited by them and included in the
Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act and the related published
Rules and Regulations;
(ii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement of Auditing
Standards No. 71, Interim Financial Information, on any unaudited
financial statements included in the Registration Statement;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial statements
of the Company, inquiries of officials of the Company who have
responsibility for financial and accounting matters and other specified
procedures, nothing came to their attention that caused them to believe
that:
(A) the unaudited financial statements, if any,
and any summary of earnings included in the Prospectus do not
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published
Rules and Regulations or any material modifications should be
made to such unaudited financial statements and summary of
earnings for them to be in conformity with generally accepted
accounting principles;
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(B) if any unaudited "capsule" information is
contained in the Prospectus, the unaudited consolidated net
sales, net operating income, net income and net income per
share amounts or other amounts constituting such "capsule"
information and described in such letter do not agree with the
corresponding amounts set forth in the unaudited consolidated
financial statements or were not determined on a basis
substantially consistent with that of the corresponding
amounts in the audited statements of income;
(C) at the date of the latest available balance
sheet read by such accountants, or at a subsequent specified
date not more than three business days prior to the date of
the Terms Agreement, there was any change in the capital stock
or any increase in short-term indebtedness or long-term debt
of the Company and its consolidated subsidiaries or, at the
date of the latest available balance sheet read by such
accountants, there was any decrease in working capital or
stockholders' equity, as compared with amounts shown on the
latest balance sheet included in the Prospectus; or
(D) for the period from the closing date of the
latest income statement included in the Prospectus to the
closing date of the latest available income statement read by
such accountants there were any decreases, as compared with
the corresponding period of the previous year and with the
period of corresponding length ended the date of the latest
income statement included in the Prospectus, in contract
drilling revenue, net operating income, in the total or (if
the Offered Securities are convertible into Common Stock) per
share amounts of consolidated income before extraordinary
items or net income or (if the Offered Securities are debt
securities) in the ratio of earnings to fixed charges or (if
the Offered Securities are preferred stock) in the ratio of
earnings to fixed charges and preferred stock dividends
combined;
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information contained in the Prospectus (in each case to the extent
that such dollar amounts, percentages and other financial information
are derived from the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by analysis
or computation) with the results obtained from inquiries, a reading of
such general accounting records and other procedures specified in such
letter and have found such dollar amounts, percentages and other
financial information to be in agreement with such results, except as
otherwise specified in such letter.
All financial statements and schedules included in material
incorporated by reference into the Prospectus shall be deemed included
in the Prospectus for purposes of this subsection.
(b) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 4(a) of this Agreement.
No stop order suspending the effectiveness of the Registration Statement or of
any part thereof shall have been issued and no proceedings for that purpose
shall have been instituted or, to the knowledge of the Company or any
Underwriter, shall be contemplated by the Commission.
(c) Subsequent to the execution of the Terms Agreement, there
shall not have occurred (i) any change, or any development or event involving a
prospective change, in the condition (financial or other), business, properties
or results of operations of the Company or its subsidiaries which, in the
judgment of a majority in interest of the Underwriters including any
Representatives, is material and adverse and makes it impractical or
inadvisable to proceed with completion of the public offering or the sale of
and payment for the Offered Securities; (ii) any downgrading in the rating of
any debt securities or preferred stock of the Company by any "nationally
recognized
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statistical rating organization" (as defined for purposes of Rule 436(g) under
the Act), or any public announcement that any such organization has under
surveillance or review its rating of any debt securities or preferred stock of
the Company (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of such
rating); (iii) any suspension or limitation of trading in securities generally
on the New York Stock Exchange, or any setting of minimum prices for trading on
such exchange, or any suspension of trading of any securities of the Company on
any exchange or in the over-the-counter market; (iv) any banking moratorium
declared by U.S. Federal or New York authorities; or (v) any outbreak or
escalation of major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the judgment of a majority in
interest of the Underwriters including any Representatives, the effect of any
such outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the public offering or
the sale of and payment for the Offered Securities.
(d) The Representatives shall have received an opinion, dated such
Closing Date, of the Vice President and General Counsel of the Company or other
counsel satisfactory to the Lead Underwriter, to the effect that:
(i) The Company is a corporation duly organized, validly
existing and in 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
Prospectus; and the Company is duly qualified to transact 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 those jurisdictions where the
failure to be so qualified would not have a material adverse effect on
the business, operations or financial condition of the Company and its
subsidiaries taken as a whole;
(ii) If the Offered Securities delivered on such Closing
Date are debt securities: The Indenture has been duly authorized,
executed and delivered by the Company and has been duly qualified under
the Trust Indenture Act; the Offered Securities delivered on such
Closing Date have been duly authorized; the Offered Securities
delivered on such Closing Date other than any Contract Securities have
been duly executed, authenticated, issued and delivered; the Indenture
and the Offered Securities delivered on such Closing Date other than
any Contract Securities constitute, and any Contract Securities, when
executed, authenticated, issued and delivered in the manner provided in
the Indenture and sold pursuant to Delayed Delivery Contracts, will
constitute, valid and legally binding obligations of the Company
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Offered Securities
delivered on such Closing Date other than any Contract Securities
conform, and any Contract Securities, when so issued and delivered and
sold will conform, to the description thereof contained in the
Prospectus;
(iii) If the Offered Securities delivered on such Closing
Date are warrants: The Warrant Agreement has been duly authorized,
executed and delivered by the Company; the Offered Securities delivered
on such Closing Date have been duly authorized; the Offered Securities
delivered on such Closing Date other than any Contract Securities have
been duly executed, countersigned, issued and delivered; the Warrant
Agreement and the Offered Securities delivered on such Closing Date
other than any Contract Securities constitute, and any Contract
Securities, when executed, countersigned, issued and delivered in the
manner provided in the Warrant Agreement and sold pursuant to Delayed
Delivery Contracts, will constitute, valid and legally binding
obligations of the Company enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Offered Securities delivered on such Closing Date other than any
Contract Securities conform, and any Contract Securities, when so
issued and delivered and sold will conform, to the description thereof
contained in the Prospectus;
(iv) If the Offered Securities delivered on such Closing
Date are preferred stock: The Offered Securities delivered on such
Closing Date have been duly authorized; the Offered Securities
delivered on such Closing Date other than any Contract Securities, upon
receipt by the Company of the purchase price
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therefor, will have been validly issued and will be fully paid and
nonassessable; any Contract Securities, when issued, delivered and sold
pursuant to Delayed Delivery Contracts, upon receipt by the Company of
the purchase price therefor, will be validly issued, fully paid and
non-assessable; and the Offered Securities delivered on such Closing
Date other than any Contract Securities conform, and any Contract
Securities, when so issued, delivered and sold, will conform, to the
description thereof contained in the Prospectus; and the stockholders
of the Company have no preemptive rights with respect to the Offered
Securities;
(v) If the Offered Securities are convertible or (if the
Offered Securities are warrants) exercisable: The Offered Securities
delivered on such Closing Date other than any Contract Securities are,
and any Contract Securities, when (if the Offered Securities are debt
securities) executed, authenticated, issued and delivered in the manner
provided in the Indenture and sold pursuant to Delayed Delivery
Contracts, (if the Offered Securities are warrants) executed,
countersigned, issued and delivered in the manner provided in the
Warrant Agreement and sold pursuant to Delayed Delivery Contracts or
(if the Offered Securities are preferred stock) when issued, delivered
and sold pursuant to Delayed Delivery Contracts, will be convertible
into or exercisable for Common Stock, preferred stock or debt
securities of the Company, as the case may be, in accordance with (if
they are debt securities) the Indenture, (if they are warrants) the
Warrant Agreement or (if they are preferred stock) their terms; the
shares of Common Stock, preferred stock or debt securities, initially
issuable upon conversion or exercise of the Offered Securities have
been duly authorized and (if the conversion or exercise securities are
Common Stock or preferred stock) reserved for issuance upon such
conversion or exercise and, if the conversion securities are Common
Stock, such Common Stock initially issuable upon conversion thereof,
when issued upon such conversion and upon receipt by the Company of the
conversion price therefor, will be validly issued, fully paid and
nonassessable; the outstanding shares of Common Stock have been duly
authorized and validly issued, are fully paid and nonassessable and
conform to the description thereof contained in the Prospectus; and the
stockholders of the Company have no preemptive rights with respect to
the Common Stock or preferred stock; if the conversion or exercise
securities are preferred stock, the preferred stock initially issuable
upon conversion or exercise thereof, when issued upon such conversion
or exercise, and upon receipt by the Company of the conversion or
exercise price therefor, will have been validly issued, fully paid and
nonassessable and will conform to the description thereof contained in
the Prospectus; if the conversion or exercise securities are debt
securities, the debt securities initially issuable upon conversion or
exercise thereof, when issued upon such conversion or exercise, and
upon receipt by the Company of the conversion or exercise price
therefor, will have been duly executed, authenticated, issued and
delivered and will conform to the description thereof contained in the
Prospectus and the Indenture; such Indenture has been duly qualified
under the Trust Indenture Act and will have been duly executed and
delivered; and the Indenture and such debt securities will constitute
valid and legally binding obligations of the Company, enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to
general equity principles;
(vi) If the Offered Securities are convertible into Common
Stock: Except for the Loews Registration Rights Agreement, there are
no contracts, agreements or understandings known to such counsel
between the Company and any person granting such person the right to
require the Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration
statement filed by the Company under the Act;
(vii) The Company is not (A) an "investment company" or an
entity "controlled" by an "investment company" under the Investment
Company Act and the rules and regulations promulgated by the Commission
thereunder or (B) a "holding company" or a "subsidiary company" or an
"affiliate" of a holding company within the meaning of the Holding
Company Act and the rules and regulations promulgated by the Commission
thereunder;
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(viii) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is required
for the consummation of the transactions contemplated by the Terms
Agreement (including the provisions of this Agreement) in connection
with the issuance or sale of the Offered Securities by the Company,
except such as have been obtained and made under the Act and, if the
Offered Securities are debt securities, the Trust Indenture Act, and
such as may be required under state securities laws;
(ix) The execution, delivery and performance of the
Indenture (if the Offered Securities are debt securities), the Warrant
Agreement (if the Offered Securities are warrants), the Terms Agreement
(including the provisions of this Agreement) and any Delayed Delivery
Contracts and the issuance and sale of the Offered Securities and
compliance with the terms and provisions thereof will not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any rule, regulation or order
of any governmental agency or body or any court having jurisdiction
over the Company or any subsidiary of the Company or any of their
properties, or any material agreement or instrument to which the
Company or any such subsidiary is a party or by which the Company or
any such subsidiary is bound or to which any of the properties of the
Company or any such subsidiary is subject, or the charter or by-laws of
the Company or any such subsidiary, and the Company has full power and
authority to authorize, issue and sell the Offered Securities as
contemplated by the Terms Agreement (including the provisions of this
Agreement). In the case of breaches or violations of any terms or
provisions of, or defaults under, any agreement or instrument of
Arethusa (Off-Shore) Limited or any of its former subsidiaries entered
into by any such entity prior to its acquisition by the Company, such
opinion may be limited to the knowledge of such counsel;
(x) The Registration Statement has become effective under
the Act, the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) specified in such opinion on the date
specified therein, and, to the best of the knowledge of such counsel,
no stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and no proceedings for
that purpose have been instituted or are pending or contemplated under
the Act, and the registration statement relating to the Registered
Securities, as of its effective date, the Registration Statement and
the Prospectus, as of the date of the Terms Agreement, and any
amendment or supplement thereto, as of its date, complied as to form in
all material respects with the requirements of the Act, the Trust
Indenture Act and the Rules and Regulations; such counsel has no reason
to believe that such registration statement, as of its effective date,
the Registration Statement, as of the date of the Terms Agreement or as
of such Closing Date, or any amendment thereto, as of its date or as of
such Closing Date, 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
Prospectus, as of the date of the Terms Agreement or as of such Closing
Date, or any amendment or supplement thereto, as of its date or as of
such Closing Date, contained any 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; the descriptions in the Registration
Statement and Prospectus of statutes, legal and governmental
proceedings and contracts and other documents are accurate and fairly
present the information required to be shown; and such counsel does not
know of any legal or governmental proceedings required to be described
in the Prospectus which are not described as required or of any
contracts or documents of a character required to be described in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement which are not described and filed as required;
it being understood that such counsel need express no opinion as to the
financial statements and related notes or the other financial,
statistical and accounting data contained in the Registration
Statement or the Prospectus;
(xi) The Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts have been duly
authorized, executed and delivered by the Company;
(xii) All of the issued and outstanding shares of capital
stock of each subsidiary of the Company designated by the Company on
Annex I to the Terms Agreement (each, a "Subsidiary" and collectively,
the "Subsidiaries"), are owned, directly or indirectly, of record and
beneficially by the Company, free and clear of all liens, claims,
limitations on voting rights, options, security interests and other
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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 the Company and its subsidiaries, taken as a whole;
(xiii) Each Subsidiary is a corporation, duly organized,
validly existing and in good standing under the laws of its
jurisdiction of incorporation. Each Subsidiary is duly qualified to
transact business and is in good standing as a foreign corporation in
each state in which such Subsidiaries are 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 the
Company and its subsidiaries, taken as a whole;
(xiv) No consent or approval of any federal governmental
agency with respect to any federal maritime law matter is required in
connection with performance by the Company of its obligations under the
Terms Agreement (including the provisions of this Agreement) or the
issuance and sale of the Offered Securities; and neither the issue,
offer, sale or delivery by the Company of the Offered Securities
pursuant to the Terms Agreement (including the provisions of this
Agreement) or the execution, delivery, and performance by the Company
and the consummation of the transactions contemplated thereby will
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
(xv) Except as described in the Registration Statement and
the Prospectus, there is no litigation, proceeding or governmental
investigation pending or, to such counsel's knowledge, overtly
threatened against the Company or any of its subsidiaries or to which
any of the property of the Company or any of its subsidiaries is
subject, which, in such counsel's judgment is likely, individually or
in the aggregate, to have a material adverse effect on the business,
assets or financial condition of the Company and its subsidiaries,
taken as a whole.
In rendering such opinion, such Vice President and General Counsel or
other counsel may rely as to the incorporation of the Company, the
authorization, execution and delivery of the Terms 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 the Vice President and
General Counsel or such other counsel.
(e) The Representatives shall have received from Andrews & Kurth
L.L.P., special counsel for the Underwriters (or any other counsel named as
counsel for the Underwriters in the Terms Agreement), such opinion or opinions,
dated such Closing Date, with respect to the incorporation of the Company, the
validity of the Offered Securities delivered on such Closing Date, the
Registration Statement, the Prospectus and other related matters as the
Representatives may require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them to pass
upon such matters.
(f) The Representatives shall have received 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 the
Company in which such officers, to the best of their knowledge after reasonable
investigation, shall state that the representations and warranties of the
Company in this Agreement are true and correct, that the Company 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, that no stop order
suspending the effectiveness of the Registration Statement or of any part
thereof has been issued and no proceedings for that purpose have been
instituted or are contemplated by the Commission and that, subsequent to the
date of the most recent financial statements in the Prospectus, 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 the Company and its
subsidiaries taken as a whole except as set forth in or contemplated by the
Prospectus or as described in such certificate.
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(g) The Representatives shall have received a letter, dated such
Closing Date, of Deloitte & Touche LLP (and any other firm of independent
public accountants who have audited financial statements that are included in
the Registration Statement and the Prospectus) which meets the requirements of
subsection (a) of this Section, except that the specified date referred to in
such subsection will be a date not more than three business days prior to such
Closing Date for the purposes of this subsection.
The Company will furnish the Representatives with such conformed copies
of such opinions, certificates, letters and documents as the Representatives
reasonably request. The Lead Underwriter may in its sole discretion waive on
behalf of the Underwriters compliance with any conditions to the obligations of
the Underwriters under this Agreement and the Terms Agreement.
SECTION 6. Indemnification and Contribution.
(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 any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, the Prospectus,
or any amendment or supplement thereto, or any related preliminary prospectus
or preliminary prospectus supplement, 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 loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company will 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 in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives, if any, specifically for use therein, it being understood and
agreed that the only such information furnished by any Underwriter consists of
the information described as such in the Terms Agreement provided that this
indemnity agreement with respect to any preliminary prospectus shall not inure
to the benefit of any Underwriter from whom the person asserting any such
losses, claims, damages or liabilities purchased Offered Securities, or any
person controlling such Underwriter, if the Company shall have sustained the
burden of proving that a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any such amendments or
supplements thereto) was not sent or given by or on behalf of the Underwriter
to such person if such is required by law at or prior to the written
confirmation of the sale of such Offered Securities to such person and if the
Prospectus (as so amended or supplemented) would have corrected any untrue
statement or omission, or alleged untrue statement or omission, giving rise to
such loss, claim, damage or liability (provided the Company has delivered the
Prospectus to the several Underwriters in requisite quantity on a timely basis
to permit such delivery or sending).
(b) Each Underwriter will severally and not jointly 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 any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, the Prospectus,
or any amendment or supplement thereto, or any related preliminary prospectus
or preliminary prospectus supplement, or arise out of or are based upon the
omission or the 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
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives, if any, specifically
for use therein, and will reimburse any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending any such
loss, claim, damage, liability or action as such expenses are incurred, it
being understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in the Terms
Agreement.
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(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a) or (b) above, except to the extent a
defense or counterclaim has been foreclosed. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any other
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 will not be
liable to such indemnified party under this Section for any legal or other
expenses 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
any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other from the
offering of the Offered Securities or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the 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 or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (d) shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Offered 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 Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company 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 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 director of the Company, to each officer of the
Company who has signed the Registration Statement and to each person, if any,
who controls the Company within the meaning of the Act.
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SECTION 7. Default of Underwriters.
If any Underwriter or Underwriters default in their obligations to
purchase Offered Securities on the First or any Optional Closing Date under the
Terms Agreement and the aggregate principal amount (if debt securities), number
(if warrants) or number of shares (if preferred stock) of Offered Securities
that such defaulting Underwriter or Underwriters agreed but failed to purchase
does not exceed 10% of the total principal amount (if debt securities), number
(if warrants) or number of shares (if preferred stock) of Offered Securities,
the Lead Underwriter may make arrangements satisfactory to the Company for the
purchase of such Offered Securities by other persons, including any of the
Underwriters, but if no such arrangements are made by such Closing Date, the
non-defaulting Underwriters shall be obligated severally, in proportion to
their respective commitments under the Terms Agreement (including the
provisions of this Agreement), to purchase the Offered Securities that such
defaulting Underwriters agreed but failed to purchase on such Closing Date. If
any Underwriter or Underwriters so default and the aggregate principal amount
(if debt securities), number (if warrants) or number of shares (if preferred
stock) of Offered Securities with respect to which such default or defaults
occur exceeds 10% of the total principal amount (if debt securities), number
(if warrants) or number of shares (if preferred stock) of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date and
arrangements satisfactory to the Lead Underwriter and the Company for the
purchase of such Offered Securities by other persons are not made within 36
hours after such default, the Terms Agreement will terminate without liability
on the part of any non-defaulting Underwriter or the Company, except as
provided in Section 8 (provided that if such default occurs with respect to
Optional Securities after the First Closing Date, such Terms Agreement will not
terminate as to the Firm Securities or any Optional Securities purchased prior
to such termination). As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this Section. Nothing
herein will relieve a defaulting Underwriter from liability for its default.
The respective commitments of the several Underwriters for the purposes of this
Section shall be determined without regard to reduction in the respective
Underwriters' obligations to purchase the principal amounts (if debt
securities), number (if warrants) or numbers of shares (if preferred stock) of
the Offered Securities set forth opposite their names in the Terms Agreement as
a result of Delayed Delivery Contracts entered into by the Company.
SECTION 8. Survival of Certain Representations and Obligations.
The respective indemnities, agreements, representations, warranties and
other statements of the Company or its officers and of the several Underwriters
set forth in or made pursuant to the Terms Agreement (including the provisions
of this Agreement) will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If the Terms Agreement is terminated
pursuant to Section 7 or if for any reason the purchase of the Offered
Securities by the Underwriters is not consummated, the Company shall remain
responsible for the expenses to be paid or reimbursed by it pursuant to Section
4 and the respective obligations of the Company and the Underwriters pursuant
to Section 6 shall remain in effect, and if any Offered Securities have been
purchased hereunder, the representations in Section 2 and all obligations under
Section 4 shall also remain in effect. If the purchase of the Offered
Securities by the Underwriters is not consummated for any reason other than
solely because of the termination of the Terms Agreement pursuant to Section 7
or the occurrence of any event specified in clause (iii), (iv) or (v) of
Section 5(c), the Company will reimburse the Underwriters for all out-of-pocket
expenses (including fees and disbursements of counsel) reasonably incurred by
them in connection with the offering of the Offered Securities.
SECTION 9. Notices.
All communications hereunder will be in writing and, if sent to the
Underwriters, will be mailed, delivered or telecopied and confirmed to them at
their address furnished to the Company in writing for the purpose of
communications hereunder or, if sent to the Company, will be mailed, delivered
or telegraphed and confirmed to it at 15415 Katy Freeway, Houston, Texas
77094, Attention: Richard L. Lionberger, telecopy (281) 647-2223.
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SECTION 10. Successors.
The Terms Agreement (including the provisions of this Agreement) will
inure to the benefit of and be binding upon the Company and such Underwriters
as are identified in the Terms Agreement and their respective successors and
the officers and directors and controlling persons referred to in Section 6,
and no other person will have any right or obligation hereunder.
SECTION 11. Representation of Underwriters.
Any Representatives will act for the several Underwriters in connection
with the financing described in the Terms Agreement, and any action under such
Terms Agreement (including the provisions of this Agreement) taken by the
Representatives jointly or by the Lead Underwriter will be binding upon all the
Underwriters.
SECTION 12. Counterparts.
The Terms Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same Agreement.
SECTION 13. APPLICABLE LAW.
THIS AGREEMENT AND THE TERMS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to the Terms Agreement
(including the provisions of this Agreement) or the transactions contemplated
thereby.
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ANNEX I
(Three copies of this Delayed Delivery Contract should be signed and returned
to the address shown below so as to arrive not later than 9:00 A.M.,
New York time, on ........................ ............, 19...(1))
DELAYED DELIVERY CONTRACT
[Insert date of initial public offering]
DIAMOND OFFSHORE DRILLING, INC.
c/o CREDIT SUISSE FIRST BOSTON CORPORATION
Eleven Madison Avenue
New York, N.Y. 10010-3629
Attention: Investment Banking Department - Transactions Advisory Group
Gentlemen:
The undersigned hereby agrees to purchase from Diamond Offshore
Drilling, Inc., a Delaware corporation ("Company"), and the Company agrees to
sell to the undersigned, [If one delayed closing, insert--as of the date
hereof, for delivery on , 199 ("Delivery Date"),]
[$]..............[shares]
- --principal amount--of the Company's [Insert title of securities]
("Securities"), offered by the Company's Prospectus dated , 199 and
a Prospectus Supplement dated , 199 relating thereto,
receipt of copies of which is hereby acknowledged, at-- % of the principal
amount thereof plus accrued interest, if any,--$ per warrant--$ per
share plus accrued dividends, if any,--and on the further terms and conditions
set forth in this Delayed Delivery Contract ("Contract").
[If two or more delayed closings, insert the following:
The undersigned will purchase from the Company as of the date hereof,
for delivery on the dates set forth below, Securities in
the--principal--amounts set forth below:
- ----------------------------------
(1) Insert date which is third full business day prior to Closing Date
under the Terms Agreement.
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Principal Amount
----------------
Number of
Warrants
--------
Number of
Delivery Date Shares
------------- ------
________________ . . . . . . . . . . . . . . . . . __________________
________________ . . . . . . . . . . . . . . . . . __________________
Each of such delivery dates is hereinafter referred to as a Delivery Date.]
Payment for the Securities that the undersigned has agreed to purchase
for delivery on--the--each--Delivery Date shall be made to the Company or its
order by certified or official bank check in New York Clearing House (next day)
funds at the office of at .M.
on--the--such--Delivery Date upon delivery to the undersigned of the Securities
to be purchased by the undersigned--for delivery on such Delivery Date--in
definitive [If debt issue, insert--fully registered] form and in such
denominations and registered in such names as the undersigned may designate by
written or telegraphic communication addressed to the Company not less than
five full business days prior to--the--such--Delivery Date.
It is expressly agreed that the provisions for delayed delivery and
payment are for the sole convenience of the undersigned; that the purchase
hereunder of Securities is to be regarded in all respects as a purchase as of
the date of this Contract; that the obligation of the Company to make delivery
of and accept payment for, and the obligation of the undersigned to take
delivery of and make payment for, Securities on--the--each--Delivery Date shall
be subject only to the conditions that (1) investment in the Securities shall
not at--the--such--Delivery Date be prohibited under the laws of any
jurisdiction in the United States to which the undersigned is subject and (2)
the Company shall have sold to the Underwriters the total--principal
amount--number of shares--of the Securities less the--principal amount---number
of shares--thereof covered by this and other similar Contracts. The
undersigned represents that its investment in the Securities is not, as of the
date hereof, prohibited under the laws of any jurisdiction to which the
undersigned is subject and which governs such investment.
Promptly after completion of the sale to the Underwriters the Company
will mail or deliver to the undersigned at its address set forth below notice
to such effect, accompanied by--a copy--copies--of the opinion[s] of counsel
for the Company delivered to the Underwriters in connection therewith.
This Contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
It is understood that the acceptance of any such Contract is in the
Company's sole discretion and, without limiting the foregoing, need not be on a
first-come, first-served basis. If this Contract is acceptable to the Company,
it is requested that the Company sign the form of acceptance below and mail or
deliver one of the counterparts hereof to the undersigned at its address set
forth below. This will become a binding contract between the Company and the
undersigned when such counterpart is so mailed or delivered.
Yours very truly,
-------------------------
(Name of Purchaser)
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By
----------------------------------
----------------------------------
(Title of Signatory)
----------------------------------
----------------------------------
(Address of Purchaser)
Accepted, as of the above date.
DIAMOND OFFSHORE DRILLING, INC.
By
---------------------------------------------
[Insert Title]
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