1
11,500,000
ROWAN COMPANIES, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
_______________, 1999
XXXXXX BROTHERS INC.,
As Representative of the several
Underwriters named in Schedule 0,
Xxxxx Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Rowan Companies, Inc., a Delaware corporation (the "Company"), proposes
to sell 10,000,000 shares (the "Firm Stock") of the Company's common stock, par
value $0.125 per share (the "Common Stock"). It is understood that, subject to
the conditions hereinafter stated, the Firm Stock will be sold to the several
Underwriters named in Schedule 1 hereto (the "Underwriters") in connection with
the offering and sale of such Firm Stock in the United States and Canada to
United States and Canadian Persons. Xxxxxx Brothers Inc. shall act as the sole
representative (the "Representative") of the several Underwriters.
In addition, the Company proposes to grant to the Underwriters an
option to purchase up to an additional 1,500,000 shares of the Common Stock on
the terms and for the purposes set forth in Sections 2 and 4 (the "Option
Stock"). The Firm Stock and the Option Stock, if purchased, are hereinafter
collectively called the "Stock." This is to confirm the agreement concerning the
purchase of the Stock from the Company by the Underwriters.
1. Representations, Warranties and Agreements of the Company.
The Company represents, warrants and agrees that:
(a) A registration statement on Form S-3 with respect to the
Stock has (i) been prepared by the Company in conformity with
the requirements of the United States Securities Act of 1933,
as amended (the "Securities Act"), and the rules and
regulations (the "Rules and Regulations") of the United States
Securities and Exchange Commission (the "Commission")
thereunder, (ii) been filed with the Commission under the
Securities Act and (iii) become effective under the Securities
Act. Copies of such registration statement have been delivered
by the Company to you. As used in this Agreement, "Effective
Time" means the date and the time as of which such
registration statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the
Commission; "Effective Date" means the date of the Effective
Time; "Preliminary Prospectus" means each prospectus included
in such registration statement, or amendments thereof, before
it became effective under the Securities Act and any
prospectus filed with the Commission by
2
the Company with the consent of the Representative pursuant to
Rule 424(a) of the Rules and Regulations; "Registration
Statement" means such registration statement, as amended at
the Effective Time, including any documents incorporated by
reference therein at such time and all information contained
in the final prospectus filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations in accordance with
Section 5 hereof and deemed to be a part of the registration
statement as of the Effective Time pursuant to paragraph (b)
of Rule 430A of the Rules and Regulations and any new
registration statement registering additional securities
pursuant to Rule 462(b)(3) of the Rules and Regulations; and
"Prospectus" means such final prospectus, as first filed with
the Commission pursuant to paragraph (1) or (4) of Rule 424(b)
of the Rules and Regulations. Reference made herein to any
Preliminary Prospectus or to the Prospectus shall be deemed to
refer to and include any documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Securities
Act, as of the date of such Preliminary Prospectus or the
Prospectus, as the case may be, and any reference to any
amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any
document filed under the United States Securities Exchange Act
of 1934, as amended (the "Exchange Act"), after the date of
such Preliminary Prospectus or the Prospectus, as the case may
be, and incorporated by reference in such Preliminary
Prospectus or the Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement shall
be deemed to include any periodic report of the Company filed
with the Commission pursuant to Section 13(a) or 15(d) of the
Exchange Act after the Effective Time that is incorporated by
reference in the Registration Statement. To the best of the
Company's knowledge, information and belief, having made
reasonable inquiries, the Commission has not issued any order
preventing or suspending the use of any Preliminary
Prospectus.
(b) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration
Statement or the 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 Securities
Act and the Rules and Regulations and do not and will not, (i)
as of the applicable effective date (as to the Registration
Statement and any amendment thereto) contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or omit to state a material fact
necessary to make the statements therein not misleading and
(ii) as of the applicable filing date (as to the Prospectus
and any amendment or supplement thereto) 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, in light of the circumstances under which
they were made, not misleading; provided that the Company
makes no representation or warranty as to information
contained in or omitted from the Registration Statement or the
Prospectus in reliance upon and in conformity with written
information furnished to
2
3
the Company through the Representative by or on behalf of any
Underwriter specifically for inclusion therein.
(c) The documents incorporated by reference in the Preliminary
Prospectus and the Prospectus have been prepared by the
Company in all material respects in conformity with the
requirements of the Exchange Act and the rules and regulations
thereunder and such documents have been timely filed as
required thereby and, when read as a whole together with the
other information in the Prospectus, at the Effective Time,
did 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, in light of the
circumstances under which they were made, not misleading.
(d) The Company and each of the subsidiaries which are listed
on Schedule 2 hereto, (each, a "Significant Subsidiary" and
collectively, the "Significant Subsidiaries"), have been duly
incorporated and are validly existing as corporations in good
standing under the laws of their respective jurisdictions of
incorporation, are duly qualified to do business and are in
good standing as foreign corporations in each jurisdiction in
which their respective ownership or lease of property or the
conduct of their respective businesses requires such
qualification (except where the failure to so qualify would
not have a material adverse effect on the Company and the
Significant Subsidiaries taken as a whole), and have all power
and authority necessary to own or hold their respective
properties and to conduct the businesses in which they are
engaged.
(e) The filing of the Registration Statement and the execution
and delivery by the Company of this Agreement, and the
consummation of the transactions contemplated hereby and
thereby, have been duly authorized by the board of directors
of the Company, and all necessary corporate action to
authorize and approve the same has been taken. The Stock and
all of the authorized shares of Common Stock have been duly
authorized and all of the issued and outstanding shares of
Common Stock are, and all of the Firm Shares and the Option
Shares, as the case may be, when issued, delivered and paid
for will be, validly issued and outstanding, fully paid and
nonassessable with no personal liability attaching to the
ownership thereof. None of the Shares of Stock when delivered
will be subject to any lien, claim, encumbrance, preemptive
right or any other claim of any third party. The Stock
conforms, or will, when issued, conform, in all material
respects to the descriptions thereof contained in the
Registration Statement and the Prospectus. The capitalization
of the Company as of September 30, 1999 is as set forth in the
Prospectus (except for exercises of options since such date
under the Company's existing stock option plans). Except as
disclosed in the Prospectus, there are no outstanding options
or warrants to purchase any shares of the capital stock of the
Company or securities convertible into or exchangeable for any
shares of the capital stock of the Company. The Company has
all requisite corporate power and authority to issue, sell,
and deliver the Stock in
3
4
accordance with and upon the terms and conditions set forth in
this Agreement and in the Registration Statement and
Prospectus.
(f) The execution, delivery and performance of this Agreement
by the Company and the consummation of the transactions
contemplated hereby 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 material 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 actions
result in any violation of the provisions of the charter or
by-laws 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 any of their properties
or assets; and except for the registration of the Stock under
the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state or
foreign securities laws in connection with the purchase and
distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is
required for the execution, delivery and performance of this
Agreement by the Company and the consummation of the
transactions contemplated hereby.
(g) 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 Securities 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.
(h) Except as described in the Prospectus, the Company has not
sold or issued any shares of Common Stock during the six-month
period preceding the date of the Prospectus, including any
sales pursuant to Rule 144A under, or Regulations D or S of,
the Securities Act, other than shares issued pursuant to
employee benefit plans, qualified stock options plans or other
employee compensation plans or pursuant to outstanding
options, rights or warrants.
(i) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest audited financial
statements included or incorporated by reference in the
Prospectus, any material loss or interference with its
business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and,
since such date, there has not been any change in the capital
stock (except for exercises of options since such date under
the
4
5
Company's existing stock option plans) or long-term debt of
the Company or any of its subsidiaries or any material adverse
change, or any development involving a prospective material
adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries,
otherwise than as set forth or contemplated in the Prospectus.
(j) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration
Statement or included or incorporated by reference in the
Prospectus present fairly the financial condition and results
of operations of the entities purported to be shown thereby,
at the dates and for the periods indicated, and have been
prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the
periods involved.
(k) Deloitte & Touche LLP, who has certified certain financial
statements of the Company, whose report appears in the
Prospectus or is incorporated by reference therein and who has
delivered the initial letter referred to in Section 7(g)
hereof, are independent public accountants as required by the
Securities Act and the Rules and Regulations.
(l) The Company and each of its subsidiaries have good and
marketable title in fee simple to all real property and good
and marketable title to all personal property owned by them,
in each case free and clear of all liens, encumbrances and
defects except such as are described in the Prospectus or such
as would not have a material adverse effect on the
consolidated financial position, stockholders' equity, results
of operations, business or prospects of the Company and its
subsidiaries; and all real property and buildings held under
lease by the Company and its subsidiaries are held by them
under valid, subsisting and enforceable leases, with such
exceptions as are not material and do not interfere with the
use made and proposed to be made of such property and
buildings by the Company and its subsidiaries.
(m) The Company and each of its subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks
the Company believes is adequate for the conduct of their
respective businesses and the value of their respective
properties and as is customary for companies engaged in
similar businesses in similar industries.
(n) Except as described in the Prospectus, there is no
litigation or governmental proceeding pending to which the
Company or any of its subsidiaries is a party or of which any
property or assets of the Company or any of its subsidiaries
is the subject which, if determined adversely to the Company
or any of its subsidiaries, is reasonably likely to have a
material adverse effect on the consolidated financial
position, stockholders' equity, results of operations,
business or prospects of the Company and its subsidiaries; and
to the best of the Company's knowledge, no such
5
6
proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(o) The conditions for use of Form S-3, as set forth in the
General Instructions thereto, have been satisfied.
(p) There are no contracts or other documents which are
required to be described in the Prospectus or filed as
exhibits to the Registration Statement by the Securities Act
or by the Rules and Regulations which have not been described
in the Prospectus or filed as exhibits to the Registration
Statement or incorporated therein by reference as permitted by
the Rules and Regulations.
(q) No relationship, direct or indirect, exists between or
among the Company on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company
on the other hand, which is required to be described in the
Prospectus which is not so described.
(r) No labor disturbance by the employees of the Company
exists or, to the knowledge of the Company, is imminent which
is reasonably likely to have a material adverse effect on the
consolidated financial position, stockholders' equity, results
of operations, business or prospects of the Company and its
subsidiaries.
(s) The Company is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder
("ERISA"); no "reportable event" (as defined in ERISA) has
occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company would have any liability; the
Company has not incurred and does not expect to incur
liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as
amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension
plan" for which the Company would have any liability that is
intended to be qualified under Section 401(a) of the Code is
so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would
cause the loss of such qualification.
(t) The Company has filed all federal, state and local income
and franchise tax returns required to be filed through the
date hereof and has paid (other than filings or payments
relating to taxes being contested in good faith and for which
an adequate reserve or accrual has been established in
accordance with generally accepted accounting principles) all
taxes due thereon, and no tax deficiency has been determined
adversely to the Company or any of its subsidiaries which has
had (nor does the Company have any knowledge of any tax
deficiency which, if determined
6
7
adversely to the Company or any of its subsidiaries, is
reasonably likely to have) a material adverse effect on the
consolidated financial position, stockholders' equity, results
of operations, business or prospects of the Company and its
subsidiaries.
(u) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may
otherwise be disclosed in the Prospectus, the Company has not
(i) issued or granted any securities (except for exercises of
options since such date under the Company's existing stock
option plans), (ii) incurred any liability or obligation,
direct or contingent, other than liabilities and obligations
which were incurred in the ordinary course of business, (iii)
entered into any transaction not in the ordinary course of
business or (iv) declared or paid any dividend on its capital
stock.
(v) The Company (i) makes and keeps accurate books and records
and (ii) maintains internal accounting controls which provide
reasonable assurance that (A) transactions are executed in
accordance with management's authorization, (B) transactions
are recorded as necessary to permit preparation of its
financial statements and to maintain accountability for its
assets, (C) access to its assets is permitted only in
accordance with management's authorization and (D) the
reported accountability for its assets is compared with
existing assets at reasonable intervals.
(w) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default, and
no event has occurred which, with notice or lapse of time or
both, would constitute such a default, in the due performance
or observance of any term, covenant or condition contained in
any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which it is a party or by
which it is bound or to which any of its properties or assets
is subject or (iii) is in violation of any law, ordinance,
governmental rule, regulation or court decree to which it or
its property or assets may be subject or has failed to obtain
any license, permit, certificate, franchise or other
governmental authorization or permit necessary to the
ownership of its property or to the conduct of its business,
which default or violation in the case of clauses (ii) and
(iii), individually or in the aggregate, could have a material
adverse effect on the consolidated financial position,
stockholders' equity, results of operations, business or
prospects of the Company and its subsidiaries.
(x) Neither the Company nor any of its subsidiaries, nor to
the knowledge of the Company, any director, officer, agent,
employee or other person associated with or acting on behalf
of the Company or any of its subsidiaries, has used any
corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political
activity; made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from
corporate funds; violated or is in violation of any provision
of the Foreign Corrupt Practices Act of 1977; or
7
8
made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.
(y) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment
of toxic wastes, medical wastes, hazardous wastes or hazardous
substances by the Company or any of its subsidiaries (or, to
the knowledge of the Company, any of their predecessors in
interest) at, upon or from any of the property now or
previously owned or leased by the Company or its subsidiaries
in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would
require remedial action under any applicable law, ordinance,
rule, regulation, order, judgment, decree or permit, except
for any violation or remedial action which would not have, or
could not be reasonably likely to have, singularly or in the
aggregate with all such violations and remedial actions, a
material adverse effect on the consolidated financial
position, stockholders' equity, results of operations,
business or prospects of the Company and its subsidiaries;
there has been no material spill, discharge, leak, emission,
injection, escape, dumping or release of any kind onto such
property or into the environment surrounding such property of
any toxic wastes, medical wastes, solid wastes, hazardous
wastes or hazardous substances due to or caused by the Company
or any of its subsidiaries, except for any such spill,
discharge, leak, emission, injection, escape, dumping or
release which would not have or would not be reasonably likely
to have, singularly or in the aggregate with all such spills,
discharges, leaks, emissions, injections, escapes, dumpings
and releases, a material adverse effect on the consolidated
financial position, stockholders' equity, results of
operations, business or prospects of the Company and its
subsidiaries; and the terms "hazardous wastes", "toxic
wastes", "hazardous substances" and "medical wastes" shall
have the meanings specified in any applicable local, state,
federal and foreign laws or regulations with respect to
environmental protection.
(z) Neither the Company nor any subsidiary is an "investment
company" within the meaning of such term under the United
States Investment Company Act of 1940 and the rules and
regulations of the Commission thereunder.
2. Purchase of the Stock by the Underwriters. On the basis of
the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 10,000,000 shares of
the Firm Stock to the several Underwriters, and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set opposite that Underwriter's name in Schedule 1 hereto. The respective
purchase obligations of the Underwriters with respect to the Firm Stock shall be
rounded among the Underwriters to avoid fractional shares, as the Representative
may determine.
In addition, the Company grants to the Underwriters an option
to purchase up to 1,500,000 shares of Option Stock. Such option is granted for
the purpose of covering over-
8
9
allotments, if any, in the sale of Firm Stock and is exercisable as provided in
Section 4 hereof. Shares of Option Stock shall be purchased severally for the
account of the Underwriters in proportion to the number of shares of Firm Stock
set opposite the name of such Underwriters in Schedule 1 hereto. The respective
purchase obligations of each Underwriter with respect to the Option Stock shall
be adjusted by the Representative so that no Underwriter shall be obligated to
purchase Option Stock other than in 100-share amounts. The price of both the
Firm Stock and any Option Stock shall be $_____ per share.
The Company shall not be obligated to deliver any of the Stock
to be delivered on any Delivery Date (as hereinafter defined), as the case may
be, except upon payment for all the Stock to be purchased on such Delivery Date
as provided herein.
3. Offering of Stock by the Underwriters. Upon authorization
by the Representative of the release of the Firm Stock, the several Underwriters
propose to offer the Firm Stock for sale upon the terms and conditions set forth
in the Prospectus.
4. Delivery of and Payment for the Stock. Delivery of the Firm
Stock to the Underwriters against payment of the purchase price therefor in
immediately available funds by wire transfer shall be made prior to 1:00 p.m.,
New York time, on November __, 1999, in book-entry form through the facilities
of The Depository Trust Company, New York, New York ("DTC"), or at such other
date or place as shall be determined by agreement between the Representative and
the Company. This date and time are sometimes referred to as the "First Delivery
Date." Delivery of the documents required by Section 7 hereof with respect to
Firm Stock shall be made at such time and date at the offices of Xxxxxxx & Xxxxx
L.L.P., 0000 Xxxxx Xxxxx, Xxxxxxx, Xxxxx 00000, or at such other date or place
as shall be determined by agreement between the Representative and the Company.
The option granted in Section 2 will expire 30 days after the date of
this Agreement and may be exercised in whole or in part from time to time by
written notice being given to the Company by the Representative. Such notice
shall set forth the aggregate number of shares of Option Stock as to which the
option is being exercised, the names in which the shares of Option Stock are to
be registered, the denominations in which the shares of Option Stock are to be
issued, as determined by the Representative, and the date and time, as
determined by the Representative and the Company, when the shares of Option
Stock are to be delivered; provided, however, that this date and time shall not
be earlier than the First Delivery Date nor earlier than the second business day
after the date on which the option shall have been exercised nor later than the
fifth business day after the date on which the option shall have been exercised.
The date and time the shares of Option Stock are delivered are sometimes
referred to as a "Second Delivery Date" and the First Delivery Date and any
Second Delivery Date are sometimes each referred to as a "Delivery Date".
Delivery of the Option Stock to the Underwriters shall be made
in book-entry form through the facilities of the DTC (or at such place as the
Representative and the Company may mutually agree upon), against payment of the
purchase price therefor in immediately available funds
9
10
by wire transfer. Such payment and delivery shall be made at 10:00 a.m., New
York time, on the Second Delivery Date (which may be the same as the First
Delivery Date), unless some other date and time are agreed upon.
5. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by
the Representative and to file such Prospectus pursuant to
Rule 424(b) under the Securities Act not later than the
Commission's close of business on the second business day
following the earlier of (i) the execution and delivery of
this Agreement, or (ii) the date such Prospectus is first used
following effectiveness of the Registration Statement, or, if
applicable, such earlier time as may be required by Rule
430A(a)(3) under the Securities Act; to make no further
amendment or any supplement to the Registration Statement or
to the Prospectus prior to the last Delivery Date except as
permitted herein or required by law or the Rules and
Regulations; for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Stock,
to advise the Representative, promptly after it receives
notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or
any supplement to the Prospectus or any amended Prospectus has
been filed and to furnish the Representative with copies of
any amendment or supplement that is not in the form of a
report or statement filed under the Exchange Act and the rules
and regulations thereof; to file promptly all reports and any
definitive proxy or information statements required to be
filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as
the delivery of a Prospectus is required in connection with
the offering or sale of the Stock subsequent to the date of
the Prospectus; to advise the Representative, promptly after
it receives notice thereof, of the issuance by the Commission
of any stop order with respect to the Company or of any order
preventing or suspending the use of any Preliminary Prospectus
or the Prospectus, of the suspension of the qualification of
the Stock for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending
or supplementing of the Registration Statement or the
Prospectus or for additional information; and, in the event of
the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the
Prospectus or suspending any such qualification, to use
promptly its reasonable best efforts to obtain its withdrawal;
(b) To furnish promptly to the Representative and to
counsel for the Underwriters a signed copy of the Registration
Statement as originally filed with the Commission, and each
amendment thereto filed with the Commission, including all
consents and exhibits filed therewith;
10
11
(c) To deliver promptly to the Representative such
number of the following documents as the Representative shall
reasonably request: (i) conformed copies of the Registration
Statement as originally filed with the Commission and each
amendment thereto (in each case excluding exhibits other than
this Agreement and the computation of per share earnings),
(ii) each Preliminary Prospectus, the Prospectus and any
amended or supplemented Prospectus and (iii) any document
incorporated by reference in the Prospectus (excluding
exhibits thereto); and, if the delivery of a prospectus is
required at any time after the Effective Time in connection
with the offering or sale of the Stock and (i) if at such time
any events shall have occurred 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 in order to make the statements
therein, in the light of the circumstances under which they
were made, when such Prospectus is delivered, not misleading,
or, (ii) if for any other reason it shall be necessary to
amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Securities Act or the
Exchange Act, to notify the Representative and, upon its
request, to file such document and to prepare and furnish
without charge to each Underwriter and to any dealer in
securities as many copies as the Representative may from time
to time reasonably request of an amended or supplemented
Prospectus which will correct such statement or omission or
effect such compliance.
(d) To file promptly with the Commission any
amendment to the Registration Statement or the Prospectus or
any supplement to the Prospectus that may be required, in the
judgment of the Company and the Representative, by the
Securities Act or is requested by the Commission;
(e) Prior to filing with the Commission any amendment
to the Registration Statement or supplement to the Prospectus,
any document incorporated by reference in the Prospectus or
any Prospectus pursuant to Rule 424 of the Rules and
Regulations, to furnish a copy thereof to the Representative
and counsel for the Underwriters and obtain the consent of the
Representative to the filing; provided that, the foregoing
restriction shall not preclude from filing any document
required to be filed under the Exchange Act without the
consent of the Representative;
(f) As soon as practicable after the Effective Date,
to make generally available to the Company's security holders
and to deliver to the Representative an earnings statement of
the Company and its subsidiaries (which need not be audited)
complying with Section 11(a) of the Securities Act and the
Rules and Regulations (including, at the option of the
Company, Rule 158);
(g) For a period of five years following the
Effective Date, to furnish to the Representative copies of all
materials furnished by the Company to its shareholders
11
12
and all public reports and all reports and financial
statements furnished by the Company to the principal national
securities exchange upon which the Common Stock may be listed
pursuant to requirements of or agreements with such exchange
or to the Commission pursuant to the Exchange Act or any rule
or regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as
the Representative may reasonably request to qualify the Stock
for offering and sale under the securities laws of such
jurisdictions as the Representative may request and to comply
with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of the Stock; provided,
however, that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now
so qualified or take any action that would subject it to
service of process in suits (other than suits arising out of
the offer or sale of the Stock) in any jurisdiction where it
is not now so subject;
(i) For a period of 90 days from the date of the
Prospectus, not to, directly or indirectly, (1) offer for
sale, sell, pledge or otherwise dispose of (or enter into any
transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any
time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock
(other than the Stock and shares issued pursuant to employee
benefit plans, qualified stock option plans or other employee
compensation plans existing on the date hereof or pursuant to
currently outstanding options, warrants or rights), or sell or
grant options, rights or warrants with respect to any shares
of Common Stock or securities convertible into or exchangeable
for Common Stock (other than the grant of options pursuant to
option plans existing on the date hereof), or (2) enter into
any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or
risks of ownership of such shares of Common Stock, whether any
such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or other securities, in
cash or otherwise, in each case without the prior written
consent of Xxxxxx Brothers Inc.; and to cause each officer and
director of the Company listed on Schedule 3 to furnish to the
Representative, prior to the First Delivery Date, a letter or
letters, in the form of Exhibit A attached hereto;
(j) Prior to the Effective Date, to apply for the
listing of the Stock on the New York Stock Exchange, Inc. and
the Pacific Exchange--Stock & Options and to use its
reasonable best efforts to complete that listing, subject only
to official notice of issuance;
(k) To apply the net proceeds from the sale of the
Stock being sold by the Company as set forth in the
Prospectus; and
12
13
(l) To take such steps as shall be necessary to
ensure that neither the Company nor any subsidiary shall
become an "investment company" within the meaning of such term
under the United States Investment Company Act of 1940 and the
rules and regulations of the Commission thereunder.
6. Expenses. The Company agrees to pay (a) the costs incident
to the authorization, issuance, sale and delivery of the Stock and any taxes
payable in that connection; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto; (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), any Preliminary
Prospectus, the Prospectus and any amendment or supplement to the Prospectus or
any document incorporated by reference therein, all as provided in this
Agreement; (d) the costs of producing and distributing this Agreement and any
other related documents in connection with the offering, purchase, sale and
delivery of the Stock; (e) the filing fees incident to securing any required
review by the National Association of Securities Dealers, Inc. of the terms of
sale of the Stock; (f) the fees and expenses of listing the Stock on the New
York Stock Exchange, Inc. and the Pacific Exchange--Stock & Options; (g) the
fees and expenses of qualifying the Stock under the securities laws of the
several jurisdictions as provided in Section 5 (h) and of preparing, printing
and distributing a Blue Sky Memorandum (including related fees and expenses of
counsel to the Underwriters); and (i) all other costs and expenses incident to
the performance of the obligations of the Company under this Agreement; provided
that, except as provided in this Section 6 and in Section 11, the Underwriters
shall pay their own costs and expenses, including the costs and expenses of
their counsel, any transfer taxes on the Stock which they may sell and the
expenses of advertising any offering of the Stock made by the Underwriters.
7. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
contained herein, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with
the Commission in accordance with Section 5(a); no stop order
suspending the effectiveness of the Registration Statement or
any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the
Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the
Prospectus or otherwise shall have been complied with.
(b) No Underwriter shall have discovered and
disclosed to the Company on or prior to such Delivery Date
that the Registration Statement or the Prospectus or any
amendment or supplement thereto contains an untrue statement
of a fact which, in the opinion of Xxxxxx & Xxxxxx L.L.P.,
counsel for the Underwriters, is material or omits to state a
fact which, in the opinion of such counsel, is material and is
required to be stated therein or is necessary to make the
statements therein not misleading.
13
14
(c) All corporate proceedings and other legal matters
incident to the authorization, form and validity of this
Agreement, the Stock, the Registration Statement and the
Prospectus, and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be
reasonably satisfactory in all material respects to counsel
for the Underwriters, and the Company shall have furnished to
such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(d) Xxxxxxx & Xxxxx L.L.P. shall have furnished to
the Representative its written opinion, as counsel to the
Company, addressed to the Underwriters and dated such Delivery
Date, in form and substance reasonably satisfactory to the
Representative, to the effect that:
(i) The Company and each of its Significant
Subsidiaries have been duly incorporated and are
validly existing as corporations in good standing
under the laws of their respective jurisdictions of
incorporation, are duly qualified to do business
(except where the failure to so qualify would not
have a a material adverse effect on the consolidated
financial position, stockholders' equity, results of
operations, business or prospects of the Company and
the Significant Subsidiaries) and are in good
standing as foreign corporations in each jurisdiction
in which their respective ownership or lease of
property or the conduct of their respective
businesses requires such qualification and have all
power and authority necessary to own or hold their
respective properties and conduct the businesses in
which they are engaged;
(ii) There are no preemptive or other rights
to subscribe for or to purchase, nor any restriction
upon the voting or transfer of, any shares of the
Stock pursuant to the Company's charter or by-laws or
any agreement or other instrument known to such
counsel;
(iii) The authorized capital stock of the
Company as of September 30, 1999 is as set forth in
the Prospectus, and the capital stock of the Company
conforms in all material respects to the description
thereof contained in the Prospectus. To the best of
such counsel's knowledge, except as disclosed in the
Prospectus, there are no outstanding options or
warrants to purchase any shares of capital stock of
the Company or securities convertible into or
exchangeable for any shares of capital stock of the
Company. The Company has all requisite corporate
power and authority to issue, sell and deliver the
Stock in accordance with and upon the terms and
conditions set forth in this Agreement and in the
Registration Statement and Prospectus. The issuance
of the Stock has been duly and validly authorized
and, when
14
15
issued and paid for by the Underwriters in accordance
with the terms of this Agreement, the Stock will be
fully paid and nonassessable. All of the issued
shares of capital stock of each Significant
Subsidiary of the Company have been duly and validly
authorized and issued and are fully paid,
non-assessable and are owned directly or indirectly
by the Company, free and clear of all liens,
encumbrances, equities or claims; the Stock is
approved for listing, subject to official notice of
issuance on the New York Stock Exchange and the
Pacific Exchange - Stock & Options;
(iv) To the best of such counsel's knowledge
and other than as set forth in the Prospectus, there
are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a
party or of which any property or assets of the
Company or any of its subsidiaries is the subject,
and of a character required to be disclosed in the
Registration Statement which are not adequately
disclosed in the Prospectus.
(v) The Registration Statement has become
effective under the Securities Act as of the date and
time specified in such opinion, and to the best of
such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement has
been issued, no proceeding for that purpose is
pending or threatened by the Commission and all
filings required by Rule 424(b) of the Rules and
Regulations have been made;
(vi) The Registration Statement and the
Prospectus and any further amendments or supplements
thereto made by the Company prior to such Delivery
Date (other than the financial statements and related
schedules therein, as to which such counsel need
express no opinion) comply as to form in all material
respects with the requirements of the Securities Act
and the Rules and Regulations; the documents
incorporated by reference in the Prospectus, when
they became effective or were filed with the
Commission, as the case may be, complied as to form
in all material respects with the requirements of the
Securities Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission
thereunder;
(vii) The statements contained in the
Prospectus under the caption "Material United States
Federal Tax Consequences to Non-United States Holders
of Common Stock," insofar as they describe United
States federal statutes, rules and
regulations, constitute a fair summary thereof;
(viii) To the best of such counsel's knowledge,
there are no contracts or other documents which are
required to be described in the Prospectus or filed
as exhibits to the Registration Statement by the
Securities Act or by the Rules and Regulations which
have not been described or filed as exhibits to
15
16
the Registration Statement or incorporated therein by
reference as permitted by the Rules and Regulations;
(ix) This Agreement has been duly authorized,
executed and delivered by the Company;
(x) The execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby will not conflict with or result
in a breach or violation of, or constitute a default
under, the certificate of incorporation or by-laws of
the Company or any indenture, mortgage, deed of
trust, loan agreement or other agreement or
instrument known to such counsel to which the Company
or any of its Significant Subsidiaries is a party or
by which the Company or any of its Significant
Subsidiaries is bound or to which any of the property
or assets of the Company or any of its Significant
Subsidiaries is subject, nor will such actions result
in any violation of any law, rule or administrative
regulation, or any decree known to such counsel, of
any court or governmental agency or body having
jurisdiction over the Company, its Significant
Subsidiaries or their property, or result in the
creation of any lien, charge, claim or encumbrance
upon any property or asset of the Company or any of
its Significant Subsidiaries; and, except for the
registration of the Stock under the Securities Act
and such consents, approvals, authorizations,
registrations or qualifications as may be required
under the Exchange Act and applicable state or
foreign securities laws in connection with the
purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or
order of, or filing or registration with, any such
court or governmental agency or body is required for
the execution, delivery and performance of this
Agreement by the Company and the consummation of the
transactions contemplated hereby; and
(xi) 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 Securities
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.
In rendering such opinion, such counsel may state
that its opinion is limited to matters governed by the Federal
laws of the United States of America, the laws of the States
of Texas and New York and the General Corporation Law of the
State of Delaware. Such counsel shall also have furnished to
the Representative a written statement, addressed to the
Underwriters and dated such Delivery Date, in form and
substance satisfactory to the Representative, to the effect
that (x) such counsel has
16
17
acted as counsel to the Company on a regular basis (although
the Company is also represented by its General Counsel), has
acted as counsel to the Company in connection with previous
financing transactions and has acted as counsel to the Company
in connection with the preparation of the Registration
Statement, and (y) based on the foregoing, no facts have come
to the attention of such counsel which lead it to believe that
(I) the Registration Statement, as of the Effective Date,
contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or
necessary in order to make the statements therein not
misleading, or that the Prospectus contains any untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under
which they were made, not misleading or (II) any document
incorporated by reference in the Prospectus, when they became
effective or were filed with the Commission, as the case may
be, contained in the case of a registration statement which
became effective under the Securities Act, any untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to
make the statements therein not misleading, or, in the case of
other documents which were filed under the Exchange Act with
the Commission, an untrue statement of a material fact or
omitted to state a material fact necessary in order to make
the statements therein, in light of the circumstances under
which they were made, not misleading. The foregoing opinion
and statement may be qualified by a statement to the effect
that such counsel does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained
in the Registration Statement or the Prospectus except for the
statements made in the Prospectus under the captions in
clauses (ii) and (vii) above; insofar as such statements
relate to the Stock and concern legal matters.
The opinions requested in subsection (d)(i) and
(d)(iii) above with respect to the Significant Subsidiaries,
in subsection (d)(iv) above with respect to legal proceedings,
in subsection (d)(viii) above with respect to material
contracts, in subsection (d)(x) above with respect to no
conflicts, breaches, violations, defaults or creation or
imposition of liens, charges, claims or encumbrances and in
subsection (d)(xi) above with respect to registration rights
may be rendered by Xxxx Xxxxxx, Vice President and General
Counsel of the Company. The opinion rendered by Xx. Xxxxxx
shall also include a statement covering the matters set forth
under clause (y) in the immediately preceding paragraph.
(e) The Representative shall have received from
Xxxxxx & Xxxxxx L.L.P., counsel for the Underwriters, such
opinion or opinions, dated such Delivery Date, with respect to
the issuance and sale of the Stock, the Registration
Statement, the Prospectus and other related matters as the
Representative may reasonably require, and the Company shall
have furnished to such counsel such documents as they
reasonably request for the purpose of enabling them to pass
upon such matters.
17
18
(f) At the time of execution of this Agreement, the
Representative shall have received from Deloitte & Touche LLP
a letter, in form and substance satisfactory to the
Representative, addressed to the Underwriters and dated the
date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are
in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission, (ii) stating, as of the date hereof (or,
with respect to matters involving changes or developments
since the respective dates as of which specified financial
information is given in the Prospectus, as of a date not more
than five days prior to the date hereof), the conclusions and
findings of such firm with respect to the financial
information and other matters ordinarily covered by
accountants' "comfort letters" to underwriters in connection
with registered public offerings.
(g) With respect to the letter of Deloitte & Touche
LLP referred to in the preceding paragraph and delivered to
the Representative concurrently with the execution of this
Agreement (the "initial letter"), the Company shall have
furnished to the Representative a letter (the "bring-down
letter") of such accountants, addressed to the Underwriters
and dated such Delivery Date (i) confirming that they are
independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants
under Rule 2-01 of Regulation S-X of the Commission, (ii)
stating, as of the date of the bring-down letter (or, with
respect to matters involving changes or developments since the
respective dates as of which specified financial information
is given in the Prospectus, as of a date not more than five
days prior to the date of the bring-down letter), the
conclusions and findings of such firm with respect to the
financial information and other matters covered by the initial
letter and (iii) confirming in all material respects the
conclusions and findings set forth in the initial letter.
(h) The Company shall have furnished to the
Representative a certificate, dated such Delivery Date, of its
Chairman of the Board, its President or a Vice President and
its Chief Financial Officer stating that:
(i) The representations, warranties and
agreements of the Company in Section 1 are true and
correct as of such Delivery Date; the Company has
complied with all its agreements contained herein;
and the conditions set forth in Sections 7(a) and
7(i) have been fulfilled; and
(ii) They have carefully examined the
Registration Statement and the Prospectus and, in
their opinion (A) as of the Effective Date, the
Registration Statement and Prospectus did not include
any untrue statement of a material fact and did not
omit to state a material fact required to be stated
18
19
therein or necessary to make the statements therein
not misleading, and (B) since the Effective Date no
event has occurred which should have been set forth
in a supplement or amendment to the Registration
Statement or the Prospectus.
(i) (i) Neither the Company nor any of its
subsidiaries shall have sustained since the date of the latest
audited financial statements included or incorporated by
reference in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus or (ii)
since such date there shall not have been any change in the
capital stock or long-term debt of the Company or any of its
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 and its subsidiaries,
otherwise than as set forth or contemplated in the Prospectus,
the effect of which, in any such case described in clause (i)
or (ii), is, in the judgment of the Representative, so
material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the
delivery of the Stock being delivered on such Delivery Date on
the terms and in the manner contemplated in the Prospectus.
(j) Subsequent to the execution and delivery of this
Agreement (i) no downgrading shall have occurred in the rating
accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) of
the Rules and Regulations and (ii) no such organization shall
have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any
of the Company's debt securities.
(k) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following:
(i) trading in securities generally on the New York Stock
Exchange or the American Stock Exchange or in the
over-the-counter market, or trading in any securities of the
Company on any exchange or in the over-the-counter market,
shall have been suspended or minimum prices shall have been
established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body
or governmental authority having jurisdiction, (ii) a banking
moratorium shall have been declared by Federal or state
authorities, (iii) the United States shall have become engaged
in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have
been a declaration of a national emergency or war by the
United States or (iv) there shall have occurred such a
material adverse change in general economic, political or
financial conditions (or the effect of international
conditions on the financial markets in the United States shall
be such) as to make it, in the judgment of
19
20
the Representative, impracticable or inadvisable to proceed
with the public offering or delivery of the Stock being
delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(l) The New York Stock Exchange, Inc. shall have
approved the Stock for listing, subject only to official
notice of issuance.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each
Underwriter, its officers and employees and each person, if any, who controls
any Underwriter within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Stock), to which that Underwriter,
officer, employee or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the statements therein not misleading or
(iii) any act or failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the Stock or the
offering contemplated hereby, and which is included as part of or referred to in
any loss, claim, damage, liability or action arising out of or based upon
matters covered by clause (i) or (ii) above (provided that the Company shall not
be liable under this clause (iii) to the extent that it is determined in a final
judgment by a court of competent jurisdiction that such loss, claim, damage,
liability or action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Underwriter through its gross
negligence or willful misconduct), and shall reimburse each Underwriter and each
such officer, employee or controlling person promptly upon demand for any legal
or other expenses reasonably incurred by that Underwriter, officer, employee or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action 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, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or in any such amendment or
supplement, in reliance upon and in conformity with written information
concerning such Underwriter furnished to the Company through the Representative
by or on behalf of any Underwriter specifically for inclusion therein which
information consists solely of the information specified in Section 8(e). The
foregoing
20
21
indemnity agreement is in addition to any liability which the Company may
otherwise have to any Underwriter or to any officer, employee or controlling
person of that Underwriter; provided, however, that with respect to any untrue
statement or omission made in the Preliminary Prospectus, the indemnity
agreement contained in this Section 8(a) shall not inure to the benefit of the
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased the Stock concerned if, to the extent such sale was an
initial sale by such Underwriter and any such loss, claim, damage or liability
of such Underwriter is a result of the fact that both (A) a copy of the
Prospectus was not sent or given to such person at or prior to the time of the
written confirmation of the sale of such Stock to such person, and (B) the
untrue statement or omission in the Preliminary Prospectus was corrected in the
Prospectus; provided further, however, that this limitation shall have no effect
unless the Company has complied with its obligation under Section 5(c) of this
Agreement and the Underwriter has a legal obligation to deliver a Prospectus to
the person asserting any such losses, claims, damages or liabilities.
(b) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, its officers and employees, each of its
directors, and each person, if any, who controls the Company within the meaning
of the Securities Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof, to which the Company or any
such director, officer or controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained (A) in any Preliminary Prospectus,
the Registration Statement or the Prospectus or in any amendment or supplement
thereto, or (B) in any Blue Sky Application or (ii) the omission or alleged
omission to state in any Preliminary Prospectus, the Registration Statement or
the Prospectus, or in any amendment or supplement thereto, or in any Blue Sky
Application any material fact required to be stated therein or necessary to make
the statements therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information concerning
such Underwriter furnished to the Company through the Representative by or on
behalf of that Underwriter specifically for inclusion therein, and shall
reimburse the Company and any such director, officer or controlling person for
any legal or other expenses reasonably incurred by the Company or any such
director, officer or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Underwriter may otherwise have to the
Company or any such director, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may
21
22
have to an indemnified party otherwise than under this Section 8. If any such
claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representative shall have the right to employ counsel to represent jointly
the Representative and those other Underwriters and their respective officers,
employees and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Underwriters
against the Company under this Section 8 if, in the reasonable judgment of the
Representative, it is advisable for the Representative and those Underwriters,
officers, employees and controlling persons to be jointly represented by
separate counsel, and in that event the fees and expenses of such separate
counsel shall be paid by the Company, it being understood, however, that the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to the fees
and expenses of any local counsel that may be retained for the action) for all
such indemnified parties. No indemnifying party shall (i) without the prior
written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be 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 Stock 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 with respect to the statements or omissions which resulted in such loss,
claim, damage
22
23
or liability, or action in respect thereof, 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 with respect to such offering shall
be deemed to be in the same proportion as the total net proceeds from the
offering of the Stock purchased under this Agreement (before deducting expenses)
received by the Company on the one hand, and the total underwriting discounts
and commissions received by the Underwriters with respect to the shares of the
Stock purchased under this Agreement on the other hand, bear to the total gross
proceeds from the offering of the shares of the Stock under this Agreement, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Underwriters, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this Section 8 were to be 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 into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 8 shall be deemed
to include, for purposes of this Section 8(d), 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
Section 8(d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Stock underwritten by
it and distributed to the public was offered to the public exceeds the amount of
any damages which such Underwriter has otherwise paid or become liable to pay by
reason of any 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 Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section 8(d) are
several in proportion to their respective underwriting obligations and not
joint.
(e) The Underwriters severally confirm and the Company
acknowledges that the statements with respect to the public offering of the
Stock by the Underwriters and the over-allotment option set forth on the cover
page of, the list of Underwriters and their respective participation in the sale
of Stock under the caption "Underwriting" in, and the paragraphs addressing the
underwriting discount, concessions and reallowances, stabilization, short
positions, syndicate transactions, penalty bids, the performance of investment
banking and financial advisory services by the Underwriters and limitations on
sales in the United Kingdom under the caption "Underwriting" in, the Prospectus
are correct and constitute the only information concerning such Underwriters
furnished in writing to the Company by or on behalf of the Underwriters
specifically for inclusion in the Registration Statement and the Prospectus.
23
24
9. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Stock which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of shares of the Firm Stock set
opposite the name of each remaining non-defaulting Underwriter in Schedule 1 or
2 hereto bears to the total number of shares of the Firm Stock set opposite the
names of all the remaining non-defaulting Underwriters in Schedule 1 or 2
hereto; provided, however, that the remaining non-defaulting Underwriters shall
not be obligated to purchase any of the Stock on such Delivery Date if the total
number of shares of the Stock which the defaulting Underwriter or Underwriters
agreed but failed to purchase on such date exceeds 9.09% of the total number of
shares of the Stock to be purchased on such Delivery Date, and any remaining
non-defaulting Underwriter shall not be obligated to purchase more than 110% of
the number of shares of the Stock which it agreed to purchase on such Delivery
Date pursuant to the terms of Section 3. If the foregoing maximums are exceeded,
the remaining non-defaulting Underwriters, or those other underwriters
satisfactory to the Representative who so agree, shall have the right, but shall
not be obligated, to purchase, in such proportion as may be agreed upon among
them, all the Stock to be purchased on such Delivery Date. If the remaining
Underwriters or other underwriters satisfactory to the Representative do not
elect to purchase the shares which the defaulting Underwriter or Underwriters
agreed but failed to purchase on such Delivery Date, this Agreement (or, with
respect to the Second Delivery Date, the obligation of the Underwriters to
purchase, and of the Company to sell, the Option Stock) shall terminate without
liability on the part of any non-defaulting Underwriter or the Company, except
that the Company will continue to be liable for the payment of expenses of the
non-defaulting Underwriters to the extent set forth in Sections 6 and 11. As
used in this Agreement, the term "Underwriter" includes, for all purposes of
this Agreement unless the context requires otherwise, any party not listed in
Schedule 1 or 2 hereto who, pursuant to this Section 9, purchases Firm Stock
which a defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting
Underwriter of any liability it may have to the Company for damages caused by
its default. If other underwriters are obligated or agree to purchase the Stock
of a defaulting or withdrawing Underwriter, either the Representative or the
Company may postpone the Delivery Date for up to seven full business days in
order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
10. Termination. The obligations of the Underwriters hereunder
may be terminated by the Representative by notice given to and received by the
Company prior to delivery of and payment for the Firm Stock if, prior to that
time, any of the events described in Sections 7(i) or 7(j), shall have occurred
or if the Underwriters shall decline to purchase the Stock for any reason
permitted under this Agreement.
11. Reimbursement of Underwriters' Expenses. If the Company
shall fail to tender the Stock for delivery to the Underwriters by reason of any
failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other
24
25
condition of the Underwriters' obligations hereunder required to be fulfilled by
the Company is not fulfilled, the Company will reimburse the Underwriters for
all reasonable out-of-pocket expenses (including fees and disbursements of
counsel) incurred by the Underwriters in connection with this Agreement and the
proposed purchase of the Stock, and upon demand the Company shall pay the full
amount thereof to the Representative. If this Agreement is terminated pursuant
to Section 9 by reason of the default of one or more Underwriters, the Company
shall not be obligated to reimburse any defaulting Underwriter on account of
those expenses.
12. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or
sent by mail, telex or facsimile transmission to Xxxxxx
Brothers Inc., Three World Financial Center, New York, New
York 10285, Attention: Syndicate Department (Fax:
212-526-6588), with a copy, in the case of any notice pursuant
to Section 8(c), to the Director of Litigation, Office of the
General Counsel, Xxxxxx Brothers Inc., 0 Xxxxx Xxxxxxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000;
(b) if to the Company, shall be delivered or sent by
mail, telex or facsimile transmission to the address of the
Company set forth in the Registration Statement, Attention:
General Counsel (Fax: (000) 000-0000);
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representative, which address will be supplied to any other party hereto by the
Representative upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by Xxxxxx Brothers Inc.
13. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the Company
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control any Underwriter within the meaning of Section 15 of
the Securities Act and (B) the indemnity agreement of the Underwriters contained
in Section 8(b) of this Agreement shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the Company within the meaning
of Section 15 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Section 13, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
25
26
14. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriters contained in this
Agreement or made by or on behalf on them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Stock and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
15. Definition of the Term "Business Day." For purposes of
this Agreement, "business day" means each Monday, Tuesday, Wednesday, Thursday
or Friday which is not a day on which banking institutions in New York are
generally authorized or obligated by law or executive order to close.
16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
17. Conflicts. The Company and the Underwriters acknowledge
that Xxxxxxx & Xxxxx L.L.P., which will be acting as counsel to the Company in
connection with the offer and sale of the Stock, also acts as counsel from time
to time to one or more of the Underwriters in connection with unrelated matters.
The Company and the Underwriters consent to Xxxxxxx & Xxxxx L.L.P. so acting as
counsel to the Company. The Company and the Underwriters also acknowledge that
Xxxxxx & Xxxxxx L.L.P., which is acting as counsel to the Underwriters in
connection with the offer and sale of Stock, also acts as counsel from time to
time to the Company in connection with unrelated matters. The Company and the
Underwriters consent to Xxxxxx & Xxxxxx L.L.P. so acting as counsel to the
Underwriters.
18. Counterparts. This Agreement may be executed in one or
more counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
19. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement between
the Company and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
ROWAN COMPANIES, INC.
By:
----------------------------------------
Name:
Title:
Accepted:
26
27
XXXXXX BROTHERS INC.
For itself and as Representative
of the several Underwriters
named in Schedule 1 hereto
By: -------------------------------------------
Authorized Representative
27
28
SCHEDULE 1
Number of
Underwriters Shares
------------ ------
Xxxxxx Brothers Inc...........................................
[Names of other Underwriters]
------
Total....................................................
======
28
29
SCHEDULE 2
Significant Subsidiaries
Era Aviation, Inc. (Washington)
Rowan International, Inc. (Panama)
Rowandrill, Inc. (Texas)
Rowan Drilling Company, Inc. (Texas)
Atlantic Maritime Services, Inc. (Texas)
Rowan Petroleum, Inc. (Texas)
XxXxxxxxxx, Inc. (Texas)
30
SCHEDULE 3
Executive Officers and Directors
31
EXHIBIT A
LOCK-UP LETTER AGREEMENT
XXXXXX BROTHERS INC.
As Representative of the
several Underwriters
named in Schedule 0
Xxxxx Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
The undersigned understands that you and certain other firms propose to
enter into an Underwriting Agreement (the "Underwriting Agreement") providing
for the purchase by you and such other firms (the "Underwriters") of shares (the
"Shares") of Common Stock, par value $0.125 per share (the "Common Stock"), of
Rowan Companies, Inc. (the "Company") and that the Underwriters propose to
reoffer the Shares to the public (the "Offering").
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of Xxxxxx
Brothers Inc., the undersigned will not, directly or indirectly, (1) offer for
sale, sell, pledge, or otherwise dispose of (or enter into any transaction or
device that is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any shares of Common Stock
(including, without limitation, shares of Common Stock that may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission and shares of Common Stock
that may be issued upon exercise of any option or warrant) or securities
convertible into or exchangeable for Common Stock (other than the Shares) owned
by the undersigned on the date of execution of this Lock-Up Letter Agreement or
on the date of the completion of the Offering, or (2) enter into any swap or
other derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such shares of Common
Stock, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or other securities, in cash or
otherwise, for a period of [90/60] days after the date of the final Prospectus
relating to the Offering.
In furtherance of the foregoing, the Company and its Transfer Agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.
It is understood that, if the Company notifies you that it does not
intend to proceed with the Offering, if the Underwriting Agreement does not
become effective, or if the Underwriting
32
Agreement (other than the provisions thereof which survive termination) shall
terminate or be terminated prior to payment for and delivery of the Shares, the
undersigned will be released from its obligations under this Lock-Up Letter
Agreement.
The undersigned understands that the Company and the Underwriter will
proceed with the Offering in reliance on this Lock-Up Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the heirs, personal representatives, successors and assigns of
the undersigned.
Very truly yours,
Dated: _______________
