EXHIBIT 1.1
10,000,000
ROWAN COMPANIES, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
January 27, 2004
XXXXXX BROTHERS INC.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 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 Xxxxxx
Brothers Inc. (the "Underwriter") in connection with the offering and sale of
such Firm Stock in the United States to United States persons.
In addition, the Company proposes to grant to the Underwriter 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 Underwriter.
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-3 including a prospectus,
relating to, among other securities, the Stock and the offering thereof
from time to time in accordance with Rule 415 under the Securities Act
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 (File No. 333-110601), and (iii) become
effective under the Securities Act. Copies of such registration
statement have been delivered by the Company to you. As provided in
Section 5(a), a prospectus supplement reflecting the terms of the
offering of the Stock and the other matters set forth therein has been
prepared and will be filed pursuant to Rule 424 under the Securities
Act. Such prospectus supplement, in the form first filed after the
Effective Time (as defined below) pursuant to Rule 424, is herein
referred to as the "Prospectus Supplement". Such registration
statement, as amended at the Effective Time, including the exhibits
thereto and the documents incorporated by reference therein, is herein
called the "Registration Statement", and the basic prospectus included
therein relating to all offerings of securities under the Registration
Statement, as supplemented by the Prospectus Supplement, is herein
called the "Prospectus", except that, if such basic prospectus is
amended or supplemented on or prior to the date on which the Prospectus
Supplement is first filed pursuant to Rule 424, the term "Prospectus"
shall refer to the basic prospectus as so amended or supplemented and
as supplemented by the Prospectus Supplement, in either case including
the documents filed by the Company with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that
are incorporated by reference therein. As used herein, "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 Supplement" means each
Prospectus Supplement included in a registration statement, or
amendments thereof, after the Registration Statement became effective
under the Securities Act but containing a "Subject to Completion"
legend comparable to that contained in paragraph 10 of Item 501 under
Regulation S-K of the Rules and Regulations. 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 the Prospectus.
(b) The Registration Statement conforms, and each Prospectus
Supplement and any further amendments or supplements to the
Registration Statement or any Prospectus Supplement 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 each
Prospectus Supplement and any 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
the case of any Prospectus Supplement 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 any Prospectus Supplement in
reliance upon and in conformity with written information furnished to
the Company by or on behalf of the Underwriter specifically for
inclusion therein.
(c) The documents incorporated by reference or deemed to be
incorporated in the Prospectus or Prospectus Supplement pursuant to
Item 12 of the Registration Statement under the Securities Act, at the
time they were or hereafter are filed with the Commission, complied in
all material respects with the requirements of the Exchange Act, and
the rules and regulations of the Commission thereunder (the "1934 Act
Regulations") and, when read together and with the other
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information in the Prospectus, as of the applicable effective date of
the Registration Statement and any amendment thereto, did not and will
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, 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 1 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 Stock and the Option Stock, 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 Supplement.
The capitalization of the Company as of September 30, 2003 is as set
forth in the Prospectus Supplement (except for shares of Common Stock
issued in connection with exercises of options and conversions of
convertible debentures granted under the Company's existing employee
benefit plans, qualified stock option plans or other employee
compensation plans). Except as disclosed in the Prospectus Supplement
and except for exercises of options and conversions of convertible
debentures since the date as of which information relating to options
and convertible debentures is given therein, 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
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accordance with and upon the terms and conditions set forth in this
Agreement and in the Registration Statement and Prospectus Supplement.
(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 any 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 Underwriter, 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 Supplement, the Company has
not sold or issued any shares of Common Stock during the six-month
period preceding the date of the Prospectus Supplement, 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 Supplement, 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 Supplement; and,
since such date, there has not been any change in the capital stock
(except for
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shares of Common Stock issued in connection with exercises of options
and conversions of convertible debentures granted under the Company's
existing employee benefit plans, qualified stock option plans or other
employee compensation 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 Supplement.
(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 Supplement
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
Supplement or is incorporated by reference therein and who has
delivered the initial letter referred to in Section 7(f) 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 Supplement 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 Supplement, 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
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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 proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(o) The Company meets the requirements for use of Form S-3 under the
Securities Act and, as of the applicable effective date of the
Registration Statement and Prospectus and any amendment thereto and as
of the applicable filing date of the Prospectus Supplement and any
supplements thereto, the Registration Statement and Prospectus, and
amendments thereto, complied and the Prospectus Supplement, and
supplements thereto, will comply with the requirements of the
Securities Act and the Rules and Regulations thereunder.
(p) There are no contracts or other documents which are required to
be described in the Prospectus Supplement 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 Supplement
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 Supplement 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
6
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 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
Supplement through the date hereof, and except as may otherwise be
disclosed in the Prospectus Supplement, the Company has not (i) issued
or granted any securities (except for shares of Common Stock issued in
connection with exercises of options and conversions of convertible
debentures granted under the Company's existing employee benefit plans,
qualified stock option plans or other employee compensation 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
7
or to the conduct of its business, which default or violation in the
case of clauses (ii) and (iii), individually or in the aggregate, 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.
(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 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.
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(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.
(aa) The Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-14 under the Exchange
Act), which (i) are designed to ensure that material information
relating to the Company, including its consolidated subsidiaries, is
made known to the Company's principal executive officer and its
principal financial officer by others within those entities,
particularly during the periods in which the periodic reports required
under the Exchange Act are being prepared; (ii) have been evaluated for
effectiveness as of the end of the period covered by the Company's most
recent annual or quarterly report filed with the Commission; and (iii)
are effective in all material respects to perform the functions for
which they were established.
(bb) Based on the evaluation of its disclosure controls and
procedures, the Company is not aware of (i) any significant deficiency
in the design or operation of internal controls over financial
reporting which are reasonably likely to adversely affect the Company's
ability to record, process, summarize and report financial data or any
material weaknesses in internal controls over financial reporting; or
(ii) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Company's internal
controls over financial reporting.
(cc) Since the date of the most recent evaluation of such disclosure
controls and procedures, there have been no significant changes in
internal controls over financial reporting that has materially
affected, or is reasonably likely to materially affect, the internal
controls over financial reporting.
2. Purchase of the Stock by the Underwriter. 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 Underwriter, and the Underwriter agrees to purchase all
such shares of the Firm Stock.
In addition, the Company grants to the Underwriter an option to
purchase up to 1,500,000 shares of Option Stock. Such option is granted for the
purpose of covering over-allotments, if any, in the sale of Firm Stock and is
exercisable as provided in Section 4 hereof. The price of both the Firm Stock
and any Option Stock shall be $23.05 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.
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3. Offering of Stock by the Underwriter. Upon authorization by the
Underwriter of the release of the Firm Stock, the Underwriter proposes to offer
the Firm Stock for sale upon the terms and conditions set forth in the
Prospectus Supplement.
4. Delivery of and Payment for the Stock. Delivery of the Firm Stock
to the Underwriter 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 January 30, 2004, 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 Underwriter 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 Xxxxxx & Xxxxxx
L.L.P., 2300 First City Tower, 0000 Xxxxxx, Xxxxxxx, Xxxxx 00000, or at such
other date or place as shall be determined by agreement between the Underwriter
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 Underwriter. 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 Underwriter, and the date and time, as determined
by the Underwriter 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 Underwriter shall be made in
book-entry form through the facilities of the DTC (or at such place as the
Underwriter and the Company may mutually agree upon), against payment of the
purchase price therefor in immediately available funds 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 a Prospectus Supplement in a form approved by the
Underwriter and, not later than the Commission's close of business on
the second business day following the execution and delivery of this
Agreement or, if applicable, such earlier time as may be required by
Rule 430A(a)(3) under the Securities Act, to file a Prospectus
Supplement pursuant to Rule 424(b) under the Securities Act; to make no
further amendment to the Registration Statement or Prospectus
(including any post-effective amendment) or any supplement to the
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Prospectus Supplement except as permitted herein; to advise the
Underwriter, promptly after it receiving notice thereof, of the time
when any supplement to the Prospectus Supplement has been filed and to
furnish the Underwriter with copies thereof; to advise the Underwriter,
promptly after it receiving notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus Supplement, the Prospectus
Supplement, the Registration Statement 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 any Preliminary Prospectus Supplement, the
Prospectus Supplement, 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 Supplement, the Prospectus Supplement, the
Registration Statement or the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) To furnish promptly to the Underwriter and to its counsel 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;
(c) To deliver promptly to the Underwriter such number of the
following documents as the Underwriter 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 Supplement, the Prospectus
Supplement and any supplemented Prospectus Supplement and (iii) any
document incorporated by reference in the Prospectus (excluding
exhibits thereto); and, if the delivery of a Prospectus Supplement 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 Supplement as then
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 Supplement is delivered, not
misleading, or, (ii) if for any other reason it shall be necessary to
supplement the Prospectus Supplement or to file under the Exchange Act
any document incorporated by reference in the Prospectus Supplement in
order to comply with the Securities Act or the Exchange Act, to notify
the Underwriter and, upon its request, to file such document and to
prepare and furnish without charge to the Underwriter and to any dealer
in securities as many copies as the Underwriter may from time to time
reasonably request of a supplemented Prospectus
11
Supplement 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 Supplement that may be required, in the judgment of the
Company and the Underwriter, by the Securities Act or is requested by
the Commission;
(e) During such time as a prospectus is required to be delivered in
connection with the offering and sale of the Stock, to furnish a copy
of any amendment to the Registration Statement or supplement to the
Prospectus Supplement, any document incorporated by reference in the
Prospectus Supplement or any Prospectus Supplement pursuant to Rule 424
of the Rules and Regulations to the Underwriter and its counsel and
obtain the consent of the Underwriter prior to the filing; provided
that, the foregoing restriction shall not preclude the Company from
filing any report under the Exchange Act without the consent of the
Underwriter;
(f) As soon as practicable after the Effective Date, to make
generally available to the Company's security holders and to deliver to
the Underwriter 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 Underwriter copies of all materials furnished by the
Company to its shareholders 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; provided, however, that the Company shall
not be required to provide the Underwriter with any such reports,
registration statements or similar forms that have been filed with the
Commission by electronic transmission pursuant to XXXXX;
(h) Promptly from time to time to take such action as the Underwriter
may reasonably request to qualify the Stock for offering and sale under
the securities laws of such jurisdictions as the Underwriter 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;
12
(i) For a period of 90 days from the date of the Prospectus
Supplement, 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 the
Underwriter; and to cause each officer and director of the Company
listed on Schedule 2 to agree, prior to the First Delivery Date, to the
terms of the lock-up agreement in the form of Exhibit A attached
hereto; and to take appropriate measures to ensure that such
individuals comply with the terms thereof.
(j) To promptly 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 prior to
Closing, 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 Supplement; and
(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
Supplement, the Prospectus Supplement and any supplement to the Prospectus
Supplement and 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;
13
(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 Underwriter);
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 Underwriter shall pay its own
costs and expenses, including the costs and expenses of its counsel, any
transfer taxes on the Stock which it may sell and the expenses of advertising
any offering of the Stock made by the Underwriter.
7. Conditions of Underwriter's Obligations. The obligations of the
Underwriter 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 Supplement 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 Supplement or otherwise shall have been
complied with.
(b) The Underwriter shall not have discovered and disclosed to the
Company on or prior to such Delivery Date that the Registration
Statement or the Prospectus Supplement or any amendment or supplement
thereto contains an untrue statement of a fact which is material or
omits to state a fact which is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(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 Supplement, 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 Underwriter, 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 LLP shall have furnished to the Underwriter its
written opinion, as counsel to the Company, addressed to the
Underwriter and dated such Delivery Date, in form and substance
reasonably satisfactory to the Underwriter, to the effect that:
14
(i) The Company and each of its Significant Subsidiaries (other
than Rowan International, Inc.) are corporations validly existing and
in good standing under the laws of their respective jurisdictions of
incorporation; the Company and the Significant Subsidiaries 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 (in each case, except where the failure to
so qualify or be in good standing would not have 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 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, 2003 is as set forth in the Prospectus Supplement, and the capital
stock of the Company conforms in all material respects to the
description thereof contained in the Prospectus. Except as disclosed in
the Prospectus Supplement (and except for shares of Common Stock issued
in connection with exercises of options and conversions of convertible
debentures granted under the Company's existing employee benefit plans,
qualified stock option plans or other employee compensation plans),
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 Supplement. The issuance of the Stock has been
duly and validly authorized and, when issued and paid for by the
Underwriter 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;
15
(iv) To the best of such counsel's knowledge and other than as set
forth in the Prospectus Supplement, 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 Registration Statement;
(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 Supplement, 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 and the 1934 Act Regulations, as applicable,
thereunder;
(vii) 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 in the Prospectus or filed as exhibits to the Registration
Statement or incorporated therein by reference as permitted by the
Rules and Regulations;
(viii) This Agreement has been duly authorized, executed and
delivered by the Company;
(ix) 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 (in each case, that is filed as an exhibit to
the Registration Statement or is incorporated therein pursuant to the
Rules and Regulations) to which the
16
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 any 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 Underwriter, 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
(x) 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 Underwriter a written statement, addressed
to the Underwriter and dated such Delivery Date, in form and substance
satisfactory to the Underwriter, to the effect that (x) such counsel
has 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 or the Prospectus Supplement 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,
17
not misleading or (II) any document incorporated by reference in the
Prospectus Supplement, 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, the Prospectus or the Prospectus Supplement
except for the statements made in the Prospectus under the section
referenced in clause (iii) 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 and options, warrants or
convertible debentures outstanding, in subsection (d)(iv) above with
respect to legal proceedings, in subsection (d)(vii) above with
respect to contracts, in subsection (d)(ix) above with respect to no
conflicts, breaches, violations, defaults or creation or imposition
of liens, charges, claims or encumbrances and in subsection (d)(x)
above with respect to registration rights may be rendered by Xxxx
Xxxxxx, Senior Vice President, Legal 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 Underwriter shall have received from Xxxxxx & Xxxxxx L.L.P.,
counsel for the Underwriter, such opinion or opinions, dated such
Delivery Date, with respect to the issuance and sale of the Stock, the
Registration Statement, the Prospectus, the Prospectus Supplement and
other related matters as the Underwriter 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.
(f) At the time of execution of this Agreement, the Underwriter shall
have received from Deloitte & Touche LLP a letter, in form and
substance satisfactory to the Underwriter, addressed to the Underwriter
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
Supplement, as of a date
18
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 Underwriter
concurrently with the execution of this Agreement (the "initial
letter"), the Company shall have furnished to the Underwriter a letter
(the "bring-down letter") of such accountants, addressed to the
Underwriter 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 Supplement, 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 Underwriter 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,
the Prospectus and the Prospectus Supplement and, in their
opinion (A) as of the Effective Date, the Registration Statement,
the Prospectus and the Prospectus Supplement did not include any
untrue statement of a material fact and did not omit to state a
material fact required to be stated 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) 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 Supplement 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 Supplement or (ii)
19
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 Supplement (and except for shares of Common Stock issued in
connection with exercises of options and conversions of convertible
debentures granted under the Company's existing employee benefit plans,
qualified stock option plans or other employee compensation plans), the
effect of which, in any such case described in clause (i) or (ii), is,
in the judgment of the Underwriter, 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 Supplement.
(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 the settlement of such trading shall have been
materially disrupted 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, including without
limitation as a result of terrorist activities after the date hereof
(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 the
Underwriter, 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
Supplement.
(l) The New York Stock Exchange, Inc. shall have approved the Stock
for listing, subject only to official notice of issuance.
20
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 Underwriter.
8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless the 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 Supplement, the
Prospectus Supplement, 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 Supplement, the
Prospectus Supplement, 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 the 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 the Underwriter through its gross
negligence or willful misconduct), and shall reimburse the Underwriter
and each such officer, employee or controlling person promptly upon
demand for any legal or other expenses reasonably incurred by the
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 Supplement, the Prospectus Supplement, 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
Underwriter by or on behalf of any Underwriter specifically for
inclusion therein
21
which information consists solely of the information specified in
Section 8(e). The foregoing 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 the Underwriter;
provided, however, that with respect to any untrue statement or
omission made in any Preliminary Prospectus Supplement, 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 the Underwriter and any such
loss, claim, damage or liability of the 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 any Preliminary Prospectus Supplement was corrected in the
Prospectus Supplement; 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 Supplement to the person
asserting any such losses, claims, damages or liabilities.
(b) The Underwriter shall indemnify and hold harmless the Company,
its officers who have signed the Registration Statement, 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 Supplement,
the Prospectus Supplement, 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 Supplement, the Prospectus Supplement, 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 the Underwriter furnished to the Company 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 the
22
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
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 Underwriter shall have the
right to employ counsel to represent the Underwriter and its 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 Underwriter against the Company under this Section 8 if, in the
reasonable judgment of the Underwriter, it is advisable for the
Underwriter and those 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
23
(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 Underwriter 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 Underwriter on the other with respect to the statements or
omissions which resulted in such loss, claim, damage 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 Underwriter 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
Underwriter 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 on the cover page of the Prospectus Supplement. 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 Underwriter, 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 Underwriter
agree that it would not be just and equitable if contributions pursuant
to this Section 8 were to be determined by pro rata allocation 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), the Underwriter shall not be required to contribute any amount in
excess of the
24
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 the 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.
(e) The Underwriter confirms and the Company acknowledges that the
statements with respect to (i) the public offering of the Stock by the
Underwriter and the over-allotment option set forth on the cover page
of, (ii) the identity of the Underwriter, the statement as to the
Underwriter's participation in the sale of Stock, and the Underwriter's
proposal to offer the Stock to the public under the caption
"Underwriting" in, and (iii) the paragraphs addressing the commissions
and expenses, over-allotment option, and affiliates under the caption
"Underwriting" in, the Prospectus Supplement are correct and constitute
the only information concerning the Underwriter furnished in writing to
the Company by or on behalf of the Underwriter specifically for
inclusion in the Registration Statement, the Prospectus and the
Prospectus Supplement.
9. Default by Underwriter. If, on any Delivery Date, the Underwriter
defaults in the performance of its obligations under this Agreement, this
Agreement (or, with respect to the Second Delivery Date, the obligation of the
Underwriter to purchase, and of the Company to sell, the Option Stock) shall
terminate. Nothing contained herein shall relieve the Underwriter of any
liability it may have to the Company for damages caused by its default.
10. Termination. The obligations of the Underwriter hereunder may be
terminated by the Underwriter 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), 7(j) or 7(k), shall have occurred or
if the Underwriter shall decline to purchase the Stock for any reason permitted
under this Agreement.
11. Reimbursement of Underwriter's Expenses. If the Company shall
fail to tender the Stock for delivery to the Underwriter 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 condition of the
Underwriter's obligations hereunder required to be fulfilled by the Company is
not fulfilled, the Company will reimburse the Underwriter for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel) incurred by
the Underwriter 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
Underwriter. If this Agreement is terminated pursuant to Section 9 by reason of
the default of the Underwriter, the Company shall not be obligated to reimburse
the Underwriter on account of the Underwriter's expenses.
12. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
25
(a) if to the Underwriter, shall be delivered or sent by mail, telex
or facsimile transmission to Xxxxxx Brothers Inc., 1285 Avenue of the
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate
Registration Department (Fax: 000-000-0000), 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., 000 Xxxx 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: (713)
960-7658);
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof.
13. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriter, 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 the Underwriter within the meaning of Section 15 of
the Securities Act and (B) the indemnity agreement of the Underwriter 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.
14. Survival. The respective indemnities, representations, warranties
and agreements of the Company and the Underwriter contained in this Agreement or
made by or on its behalf, 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 Underwriter acknowledge that
Xxxxxxx Xxxxx LLP, 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
the Underwriter in connection with
26
unrelated matters. The Company and the Underwriter consent to Xxxxxxx Xxxxx LLP
so acting as counsel to the Company. The Company and the Underwriter also
acknowledge that Xxxxxx & Xxxxxx L.L.P., which is acting as counsel to the
Underwriter 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 Underwriter consent to Xxxxxx & Xxxxxx L.L.P. so acting as
counsel to the Underwriter.
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.
27
If the foregoing correctly sets forth the agreement between the Company and
the Underwriter, please indicate your acceptance in the space provided for that
purpose below.
Very truly yours,
ROWAN COMPANIES, INC.
By: /s/ X. X. Xxxxxx
--------------------------------------
Name: X. X. Xxxxxx
Title: Senior Vice President, Finance,
Administration and Treasurer
Accepted:
XXXXXX BROTHERS INC.
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Authorized Representative
Signature Page -- Rowan Companies, Inc.
SCHEDULE 1
Significant Subsidiaries
Era Aviation, Inc. (Washington)
Rowan International, Inc. (Panama)
Rowandrill, Inc. (Texas)
Rowan Drilling Company, Inc. (Texas)
Atlantic Maritime Services, Inc. (Texas)
XxXxxxxxxx, Inc. (Texas)
SCHEDULE 2
Executive Officers and Directors:
Xxxxxxx
Xxxxxx
Xxxxxxxxx
Xxxxxxx
Xxxxxx
Xxxxx
XxXxxxx
Xxxxxx
Person
Xxxxxxx
Xxxxxx
EXHIBIT A
LOCK-UP LETTER AGREEMENT
XXXXXX BROTHERS INC.
000 Xxxxxxx 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 (the "Underwriter") 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 Underwriter proposes to reoffer the Shares to the
public (the "Offering").
In consideration of the execution of the Underwriting Agreement by the
Underwriter, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without your prior written consent, 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 60 days
after the date of the final Prospectus relating to the Offering; provided,
however, that the foregoing restrictions shall not apply to any bona fide gift
of Common Stock to a donee that agrees in writing for the benefit of the
Underwriter to be bound by the foregoing restrictions with respect to such
shares of Common Stock.
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 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.
Whether or not the Offering actually occurs depends on a number of
factors, including market conditions. Any Offering will only be made pursuant to
an Underwriting Agreement, the terms of which are subject to negotiation between
the Company and the Underwriter.
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: _______________
A-2
