1
EXHIBIT 10.1
PURCHASE AGREEMENT
------------------------
RBF FINANCE CO.
$800,000,000 PRINCIPAL AMOUNT OF
$400,000,000 11% SENIOR SECURED NOTES DUE 2006
$400,000,000 11-3/8% SENIOR SECURED NOTES DUE 2009
UNCONDITIONALLY GUARANTEED BY
R&B FALCON CORPORATION
MARCH 19, 1999
------------------------
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
2
$800,000,000
$400,000,000 11%SENIOR SECURED NOTES DUE 2006
$400,000,000 11-3/8% SENIOR SECURED NOTES DUE 2009
RBF FINANCE CO.
UNCONDITIONALLY GUARANTEED BY
R&B FALCON CORPORATION
PURCHASE AGREEMENT
March 19, 1999
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
AS INITIAL PURCHASER
000 XXXX XXXXXX
XXX XXXX, XXX XXXX 00000
Dear Sirs:
RBF Finance Co., a Delaware corporation ("XXXXX"), proposes to issue
and sell to Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation (the "INITIAL
PURCHASER") an aggregate of $400,000,000 in principal amount of its 11% Senior
Secured Notes due 2006 and $400,000,000 in principal amount of its 11-3/8%
Senior Secured Notes due 2009 (collectively, the "RESTRICTED NOTES"), subject to
the terms and conditions set forth herein. The Restricted Notes are to be issued
pursuant to the provisions of an indenture (the "INDENTURE"), to be dated as of
the Closing Date (as defined below), among Xxxxx, the Company (as defined below)
and United States Trust Company of New York, as trustee (the "TRUSTEE"). The
Restricted Notes and the Exchange Notes (as defined below), issuable in exchange
therefor, are collectively referred to herein as the "SECURED NOTES." The
Secured Notes will be guaranteed (the "GUARANTEE") by R&B Falcon Corporation, a
Delaware corporation (the "COMPANY"). Capitalized terms used but not defined
herein shall have the meanings given to such terms in the Indenture.
1. OFFERING MEMORANDUM. The Restricted Notes will be offered and sold
to the Initial Purchaser pursuant to one or more exemptions from the
registration requirements under the Securities Act of 1933, as amended (the
"Act"). Xxxxx and the Company have prepared a preliminary offering memorandum,
dated March 15, 1999 (the "PRELIMINARY OFFERING MEMORANDUM"), and a final
offering memorandum, dated March 19, 1999 (the "OFFERING Memorandum"), relating
to the Restricted Notes and the Guarantee.
Upon original issuance thereof, and until such time as the same is no
longer required pursuant to the Indenture, the Restricted Notes (and all
securities issued in exchange therefor, in substitution thereof or upon
conversion thereof) shall bear the following legend:
1
3
THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS. ACCORDINGLY, THIS NOTE MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN
THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB") OR (B) IT IS
AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1),
(2), (3) OR (7) UNDER REGULATION D UNDER THE SECURITIES ACT (AN
"IAI")),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE
EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A OR (C) TO AN AIA THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE TRUSTEE WITH A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF
THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF
SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES
LESS THAN $250,000, AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE
COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT,
AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION, AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN
INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING.
2
4
Even after the registration of the Exchange Notes (defined below) under
the Act, the Exchange Notes, when issued, will bear a legend to the following
effect unless otherwise agreed upon by Xxxxx and the holder thereof:
THE HOLDER: (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"),
(B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) UNDER REGULATION D UNDER THE SECURITIES ACT
(AN "IAI")) OR (C) IT IS A PERSON INVOLVED IN THE ORGANIZATION OR
OPERATION OF THE COMPANY OR AN AFFILIATE (AS DEFINED IN RULE 405 UNDER
THE SECURITIES ACT) OF THE COMPANY,
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE
EXCEPT TO (A) A QIB, (B) AN IAI, OR (C) A PERSON INVOLVED IN THE
ORGANIZATION OR OPERATION OF THE COMPANY OR AN AFFILIATE (AS DEFINED
IN RULE 405 UNDER THE SECURITIES ACT) OF THE COMPANY,
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN
INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING. THE
INDENTURE ALSO CONTAINS A PROVISION REQUIRING XXXXX AND THE COMPANY TO
EXERCISE REASONABLE CARE TO ENSURE THAT THE SECURED NOTES ARE RESOLD
OR OTHERWISE TRANSFERRED ONLY TO PURCHASERS MEETING THE REQUIREMENTS
SPECIFIED IN CLAUSE (2) ABOVE.
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained herein, Xxxxx agrees to issue and
sell to the Initial Purchaser, and the Initial Purchaser agrees to purchase from
Xxxxx, the aggregate principal amount of Restricted Notes at a purchase price
equal to 100% of the principal amount thereof (the "PURCHASE Price").
3. TERMS OF OFFERING. The Initial Purchaser has advised, and represents
and warrants to, Xxxxx that the Initial Purchaser will make offers and sales
(the "EXEMPT RESALES") of the Restricted Notes purchased hereunder on the terms
set forth in the Offering Memorandum, as amended or supplemented, solely to (i)
persons whom the Initial Purchaser reasonably believes to be "qualified
institutional buyers" (as defined in Rule 144A under the Securities Act)
("QIBS"), and (ii) to persons
3
5
permitted to purchase the Restricted Notes in offshore transactions in reliance
upon Regulation S under the Act (each a "REGULATION S PURCHASER") (QIBs and
Regulation S Purchasers being referred to herein as the "ELIGIBLE PURCHASERS").
The Initial Purchaser will offer the Restricted Notes to Eligible Purchasers
initially at a price equal to the percentage of the principal amount thereof set
forth on the cover page of the Offering Memorandum.
Holders (including subsequent transferees) of the Restricted Notes will
have the registration rights set forth in the registration rights agreement (the
"REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in substantially
the form of Exhibit A hereto, for so long as such Restricted Notes constitute
"TRANSFER RESTRICTED SECURITIES" (as defined in the Registration Rights
Agreement). Pursuant to the Registration Rights Agreement, Xxxxx and the Company
will agree to (i) file with the Securities and Exchange Commission (the
"COMMISSION") under the circumstances set forth therein (A) a registration
statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating
to two new series of Xxxxx'x Secured Notes of like amounts having identical
terms (the "EXCHANGE NOTES") to be offered in exchange for the Restricted Notes
(such offer to exchange being referred to as the "EXCHANGE OFFER") and the
Guarantee and/or (B) a shelf registration statement pursuant to Rule 415 under
the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange
Offer Registration Statement, the "REGISTRATION STATEMENTS") relating to the
resale by certain holders of the Restricted Notes and (ii) to use their
reasonable best efforts to cause such Registration Statements to be declared and
remain effective and usable for the periods specified in the Registration Rights
Agreement and to consummate the Exchange Offer. The Loan Agreements, the
Security Agreements, the Escrow Agreements described in the Offering Memorandum
and the related security documents are herein referred to collectively as the
"COLLATERAL DOCUMENTS." This Agreement, the Indenture, the Restricted Notes, the
Guarantee, the Registration Rights Agreement and the Collateral Documents are
referred to herein as the "OPERATIVE DOCUMENTS."
4. DELIVERY AND PAYMENT.
(a) Delivery of, and payment of the Purchase Price for, the Secured
Notes shall be made at the offices of Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.,
in Houston, Texas, or such other location as may be mutually acceptable. Such
delivery and payment shall be made at 9:00 a.m. New York City time, on March 26,
1999 or at such other time or date as shall be agreed upon by the Initial
Purchaser and Xxxxx in writing. The time and date of such delivery and the
payment for the Secured Notes are herein called the "CLOSING DATE."
(b) One or more of the Restricted Notes in definitive global form,
registered in the name of Cede & Co., as nominee of The Depository Trust Company
("DTC"), having an aggregate principal amount corresponding to the aggregate
principal amount of the Restricted Notes (collectively, the "GLOBAL NOTES"),
shall be delivered by Xxxxx to the Initial Purchaser (or as the Initial
Purchaser direct) in each case with any transfer taxes thereon duly paid by
Xxxxx against payment by the Initial Purchaser of the Purchase Price thereof by
wire transfer in same day funds to the order of Xxxxx. The Global Notes shall be
made available to the Initial Purchaser for inspection not later than 9:30 a.m.,
New York City time, on the business day immediately preceding the Closing Date.
5. AGREEMENTS OF XXXXX AND THE COMPANY. Each of Xxxxx and the Company
hereby agrees with the Initial Purchaser as follows:
(a) To advise the Initial Purchaser promptly and, if requested by the
Initial
4
6
Purchaser, confirm such advice in writing, (i) of the issuance by any state
securities commission of any stop order suspending the qualification or
exemption from qualification of any Restricted Notes for offering or sale in any
jurisdiction designated by the Initial Purchaser pursuant to Section 5(e)
hereof, or the initiation of any proceeding by any state securities commission
or any other federal or state regulatory authority for such purpose and (ii) of
the happening of any event during the period referred to in Section 5(c) below
that makes any statement of a material fact made in the Preliminary Offering
Memorandum or the Offering Memorandum untrue or that requires any additions to
or changes in the Preliminary Offering Memorandum or the Offering Memorandum in
order to make the statements therein not misleading. Xxxxx and the Company shall
use their best efforts to prevent the issuance of any stop order or order
suspending the qualification or exemption of any Restricted Notes under any
state securities or Blue Sky laws and, if at any time any state securities
commission or other federal or state regulatory authority shall issue an order
suspending the qualification or exemption of any Restricted Notes under any
state securities or Blue Sky laws, Xxxxx and the Company shall use their best
efforts to obtain the withdrawal or lifting of such order at the earliest
possible time.
(b) To furnish the Initial Purchaser and those persons identified by
the Initial Purchaser to Xxxxx as many copies of the Preliminary Offering
Memorandum and the Offering Memorandum, and any amendments or supplements
thereto, as the Initial Purchaser may reasonably request for the time period
specified in Section 5(c). Subject to the Initial Purchaser's compliance with
their representations and warranties and agreements set forth in Section 7
hereof, Xxxxx consents to the use of the Preliminary Offering Memorandum and the
Offering Memorandum, and any amendments and supplements thereto required
pursuant hereto, by the Initial Purchaser in connection with Exempt Resales.
(c) During such period as in the opinion of counsel for the Initial
Purchaser an Offering Memorandum is required by law to be delivered in
connection with Exempt Resales by the Initial Purchaser and in connection with
market-making activities of the Initial Purchaser for so long as any Restricted
Notes are outstanding, (i) not to make any amendment or supplement to the
Offering Memorandum of which the Initial Purchaser shall not previously have
been advised or to which the Initial Purchaser shall reasonably object after
being so advised and (ii) to prepare promptly upon the Initial Purchaser's
reasonable request based on the opinion of its counsel, any amendment or
supplement to the Offering Memorandum which may be necessary or advisable in
connection with such Exempt Resales or such market-making activities.
(d) If, during the period referred to in Section 5(c) above, any event
shall occur or condition shall exist as a result of which, in the opinion of
counsel to the Initial Purchaser, it becomes necessary to amend or supplement
the Offering Memorandum in order to make the statements therein, in the light of
the circumstances when such Offering Memorandum is delivered to an Eligible
Purchaser, not misleading, or if, in the opinion of counsel to the Initial
Purchaser, it is necessary to amend or supplement the Offering Memorandum to
comply with any applicable law, forthwith to prepare an appropriate amendment or
supplement to such Offering Memorandum so that the statements therein, as so
amended or supplemented, will not, in the light of the circumstances when it is
so delivered, be misleading, or so that such Offering Memorandum will comply
with applicable law, and to furnish to the Initial Purchaser and such other
persons as the Initial Purchaser may designate such number of copies thereof as
the Initial Purchaser may reasonably request.
(e) Prior to the sale of all Restricted Notes pursuant to Exempt
Resales as contemplated hereby, to cooperate with the Initial Purchaser and
counsel to the Initial Purchaser in
5
7
connection with the registration or qualification of the Restricted Notes for
offer and sale to the Initial Purchaser and pursuant to Exempt Resales under the
securities or Blue Sky laws of such jurisdictions as the Initial Purchaser may
reasonably request and to continue such registration or qualification in effect
so long as required for Exempt Resales and to file such consents to service of
process or other documents as may be necessary in order to effect such
registration or qualification; provided, however, that neither Xxxxx nor the
Company shall be required in connection therewith to qualify as a foreign
corporation in any jurisdiction in which it is not now so qualified or to take
any action that would subject it to general consent to service of process or
taxation other than as to matters and transactions relating to the Preliminary
Offering Memorandum, the Offering Memorandum or Exempt Resales, in any
jurisdiction in which it is not now so subject.
(f) So long as the Secured Notes are outstanding, (i) to mail and make
generally available as soon as practicable after the end of each fiscal year to
the record holders of the Secured Notes a financial report of the Company and
its subsidiaries on a consolidated basis if such report is required to be made
available pursuant to Section 4.13 of the Indenture (and a similar financial
report of all unconsolidated subsidiaries, if any), all such financial reports
to include a consolidated balance sheet, a consolidated statement of operations,
a consolidated statement of cash flows and a consolidated statement of
stockholders' equity as of the end of and for such fiscal year, together with
comparable information as of the end of and for the preceding year, certified by
the independent public accountants of Xxxxx or the Company, as applicable, and
(ii) to mail or make generally available as soon as practicable after the end of
each quarterly period (except for the last quarterly period of each fiscal year)
to such holders, a consolidated balance sheet, a consolidated statement of
operations and a consolidated statement of cash flows (and similar financial
reports of all unconsolidated subsidiaries, if any) as of the end of and for
such period, and for the period from the beginning of such year to the close of
such quarterly period, together with comparable information for the
corresponding periods of the preceding year of Xxxxx or the Company, as
applicable.
(g) So long as the Secured Notes are outstanding, to furnish upon
request to the Initial Purchaser as soon as available copies of all reports or
other communications furnished by Xxxxx or the Company to its security holders
or furnished to or filed with the Commission or any national securities exchange
on which any class of securities of Xxxxx or the Company is listed and such
other publicly available information concerning Xxxxx as the Initial Purchaser
may reasonably request.
(h) So long as any of the Restricted Notes remain outstanding and
during any period in which Xxxxx and the Company are not subject to Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), to make available to any holder of Restricted Notes in connection with
any sale thereof and any prospective purchaser of such Restricted Notes from
such holder, the information ("RULE 144A INFORMATION") required by Rule
144A(d)(4) under the Act.
(i) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of the obligations of Xxxxx and the Company
under this Agreement, including: (i) the fees, disbursements and expenses of
counsel to Xxxxx and the Company and accountants of Xxxxx and the Company in
connection with the sale and delivery of the Restricted Notes to the Initial
Purchaser and pursuant to Exempt Resales, and all other fees and expenses in
connection with the preparation, printing, filing and distribution of the
Preliminary Offering Memorandum, the Offering Memorandum and all amendments and
supplements to any of the foregoing (including financial statements), including
the
6
8
mailing and delivering of copies thereof to the Initial Purchaser and
persons designated by it in the quantities specified herein, (ii) all costs and
expenses related to the transfer and delivery of the Restricted Notes to the
Initial Purchaser and pursuant to Exempt Resales, including any transfer or
other taxes payable thereon, (iii) all costs of printing or producing this
Agreement, the other Operative Documents and any other agreements or documents
in connection with the offering, purchase, sale or delivery of the Restricted
Notes, (iv) all expenses in connection with the registration or qualification of
the Restricted Notes and the Guarantee for offer and sale under the securities
or Blue Sky laws of the several states and all costs of printing or producing
any preliminary and supplemental Blue Sky memoranda in connection therewith
(including the filing fees and fees and disbursements of counsel for the Initial
Purchaser in connection with such registration or qualification and memoranda
relating thereto), (v) the cost of printing certificates representing the
Restricted Notes and the Guarantee, (vi) all expenses and listing fees in
connection with the application for quotation of the Restricted Notes in The
PORTAL Market ("PORTAL") of the Nasdaq Stock Market, Inc. ("NASDAQ"), (vii) the
fees and expenses of the Trustee and the Trustee's counsel in connection with
the Indenture, the Secured Notes and the Guarantee, (viii) the costs and charges
of any transfer agent, registrar and/or depositary (including DTC), (ix) any
fees charged by rating agencies for the rating of the Secured Notes, (x) all
costs and expenses of the Exchange Offer and any Registration Statement, as set
forth in the Registration Rights Agreement, and (xi) and all other costs and
expenses incident to the performance of the obligations of Xxxxx and the Company
hereunder for which provision is not otherwise made in this Section.
(j) To use its best efforts, with the cooperation of the Initial
Purchaser, to effect the inclusion of the Restricted Notes in PORTAL and to
maintain the listing of the Restricted Notes on PORTAL for so long as any
Restricted Notes are outstanding.
(k) To obtain, with the cooperation of the Initial Purchaser, the
approval of DTC for "book-entry" transfer of the Secured Notes, and to comply
with all of its agreements set forth in the representation letters of Xxxxx and
the Company to DTC relating to the approval of the Secured Notes by DTC for
"book-entry" transfer.
(l) Except as described in the Offering Memorandum, during the period
beginning on the date hereof and continuing to and including the Closing Date,
not to offer, sell, contract to sell or otherwise transfer or dispose of any
debt securities of Xxxxx or the Company or any warrants, rights or options to
purchase or otherwise acquire debt securities of Xxxxx or the Company
substantially similar to the Secured Notes and the Guarantee (other than (i) the
Secured Notes and the Guarantee and (ii) commercial paper issued in the ordinary
course of business), without the prior written consent of the Initial Purchaser.
(m) Not to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Act) that would be
integrated with the sale of the Restricted Notes to the Initial Purchaser or
pursuant to Exempt Resales in a manner that would require the registration of
any such sale of the Restricted Notes under the Act.
(n) Not to voluntarily claim, and to actively resist any attempts to
claim, the benefit of any usury laws against the holders of any Notes and the
related Guarantee.
(o) To comply with all of its agreements set forth in the Registration
Rights Agreement.
7
9
(p) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by it prior to the
Closing Date and to satisfy all conditions precedent to the delivery of the
Restricted Notes and the Guarantee.
(q) The Company shall pay to the Initial Purchaser, at the Closing, the
amount of $22.0 million as payment of commission and discounts in connection
with the purchase by the Initial Purchaser of the Restricted Notes.
6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF XXXXX AND THE COMPANY.
As of the date hereof, each of Xxxxx and the Company represents and warrants to,
and agrees with, the Initial Purchaser that:
(a) The Preliminary Offering Memorandum and the Offering Memorandum do
not, and any supplement or amendment to them will not, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties contained in this paragraph (a) shall not apply
to statements in or omissions from the Preliminary Offering Memorandum or the
Offering Memorandum (or any supplement or amendment thereto) based upon
information relating to the Initial Purchaser furnished to Xxxxx in writing by
the Initial Purchaser expressly for use therein. No stop order preventing the
use of the Preliminary Offering Memorandum or the Offering Memorandum, or any
amendment or supplement thereto, or any order asserting that any of the
transactions contemplated by this Agreement are subject to the registration
requirements of the Act, has been issued.
(b) Each of Xxxxx and the Company and the Company's subsidiaries has
been duly incorporated, is validly existing as a corporation or limited
liability company in good standing under the laws of its jurisdiction of
incorporation or formation and has the corporate or limited liability company
power and authority to carry on its business as described in the Preliminary
Offering Memorandum and the Offering Memorandum and to own, lease and operate
its properties, and each is duly qualified and is in good standing as a foreign
corporation or entity authorized to do business in each jurisdiction in which
the nature of its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the business, prospects, financial condition or
results of operations of Xxxxx or the Company and the Company's subsidiaries,
taken as a whole (a "MATERIAL ADVERSE EFFECT"), as the case may be. Each of the
subsidiaries of the Company listed on Schedule B hereto (the "SIGNIFICANT
SUBSIDIARIES"), which Significant Subsidiaries in the aggregate directly own
substantially all of the assets held by the Company and all of its subsidiaries
on a consolidated basis and which constitute all of the Company's "significant
subsidiaries" (as such term is defined in Regulation S-X under the Act) has been
duly incorporated, is validly existing as a corporation or limited liability
company in good standing under the laws of its jurisdiction of incorporation or
formation and has the corporate or limited liability company power and authority
to carry on its business and to own, lease and operate its properties, and each
is duly qualified and is in good standing as a foreign corporation or entity
authorized to do business in each jurisdiction in which the nature of its
business or its ownership or leasing of property requires such qualification,
except where the failure to be so qualified would not have a Material Adverse
Effect. Xxxxx is a newly-formed limited purpose entity that has not conducted
business other than negotiations in connection with transactions contemplated by
this Agreement. and does not have any subsidiaries.
8
10
(c) All outstanding shares of capital stock of Xxxxx and the Company
and the Company's subsidiaries have been duly authorized and validly issued and
are fully paid, non-assessable and not subject to any preemptive or similar
rights.
(d) This Agreement has been duly authorized, executed and delivered by
Xxxxx and the Company.
(e) The Indenture has been duly authorized by Xxxxx and the Company
and, on the Closing Date, will have been validly executed and delivered by Xxxxx
and the Company. When the Indenture has been duly executed and delivered by
Xxxxx and the Company, the Indenture will be a valid and binding agreement of
Xxxxx and the Company, enforceable against Xxxxx and the Company in accordance
with its terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent transfer, or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles of general
applicability. On the Closing Date, the Indenture will conform in all material
respects to the requirements of the Trust Indenture Act of 1939, as amended (the
"TIA" or "TRUST INDENTURE ACT"), and the rules and regulations of the Commission
applicable to an indenture which is qualified thereunder.
(f) The Restricted Notes have been duly authorized and, on the Closing
Date, will have been validly executed and delivered by Xxxxx. When the
Restricted Notes have been issued, executed and authenticated in accordance with
the provisions of the Indenture and delivered to and paid for by the Initial
Purchaser in accordance with the terms of this Agreement, the Restricted Notes
will be entitled to the benefits of the Indenture and will be valid and binding
obligations of Xxxxx, enforceable in accordance with their terms except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
transfer, or similar laws affecting creditors' rights generally and (ii) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability. On the Closing Date, the
Restricted Notes will conform as to legal matters to the description thereof
contained in the Offering Memorandum.
(g) On the Closing Date, the Exchange Notes will have been duly
authorized by Xxxxx. When the Exchange Notes are issued, executed and
authenticated in accordance with the terms of the Exchange Offer and the
Indenture, the Exchange Notes will be entitled to the benefits of the Indenture
and will be the valid and binding obligations of Xxxxx, enforceable against
Xxxxx in accordance with their terms, except as (i) the enforceability thereof
may be limited by bankruptcy, insolvency, fraudulent transfer, or similar laws
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.
(h) The notation of the Guarantee to be endorsed on the Restricted
Notes by the Company has been duly authorized by the Company and, on the Closing
Date, will have been duly executed and delivered by the Company. When the
Restricted Notes have been issued, executed and authenticated in accordance with
the Indenture and delivered to and paid for by the Initial Purchaser in
accordance with the terms of this Agreement, the Guarantee of the Company will
be entitled to the benefits of the Indenture and will be the valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent transfer, or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles of
9
11
general applicability. On the Closing Date, the Guarantee will conform as to
legal matters to the description thereof contained in the Offering Memorandum.
(i) The notation of the Guarantee to be endorsed on the Exchange Notes
by the Company has been duly authorized by the Company and, when issued, will
have been duly executed and delivered by the Company. When the Exchange Notes
have been issued, executed and authenticated in accordance with the terms of the
Exchange Offer and the Indenture, the Guarantee of the Company endorsed thereon
will be entitled to the benefits of the Indenture and will be the valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent transfer, or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles of general
applicability. When the Exchange Notes are issued, authenticated and delivered,
the Guarantee will continue to conform as to legal matters to the description
thereof in the Offering Memorandum.
(j) The Registration Rights Agreement has been duly authorized by Xxxxx
and the Company and, on the Closing Date, will have been duly executed and
delivered by Xxxxx and the Company. When the Registration Rights Agreement has
been duly executed and delivered, the Registration Rights Agreement will be a
valid and binding agreement of Xxxxx and the Company, enforceable against Xxxxx
and the Company in accordance with its terms except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent transfer or similar
laws affecting creditors' rights generally and (ii) rights of acceleration and
the availability of equitable remedies may be limited by equitable principles of
general applicability. On the Closing Date, the Registration Rights Agreement
will conform as to legal matters to the description thereof in the Offering
Memorandum.
(k) Neither Xxxxx nor the Company or any of the Company's subsidiaries
is in violation of its respective charter or by-laws or in default in the
performance of any obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, lease or other agreement or instrument that
is material to Xxxxx or the Company and the Company's subsidiaries to which
Xxxxx or the Company or the Company's subsidiaries is a party or by which Xxxxx,
the Company or the Company's subsidiaries, or their respective property, is
bound.
(l) Each of Xxxxx and the Company has duly authorized the Collateral
Documents to which it is a party, and when each of Xxxxx and the Company has
duly executed and delivered the Collateral Documents to which it is a party
(assuming due execution and delivery thereof by the Trustee, the Collateral
Agent and the Escrow Agent), each of the Collateral Documents to which such
entity is a party will be a legally valid and binding obligation of each of
Xxxxx and the Company enforceable against each in accordance with its terms,
except as (i) bankruptcy, insolvency, fraudulent transfer, or other similar laws
affecting creditors' rights generally, and (ii) the enforceability thereof may
be limited by rights of acceleration and the availability of equitable remedies
may be limited by equitable principles of general applicability.
(m) The execution, delivery and performance of this Agreement and the
other Operative Documents by Xxxxx and the Company, compliance by Xxxxx and the
Company with all provisions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby will not (i) require any consent,
approval, authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under the securities
or Blue Sky laws of the
10
12
various states), (ii) conflict with or constitute a breach of any of the terms
or provisions of, or a default under, the charter or by-laws of Xxxxx or the
Company or the Company's subsidiaries or any indenture, loan agreement,
mortgage, lease or other agreement or instrument that is material to Xxxxx and
the Company and the Company's subsidiaries, taken as a whole, to which Xxxxx or
the Company or the Company's subsidiaries is a party or by which Xxxxx, the
Company or the Company's subsidiaries, or their respective property is bound,
(iii) violate or conflict with any applicable law or any rule, regulation,
judgment, order or decree of any court or any governmental body or agency having
jurisdiction over Xxxxx, the Company or the Company's subsidiaries or their
respective property, (iv) result in the imposition or creation of (or the
obligation to create or impose) a Lien under, any agreement or instrument to
which Xxxxx or the Company or the Company's subsidiaries is a party or by which
Xxxxx or the Company or their respective property is bound (other than Liens
granted under or contemplated by the Operative Documents), or (v) result in the
termination, suspension or revocation of any Authorization (as defined below) of
Xxxxx or result in any other impairment of the rights of the holder of any such
Authorization.
(n) There are no legal or governmental proceedings pending or, to the
knowledge of the Xxxxx, the Company or any of the Company's subsidiaries,
threatened, to which Xxxxx, Company or the Company's subsidiaries are a party or
to which any of their respective property is subject, which, if determined
adversely against Xxxxx, the Company or the Company's subsidiaries, would,
singly or in the aggregate, have a Material Adverse Effect.
(o) Except as disclosed in the Offering Memorandum, neither the Company
nor any of its subsidiaries has violated any foreign, federal, state or local
law or regulation relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), any provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or any provisions of the
Foreign Corrupt Practices Act or the rules and regulations promulgated
thereunder, except for such violations which, singly or in the aggregate, would
not have a Material Adverse Effect.
(p) Except as disclosed in the Offering Memorandum, neither the Company
nor any of its subsidiaries are obligated for costs or liabilities associated
with Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any Authorization, any related constraints on operating
activities and any potential liabilities to third parties) which would, singly
or in the aggregate, have a Material Adverse Effect.
(q) Each of Xxxxx, the Company and the Company's subsidiaries has such
permits, licenses, consents, exemptions, franchises, authorizations and other
approvals (each, an "AUTHORIZATION") of, and has made all filings with and
notices to, all governmental or regulatory authorities and self-regulatory
organizations and all courts and other tribunals, including without limitation,
under any applicable Environmental Laws, as are necessary to own, lease, license
and operate its respective properties and to conduct its business, except where
the failure to have any such Authorization or to make any such filing or notice
would not, singly or in the aggregate, have a Material Adverse Effect. Each such
Authorization is valid and in full force and effect and each of Xxxxx, the
Company and the Company's subsidiaries is in compliance with all the terms and
conditions thereof and with the rules and regulations of the authorities and
governing bodies having jurisdiction with respect thereto; and no event has
occurred (including, without limitation, the receipt of any notice from any
authority or governing body) which allows or, after notice or lapse of time or
both, would allow, revocation, suspension or termination of any such
11
13
Authorization or results or, after notice or lapse of time or both, would result
in any other impairment of the rights of the holder of any such Authorization;
except where such burden or failure to be valid and in full force and effect or
to be in compliance, the occurrence of any such event or the presence of any
such restriction would not, singly or in the aggregate, have a Material Adverse
Effect.
(r) The accountants, Xxxxxx Xxxxxxxx LLP and Ernst & Young LLP, that
have and/or as of the Closing will have certified the financial statements and
supporting schedules of the Company, one or more of the Company's subsidiaries
and/or Xxxxx, are independent public accountants with respect to Xxxxx and the
Company and the Company's subsidiaries, as required by the Act and the Exchange
Act. The summary and selected historical consolidated financial data of the
Company and the historical financial statements, together with related schedules
and notes, in the Preliminary Offering Memorandum and the Offering Memorandum or
incorporated therein by reference, complied as to form in all material respects
with the requirements applicable to (i) registration statements under the Act or
(ii) with respect to financial information incorporated by reference, reports
required to be filed under the Exchange Act, except that the historical
financial statements incorporated therein have not been adjusted to reflect the
previously discounted oil and gas exploration and production operations as
continuing operations for accounting purposes and that an unqualified audit
report with respect to such financial statements will not be delivered until
Closing.
(s) The historical financial statements, together with related
schedules and notes incorporated by reference in the Offering Memorandum (and
any amendment or supplement thereto), present fairly the consolidated financial
position, results of operations and changes in financial position of the Company
and its subsidiaries on the basis stated in the Offering Memorandum at the
respective dates or for the respective periods to which they apply, except that
the historical financial statements incorporated therein have not been adjusted
to reflect the previously discounted oil and gas exploration and production
operations as continuing operations for accounting purposes and that an
unqualified audit report with respect to such financial statements will not be
delivered until Closing; such statements and related schedules and notes have
been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data set forth
in the Offering Memorandum (and any amendment or supplement thereto) are, in all
material respects, accurately presented and prepared on a basis consistent with
such financial statements and the books and records of the Company.
(t) The pro forma financial statements included in the Preliminary
Offering Memorandum and the Offering Memorandum have been prepared on a basis
consistent with the historical financial statements of the Company and its
subsidiaries, as adjusted to reflect the previously discontinued oil and gas
exploration and production operations as continuing operations for accounting
purposes only, and give effect to assumptions used in the preparation thereof on
a reasonable basis and in good faith and such pro forma financial statements
comply as to form in all material respects with the requirements applicable to
pro forma financial statements included in a registration statement under the
Act. The other pro forma financial and statistical information and data included
in the Offering Memorandum are, in all material respects, accurately presented
and prepared on a basis consistent with the pro forma financial statements.
(u) Neither Xxxxx nor the Company is and, after giving effect to the
offering and sale of the Restricted Notes and the application of the net
proceeds thereof as described in the Offering Memorandum, will be, an
"investment company," as such term is defined in the Investment Company Act of
1940, as amended.
12
14
(v) Except as disclosed in the Offering Memorandum and required under
the terms of the Company's $400 million senior note offering in December 1998,
there are no contracts, agreements or understandings between Xxxxx or the
Company and any person granting such person the right to require Xxxxx or the
Company to file a registration statement under the Act with respect to any
securities of Xxxxx or the Company or to require Xxxxx or the Company to include
such securities with the Secured Notes and Guarantee registered pursuant to any
Registration Statement.
(w) Neither Xxxxx nor the Company or the Company's subsidiaries nor any
agent thereof acting on the behalf of them has taken, and none of them will
take, any action that might cause this Agreement or the issuance or sale of the
Restricted Notes to violate Regulation T (12 C.F.R. Part 220), Regulation U (12
C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of Governors
of the Federal Reserve System.
(x) No "nationally recognized statistical rating organization" as such
term is defined for purposes of Rule 436(g)(2) under the Act (i) has imposed (or
has informed the Company that it is considering imposing) any condition
(financial or otherwise) on the Company's retaining any rating assigned to the
Company or any securities of the Company or (ii) has indicated to the Company
that it is considering (a) the downgrading, suspension, or withdrawal of, or any
review for a possible change that does not indicate the direction of the
possible change in, any rating so assigned or (b) any change in the outlook for
any rating of the Company or any securities of the Company, except in the case
of (i) and (ii) as publicly announced by such nationally recognized statistical
rating organization.
(y) Since the respective dates as of which information is given in the
Offering Memorandum other than as set forth in the Offering Memorandum
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there has not occurred any material adverse change or, to
the Company's or its subsidiaries' knowledge, any development involving a
prospective material adverse change in the condition, financial or otherwise, or
the earnings, business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there has not been any adverse change or,
to the Company's or its subsidiaries' knowledge, any development involving a
prospective adverse change in the capital stock or in the long-term debt of
Xxxxx or the Company or the Company's subsidiaries and (iii) neither the Company
nor its subsidiaries has incurred any material liability or obligation, direct
or contingent.
(z) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date, contains or incorporates by reference all the
information specified in, and meeting the requirements of, Rule 144A(d)(4) under
the Act.
(aa) When the Restricted Notes and the Guarantee are issued and
delivered pursuant to this Agreement, neither the Restricted Notes nor the
Guarantee will be of the same class (within the meaning of Rule 144A under the
Act) as any security of Xxxxx or the Company that is listed on a national
securities exchange registered under Section 6 of the Exchange Act or that is
quoted in a United States automated inter-dealer quotation system.
(bb) No form of general solicitation or general advertising (as defined
in Regulation D under the Act) was used by Xxxxx, the Company or any of their
respective representatives
13
15
(other than the Initial Purchaser, as to whom Xxxxx and the Company make no
representation) in connection with the offer and sale of the Restricted Notes
contemplated hereby, including, but not limited to, articles, notices or other
communications published in any newspaper, magazine, or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising. No
securities of the same class as the Restricted Notes have been issued and sold
by Xxxxx or the Company within the six-month period immediately prior to the
date hereof.
(cc) Prior to the effectiveness of any Registration Statement, the
Indenture is not required to be qualified under the TIA.
(dd) None of Xxxxx, the Company nor any of their respective affiliates
or any person acting on its or their behalf (other than the Initial Purchaser,
as to whom Xxxxx and the Company make no representation) has engaged or will
engage in any directed selling efforts within the meaning of Regulation S under
the Act ("REGULATION S") with respect to the Restricted Notes or the Guarantee.
(ee) The sale of the Restricted Notes pursuant to Regulation S is not
part of a plan or scheme to evade the registration provisions of the Act.
(ff) No registration under the Act of the Restricted Notes or the
Guarantee is required for the sale of the Restricted Notes and the Guarantee to
the Initial Purchaser as contemplated hereby or for the Exempt Resales assuming
the accuracy of the Initial Purchaser's representations and warranties and
agreements set forth in Section 7 hereof.
(gg) Each certificate signed by any officer of Xxxxx, the Company or
the Company's subsidiaries and delivered to the Initial Purchaser or counsel for
the Initial Purchaser shall be deemed to be a representation and warranty by
Xxxxx or Company to the Initial Purchaser as to the matters covered thereby.
(hh) The Company and its subsidiaries have good and marketable title to
all real property and to all personal property owned by them which is material
to the business of Xxxxx and the Company, in each case free and clear of all
Liens, except such as are described in the Offering Memorandum or such as do not
materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company and its
subsidiaries. Except as otherwise described in the Offering Memorandum or
incorporated by reference, the Company and its subsidiaries do not own any real
property or buildings with such exceptions, and any real property and buildings
held under lease by the Company or its subsidiaries are held by them under
valid, subsisting and enforceable leases that do not have such exceptions,
unless in any case such exceptions are not material and do not interfere with
the use made and proposed to be made of such property and buildings by the
Company or its subsidiaries.
(ii) All indebtedness of the Company that will be repaid with the
proceeds of Xxxxx'x loans to the Company (the "XXXXX LOANS") funded with the
proceeds of the issuance and sale of the Restricted Notes was incurred, and the
indebtedness represented by the Restricted Notes and Xxxxx Loans is being
incurred, for proper purposes and in good faith and the Company was, at the time
of the incurrence of such indebtedness that will be repaid with a portion of the
proceeds of the issuance and sale of the Restricted Notes, and each of the
Company and Xxxxx will be on the Closing Date (after giving effect to the
application of the proceeds from the issuance of the Restricted Notes and from
Xxxxx Loans) solvent, and
14
16
the Company had at the time of the incurrence of such indebtedness that will be
repaid with Xxxxx Loans funded with proceeds of the issuance and sale of the
Restricted Notes, and each of the Company and Xxxxx will have on the Closing
Date (after giving effect to the application of the proceeds from the offering)
sufficient capital for carrying on its business and the Company was, at the time
of the incurrence of such indebtedness that will be repaid with the proceeds of
the issuance and sale of the Restricted Notes, and each of the Company and Xxxxx
will be on the Closing Date (after giving effect to the application of the
proceeds from the offering), able to pay its debts as they mature.
(jj) Each of Xxxxx and the Company maintains its principal place of
business in Houston, Texas.
Each of Xxxxx and the Company acknowledges that the Initial Purchaser
and, for purposes of the opinions to be delivered to the Initial Purchaser
pursuant to Section 9 hereof, counsel to Xxxxx and the Company and counsel to
the Initial Purchaser will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
7. INITIAL PURCHASER'S REPRESENTATIONS AND WARRANTIES. The Initial
Purchaser represents and warrants to, and agrees with, Xxxxx and the Company:
(a) Such Initial Purchaser is either a QIB or an Accredited
Institution, in either case, with such knowledge and experience in financial and
business matters as is necessary in order to evaluate the merits and risks of an
investment in the Restricted Notes.
(b) Such Initial Purchaser (A) is not acquiring the Restricted Notes
with a view to any distribution thereof or with any present intention of
offering or selling any of the Restricted Notes in a transaction that would
violate the Act or the securities laws of any state of the United States or any
other applicable jurisdiction and (B) will be reoffering and reselling the
Restricted Notes only to QIBs in reliance on the exemption from the registration
requirements of the Act provided by Rule 144A.
(c) Such Initial Purchaser agrees that no form of general solicitation
or general advertising (within the meaning of Regulation D under the Act) has
been or will be used by the Initial Purchaser or any of its representatives in
connection with the offer and sale of the Restricted Notes pursuant hereto,
including, but not limited to, articles, notices or other communications
published in any newspaper, magazine or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been invited
by any general solicitation or general advertising.
(d) Such Initial Purchaser agrees that, in connection with Exempt
Resales, the Initial Purchaser will solicit offers to buy the Restricted Notes
only from, and will offer to sell the Restricted Notes only to, Eligible
Purchasers. Each Initial Purchaser further agrees that it will offer to sell the
Restricted Notes only to, and will solicit offers to buy the Restricted Notes
only from Eligible Purchasers that the Initial Purchaser reasonably believes are
QIBs that agree that (x) the Restricted Notes purchased by them may be resold,
pledged or otherwise transferred only (I) to Xxxxx or any of its subsidiaries,
(II) to a person whom the seller reasonably believes is a QIB purchasing for its
own account or for the account of a QIB in a transaction meeting the
requirements of Rule 144A under the Act, (III) to an Accredited Institution
that, prior to such transfer, furnishes the Trustee a signed letter containing
certain representations and agreements relating to the registration of transfer
of such Restricted Note and, if such transfer is in respect of an aggregate
principal amount of Restricted Notes less than $250,000, an opinion of counsel
acceptable
15
17
to Xxxxx that such transfer is in compliance with the Act, (IV) to an affiliate
of Xxxxx or (V) pursuant to an effective registration statement and, in each
case, in accordance with the applicable securities laws of any state of the
United States or any other applicable jurisdiction and (y) they will deliver to
each person to whom such Restricted Notes or an interest therein is transferred
a notice substantially to the effect of the foregoing.
(e) Such Initial Purchaser and its affiliates or any person acting on
its or their behalf have not engaged or will not engage in any directed selling
efforts within the meaning of Regulation S with respect to the Restricted Notes
or the Guarantee.
The Initial Purchaser acknowledges that Xxxxx and the Company and, for
purposes of the opinions to be delivered to the Initial Purchaser pursuant to
Section 9 hereof, counsel to Xxxxx and the Company and counsel to the Initial
Purchaser will rely upon the accuracy and truth of the foregoing representations
and the Initial Purchaser hereby consents to such reliance.
8. INDEMNIFICATION.
(a) Xxxxx and the Company agree, jointly and severally, to indemnify
and hold harmless the Initial Purchaser, their directors, their officers and
each person, if any, who controls the Initial Purchaser within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages, liabilities and judgments (including, without
limitation, any legal or other expenses reasonably incurred in connection with
investigating or defending any matter, including any action, that could give
rise to any such losses, claims, damages, liabilities or judgments) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Offering Memorandum (or any amendment or supplement thereto), the
Preliminary Offering Memorandum or any Rule 144A Information provided by Xxxxx
or the Company to any holder or prospective purchaser of Restricted Notes
pursuant to Section 5(h) or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information relating
to the Initial Purchaser furnished in writing to Xxxxx by the Initial Purchaser;
provided, however, that the foregoing indemnity agreement with respect to any
Preliminary Offering Memorandum shall not inure to the benefit of any Initial
Purchaser who failed to deliver a Final Offering Memorandum (as then amended or
supplemented, provided by Xxxxx to the several Initial Purchaser in the
requisite quantity and on a timely basis to permit proper delivery on or prior
to the Closing Date) to the person asserting any losses, claims, damages and
liabilities and judgements caused by any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Offering Memorandum,
or caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, if such material misstatement or omission or alleged material
misstatement or omission was cured in the Final Offering Memorandum.
(b) The Initial Purchaser agree to indemnify and hold harmless Xxxxx
and the Company, and their respective directors and officers and each person, if
any, who controls (within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act) Xxxxx or the Company, to the same extent as the foregoing
indemnity from Xxxxx and the Company to the Initial Purchaser, but only with
reference to information relating to the Initial Purchaser furnished in writing
to Xxxxx or the Company by the Initial Purchaser expressly for use in the
Preliminary Offering Memorandum or the Offering Memorandum.
16
18
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), the Initial Purchaser shall not be required to
assume the defense of such action pursuant to this Section 8(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
the Initial Purchaser). Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the indemnified
party unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
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 any local counsel) for all indemnified parties and all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be designated
in writing by the Initial Purchaser, in the case of the parties indemnified
pursuant to Section 8(a), and by Xxxxx, in the case of parties indemnified
pursuant to Section 8(b). The indemnifying party shall indemnify and hold
harmless the indemnified party from and against any and all losses, claims,
damages, liabilities and judgments by reason of any settlement of any action (i)
effected with its written consent or (ii) effected without its written consent
if the settlement is entered into more than twenty business days after the
indemnifying party shall have received a request from the indemnified party for
reimbursement for the fees and expenses of counsel (in any case where such fees
and expenses are at the expense of the indemnifying party) and, prior to the
date of such settlement, the indemnifying party shall have failed to comply with
such reimbursement request. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement or compromise
of, or consent to the entry of judgment with respect to, any pending or
threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of such
action and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this Section 8 is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits
17
19
received by Xxxxx and the Company, on the one hand, and the Initial Purchaser on
the other hand from the offering of the Restricted Notes or (ii) if the
allocation provided by clause 8(d)(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 8(d)(i) above but also the relative fault of Xxxxx and the
Company, on the one hand, and the Initial Purchaser, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by Xxxxx and the
Company, on the one hand and the Initial Purchaser, on the other hand, shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Restricted Notes (after underwriting discounts and commissions, but
before deducting expenses) received by Xxxxx, and the total discounts and
commissions received by the Initial Purchaser bear to the total price to
investors of the Restricted Notes, in each case as set forth in the table on the
cover page of the Offering Memorandum. The relative fault of Xxxxx and the
Company, on the one hand, and the Initial Purchaser, on the other hand, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by Xxxxx or the Company, on the
one hand, or the Initial Purchaser, on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
Xxxxx and the Company, on the one hand, and the Initial Purchaser, on
the other hand, agree that it would not be just and equitable if contribution
pursuant to this Section 8(d) were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or judgments referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 8, the Initial
Purchaser shall not be required to contribute any amount in excess of the amount
by which the total discounts and commissions received by the Initial Purchaser
exceeds the amount of any damages which the Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(e) The remedies provided for in this Section 8 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
9. CONDITIONS OF INITIAL PURCHASER'S OBLIGATIONS. The obligations of
the Initial Purchaser to purchase the Restricted Notes under this Agreement are
subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of Xxxxx and the Company and
the Company's subsidiaries contained in this Agreement shall be true and correct
on the Closing Date with the same force and effect as if made on and as of the
Closing Date.
(b) On or after the date hereof, (i) there shall not have occurred any
downgrading, suspension or withdrawal of, nor shall any notice have been given
of any potential or intended downgrading, suspension or withdrawal of, or of any
review (or of any potential or intended
18
20
review) for a possible change that does not indicate the direction of the
possible change in, any rating of Xxxxx or the Company or any securities of
Xxxxx or the Company (including, without limitation, the placing of any of the
foregoing ratings on credit watch with negative or developing implications or
under review with an uncertain direction) by any "nationally recognized
statistical rating organization" as such term is defined for purposes of Rule
436(g)(2) under the Act, (ii) there shall not have occurred any change, nor
shall any notice have been given of any potential or intended change, in the
outlook for any rating of Xxxxx or the Company or any securities of Xxxxx or the
Company by any such rating organization and (iii) no such rating organization
shall have given notice that it has assigned (or is considering assigning) a
lower rating to the Secured Notes than that on which the Secured Notes were
marketed.
(c) Since the respective dates as of which information is given in the
Offering Memorandum other than as set forth in the Offering Memorandum
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there shall not have occurred any adverse change or any
development involving a prospective change in the condition, financial or
otherwise, or the earnings, business, management or operations of the Company
and its subsidiaries, taken as a whole, (ii) there shall not have been any
material adverse change or any development involving a prospective material
adverse change in the capital stock or in the long-term debt of the Company and
(iii) neither Xxxxx nor the Company shall have incurred any liability or
obligation, direct or contingent, the effect of which, in any such case
described in clause 9(c)(i), 9(c)(ii) or 9(c)(iii), in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Restricted Notes on the terms and in the manner contemplated in the Offering
Memorandum.
(d) The Initial Purchaser shall have received on the Closing Date a
certificate dated the Closing Date, signed by the Chief Executive Officer and
the Secretary of both Xxxxx and the Company, confirming the matters set forth in
Sections 6(x), 9(a) and 9(c) and stating that each of Xxxxx and the Company has
complied with all the agreements and satisfied all of the conditions herein
contained and required to be complied with or satisfied on or prior to the
Closing Date.
(e) The Initial Purchaser shall have received on the Closing Date an
opinion (satisfactory to you and counsel for the Initial Purchaser), dated
the Closing Date, of Gardere Xxxxx Xxxxxx & Xxxxx, L.L.P., counsel for
Xxxxx and the Company, to the effect that:
(i) each of Xxxxx and the Company has been duly incorporated or
formed, is validly existing as a corporation in good standing under
the laws of Delaware and has the corporate power and authority to
carry on its business as described in the Offering Memorandum and to
own, lease and operate its properties;
(ii) the Restricted Notes have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Initial Purchaser in
accordance with the terms of this Agreement, will be entitled to the
benefits of the Indenture and will be valid and binding obligations of
Xxxxx, enforceable in accordance with their terms except as (x) the
enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent transfer or similar laws affecting creditors' rights
generally and (y) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability;
19
21
(iii) the Guarantee of the Company has been duly authorized and,
when the Restricted Notes are executed and authenticated in accordance
with the provisions of the Indenture and delivered to and paid for by
the Initial Purchaser in accordance with the terms of this Agreement,
the Guarantee endorsed thereon will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the Company,
enforceable in accordance with their terms except as (x) the
enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent transfer or similar laws affecting creditors' rights
generally and (y) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability;
(iv) the Indenture has been duly authorized, executed and
delivered by Xxxxx and the Company and is a valid and binding
agreement of Xxxxx and the Company, enforceable against Xxxxx and the
Company in accordance with its terms except as (x) the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent transfer
or similar laws affecting creditors' rights generally and (y) rights
of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability;
(v) this Agreement has been duly authorized, executed and
delivered by Xxxxx and the Company;
(vi) each of Xxxxx and the Company has duly authorized the
Collateral Documents to which it is a party, and when each of Xxxxx
and the Company has duly executed and delivered the Collateral
Documents to which it is a party (assuming due execution and delivery
thereof by the Trustee, the Collateral Agent and the Escrow Agent),
each of the Collateral Documents to which such entity is a party will
be a legally valid and binding obligation of each of Xxxxx and the
Company enforceable against each in accordance with its terms, except
as (i) bankruptcy, insolvency, fraudulent transfer or other similar
laws affecting creditors' rights generally, and (ii) the
enforceability thereof may be limited by rights of acceleration and
the availability of equitable remedies may be limited by equitable
principles of general applicability;
(vii) the Registration Rights Agreement has been duly authorized,
executed and delivered by Xxxxx and the Company and is a valid and
binding agreement of Xxxxx and the Company, enforceable against Xxxxx
and the Company in accordance with its terms, except as (x) the
enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent transfer or similar laws affecting creditors' rights
generally, (y) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability and (z) the enforceability of the indemnification
provisions thereof may be limited by federal and state securities
laws;
(viii) the Exchange Notes have been duly authorized;
20
22
(ix) the statements under the captions "Risk Factors,"
"Description of the Secured Notes, " "Description of the New Senior
Notes," "Description of Certain Indebtedness," "United States Federal
Income Tax Considerations for Non-U.S. Holders," "Description of
Security for the Secured Notes," "Plan of Distribution," "Notice to
Investors in the New Senior Notes" and "Notice to Investors in the
Secured Notes," in the Offering Memorandum, insofar as such statements
constitute a summary of the legal matters, fairly present in all
material respects such legal matters;
(x) the execution, delivery and performance of this Agreement and
the other Operative Documents by Xxxxx and the Company, and the
issuance and sale of the Restricted Notes and compliance with the
terms and provisions thereof and of the other Operative Documents will
not (i) violate its respective charter or bylaws, (ii) require any
consent, approval, authorization or other order of, or qualification
with, any court or governmental body or agency of the United States or
the States of Texas or New York (except such as may be required under
the securities or Blue Sky laws of the various states), (iii) conflict
with or constitute a breach of any of the terms or provisions of, or a
default under the indentures executed, or senior notes issued, by the
Company in connection with debt offerings by the Company of $1.1
billion in April 1998 and $400 million in December 1998 or, to such
counsel's actual knowledge, any other indenture, loan agreement,
mortgage, lease or other agreement or instrument, to which Xxxxx or
the Company or the Significant Subsidiaries is a party or by which
Xxxxx, the Company or the Significant Subsidiaries or their respective
property is bound, which conflict, breach or default is likely to
have, either individually or in the aggregate, a Material Adverse
Effect, or (iv) violate or conflict with any applicable law or any
rule or regulation, or to such counsel's actual knowledge, any
judgment, order or decree, in each case of any court or any
governmental body or agency of the United States or the States of
Texas or New York having jurisdiction over Xxxxx, the Company or the
Significant Subsidiaries or their respective property;
(xi) the Company is not and, after giving effect to the offering
and sale of the Restricted Notes and the application of the net
proceeds thereof as described in the Offering Memorandum, will not be,
an "investment company" as such term is defined in the Investment
Issuer Act of 1940, as amended;
(xii) the Indenture complies as to form in all material respects
with the requirements of the TIA, and the rules and regulations of the
Commission applicable to an indenture which is qualified thereunder;
it is not necessary in connection with the offer, sale and delivery of
the Restricted Notes to the Initial Purchaser in the manner
contemplated by this Agreement or in connection with the Exempt
Resales to qualify the Indenture under the TIA;
(xiii) no registration under the Act of the Restricted Notes is
required for the sale of the Restricted Notes to the Initial Purchaser
as contemplated by this Agreement or for the Exempt Resales assuming
that (i) the Initial Purchaser is a
21
23
QIB or a Regulation S Purchaser, (ii) the accuracy of, and compliance
with, the Initial Purchaser's representations and agreements contained
in Section 7 of this Agreement and (iii) the accuracy of the
representations of Xxxxx and the Company set forth in Sections 5(f)
and 6(dd), (ee) and (ff) of this Agreement;
(xiv) the appropriate Security Agreements create a valid security
interest in the Xxxxx Loan Agreements and the notes issued thereunder
(the "XXXXX NOTES") in favor of the Collateral Agent for the benefit
of the Trustee and the holders of the Secured Notes and when the
Collateral Agent takes possession of the Xxxxx Notes representing the
Xxxxx Loans and upon the filing of financing statement designated by
such counsel with the Secretary of State of the State of Texas, the
Department of State of the State of New York and the County Register
for the County of New York, the Collateral Agent will have a perfected
security in such Xxxxx Loan Agreements and the Xxxxx Notes;
(xv) upon deposit of funds into the Company Escrow Account, the
Company Escrow Agent will have a perfected security interest in such
funds so long as they are held in the Company Escrow Account. Any
proceeds will remain subject to a perfected security interest so long
as they are held in the Company Escrow Account. Any investments of
Temporary Cash Equivalents with funds from the Company Escrow Account
will be subject to a perfected security interest in the manner
specified by such counsel in its opinion;
(xvi) upon deposit of funds into the Xxxxx Escrow Account, the
Xxxxx Escrow Agent will have a perfected security interest in such
funds so long as they are held in the Xxxxx Escrow Account. Any
proceeds will remain subject to a perfected security interest so long
as they are held in the Xxxxx Escrow Account. Any investments of
Temporary Cash Equivalents with funds from the Xxxxx Escrow Account
will be subject to a perfected security interest in the manner
specified by such counsel in its opinion;
(xvii) assuming the Bahamian statutory mortgages to be recorded
on the date of closing of the offering constitute valid and perfected
statutory ship mortgages under the laws of the Commonwealth of The
Bahamas on the respective vessels covered thereby, each such mortgage
is also entitled under United States law to a foreign preferred ship
mortgage status pursuant to Title 00 Xxxxxx Xxxxxx Code Section
31301(6)(B);
(xviii) in such counsel's opinion, a court applying Texas
conflict of laws rules in a properly presented and argued case would
give effect to the express choice of law opinions contained in the
Indenture and the other Collateral Documents to the extent that such
provisions provide that the laws of the State of New York are to
govern issues under such documents; and
(xix) such counsel has participated in conferences with officers
and other representatives of the Company, representatives of the
Company's accountants, the Initial Purchaser's representatives and
counsel for the Initial
22
24
Purchaser, at which conferences the contents of the Offering
Memorandum and related matters were discussed and, although such
counsel is not passing upon and do not assume any responsibility for
and shall not be deemed to have independently verified the accuracy,
completeness or fairness of the statements contained in the Offering
Memorandum no facts have come to the attention of such counsel that
lead such counsel to believe that the Offering Memorandum contained an
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
contained therein not misleading or that the Offering Memorandum on
the date thereof or on the date hereof (other than the financial
statements and notes thereto and the other financial information,
including the information referred to under the caption "Experts" as
to which such counsel does not comment) contained any untrue statement
of a material fact or omitted to state a material fact necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
The opinion of Gardere Xxxxx Xxxxxx & Xxxxx, L.L.P. described in
Section 9(e) above shall be rendered to you at the request of Xxxxx and the
Company and shall so state therein. In giving such opinion with respect to the
matters covered by Section 9(e)(xix), Gardere Xxxxx Xxxxxx & Xxxxx, L.L.P. may
state that their opinion and belief are based upon their participation in the
preparation of the Offering Memorandum and any amendments or supplements thereto
and review and discussion of the contents thereof, but are without independent
check or verification except as specified.
(f) The Initial Purchaser shall have received on the Closing Date an
opinion (satisfactory to you and counsel for the Initial Purchaser), dated the
Closing Date, of Xxxxxxxx X. Xxxx, Senior Vice President and Co-Counsel for the
Company, to the effect that:
(i) each of Xxxxx and the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of
Delaware and has the corporate power and authority to carry on its
business as described in the Offering Memorandum and to own, lease and
operate its properties;
(ii) each of Xxxxx and the Company is duly qualified and is in
good standing as a foreign corporation authorized to do business in
each jurisdiction in which the nature of its business or its ownership
or leasing of property requires such qualification, or application has
been made and is pending except where the failure to be so qualified
would not have a Material Adverse Effect;
(iii) R&B Falcon Holdings, Inc. ("HOLDINGS") has been duly
incorporated, is validly existing as a corporation and in good
standing under the laws of its jurisdiction of incorporation, has the
corporate authority to carry on its business and to own, lease and
operate its properties; is duly qualified and is in good standing as a
foreign corporation or entity authorized to do business in each state
of the United States in which the nature of its business or its
ownership or leasing of property requires such qualification, or
application has been made and is pending except where the failure to
be so qualified would not have a Material Adverse Effect;
23
25
(iv) R&B Falcon Drilling (International & Deepwater) Inc.
("DEEPWATER") has been duly incorporated, is validly existing as a
corporation and in good standing under the laws of its jurisdiction of
incorporation, has the corporate and authority to carry on its
business and to own, lease and operate its properties; is duly
qualified and is in good standing as a foreign corporation or entity
authorized to do business in each state of the United States in which
the nature of its business or its ownership or leasing of property
requires such qualification, or application has been made and is
pending except where the failure to be so qualified would not have a
Material Adverse Effect;
(v) Cliffs Drilling Company ("CLIFFS") has been duly
incorporated, is validly existing as a corporation and in good
standing under the laws of its jurisdiction of incorporation, has the
corporate and authority to carry on its business and to own, lease and
operate its properties; is duly qualified and is in good standing as a
foreign corporation or entity authorized to do business in each state
of the United States in which the nature of its business or its
ownership or leasing of property requires such qualification, or
application has been made and is pending except where the failure to
be so qualified would not have a Material Adverse Effect;
(vi) R&B Falcon Drilling USA, Inc. ("DRILLING USA") has been duly
incorporated, is validly existing as a corporation and in good
standing under the laws of its jurisdiction of incorporation, has the
corporate and authority to carry on its business and to own, lease and
operate its properties; is duly qualified and is in good standing as a
foreign corporation or entity authorized to do business in each state
of the United States in which the nature of its business or its
ownership or leasing of property requires such qualification, or
application has been made and is pending except where the failure to
be so qualified would not have a Material Adverse Effect;
(vii) R&B Falcon Drilling Co. ("DRILLING CO.") has been duly
incorporated, is validly existing as a corporation and in good
standing under the laws of its jurisdiction of incorporation, has the
corporate and authority to carry on its business and to own, lease and
operate its properties; is duly qualified and is in good standing as a
foreign corporation or entity authorized to do business in each state
of the United States in which the nature of its business or its
ownership or leasing of property requires such qualification, or
application has been made and is pending except where the failure to
be so qualified would not have a Material Adverse Effect;
(viii) all the outstanding shares of capital stock of Xxxxx, the
Company Deepwater, Holdings and Cliffs have been duly authorized and
validly issued and are fully paid, non-assessable and not subject to
any preemptive or similar rights;
(ix) each of Xxxxx and the Company has the corporate power and
24
26
authority to perform its respective obligations under the Operative
Documents and the Collateral Documents;
(x) the Restricted Notes have been duly authorized, executed and
delivered by Xxxxx;
(xi) the Guarantee of the Company has been duly authorized,
executed and delivered by the Company;
(xii) the Indenture has been duly authorized, executed and
delivered by Xxxxx and the Company;
(xiii) this Agreement has been duly authorized, executed and
delivered by Xxxxx and the Company;
(xiv) each of Xxxxx and the Company has duly authorized, executed
and delivered the Collateral Documents to which it is a party;
(xv) the Registration Rights Agreement has been duly authorized,
executed and delivered by Xxxxx and the Company;
(xvi) the execution and delivery of Exchange Notes have been duly
authorized by the Company;
(xvii) to such counsel's knowledge, (a) none of Xxxxx, the
Company or the Significant Subsidiaries is in violation of its
respective charter or by-laws and, (b) neither Xxxxx nor the Company
nor the Significant Subsidiaries is in default in the performance of
any obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, lease or other agreement or
instrument that is material to Xxxxx or the Company and the
Significant Subsidiaries, taken as a whole, to which Xxxxx or the
Company or the Significant Subsidiaries is a party or by which Xxxxx,
the Company or the Significant Subsidiaries or their respective
property is bound which default could reasonably be expected to result
in a Material Adverse Effect;
(xviii) the execution, delivery and performance of this Agreement
and the other Operative Documents by Xxxxx and the Company and the
issuance and sale of the Restricted Notes and compliance with the
terms and provisions thereof and of the other Operative Documents will
not (i) violate its respective charter or bylaws, (ii) require any
consent, approval, authorization or other order of, or qualification
with, any court or governmental body or agency of the United States or
the States of Texas or New York (except such as may be required under
the securities or Blue Sky laws of the various states), (iii) conflict
with or constitute a breach of any of the terms or provisions of, or a
default under the indenture executed, or senior notes issued, by the
Company in connection with debt offerings by the Company of $1.1
billion in April 1998 and $400 million in December 1998 or, to such
counsel's knowledge, any indenture,
25
27
loan agreement, mortgage, lease or other agreement or instrument to
which Xxxxx, the Company or the Significant Subsidiaries is a party or
by which Xxxxx, the Company or the Significant Subsidiaries or their
respective property is bound, which conflict, breach or default is
likely to have, either individually or in the aggregate, a Material
Adverse Effect, or (iv) violate or conflict with any applicable law or
any rule or regulation, or to such counsel's actual knowledge, any
judgment, order or decree, in each case, of any court or any
governmental body or agency having jurisdiction over Xxxxx, the
Company or the Significant Subsidiaries or their respective property.
(xix) such counsel has no knowledge of any legal or governmental
proceedings pending or threatened to which Xxxxx, the Company or the
Significant Subsidiaries is or could be a party or to which any of
their respective property is or could be subject, which could
reasonably be expected to result, singly or in the aggregate, in a
Material Adverse Effect.
(xx) to such counsel's knowledge, each of Xxxxx, the Company and
the Significant Subsidiaries has such Authorizations of, and has made
all filings with and notices to, all governmental or regulatory
authorities and self-regulatory organizations and all courts and other
tribunals, including without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and
operate its respective properties and to conduct its business, except
where the failure to have any such Authorization or to make any such
filing or notice would not, singly or in the aggregate, have a
Material Adverse Effect. To such counsel's knowledge, (a) each such
Authorization is valid and in full force and effect and each of Xxxxx,
the Company and the Significant Subsidiaries is in compliance with all
the terms and conditions thereof and with the rules and regulations of
the authorities and governing bodies having jurisdiction with respect
thereto; and (b) no event has occurred (including the receipt of any
notice from any authority or governing body) which allows or, after
notice or lapse of time or both, would allow, revocation, suspension
or termination of any such Authorization or results or, after notice
or lapse of time or both, would result in any other impairment of the
rights of the holder of any such Authorization; and (c) such
Authorizations contain no restrictions that are burdensome to Xxxxx,
the Company or the Significant Subsidiaries; except where such failure
to be valid and in full force and effect or to be in compliance, the
occurrence of any such event or the presence of any such restriction
would not, singly or in the aggregate, have a Material Adverse Effect;
(xxi) to such counsel's knowledge, neither the Company nor its
subsidiaries has violated any Environmental Law or any provisions of
ERISA, any provisions of the Foreign Corrupt Practices Act of the
rules and regulations promulgated thereunder, except for such
violations which, singly or in the aggregate, would not have a
Material Adverse Effect;
(xxi) to such counsel's knowledge, except as disclosed in the
Offering
26
28
Memorandum, there are no contracts, agreements or understandings
(other than the Registration Rights Agreement) between Xxxxx or the
Company and any person granting such person the right to require Xxxxx
or such Company to include such securities with the Secured Notes and
Guarantee registered pursuant to any Registration Statement; and
(xxii) such counsel has participated in conferences with officers
and other representatives of the Company, representatives of the
Company's accountants, the Initial Purchaser's representatives and
counsel for the Initial Purchaser, at which conferences the contents
of the Offering Memorandum and related matters were discussed and,
although such counsel is not passing upon and do not assume any
responsibility for and shall not be deemed to have independently
verified the accuracy, completeness or fairness of the statements
contained in the Offering Memorandum, no facts have come to the
attention of such counsel that lead such counsel to believe (a) that
the Offering Memorandum contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein
or necessary to make the statements contained therein not misleading
or (b) that the Offering Memorandum on the date thereof or on the date
hereof contained any untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(g) The Initial Purchaser shall have received on the Closing Date an
opinion, dated the Closing Date, of Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.,
counsel for the Initial Purchaser, in form and substance reasonably satisfactory
to the Initial Purchaser.
(h) The Initial Purchaser shall have received, at the Closing Date, a
letter dated the Closing Date, as the case may be, in the form attached hereto
as Annex I, from Ernst & Young LLP, independent public accountants.
(i) The Initial Purchaser shall have received, at the Closing Date, a
letter dated the Closing Date, in the form attached hereto as Annex II, from
Xxxxxx Xxxxxxxx LLP, independent public accountants.
(j) The Initial Purchaser shall have received, at the Closing Date, an
opinion from Gardere Xxxxx Xxxxxx & Xxxxx, L.L.P. in a form reasonably
satisfactory to the Initial Purchaser regarding filing and perfection of first
priority ship mortgages registered in the Xxxxxxxx Islands.
(k) The Collateral Documents shall have been executed and delivered by
the parties thereto and the Company shall have taken all necessary steps to have
the Liens created by such Collateral Documents perfected under the laws
governing such perfection. At the time of Closing, the Initial Purchaser shall
be provided with undertakings from legal counsel and forms of their opinions,
and within thirty (30) days of the issuance of the Restricted Notes, the Company
shall provide to the Initial Purchaser, the Collateral Agent and the Trustee
opinions of counsel as to the perfection and priority of the Liens and ship
mortgages created by the Collateral Documents in forms reasonably satisfactory
to each of such persons.
(l) The Initial Purchaser shall have received a copy of the Company's
audit report for the three years ended December 31, 1998 and as of December 1998
and 1997 from Xxxxxx Xxxxxxxx LLP on or before the Closing Date and such report
shall not contain any qualification relating to
27
29
the financial condition of the Company and its subsidiaries. Such audited
financial statements shall reflect historical consolidated financial results and
position of the Company identical to those contained in the Preliminary Offering
Memorandum and the Offering Memorandum and the notes thereto shall not contain
information different from that included in the Preliminary Offering Memorandum
or the Offering Memorandum.
(m) Xxxxx shall have filed organizational documents which are in full
force and effect and in form and substance reasonably acceptable to the Initial
Purchaser.
(n) The Restricted Notes shall have been approved by Nasdaq for trading
and duly listed in PORTAL.
(o) The closing of the New Senior Notes offering (as defined in the
Offering Memorandum) shall have occurred.
(p) The Initial Purchaser shall have received a counterpart, conformed
as executed, of the Indenture which shall have been entered into by Xxxxx, the
Company and the Trustee.
(q) Xxxxx and the Company shall have executed the Registration Rights
Agreement and the Initial Purchaser shall have received an original copy
thereof, duly executed by Xxxxx and the Company.
(r) Neither Xxxxx nor the Company shall have failed at or prior to the
Closing Date to perform or comply with any of the agreements herein contained
and required to be performed or complied with by Xxxxx or the Company, as the
case may be, at or prior to the Closing Date.
(s) The Initial Purchaser shall have received from the Company the
amount of $22.0 million as payment for the commissions and discounts in
connection with the purchase by the Initial Purchaser of the Restricted Notes.
(t) The Initial Purchaser shall have received evidence satisfactory to
it and its counsel taking all actions with respect to the Collateral Documents
and such other security documents as may be necessary or in the opinion of the
Initial Purchaser and its counsel, desirable to permit the perfection of the
liens created, or purported to be created by the Collateral Documents.
10. EFFECTIVENESS OF AGREEMENT AND TERMINATION. This Agreement shall
become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by the Initial Purchaser by written notice to Xxxxx if any of the following
has occurred: (i) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in the Initial
Purchaser's judgment, is material and adverse and, in the Initial Purchaser's
judgment, makes it impracticable to market the Restricted Notes on the terms and
in the manner contemplated in the Offering Memorandum, (ii) the suspension or
material limitation of trading in securities or other instruments on the New
York Stock Exchange, the American Stock Exchange, the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade or the
Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of Xxxxx or the Company on any exchange
or in the over-the-counter market, (iv) the enactment, publication, decree or
other promulgation of any federal or state statute, regulation, rule or order
28
30
of any court or other governmental authority which in your opinion materially
and adversely affects, or will materially and adversely affect, the business,
prospects, financial condition or results of operations of Xxxxx and the
Company, taken as a whole, (v) the declaration of a banking moratorium by either
federal or New York State authorities or (vi) the taking of any action by any
federal, state or local government or agency in respect of its monetary or
fiscal affairs which in your opinion has a material adverse effect on the
financial markets in the United States.
11. MISCELLANEOUS. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (i) if to Xxxxx, to RBF Finance Co.,
000 Xxxxxxxxxxxx, Xxxxxxx, XX 00000 (telephone number: 000 000-0000) (iii) if
the Company, to R&B Falcon Corporation, 000 Xxxxxxxxxxxx, Xxxxxxx, XX 00000
(telephone number: 000-000-0000) and (ii) if to the Initial Purchaser,
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Syndicate Department, or in any case to such other
address as the person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of Xxxxx, the Company and the Company's
subsidiaries and the Initial Purchaser set forth in or made pursuant to this
Agreement shall remain operative and in full force and effect, and will survive
delivery of and payment for the Restricted Notes, regardless of (i) any
investigation, or statement as to the results thereof, made by or on behalf of
the Initial Purchaser, the officers or directors of the Initial Purchaser, any
person controlling the Initial Purchaser, Xxxxx, the Company, the officers or
directors of Xxxxx or the Company, or any person controlling Xxxxx or the
Company, (ii) acceptance of the Restricted Notes and payment for them hereunder
and (iii) termination of this Agreement.
If for any reason the Restricted Notes are not delivered by or on
behalf of Xxxxx as provided herein (other than as a result of any termination of
this Agreement pursuant to Section 10), Xxxxx and the Company, jointly and
severally, agree to reimburse the Initial Purchaser for all out-of-pocket
expenses (including the fees and disbursements of counsel) incurred by them.
Notwithstanding any termination of this Agreement, Xxxxx and the Company,
jointly and severally, shall be liable for all expenses which it has agreed to
pay pursuant to Section 5(i) hereof. Xxxxx and the Company also agree, jointly
and severally, to reimburse the Initial Purchaser and their officers, directors
and each person, if any, who controls the Initial Purchaser within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act for any and all fees
and expenses (including without limitation the fees and expenses of counsel)
incurred by them in connection with enforcing their rights under this Agreement
(including without limitation its rights under Section 8).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon Xxxxx, the Company, the
Initial Purchaser, the Initial Purchaser's directors and officers, any
controlling persons referred to herein, the directors and officers of Xxxxx and
the Company and their respective successors and assigns, all as and to the
extent provided in this Agreement, and no other person shall acquire or have any
right under or by virtue of this Agreement. The term "successors and assigns"
shall not include a purchaser of any of the Restricted Notes from the Initial
Purchaser merely because of such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York, without regard to the conflict of law rules
thereof.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
29
31
Please confirm that the foregoing correctly sets forth the agreement
among Xxxxx, the Company and the Initial Purchaser.
Very truly yours,
RBF FINANCE CO.
By: /S/ XXXXXXXX XXXX
----------------------------------------
Name: Xxxxxxxx Xxxx
Title: V.P.
R&B FALCON CORPORATION
By: /S/ XXXXXX X. XXXXXXX
----------------------------------------
Name:Xxxxxx X. Xxxxxxx
Title: CEO
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By: /S/ XXXXX XXXXXXXXXX
----------------------------------------
Name: Xxxxx Klassmeyer
Title: Senior Vice President
32
EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT
33
SCHEDULE B
SIGNIFICANT SUBSIDIARIES
R&B Falcon Holdings Inc.
R&B Falcon Drilling (International & Deepwater) Inc.
Cliffs Drilling Company
R&B Falcon Drilling USA, Inc.
R&B Falcon Drilling Co.
R&B Falcon Exploration Co.
Double Eagle Marine, Inc.
Arcade Drilling AS
