EXHIBIT 1.1
[ ] SHARES
TODCO
CLASS A COMMON STOCK (PAR VALUE $0.01 PER SHARE)
UNDERWRITING AGREEMENT
, 2004
[ ], 2004
Xxxxxx Xxxxxxx & Co. Incorporated
Citigroup Global Markets Inc.
Xxxxxxx, Sachs & Co.
UBS Securities LLC
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
Transocean Inc., a Cayman Islands company ("Transocean"), and
Transocean Holdings Inc., a Delaware corporation ("Transocean Holdings" and
together with Transocean, the "Selling Stockholders"), severally and not
jointly, propose to sell to the several underwriters named in Schedule I hereto
(the "UNDERWRITERS") an aggregate of [ ] shares of the Class A common stock (par
value $0.01 per share) (the "FIRM SHARES") of TODCO, a Delaware corporation (the
"COMPANY"), of which [ ] shares are to be sold by Transocean and [ ] are to be
sold by Transocean Holdings.
Transocean also proposes to sell to the several Underwriters not more
than an additional [ ] shares of the Class A common stock (par value $0.01 per
share) of the Company (the "ADDITIONAL SHARES") if and to the extent that you,
as managers of the offering, shall have determined to exercise, on behalf of the
Underwriters, the right to purchase such shares of common stock granted to the
Underwriters in Section 3 hereof. The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the "SHARES." The shares of Class A
common stock (par value $0.01 per share) of the Company to be outstanding after
giving effect to the sales contemplated hereby are hereinafter referred to as
the "COMMON STOCK."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to the
Shares. The registration statement as amended at the time it became effective,
including the information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), is hereinafter
referred to as the "REGISTRATION STATEMENT"; the prospectus in the form first
used to confirm sales of Shares is hereinafter referred to as the "PROSPECTUS."
If the Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the Securities
Act (the "RULE 462 REGISTRATION STATEMENT"), then any reference herein to the
term "REGISTRATION STATEMENT" shall be deemed to include such Rule 462
Registration Statement.
1. Representations and Warranties of the Company and the Selling
Stockholders. The Company and the Selling Stockholders, jointly and severally,
represent and warrant to and agree with each of the Underwriters that:
(a) The Registration Statement (excluding for this purpose any
Rule 462 Registration Statement) has become effective; no stop order
suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) The Registration Statement, when it became effective,
did not contain and, as amended or supplemented, if applicable, will
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement and
the Prospectus comply and, as amended or supplemented, if applicable,
will comply in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and (iii)
the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact 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 set forth in
this paragraph (b) do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information
furnished to the Company in writing by any Underwriter through you
expressly for use therein.
(c) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
general affairs, management, financial position, stockholders' equity
or result of operations, or in the earnings, business or operations of
the Company and its subsidiaries, taken as a whole, from that set forth
in the Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement).
(d) The preliminary prospectus dated [] filed as part of the
registration statement relating to the Shares and any preliminary
prospectus filed as part of any subsequent amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed
in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder.
(e) The statements set forth in the Prospectus under the
caption "Description of Capital Stock", insofar as they purport to
constitute a summary of the terms of the Company's capital stock, and
under the captions "Material U.S. Federal Income Tax Considerations for
Non-U.S. Holders" and "Underwriters", insofar as they purport to
describe the provisions of the laws and documents referred to therein,
are accurate, complete and fair in all material respects.
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(f) To the knowledge of the Company and the Selling
Stockholders, Ernst & Young LLP, who have certified certain financial
statements of the Company, are independent public accountants as
required by the Securities Act and the rules and regulations of the
Commission thereunder.
(g) Each of the Company and its significant subsidiaries (as
defined in Rule 1-02(w) forming part of Regulation S-X under the
Securities Act, except that the determination of whether a subsidiary
is a significant subsidiary shall be made as of the date hereof or as
of the Closing Date, as applicable, rather than as of the end of the
relevant fiscal year) (each, a "SIGNIFICANT SUBSIDIARY") has been duly
organized and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, with power and
authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified as
a foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, except where the failure to be so qualified would not
have a material adverse effect on the general affairs, management,
financial position, stockholders' equity or results of operations of
the Company and its subsidiaries considered as one enterprise (a
"MATERIAL ADVERSE EFFECT").
(h) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement
of the Company.
(i) On the Closing Date (as defined in Section 5 hereof), the
Company will have an authorized capitalization as set forth in the
Prospectus, and all of the outstanding shares of capital stock of the
Company (including the Shares) will have been duly and validly
authorized and issued and will be fully paid and non-assessable.
(j) All of the issued shares of capital stock of each
Significant Subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims, except as described in the Prospectus
and except to the extent that any failure of such shares to be free and
clear of all liens, encumbrances, equities or claims would not,
individually or in the aggregate, have a Material Adverse Effect.
(k) The Shares are duly authorized for listing on the New York
Stock Exchange, subject to notice of issuance.
(l) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its
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subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the properties or assets of
the Company or any of its subsidiaries is subject, nor will such action
result in any violation of the provisions of the Certificate of
Incorporation or Bylaws of the Company or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties, except, in each case other than with respect to such
Certificate of Incorporation or Bylaws, for any such conflict, breach,
violation or default which would not, individually or in the aggregate,
have a Material Adverse Effect and would not impair the Company's
ability to perform its obligations hereunder or have any material
adverse effect upon the consummation of the transactions contemplated
hereby; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the performance by the Company of its obligations under
this Agreement, except for such consents, approvals, authorizations,
registrations or qualifications as (i) have been, or will have been
prior to the Closing Date, obtained under the Securities Act or the
Securities Exchange Act of 1934, as amended (the "Exchange Act") or
(ii) may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters.
(m) Neither the Company nor any of its Significant
Subsidiaries is in violation of its Certificate of Incorporation or
Bylaws or other constituent documents, as applicable, or in default in
the performance or observance of any material obligation, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound, except for
any such violation or default which would not, individually or in the
aggregate, have a Material Adverse Effect.
(n) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would,
individually or in the aggregate, have a Material Adverse Effect; and,
to the best of the Company's and the Selling Stockholders' knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(o) The Company is not, and after giving effect to the
offering and sale of the Shares, will not be, an "investment company",
as such term is defined in the Investment Company Act of 1940, as
amended (the "INVESTMENT COMPANY ACT").
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(p) Except as set forth in the Prospectus, the Company and its
Significant Subsidiaries (i) are in compliance with any and all
applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("ENVIRONMENTAL LAWS"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to
conduct their respective businesses and (iii) are in compliance with
all terms and conditions of any such permit, license or approval,
except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have a Material
Adverse Effect.
(q) Except as set forth in the Prospectus, there are no 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 permit, license or approval, 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.
(r) Except as described in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company or to require the Company to include such
securities with the Shares registered pursuant to the Registration
Statement.
(s) The Company and its Significant Subsidiaries have good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them which is
material to the business of the Company and its subsidiaries, taken as
a whole, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Prospectus or such as do
not materially affect the value of such property and would not,
individually or in the aggregate, have a Material Adverse Effect; and
any real property and buildings held under lease by the Company and its
Significant Subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as do not interfere with the
use made and proposed to be made of such property and buildings by the
Company and its subsidiaries, in each case except as described in the
Prospectus and except as would not, individually or in the aggregate,
have a Material Adverse Effect.
(t) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, all material patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures),
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trademarks, service marks and trade names currently employed by them in
connection with the business now operated by them, and neither the
Company or any of its subsidiaries nor either Selling Stockholder has
received any notice of infringement of or conflict with asserted rights
of others with respect to any of the foregoing which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a Material Adverse Affect.
(u) No labor dispute with the employees of the Company or any
of its subsidiaries exists, except as described in the Prospectus, or,
to the knowledge of the Company, is imminent, except such as would not
have a Material Adverse Effect; and neither the Company nor either
Selling Stockholder is aware of any existing, threatened or imminent
labor disturbance by the employees of any of its principal suppliers,
manufacturers or contractors that could have a Material Adverse Effect
on the Company and its subsidiaries, taken as a whole.
(v) The Company and its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks
and in such amounts as are prudent in the businesses in which they are
engaged (such businesses are as described in the Prospectus); and
neither the Company nor either Selling Stockholder has any reason to
believe that the Company will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its businesses at a cost that would not have a Material Adverse Effect
on the Company and its subsidiaries, taken as a whole, except as
described in the Prospectus.
(w) The Company and its subsidiaries possess all material
certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct
their respective businesses, and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse
Effect, except as described in the Prospectus.
(x) The Company and each of its subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability, (iii) access to assets is permitted only
in accordance with management's general or specific authorization and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
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(y) Except as described in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, (i) the Company and its subsidiaries have
not incurred any liability or obligation, direct or contingent, nor
entered into any transaction not in the ordinary course of business,
except such as would not have a Material Adverse Effect; (ii) the
Company has not purchased any of its outstanding capital stock, nor
declared, paid or otherwise made any dividend or distribution of any
kind on its capital stock other than ordinary and customary dividends;
and (iii) there has not been any material change in the capital stock,
short-term debt or long-term debt of the Company and its subsidiaries.
(z) Prior to the date hereof, neither the Company nor any of
its affiliates has taken any action which is designed to or which has
constituted or which might have been expected to cause or result in
stabilization or manipulation of the price of any security of the
Company in connection with the offering of the Shares.
2. Additional Representations and Warranties of the Selling
Stockholders. Each Selling Stockholder represents and warrants to and agrees
with each of the Underwriters that:
(a) This Agreement has been duly authorized, executed and
delivered by such Selling Stockholder and constitutes a valid and
binding agreement of such Selling Stockholder.
(b) The execution and delivery by such Selling Stockholder of,
and the performance by such Selling Stockholder of its obligations
under, this Agreement, will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which such Selling Stockholder or any of its
subsidiaries is a party or by which such Selling Stockholder or any of
its subsidiaries is bound or to which any of the properties or assets
of such Selling Stockholder or any of its subsidiaries is subject, nor
will such action result in any violation of the provisions of the
Memorandum and Articles of Association or Certificate of Incorporation
and Bylaws, as applicable, of such Selling Stockholder or any statute
or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over such Selling Stockholder or any of its
subsidiaries or any of their properties, except, in each case other
than with respect to such Certificate of Incorporation and Bylaws or
Memorandum and Articles of Association, as applicable, for any such
conflict, breach, violation or default which would not, individually or
in the aggregate, impair such Selling Stockholder's ability to perform
its obligations hereunder or have any material adverse effect upon the
consummation of the transactions contemplated hereby; and no consent,
approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is
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required for the performance by such Selling Stockholder of its
obligations under this Agreement, except for such consents, approvals,
authorizations, registrations or qualifications as (i) have been, or
will have been prior to the Closing, obtained under the Securities Act
or the Exchange Act or (ii) may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the
Shares by the Underwriters.
(c) Assuming the Underwriters purchase the Shares to be sold
by such Selling Shareholder in good faith and without "notice of an
adverse claim" (as such phrase is used in Section 8-105 of the Uniform
Commercial Code of the State of Texas (the "TEXAS UCC")), upon (i)
delivery to the Underwriters of the certificates representing such
Shares endorsed in blank by an effective endorsement and (ii) payment
therefor in accordance with the terms of this Agreement, the
Underwriters will become "protected purchasers" (as defined in Section
8-303(a) of the Texas UCC) of such Shares, free and clear of "adverse
claims" (as defined in Section 8-102 of the Texas UCC), except for any
such adverse claims created by or at the request of the Underwriters.
(d) Except as described in the Prospectus, neither the Company
nor either of the Selling Stockholders has granted any option, right or
warrant to purchase any shares of Common Stock or securities
convertible into or exchangeable for Common Stock (other than the Class
B common stock (par value $0.01 per share) of the Company), in each
case that would or could vest within [90] days after the date of the
Prospectus, except in the event of a change of control of the Company
or termination of employment or death.
3. Agreements to Sell and Purchase. Each Selling Stockholder, severally
and not jointly, hereby agrees to sell to the several Underwriters, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees, severally
and not jointly, to purchase from each Selling Stockholder at $[ ] a share (the
"PURCHASE PRICE"), the number of Firm Shares (subject to such adjustments to
eliminate fractional shares as you may determine) that bears the same proportion
to the number of Firm Shares to be sold by each Selling Stockholder as the
number of Firm Shares set forth in Schedule I hereto opposite the name of such
Underwriter bears to the total number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, Transocean agrees to sell to
the Underwriters the Additional Shares, and the Underwriters shall have the
right to purchase, severally and not jointly, up to [ ] Additional Shares at the
Purchase Price. You may exercise this right on behalf of the Underwriters in
whole or from time to time in part by giving written notice of each election to
exercise the option not later than 30 days after the date of this Agreement. Any
exercise notice shall specify the number of Additional Shares to be purchased by
the Underwriters and the date on which such shares are to be purchased. Each
purchase date must be at least one business day after the written notice is
given and
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may not be earlier than the closing date for the Firm Shares nor later than ten
business days after the date of such notice. Additional Shares may be purchased
as provided in Section 5 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. On each
day, if any, that Additional Shares are to be purchased (an "OPTION CLOSING
DATE"), each Underwriter agrees, severally and not jointly, to purchase the
number of Additional Shares (subject to such adjustments to eliminate fractional
shares as you may determine) that bears the same proportion to the total number
of Additional Shares to be purchased on such Option Closing Date as the number
of Firm Shares set forth in Schedule I hereto opposite the name of such
Underwriter bears to the total number of Firm Shares.
Each of the Company and the Selling Stockholders hereby agrees that,
without the prior written consent of Xxxxxx Xxxxxxx & Co. Incorporated on behalf
of the Underwriters, it will not, during the period ending [90] days after the
date of the Prospectus, (i) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, lend, or otherwise transfer or dispose
of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock; or (ii) enter
into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of the Common Stock, whether
any such transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise.
The restrictions contained in the preceding paragraph shall not apply
to (i) the Shares, (ii) the issuance by the Company of shares of Common Stock
upon the exercise of an option or warrant or the conversion of a security
outstanding on the date hereof of which the Underwriters have been advised in
writing, (iii) transactions by any person other than the Company relating to
shares of Common Stock or other securities acquired in open market transactions
after the completion of the offering of the Shares, (iv) any distribution of
shares of Common Stock by Transocean to the holders of its ordinary shares by
means of a distribution or exchange offer in a transaction intended to qualify
as a tax-free distribution under Section 355 of the Internal Revenue Code, as
amended, or any corresponding provision of any successor statute, (v) any
issuance of Common Stock or other securities pursuant to Transocean's
subscription rights described in the Prospectus, (vi) grants of Common Stock or
other securities pursuant to employee benefit plans described in the Prospectus
or (vii) private sales by the Selling Stockholders of Common Stock or other
securities in which the purchaser agrees to be bound by the restrictions
contained in the preceding paragraph. In addition, the Company agrees that,
without the prior written consent of Xxxxxx Xxxxxxx & Co. Incorporated on behalf
of the Underwriters, it will not, during the period ending 90 days after the
date of the Prospectus, file any registration statement with respect to
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any shares of Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock.
4. Terms of Public Offering. The Company and the Selling Stockholders
are advised by you that the Underwriters propose to make a public offering of
their respective portions of the Shares as soon after the Registration Statement
and this Agreement have become effective as in your judgment is advisable. The
Company and the Selling Stockholders are further advised by you that the Shares
are to be offered to the public initially at $[ ] a share (the "PUBLIC OFFERING
PRICE") and to certain dealers selected by you at a price that represents a
concession not in excess of $[ ] a share under the Public Offering Price.
5. Payment and Delivery. Payment for the Firm Shares to be sold by each
Selling Stockholder shall be made to each Selling Stockholder in Federal or
other funds immediately available in Houston, Texas against delivery of such
Firm Shares for the respective accounts of the several Underwriters at 10:00
a.m., Houston time, on [], 2004. The time and date of such payment are
hereinafter referred to as the "CLOSING DATE."
Payment for any Additional Shares shall be made to Transocean in
Federal or other funds immediately available in Houston, Texas against delivery
of such Additional Shares for the respective accounts of the several
Underwriters at 10:00 a.m., Houston time, on the date specified in the
corresponding notice described in Section 3 hereof or at such other time on the
same or on such other date, in any event not later than [], 2004, as shall be
designated in writing by you.
The Firm Shares and Additional Shares shall be registered in such names
and in such denominations as you shall request in writing not later than one
full business day prior to the Closing Date or the applicable Option Closing
Date, as the case may be. The Firm Shares and Additional Shares shall be
delivered to you on the Closing Date or an Option Closing Date, as the case may
be, for the respective accounts of the several Underwriters, with any transfer
taxes payable in connection with the transfer of the Shares to the Underwriters
duly paid, against payment of the Purchase Price therefor.
6. Conditions to the Underwriters' Obligations. The obligations of the
Selling Stockholders to sell the Shares to the Underwriters and the several
obligations of the Underwriters to purchase and pay for the Shares on the
Closing Date are subject to the condition that the Registration Statement shall
have become effective not later than [] p.m. (Houston time) on the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
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(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the
Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the general
affairs, management, financial position, stockholders' equity
or results of operations, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a
whole, from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of
this Agreement) that, in your reasonable judgment, is material
and adverse and that makes it, in your reasonable judgment,
impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date
an opinion of Walkers, Cayman Islands counsel for Transocean, dated the
Closing Date, to the effect that:
(i) Transocean has been duly incorporated and is
validly existing as a company in good standing under the laws
of the Cayman Islands, with full corporate power and authority
to own its properties and conduct its business as described in
the Prospectus;
(ii) this Agreement has been duly authorized by
Transocean, and assuming its due execution and delivery by
Transocean insofar as such matters are governed by New York
law, has been duly executed and delivered by Transocean;
(iii) the execution, delivery and performance of this
Agreement and the consummation of the transactions
contemplated hereby and the compliance by Transocean with the
terms and provisions hereof do not contravene any law or
regulation of the Cayman Islands applicable to Transocean or
contravene the Memorandum and Articles of Association of
Transocean; and
(iv) neither the execution, delivery or performance
of this Agreement nor the consummation of any of the
transactions contemplated hereby or the compliance by
Transocean with the terms and provisions hereof, requires the
consent or approval of, the giving of notice to, or the
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registration with, or the taking of any other action in
respect of any Cayman Islands governmental or judicial
authority or agency.
The opinion of Walkers described in this Section 6(b) shall be
rendered to the Underwriters at the request of Transocean and shall so
state therein.
(c) The Underwriters shall have received on the Closing Date
an opinion of Xxxxx Xxxxx L.L.P., United States counsel for the Company
and the Selling Stockholders, dated the Closing Date, to the effect
that:
(i) each of the Company and Transocean Holdings has
been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own its
properties and conduct its business as described in the
Prospectus;
(ii) the Company has an authorized capitalization as
set forth in the Prospectus, and all of the outstanding shares
of capital stock of the Company (including the Shares) have
been duly authorized and validly issued and are fully paid and
non-assessable;
(iii) this Agreement has been duly authorized,
executed and delivered by the Company and by Transocean
Holdings and, assuming its due authorization by Transocean,
and further assuming its due execution and delivery by
Transocean insofar as such matters are governed by Cayman
Islands law, has been duly executed and delivered by
Transocean;
(iv) the execution and delivery by the Company of,
and the performance by the Company of its obligations under,
this Agreement will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument that is identified
as an exhibit to the Registration Statement (other than the
Omnibus Credit and Guaranty Agreement, dated as of December
30, 2003, among the Company, the guarantors, lenders and
issuing bank parties thereto, Citibank N.A., as administrative
agent and collateral agent, and Citigroup Global Markets Inc.,
as lead arranger and sole book runner, as to which such
counsel need express no opinion), nor will such action result
in any violation of any statute, rule or regulation or any
order known to such counsel of any court or governmental
agency or body having jurisdiction over the Company or any of
its subsidiaries or any of their properties, except for any
such conflict, breach, violation or default which would not,
individually or in the aggregate, have a Material Adverse
Effect and could not reasonably be expected to adversely
affect the Company's ability to perform its obligations under
this Agreement (it being understood that for purposes of this
opinion, such counsel shall not be required to pass upon
-12-
compliance with respect to antifraud or similar provisions of
any law, rule or regulation); and no consent, approval,
authorization, order, registration or qualification of or with
any court or governmental agency or body which, to the best of
such counsel's knowledge, has jurisdiction over the Company or
any of its subsidiaries or any of their properties is required
under the laws of the States of Delaware, New York or Texas
for the performance by the Company of its obligations under
this Agreement, except for such consents, approvals,
authorizations, registrations or qualifications as (A) have
been obtained under the Securities Act and the Exchange Act,
(B) may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by
the Underwriters or (C) would not, individually or in the
aggregate, have a Material Adverse Effect and could not
reasonably be expected to adversely affect the Company's
ability to perform its obligations hereunder or have any
material adverse effect upon the consummation of the
transactions contemplated hereby;
(v) the execution and delivery by Transocean Holdings
of, and the performance by Transocean Holdings of its
obligations under, this Agreement will not result in any
violation of the Certificate of Incorporation or Bylaws of
Transocean Holdings and will not conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement that is identified as
an exhibit to Transocean's Annual Report on Form 10-K for the
year ended December 31, 2003 or the Quarterly Reports on Form
10-Q for the quarters ended March 31 and June 30, 2004, nor
will such action result in any violation of any statute, rule
or regulation or any order known to such counsel of any court
or governmental agency or body having jurisdiction over
Transocean Holdings or any of its subsidiaries or any of their
properties, except, in each case other than with respect to
such Certificate of Incorporation or Bylaws for any such
conflict, breach, violation or default which would not,
individually or in the aggregate, have a Material Adverse
Effect and could not reasonably be expected to adversely
affect Transocean Holdings' ability to perform its obligations
under this Agreement (it being understood that for purposes of
this opinion, such counsel shall not be required to pass upon
compliance with respect to antifraud or similar provisions of
any law, rule or regulation); and no consent, approval,
authorization, order, registration or qualification of or with
any court or governmental agency or body which, to the best of
such counsel's knowledge, has jurisdiction over Transocean
Holdings or any of its subsidiaries or any of their properties
is required under the laws of the States of Delaware, New York
or Texas for the performance by Transocean Holdings of its
obligations under this Agreement except for such consents,
approvals, authorizations, registrations or qualifications as
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(A) have been obtained under the Securities Act and the
Exchange Act, (B) may be required under state securities or
Blue Sky laws in connection with the purchase and distribution
of the Shares by the Underwriters or (C) would not,
individually or in the aggregate, have a Material Adverse
Effect and could not reasonably be expected to adversely
affect Transocean Holdings' ability to perform its obligations
hereunder or have any material adverse effect upon the
consummation of the transactions contemplated hereby;
(vi) the execution and delivery by Transocean of, and
the performance by Transocean of its obligations under, this
Agreement will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument that is identified
as an exhibit to Transocean's Annual Report on Form 10-K for
the year ended December 31, 2003 or the Quarterly Reports on
Form 10-Q for the quarters ended March 31 and June 30, 2004,
nor will such action result in any violation of any statute,
rule or regulation or any order known to such counsel of any
court or governmental agency or body having jurisdiction over
Transocean or any of its subsidiaries or any of their
properties, except for any such conflict, breach, violation or
default which would not, individually or in the aggregate,
have a Material Adverse Effect and could not reasonably be
expected to adversely affect Transocean's ability to perform
its obligations under this Agreement (it being understood that
for purposes of this opinion, such counsel shall not be
required to pass upon compliance with respect to antifraud or
similar provisions of any law, rule or regulation); and no
consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or
body which, to the best of such counsel's knowledge, has
jurisdiction over Transocean or any of its subsidiaries or any
of their properties is required under the laws of the States
of New York or Texas for the performance by Transocean of its
obligations under this Agreement, except for such consents,
approvals, authorizations, registrations or qualifications as
(A) have been obtained under the Securities Act and the
Exchange Act, (B) may be required under state securities or
Blue Sky laws in connection with the purchase and distribution
of the Shares by the Underwriters or (C) would not,
individually or in the aggregate, have a Material Adverse
Effect and could not reasonably be expected to adversely
affect Transocean's ability to perform its obligations
hereunder or have any material adverse effect upon the
consummation of the transactions contemplated hereby;
(vii) the Company is not, and after giving effect to
the offering and sale of the Shares will not be, an
"investment company", as such term is defined in the
Investment Company Act;
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(viii) assuming the Underwriters purchase the Shares
to be sold by the Selling Stockholders in good faith and
without "notice of an adverse claim" (as such phrase is used
in Section 8-105 of the Texas UCC), upon (i) delivery to the
Underwriters of the certificates representing such Shares
endorsed in blank by an effective endorsement and (ii) payment
therefor in accordance with the terms of this Agreement, the
Underwriters will become "protected purchasers" (as defined in
Section 8-303(a) of the Texas UCC) of such Shares, free and
clear of "adverse claims" (as defined in Section 8-102 of the
Texas UCC), except for any such adverse claims created by or
at the request of the Underwriters;
(ix) the statements set forth in the Prospectus under
the caption "Description of Capital Stock", insofar as they
purport to constitute a summary of the terms of the Company's
capital stock, and under the captions "Material U.S. Federal
Income Tax Considerations For Non-U.S. Holders" and
"Underwriters", insofar as they purport to constitute a
summary of the provisions of the laws and documents referred
to therein, are accurate in all material respects; and
(x) the Registration Statement and the Prospectus and
any amendments and supplements thereto made by the Company
prior to the Closing Date (other than the financial statements
and schedules, the notes thereto and the auditors' report
thereon and other financial and accounting data included
therein, or omitted therefrom, as to which such counsel need
express no opinion), when they became effective or were filed
with the Commission, as the case may be, appeared on their
face to comply as to form in all material respects with the
requirements of the Securities Act and the rules and
regulations thereunder.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of
the Company and the Selling Stockholders, representatives of the
independent public accountants for the Company and representatives of
and counsel for the Underwriters at which the contents of the
Registration Statement and the Prospectus and related matters were
discussed and, although such counsel did not independently verify such
information and is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus,
except for those referred to in the opinion in clause (ix) of this
Section 6(c), on the basis of the foregoing (relying as to materiality
to a certain extent upon statements of officers and other
representatives of the Company), no facts have come to such counsel's
attention that would lead such counsel to believe that, as of its
effective date, the Registration Statement or any further amendment
thereto made by the Company prior to the Closing Date (other than the
financial statements and schedules, the notes thereto and the auditors'
report thereon and other financial and accounting data included
therein, or omitted therefrom, or the exhibits thereto, as to which
such counsel need express no opinion) 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 therein not
misleading or that, as of its date or as of the Closing Date, the
Prospectus or any amendment or supplement thereto made by the Company
prior to the Closing Date (other than the financial statements and
schedules, the
-15-
notes thereto and the auditors' report thereon and other financial and
accounting data included therein, or omitted therefrom, as to which
such counsel need express no opinion) contained an untrue statement of
a material fact or omitted to state a material fact necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading.
Such counsel may rely as to matters of Cayman Islands law upon
the opinion of Walkers furnished pursuant to Section 6(b) hereof. Such
counsel may limit the foregoing opinions in all respects to the laws of
the States of Delaware, New York and Texas and applicable Federal law,
in each case as in effect on the date of such opinions.
The opinion of Xxxxx Xxxxx L.L.P. described in this Section
6(c) shall be rendered to the Underwriters at the request of the
Company and the Selling Stockholders and shall so state therein.
(d) The Underwriters shall have received on the Closing Date
an opinion of Xxxx X. Xxxxx, Senior Vice President, General Counsel and
Corporate Secretary of Transocean and Vice President of Transocean
Holdings, dated the Closing Date, to the effect that:
(i) to the best of such counsel's knowledge, neither
of the Selling Stockholders nor any of their respective
subsidiaries (other than the Company and its subsidiaries) is
in default in the performance or observance of any material
obligation, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it
is bound or to which any of its property or assets is subject,
except for any such defaults which would not, individually or
in the aggregate, have a Material Adverse Effect; and
(ii) the execution and delivery by each Selling
Stockholder of, and the performance by each Selling
Stockholder of its obligations under, this Agreement will not
conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel (after
reasonable inquiry) to which such Selling Stockholder or any
of its subsidiaries (other than the Company and
-16-
its subsidiaries) is a party or by which such Selling
Stockholder or any of its subsidiaries (other than the Company
and its subsidiaries) is subject, except for any such
conflict, breach, violation or default which would not,
individually or in the aggregate, have a Material Adverse
Effect and could not reasonably be expected to adversely
affect such Selling Stockholder's ability to perform its
obligations under this Agreement.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of
the Company and the Selling Stockholders, representatives of the
independent public accountants for the Company and representatives of
and counsel for the Underwriters at which the contents of the
Registration Statement and the Prospectus and related matters were
discussed and, although such counsel did not independently verify such
information and is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus,
on the basis of the foregoing (relying as to materiality to a certain
extent upon statements of officers and other representatives of the
Selling Stockholders and the Company), no facts have come to such
counsel's attention that would lead such counsel to believe that, as of
its effective date, the Registration Statement or any further amendment
thereto made by the Company prior to the Closing Date (other than the
financial statements and schedules, the notes thereto and the auditors'
report thereon and other financial and accounting data included
therein, or omitted therefrom, or the exhibits thereto, as to which
such counsel need express no opinion) 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 therein not
misleading or that, as of its date or as of the Closing Date, the
Prospectus or any amendment or supplement thereto made by the Company
prior to the Closing Date (other than the financial statements and
schedules, the notes thereto and the auditors' report thereon and other
financial and accounting data included therein, or omitted therefrom,
as to which such counsel need express no opinion) contained an untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and such
counsel does not know of any amendment to the Registration Statement
required to be filed or any contracts or other documents of a character
required to be filed as an exhibit to the Registration Statement or
required to be described in the Registration Statement or the
Prospectus which are not filed or incorporated by reference or
described as required.
Such counsel may rely as to matters of Cayman Islands law upon
the opinion of Walkers furnished pursuant to Section 6(b) hereof. Such
counsel may limit the foregoing opinions in all respects to the laws of
the State of Texas and applicable Federal law, in each case as in
effect on the date of such opinions.
-17-
The opinion of Xxxx X. Xxxxx described in this Section 6(d)
shall be rendered to the Underwriters at the request of the Selling
Stockholders and shall so state therein.
(e) The Underwriters shall have received on the Closing Date
an opinion of Xxxxxxx X. Xxxxxxxx, General Counsel of the Company,
dated the Closing Date, to the effect that:
(i) each of the Significant Subsidiaries has been
duly organized, is validly existing and in good standing under
the laws of its jurisdiction of organization, with corporate
power and authority to own its properties and conduct its
business as described in the Prospectus; the Company has been
duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of the State
of Texas; THE Offshore Drilling Company has been duly
qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of the States
of Texas and Louisiana; Cliffs Drilling Company has been duly
qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of the State
of Texas and the Bolivarian Republic of Venezuela; and TODCO
Mexico Inc. has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under
the laws of the Mexico;
(ii) to the best of such counsel's knowledge, neither
the Company nor any of its subsidiaries is in default in the
performance or observance of any material obligation, covenant
or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument
to which it is a party or by which it is bound or to which any
of its property or assets is subject, except for any such
defaults which would not, individually or in the aggregate,
have a Material Adverse Effect;
(iii) to the best of such counsel's knowledge and
other than as set forth in the Prospectus, there are no legal
or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property of
the Company or any of its subsidiaries is the subject which,
if determined adversely to the Company or any of its
subsidiaries, would, individually or in the aggregate, have a
Material Adverse Effect; and, to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
(iv) all of the issued shares of capital stock of
each Significant Subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and
non-assessable and, to the best of such counsel's
-18-
knowledge, are owned directly by the Company, free and clear
of all liens, encumbrances, equities or claims, except for any
such liens, encumbrances, equities or claims described in the
Prospectus; and
(v) the execution and delivery by the Company of, and
the performance by the Company of its obligations under, this
Agreement will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such
counsel (after reasonable inquiry), including any identified
as exhibits to the Registration Statement, to which the
Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is subject, except for any
such conflict, breach, violation or default which would not,
individually or in the aggregate, have a Material Adverse
Effect and could not reasonably be expected to adversely
affect the Company's ability to perform its obligations under
this Agreement.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of
the Company and the Selling Stockholders, representatives of the
independent public accountants for the Company and representatives of
and counsel for the Underwriters at which the contents of the
Registration Statement and the Prospectus and related matters were
discussed and, although such counsel did not independently verify such
information and is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus,
on the basis of the foregoing (relying as to materiality to a certain
extent upon statements of officers and other representatives of the
Company and the Selling Stockholders), no facts have come to such
counsel's attention that would lead such counsel to believe that, as of
its effective date, the Registration Statement or any further amendment
thereto made by the Company prior to the Closing Date (other than the
financial statements and schedules, the notes thereto and the auditors'
report thereon and other financial and accounting data included
therein, or omitted therefrom, or the exhibits thereto, as to which
such counsel need express no opinion) 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 therein not
misleading or that, as of its date or as of the Closing Date, the
Prospectus or any amendment or supplement thereto made by the Company
prior to the Closing Date (other than the financial statements and
schedules, the notes thereto and the auditors' report thereon and other
financial and accounting data included therein, or omitted therefrom,
as to which such counsel need express no opinion) contained an untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and such
counsel does not know of any amendment to the Registration Statement
required to be filed or any contracts or other documents of
-19-
a character required to be filed as an exhibit to the Registration
Statement or required to be described in the Registration Statement or
the Prospectus which are not filed or incorporated by reference or
described as required.
For purposes of such counsel's opinion to be rendered pursuant
to Section 6(e)(i) hereof with respect to Significant Subsidiaries, as
to matters of the laws of jurisdictions other than the State of Texas
and applicable Federal law, such counsel may rely upon opinions of
foreign counsel furnished with respect to such Significant
Subsidiaries. Such counsel may limit the foregoing opinions in all
respects to the laws of the State of Texas and applicable Federal law,
in each case as in effect on the date of such opinions.
The opinion of Xxxxxxx X. Xxxxxxxx described in this Section
6(e) shall be rendered to the Underwriters at the request of the
Company and shall so state therein.
(f) The Underwriters shall have received on the Closing Date
an opinion of Xxxxxxxx & Xxxxxxxx LLP, counsel for the Underwriters,
dated the Closing Date, covering the matters referred to in clauses (i)
(but only as to the due incorporation and valid existence of the
Company), (ii) and (ix) (but only as to the statements in the
Prospectus under "Description of Capital Stock" and "Underwriters") and
the fourth last paragraph of Section 6(c) hereof.
(g) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance agreed by you
prior to the execution of this Agreement, from Ernst & Young LLP,
independent public accountants, containing statements and information
of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain
financial information contained in the Registration Statement and the
Prospectus; provided that the letter delivered on the Closing Date
shall use a "cut-off date" not earlier than the date hereof.
(h) The "lock-up" agreements, each substantially in the form
of Exhibit A hereto, between the Underwriters and Xx. Xxx Xxxx, Mr. T.
Xxxxx X'Xxxxx and members of the Board of Directors of the Company
relating to sales and certain other dispositions of shares of Common
Stock or certain other securities, delivered to such persons on or
before the date hereof, shall be in full force and effect on the
Closing Date.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the delivery to you on the applicable Option
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of the
Additional Shares to be sold on such Option Closing Date and other matters
related to the issuance of such Additional Shares.
-20-
7. Covenants of the Company. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, three signed copies of
the Registration Statement (including exhibits thereto) and for
delivery to each other Underwriter a conformed copy of the Registration
Statement (without exhibits thereto) and to furnish to you in New York
City, without charge, prior to 5:00 p.m. New York City time on the
business day next succeeding the date of this Agreement and during the
period mentioned in Section 7(c) hereof, as many copies of the
Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object, and to file
with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares and prior to the expiration of nine months after
the date of the Prospectus, the Prospectus is required by law to be
delivered in connection with sales by an Underwriter or dealer, any
event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if, in the
opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, to prepare,
file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses you will
furnish to the Company) to which Shares may have been sold by you on
behalf of the Underwriters and to any other dealers upon request,
either amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not, in
the light of the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus, as amended or
supplemented, will comply with law and if at any time on or after the
expiration of nine months after the date of the Prospectus, any
Underwriter is required to deliver a prospectus in connection with the
offering or sale of the Shares, upon the request but at the expense of
such Underwriter, to prepare and furnish to such Underwriter as many
copies as such Underwriter may request of an amended Prospectus or a
supplemented Prospectus complying with Section 10(a)(3) of the Act.
(d) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request;
-21-
provided that in connection therewith the Company shall not be required
to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement covering
the twelve-month period ending [], 2004 that satisfies the provisions
of Section 11(a) of the Securities Act and the rules and regulations of
the Commission thereunder (including, at the option of the Company,
Rule 158).
8. Expenses. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company and the
Selling Stockholders, jointly and severally, agree to pay or cause to be paid
all expenses incident to the performance of their obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the Company's
and the Selling Stockholders' counsel (except as provided in the following
sentence) and the Company's accountants in connection with the registration and
delivery of the Shares under the Securities Act and all other fees or expenses
in connection with the preparation and filing of the Registration Statement, any
preliminary prospectus, the Prospectus and amendments and supplements to any of
the foregoing, including all printing costs associated therewith, and the
mailing and delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable thereon, (iii) the cost of printing or producing any Blue
Sky or Legal Investment memorandum in connection with the offer and sale of the
Shares under state securities laws and all expenses in connection with the
qualification of the Shares for offer and sale under state securities laws as
provided in Section 7(d) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or Legal Investment
memorandum, (iv) all filing fees and the reasonable fees and disbursements of
counsel to the Underwriters incurred in connection with the review and
qualification of the offering of the Shares by the National Association of
Securities Dealers, Inc., (v) all costs and expenses incident to listing the
Shares on the New York Stock Exchange, (vi) the cost of printing certificates
representing the Shares, (vii) the costs and charges of any transfer agent,
registrar or depositary, (viii) the costs and expenses of the Company relating
to investor presentations on any "road show" undertaken in connection with the
marketing of the offering of the Shares, including, without limitation, expenses
associated with the production of road show slides and graphics, fees and
expenses of any consultants engaged in connection with the road show
presentations with the prior approval of the Company, travel and lodging
expenses of the representatives and officers of the Company and any such
consultants, and the cost of any aircraft chartered in connection with the road
show, (ix) the document production charges and expenses associated with printing
this Agreement and (x) all other costs and expenses incident to the performance
of the obligations of the Company hereunder for which provision is not otherwise
made in this Section 8. It is understood, however, that, except as provided in
this Section 8, Section 9 hereof, entitled
-22-
"Indemnity and Contribution", and the last paragraph of Section 11 hereof, the
Underwriters will pay all of their costs and expenses, including fees and
disbursements of their counsel, stock transfer taxes payable on resale of any of
the Shares by them and any advertising expenses connected with any offers they
may make and will reimburse the Company for the fees of foreign counsel retained
to render opinions with respect to the qualification as foreign corporations and
good standing of significant subsidiaries.
The provisions of this Section 8 shall not supersede or otherwise
affect any other written agreement that the Company and the Selling Stockholders
may otherwise have for the allocation of such expenses among themselves.
9. Indemnity and Contribution. (a) The Company and each Selling
Stockholder, jointly and severally, agree to indemnify and hold harmless each
Underwriter, each person, if any, who controls any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and each
affiliate of any Underwriter within the meaning of Rule 405 under the Securities
Act, from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), 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 or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein; provided, however, that
the foregoing indemnity agreement with respect to any preliminary prospectus
shall not inure to the benefit of any Underwriter from whom the person asserting
any such losses, claims, damages or liabilities purchased Shares, or any person
controlling such Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company has furnished any amendments or supplements thereto)
was not sent or given by or on behalf of such Underwriter to such person, if
required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the Prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
losses, claims, damages or liabilities, unless such failure is the result of
material noncompliance by the Company with Section 7(a) hereof.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Selling Stockholders, the directors
of the Company, the officers of the Company who sign the Registration Statement
and each person, if any, who controls the Company or either Selling Stockholder
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or
-23-
other expenses reasonably incurred in connection with defending or investigating
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), 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, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to Section 9(a) or 9(b) hereof, such person
(the "INDEMNIFIED PARTY") shall promptly notify the person against whom such
indemnity may be sought (the "INDEMNIFYING PARTY") in writing (but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under such subsection,
except to the extent that indemnifying party suffers actual prejudice as a
result of such failure) and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (i) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Underwriters and all persons, if any, who
control any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act or who are affiliates of any
Underwriter within the meaning of Rule 405 under the Securities Act and (ii) the
fees and expenses of more than one separate firm (in addition to any local
counsel) for the Company, each Selling Stockholder, the directors of the
Company, the officers of the Company who sign the Registration Statement each
person, if any, who controls the Company or either Selling Stockholder within
the meaning of either such Section. In the case of any such separate firm for
the Underwriters and such control persons and affiliates of any Underwriters,
such firm shall be designated in writing by Xxxxxx Xxxxxxx & Co. Incorporated.
In the case of any such separate firm for the Company, and such directors,
officers and control persons of the Company or either Selling Stockholder, such
firm shall be designated in writing by the Company and the Selling Stockholders.
The indemnifying party shall not
-24-
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in Section
9(a) or 9(b) hereof is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein,
except to the extent (but only to the extent) that the indemnifying party
suffers actual prejudice as a result of any failure by the indemnified party to
notify the indemnifying party of any action, proceeding or investigation as
contemplated by subsection (c) of this Section 9, each indemnifying party under
such paragraph, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
or parties on the one hand and the indemnified party or parties on the other
hand from the offering of the Shares or (ii) if the allocation provided by
Section 9(d)(i) hereof is not permitted by applicable law, or if the indemnified
party failed to give the notice required under subsection (c) above, then,
except to the extent (but only to the extent) that the indemnifying party
suffers actual prejudice as a result of any failure by the indemnified party to
notify the indemnifying party of any action, proceeding or investigation as
contemplated by subsection (c) of this Section 9, in such proportion as is
appropriate to reflect not only the relative benefits referred to in Section
9(d)(i) hereof but also the relative fault of the indemnifying party or parties
on the one hand and of the indemnified party or parties on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company or the Selling
Stockholders on the one hand and the Underwriters on the other hand in
connection with the offering of the Shares shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the Shares
(before deducting expenses) received by the Selling Stockholders and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus, bear to the
aggregate Public Offering Price of the Shares. The relative fault of the Company
or the Selling Stockholders on the one hand and the Underwriters 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 the Company
or the Selling Stockholders or by the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Underwriters' respective obligations
-25-
to contribute pursuant to this Section 9 are several in proportion to the
respective number of Shares they have purchased hereunder, and not joint.
(e) The Company, the Selling Stockholders and the Underwriters
agree that it would not be just or equitable if contribution pursuant to this
Section 9 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in
Section 9(d) hereof. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities 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 such
action or claim. Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Shares underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 9 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.
(f) The indemnity and contribution provisions contained in
this Section 9 and the representations, warranties and other statements of the
Company and each Selling Stockholder contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any Underwriter, any
person controlling any Underwriter or any affiliate of any Underwriter, either
Selling Stockholder or any person controlling either Selling Stockholder, or the
Company, its officers or directors or any person controlling the Company and
(iii) acceptance of and payment for any of the Shares; provided, however, that
if this Agreement shall be terminated pursuant to Section 10(i), (iii), (iv), or
(v) or the second paragraph of Section 11 hereof, the Company and the Selling
Stockholders shall have no liability to you.
10. Termination. The Underwriters may terminate this Agreement by
notice given by you to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on, or by, as the case may be, the New York
Stock Exchange or the Nasdaq National Market, (ii) trading of any securities of
the Company shall have been suspended on the New York Stock Exchange, (iii) a
material disruption in securities settlement, payment or clearance services in
the United States shall have occurred, (iv) any moratorium on commercial banking
activities shall have been declared by Federal or New York State authorities or
(v) there shall have occurred any outbreak or escalation of hostilities, or any
adverse change in financial markets or any calamity or crisis that, in
-26-
your reasonable judgment, is material and adverse and which, singly or together
with any other event specified in this clause (v), makes it, in your reasonable
judgment, impracticable or inadvisable to proceed with the offer, sale or
delivery of the Shares on the terms and in the manner contemplated in the
Prospectus.
11. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or an Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Shares that
it has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule I bears to the aggregate number of
Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; provided that in no event shall the number of
Shares that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 11 by an amount in excess of one-ninth of
such number of Shares without the written consent of such Underwriter. If, on
the Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of Firm
Shares to be purchased, and arrangements satisfactory to you, the Company and
the Selling Stockholders for the purchase of such Firm Shares are not made
within 36 hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter, the Company or either
Selling Stockholder. In any such case either you, the Company or either Selling
Stockholder shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. If, on an Option Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Additional Shares and the
aggregate number of Additional Shares with respect to which such default occurs
is more than one-tenth of the aggregate number of Additional Shares to be
purchased on such Option Closing Date, the non-defaulting Underwriters shall
have the option to (i) terminate their obligation hereunder to purchase the
Additional Shares to be sold on such Option Closing Date or (ii) purchase not
less than the number of Additional Shares that such non-defaulting Underwriters
would have been obligated to purchase in the absence of such default. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company or either
Selling Stockholder
-27-
to comply with the terms or to fulfill any of the conditions of this Agreement,
or if for any reason the Company or either Selling Stockholder shall be unable
to perform its obligations under this Agreement, the Company and the Selling
Stockholders, jointly and severally, will reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves for
all out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder, but the Company and the
Selling Stockholders shall then be under no further liability to you except as
provided in Sections 1, 8 and 9.
12. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
-28-
14. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
Very truly yours,
TODCO
By:
---------------------------------
Name:
Title:
TRANSOCEAN HOLDINGS INC.
as Selling Stockholder
By:
---------------------------------
Name:
Title:
TRANSOCEAN INC.
as Selling Stockholder
By:
---------------------------------
Name:
Title:
Accepted as of the date hereof:
Xxxxxx Xxxxxxx & Co. Incorporated
Citigroup Global Markets Inc.
Xxxxxxx, Sachs & Co.
UBS Securities LLC
Acting severally on behalf of themselves
and the several Underwriters named in
Schedule I hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:
---------------------------------
Name:
Title:
-29-
SCHEDULE I
--------------------------------------------------------------------------------
NUMBER OF FIRM SHARES
UNDERWRITER TO BE PURCHASED
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxx & Co. Incorporated [ ]
--------------------------------------------------------------------------------
Citigroup Global Markets Inc. [ ]
--------------------------------------------------------------------------------
Xxxxxxx, Sachs & Co. [ ]
--------------------------------------------------------------------------------
UBS Securities LLC [ ]
--------------------------------------------------------------------------------
Total: [ ]
--------------------------------------------------------------------------------
EXHIBIT A
FORM OF LOCK-UP LETTER
o , 2004
Xxxxxx Xxxxxxx & Co. Incorporated
Citigroup Global Markets Inc.
Xxxxxxx, Sachs & Co.
UBS Securities LLC
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated
("XXXXXX XXXXXXX") and the several underwriters named in Schedule I to the
Underwriting Agreement (as defined below), including Xxxxxx Xxxxxxx (the
"UNDERWRITERS"), propose to enter into an
Underwriting Agreement (the
"
UNDERWRITING AGREEMENT") with
TODCO, a Delaware corporation (the "COMPANY"),
and its stockholders, Transocean Inc., a Cayman Islands company, and Transocean
Holdings Inc., a Delaware corporation, providing for the public offering (the
"PUBLIC OFFERING") by the several Underwriters of [ ] shares (the "SHARES") of
the Class A common stock (par value $0.01 per share) of the Company (the "COMMON
STOCK").
To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the undersigned
hereby agrees that, without the prior written consent of Xxxxxx Xxxxxxx on
behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending 25 days after the date of the final prospectus relating
to the Public Offering (the "PROSPECTUS"), (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock,
or (ii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Common
Stock, whether any such transaction described in clause (i) or (ii) above is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (a) transactions relating
to shares of Common Stock or other securities acquired in the Public Offering or
open market transactions after the completion of the Public Offering, (b)
transfers of shares of Common Stock or any security convertible into
A-1
Common Stock as a bona fide gift or gifts and (c) transfers of Common Stock or
any security convertible into Common Stock by will or intestacy; provided that
in the case of any transfer or distribution pursuant to clause (b), (i) each
donee or distributee shall execute and deliver to Xxxxxx Xxxxxxx a duplicate
form of this Lock-up Letter and (ii) no filing by any party (donor, donee,
transferor or transferee) under Section 16(a) of the Securities Exchange Act of
1934, as amended, shall be required or shall be made voluntarily in connection
with such transfer or distribution (other than a filing on a Form 5). In
addition, the undersigned agrees that, without the prior written consent of
Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending [90] days after the date of the
Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock. The undersigned also agrees and
consents to the entry of stop transfer instructions with the Company's transfer
agent and registrar against the transfer of the undersigned's share of Common
Stock except in compliance with the foregoing restrictions.
The undersigned understands that the Company and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
Public Offering. The undersigned further understands that this Lock-Up Agreement
is irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an
Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
----------------------------------
(Name)
----------------------------------
(Address)
A-2
