Common use of Subscription Right Clause in Contracts

Subscription Right. (a) TODCO hereby grants to Transocean, on the terms and conditions set forth herein, a continuing right (the "Subscription Right") to purchase from TODCO, at the times set forth herein: (i) with respect to the issuance of a class or series of shares of TODCO Voting Stock, the number of such shares as is necessary to allow Transocean to maintain its Voting Percentage, and (ii) with respect to the issuance of a class or series of shares of TODCO Non-Voting Stock, the number of such shares as is necessary to allow Transocean to maintain its Ownership Percentage with respect to such class or series of shares (or, in the case of a class or series not outstanding prior to such issuance, 80% of the total number of shares of such class or series being issued). The Subscription Right shall be assignable, in whole or in part and from time to time, by Transocean to any member of the Transocean Group. The exercise price for each share of TODCO Stock purchased pursuant to an exercise of the Subscription Right shall be: (i) in the event of the issuance by TODCO of TODCO Stock in exchange for cash consideration, the per share price paid to TODCO for shares of the TODCO Stock issued by TODCO in the related Issuance Event; and (ii) in the event of the issuance by TODCO of TODCO Stock for consideration other than cash, the per share Market Price of such TODCO Stock at the Issuance Event Date of such issuance. (b) The provisions of Section 5.6(a) hereof notwithstanding, the Subscription Right granted pursuant to Section 5.6(a) shall not apply and shall not be exercisable in connection with the issuance by TODCO of any shares of TODCO Common Stock pursuant to any stock option or other executive or employee benefit or compensation plan maintained by TODCO, to the extent such issuance would not result in Transocean and other members of the Transocean Group losing collective control of TODCO within the meaning of Section 368(c) of the Code. The Subscription Right granted pursuant to Section 5.6(a) shall terminate if at any time the Voting Percentage, or the Ownership Percentage with respect to any class or series of TODCO Non-Voting Stock, is less than 80%. (c) At least 20 Business Days prior to the issuance of any shares of TODCO Stock (other than pursuant to any stock option or other executive or employee benefit or compensation plan maintained by TODCO in the circumstances described in Section 5.6(b) above and other than issuances of TODCO Stock to any member of the Transocean Group) or the first date on which any event could occur that, in the absence of a full or partial exercise of the Subscription Right, would result in a reduction in the Voting Percentage, a reduction in any Ownership Percentage or the issuance of any shares of a class or series of TODCO Non-Voting Stock not outstanding prior to such issuance, TODCO will notify Transocean in writing (a "Subscription Right Notice") of any plans it has to issue such shares or the date on which such event could first occur. Each Subscription Right Notice must specify the date on which TODCO intends to issue such additional shares of TODCO Stock or on which such event could first occur (such issuance or event being referred to herein as an "Issuance Event" and the date of such issuance or event as an "Issuance Event Date"), the number of shares TODCO intends to issue or may issue and the other terms and conditions of such Issuance Event. (d) The Subscription Right may be exercised by Transocean (or any member of the Transocean Group to which all or any part of the Subscription Right has been assigned) for a number of shares equal to or less than the number of shares the Transocean Group is entitled to purchase pursuant to Section 5.6(a). The Subscription Right may be exercised at any time after receipt of an applicable Subscription Right Notice and prior to the applicable Issuance Event Date by the delivery to TODCO of a written notice to such effect specifying (i) the number of shares of TODCO Stock to be purchased by Transocean, or any member of the Transocean Group, and (ii) a determination of the exercise price for such shares. Upon any such exercise of the Subscription Right, TODCO will, prior to the applicable Issuance Event Date, deliver to Transocean (or any member of the Transocean Group designated by Transocean), against payment therefor, certificates (issued in the name of Transocean or its permitted assignee hereunder or as directed by Transocean) representing the shares of TODCO Stock being purchased upon such exercise. Payment for such shares shall be made by wire transfer or intrabank transfer of immediately-available funds to such account as shall be specified by TODCO, for the full purchase price of such shares. (e) Except as provided in Section 5.6(f), any failure by Transocean to exercise the Subscription Right, or any exercise for less than all shares purchasable under the Subscription Right, in connection with any particular Issuance Event shall not affect Transocean's right to exercise the Subscription Right in connection with any subsequent Issuance Event; provided, however, that the Voting Percentage and any Ownership Percentage following such Issuance Event in connection with which Transocean so failed to exercise such Subscription Right in full or in part shall be recalculated as set forth in Section 1.110 or Section 1.66, respectively. (f) The Subscription Right, or any part thereof, assigned to any member of the Transocean Group other than Transocean, shall terminate in the event that such member ceases to be a Subsidiary of Transocean for any reason whatsoever.

Subscription Right. (a) TODCO hereby grants to Transocean, on the terms and conditions set forth herein, a continuing right (the "Subscription Right") to purchase from TODCO, at the times set forth herein: (i) with respect to the issuance of a class or series of shares of TODCO Voting Stock, the number of such shares as is necessary to allow Transocean to maintain its Voting Percentage, and (ii) with respect to the issuance of a class or series of shares of TODCO Non-Voting Stock, the number of such shares as is necessary to allow Transocean to maintain its Ownership Percentage with respect to such class or series of shares (or, in the case of a class or series not outstanding prior to such issuance, 80% of the total number of shares of such class or series being issued). The Subscription Right shall be assignable, in whole or in part and from time to time, by Transocean to any member of the Transocean Group. The exercise price for each share of TODCO Stock purchased pursuant to an exercise of the Subscription Right shall be: (i) in the event of the issuance by TODCO of TODCO Stock in exchange for cash consideration, the per share price paid to TODCO for shares of the TODCO Stock issued by TODCO in the related Issuance Event; and (ii) in the event of the issuance by TODCO of TODCO Stock for consideration other than cash, the per share Market Price of such TODCO Stock at the Issuance Event Date of such issuance. (b) The provisions of Section 5.6(a) hereof notwithstanding, the Subscription Right granted pursuant to Section 5.6(a) shall not apply and shall not be exercisable in connection with the issuance by TODCO of any shares of TODCO Common Stock pursuant to any stock option or other executive or employee benefit or compensation plan maintained by TODCO, to the extent such issuance would not result in Transocean and other members of the Transocean Group losing collective control of TODCO within the meaning of Section 368(c) of the Code. The Subscription Right granted pursuant to Section 5.6(a) shall terminate if at any time the Voting Percentage, or the Ownership Percentage with respect to any class or series of TODCO Non-Voting Stock, is less than 80%. (c) At least 20 Business Days business days prior to the issuance of any shares of TODCO Stock (other than pursuant to any stock option or other executive or employee benefit or compensation plan maintained by TODCO in the circumstances described in Section 5.6(b) above and other than issuances of TODCO Stock to any member of the Transocean Group) or the first date on which any event could occur that, in the absence of a full or partial exercise of the Subscription Right, would result in a reduction in the Voting Percentage, a reduction in any Ownership Percentage or the issuance of any shares of a class or series of TODCO Non-Voting Stock not outstanding prior to such issuance, TODCO will notify Transocean in writing (a "Subscription Right Notice") of any plans it has to issue such shares or the date on which such event could first occur. Each Subscription Right Notice must specify the date on which TODCO intends to issue such additional shares of TODCO Stock or on which such event could first occur (such issuance or event being referred to herein as an "Issuance Event" and the date of such issuance or event as an "Issuance Event Date"), the number of shares TODCO intends to issue or may issue and the other terms and conditions of such Issuance Event. (d) The Subscription Right may be exercised by Transocean (or any member of the Transocean Group to which all or any part of the Subscription Right has been assigned) for a number of shares equal to or less than the number of shares the Transocean Group is entitled to purchase pursuant to Section 5.6(a). The Subscription Right may be exercised at any time after receipt of an applicable Subscription Right Notice and prior to the applicable Issuance Event Date by the delivery to TODCO of a written notice to such effect specifying (i) the number of shares of TODCO Stock to be purchased by Transocean, or any member of the Transocean Group, and (ii) a determination of the exercise price for such shares. Upon any such exercise of the Subscription Right, TODCO will, prior to the applicable Issuance Event Date, deliver to Transocean (or any member of the Transocean Group designated by Transocean), against payment therefor, certificates (issued in the name of Transocean or its permitted assignee hereunder or as directed by Transocean) representing the shares of TODCO Stock being purchased upon such exercise. Payment for such shares shall be made by wire transfer or intrabank transfer of immediately-available funds to such account as shall be specified by TODCO, for the full purchase price of such shares. (e) Except as provided in Section 5.6(f), any failure by Transocean to exercise the Subscription Right, or any exercise for less than all shares purchasable under the Subscription Right, in connection with any particular Issuance Event shall not affect Transocean's right to exercise the Subscription Right in connection with any subsequent Issuance Event; provided, however, that the Voting Percentage and any Ownership Percentage following such Issuance Event in connection with which Transocean so failed to exercise such Subscription Right in full or in part shall be recalculated as set forth in Section 1.110 1.111 or Section 1.66, respectively. (f) The Subscription Right, or any part thereof, assigned to any member of the Transocean Group other than Transocean, shall terminate in the event that such member ceases to be a Subsidiary of Transocean for any reason whatsoever.