EXHIBIT 1.1
[ ] SHARES
TODCO
CLASS A COMMON STOCK (PAR VALUE $0.01 PER SHARE)
UNDERWRITING AGREEMENT
December [ ], 2004
December [ ], 2004
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Citigroup Global Markets Inc.
▇▇▇▇▇▇▇, Sachs & Co.
[ ]
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
c/o Citigroup Global Markets Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
Transocean Inc., a Cayman Islands company (the "SELLING STOCKHOLDER"),
proposes 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").
The Selling Stockholder 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
Stockholder. The Company and the Selling Stockholder, 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 December [ ], 2004 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.
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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.
(f) To the knowledge of the Company and the Selling
Stockholder, 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.
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(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 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 Stockholder's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
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(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").
(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 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.
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(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), 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 the 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 the 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 the 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
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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.
(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
Stockholder. The 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 the Selling Stockholder and constitutes a valid and
binding agreement of the Selling Stockholder.
(b) The execution and delivery by the Selling Stockholder of,
and the performance by the 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 the Selling Stockholder or any of its
subsidiaries is a party or by which the Selling Stockholder or any of
its subsidiaries is bound or to which any of the properties or assets
of the 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 of the Selling Stockholder or
any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Selling
Stockholder or any of its subsidiaries or any of their properties,
except, in each case other than with respect to such Memorandum and
Articles of Association, for any such conflict, breach, violation or
default which would not, individually or in the aggregate, impair the
Selling Stockholder's ability to perform its obligations
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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 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 the Selling Stockholder 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 Z 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 the Selling Stockholder 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 60 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. The Selling Stockholder 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 the 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 the 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, the Selling Stockholder
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
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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 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 Stockholder hereby agrees that,
without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and
Citigroup Global Markets Inc. on behalf of the Underwriters, it will not, during
the period ending 60 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 the Selling Stockholder to the holders of its ordinary
shares by means of a distribution or exchange offer, (v) grants of Common Stock
or other securities pursuant to employee benefit plans described in the
Prospectus or (vi) private sales by the Selling Stockholder 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and
Citigroup Global Markets Inc. on behalf of the Underwriters, it will not, during
the period ending 60 days after the date of the Prospectus, file any
registration statement with respect to any shares of Common Stock or any
security convertible into or exercisable or exchangeable for Common Stock.
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4. Terms of Public Offering. The Company and the Selling Stockholder
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 Stockholder 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 the
Selling Stockholder shall be made to the 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 December [ ], 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 the Selling
Stockholder 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 December [ ], 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 obligation of the
Selling Stockholder 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 3:00 p.m. (Houston time) on the date
hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(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
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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 the reasonable judgment of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated and Citigroup Global Markets Inc.,
is material and adverse and that makes it, in the reasonable
judgment of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and Citigroup
Global Markets Inc., 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 the Selling
Stockholder, dated the Closing Date, to the effect that:
(i) the Selling Stockholder 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 and
executed and, when delivered by the Selling Stockholder, will
constitute the legal, valid and binding obligations of the
Selling Stockholder enforceable in accordance with its terms;
(iii) the execution, delivery and performance of this
Agreement and the consummation of the transactions
contemplated hereby and the compliance by the Selling
Stockholder with the terms and provisions hereof do not
contravene any law or regulation of the Cayman Islands
applicable to the Selling Stockholder or contravene the
Memorandum and Articles of Association of the Selling
Stockholder; 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 the
Selling Stockholder with the terms and provisions hereof,
requires the consent or approval of, the giving of notice to,
or the registration with, or the taking of any other action in
respect of any Cayman Islands governmental or judicial
authority or agency.
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The opinion of Walkers described in this Section 6(b) shall be rendered
to the Underwriters at the request of the Selling Stockholder and shall so state
therein.
(c) The Underwriters shall have received on the Closing Date an opinion
of ▇▇▇▇▇ ▇▇▇▇▇ L.L.P., United States counsel for the Selling Stockholder, dated
the Closing Date, to the effect that:
(i) assuming its due authorization by the Selling Stockholder,
and further assuming its due execution and delivery by the Selling
Stockholder insofar as such matters are governed by Cayman Islands law,
this Agreement has been duly executed and delivered by the Selling
Stockholder;
(ii) the execution and delivery by the Selling Stockholder of,
and the performance by the 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 that is identified as an exhibit to the Selling
Stockholder'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, June 30 and September 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 the Selling Stockholder 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 Selling Stockholder'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 the Selling Stockholder 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 the Selling Stockholder 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
Selling
-12-
Stockholder's ability to perform its obligations hereunder or
have any material adverse effect upon the consummation of the
transactions contemplated hereby; and
(iii) assuming the Underwriters purchase the Shares
to be sold by the Selling Stockholder 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.
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 New York and Texas and applicable Federal law, in each
case as in effect on the date of such opinions.
The opinion of ▇▇▇▇▇ ▇▇▇▇▇ L.L.P. described in this Section
6(c) shall be rendered to the Underwriters at the request of the
Selling Stockholder and shall so state therein.
(d) The Underwriters shall have received on the Closing Date
an opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., United States counsel for the
Company, dated the Closing Date, to the effect that:
(i) the Company 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;
(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
-13-
of trust, loan agreement or other agreement or instrument that
is identified as an exhibit to the Registration Statement,
assuming the due authorization, execution and delivery by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated of that certain Waiver and
Consent dated November 19, 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 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
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 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;
(vi) 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 assuming the due conversion on the Closing
Date of all outstanding shares of Class B common stock into an
equal number of shares of Class A common stock as contemplated
by the Prospectus and Section 6(k) hereof, 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
-14-
(vii) 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 Stockholder, 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 (vi) of this
Section 6(d), 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 Stockholder), 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 or
contains 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 or contains an untrue statement of a material fact or omitted
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.
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.
-15-
The opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P. described in this
Section 6(d) shall be rendered to the Underwriters at the request of
the Company and shall so state therein.
(e) The Underwriters shall have received on the Closing Date
an opinion of ▇▇▇▇ ▇. ▇▇▇▇▇, Senior Vice President, General Counsel and
Corporate Secretary of the Selling Stockholder, dated the Closing Date,
to the effect that:
(i) to the best of such counsel's knowledge, neither
the Selling Stockholder nor any of its 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 the Selling
Stockholder of, and the performance by the 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 the Selling Stockholder or any of its subsidiaries
(other than the Company and its subsidiaries) is a party or by
which the 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 the Selling Stockholder's ability to
perform its obligations under this Agreement.
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.
The opinion of ▇▇▇▇ ▇. ▇▇▇▇▇ described in this Section 6(e)
shall be rendered to the Underwriters at the request of the Selling
Stockholder and shall so state therein.
(f) The Underwriters shall have received on the Closing Date
an opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, 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
-16-
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 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
-17-
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, assuming the due authorization,
execution and delivery by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated of
that certain Waiver and Consent dated November 19, 2004,
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 Stockholder, 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 Stockholder), 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 or contains 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
or contains an untrue statement of a material fact or omitted 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.
For purposes of such counsel's opinion to be rendered pursuant
to Section 6(f)(i) hereof with respect to Significant Subsidiaries, as
to matters of the laws of
-18-
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 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ described in this Section
6(f) shall be rendered to the Underwriters at the request of the
Company and shall so state therein.
(g) The Underwriters shall have received on the Closing Date
an opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ 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 (vi) (but only as to the statements in the
Prospectus under "Description of Capital Stock" and "Underwriters") and
the third to last paragraph of Section 6(d) hereof.
(h) 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.
(i) The "lock-up" agreements, each substantially in the form
of Exhibit A hereto, between the Underwriters and ▇▇. ▇▇▇ ▇▇▇▇, Mr. T.
▇▇▇▇▇ ▇'▇▇▇▇▇ 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.
(j) The Company and Selling Stockholder shall have furnished
or caused to be furnished to the Underwriters on the Closing Date
certificates of officers of the Company and Selling Stockholder,
respectively, satisfactory to the Underwriters as to the accuracy of
the representations and warranties of the Company and Selling
Stockholder, respectively, herein at and as of such Closing Date, as to
the performance by the Company and Selling Stockholder, respectively,
of all obligations hereunder to be performed at or prior to such
Closing Date, as to the matters set forth in subsection (a) of this
Section and as to such other matters as the Underwriters may reasonably
request.
(k) The Selling Stockholder and its affiliates shall have
converted, on or prior to the Closing Date, all the shares of Class B
common stock (par value
-19-
$0.01 per share) of the Company owned by it or any of its affiliates
into an equal number of shares of Class A common stock of the Company
such that at and as of the Closing Date no shares of the Company's
Class B common stock will remain outstanding.
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.
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
-20-
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; 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 December 31, 2005 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 Stockholder, 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 Stockholder's 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
-21-
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 "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. Notwithstanding anything in this Section 8 to the contrary, the
Underwriters agree to reimburse the Company and the Selling Stockholder for a
portion of the aforementioned expenses in an aggregate amount of up to $[*],
against delivery of original invoices or other acceptable documentation
evidencing the Company's or the Selling Stockholder's expenditure of each amount
for which reimbursement is sought.
The provisions of this Section 8 shall not supersede or otherwise
affect any other written agreement that the Company and the Selling Stockholder
may otherwise have for the allocation of such expenses among themselves.
9. Indemnity and Contribution. (a) The Company and the 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 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
-22-
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 Stockholder, 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 the 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 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
-23-
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, the
Selling Stockholder, 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 the 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
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and Citigroup Global Markets Inc. In the case
of any such separate firm for the Company, and such directors, officers and
control persons of the Company or the Selling Stockholder, such firm shall be
designated in writing by the Company and the Selling Stockholder. The
indemnifying party shall not 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
Stockholder 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 Stockholder and the total
-24-
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 Stockholder 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 Stockholder 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 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 Stockholder 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 the 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, the
Selling Stockholder or any person controlling the 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
Stockholder shall have no liability to you.
-25-
10. Termination. The Underwriters may terminate this Agreement by
notice given by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and Citigroup Global Markets
Inc. 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 the reasonable judgment
of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and Citigroup Global Markets Inc., is
material and adverse and which, singly or together with any other event
specified in this clause (v), makes it, in the reasonable judgment of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated and Citigroup Global Markets Inc., 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 Stockholder 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 the Selling
Stockholder. In any such case either you, the Company or the 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
-26-
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 the
Selling Stockholder to comply with the terms or to fulfill any of the conditions
of this Agreement, or if for any reason the Company or the Selling Stockholder
shall be unable to perform its obligations under this Agreement, the Company and
the Selling Stockholder, 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 Stockholder 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.
-27-
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 INC.
as Selling Stockholder
By:
----------------------------------------
Name:
Title:
Accepted as of the date hereof:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Citigroup Global Markets Inc.
▇▇▇▇▇▇▇, Sachs & Co.
[ ]
Acting severally on behalf of themselves
and the several Underwriters named in
Schedule I hereto.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By:
----------------------------------------
Name:
Title:
By: Citigroup Global Markets Inc.
By:
----------------------------------------
Name:
Title:
-28-
SCHEDULE I
NUMBER OF FIRM SHARES
UNDERWRITER TO BE PURCHASED
----------- ---------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Citigroup Global Markets Inc.
▇▇▇▇▇▇▇, Sachs & Co.
Total:
EXHIBIT A
FORM OF LOCK-UP LETTER
[ ], 2004
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Citigroup Global Markets Inc.
▇▇▇▇▇▇▇, Sachs & Co.
[ ]
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
c/o Citigroup Global Markets Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
The undersigned understands that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
("▇▇▇▇▇▇ ▇▇▇▇▇▇▇"), Citigroup Global Markets Inc. ("CITIGROUP") and the several
underwriters named in Schedule I to the
Underwriting Agreement (as defined
below), including ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and Citigroup (the "UNDERWRITERS"), propose to
enter into an
Underwriting Agreement (the "
UNDERWRITING AGREEMENT") with
TODCO,
a Delaware corporation (the "COMPANY"), and its stockholder, Transocean Inc., a
Cayman Islands company, 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and
Citigroup on behalf of the Underwriters, he will not, during the period
commencing on the date hereof and ending 45 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
A-1
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 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and Citigroup 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and
Citigroup on behalf of the Underwriters, he will not, during the period
commencing on the date hereof and ending 45 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