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EXHIBIT 1.1
R&B FALCON CORPORATION
COMMON STOCK
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UNDERWRITING AGREEMENT
Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Ladies and Gentlemen:
R&B Falcon Corporation, a Delaware corporation (the "Issuer"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to you an aggregate of 16.3 million shares (the "Shares") of common stock
("Stock") of the Issuer. The net proceeds from such sale are intended to be used
by the Issuer to purchase or redeem outstanding shares of 13 7/8% Senior
Cumulative Redeemable Preferred Stock of the Issuer, as contemplated by the
Agreement and Plan of Merger, dated as of August 19, 2000, among Transocean
Sedco Forex Inc., a Cayman Islands company ("Transocean"), Transocean Holdings
Inc., TSF Delaware Inc. and the Issuer (the "Merger Agreement").
1. The Issuer represents and warrants to, and agrees with, you that:
(a) A registration statement on Form S-3 (File No. 333-39500) (the
"Initial Registration Statement") in respect of the Shares has been filed with
the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in the
form heretofore delivered to you, excluding exhibits thereto but including all
documents incorporated by reference in the prospectus contained therein, have
been declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the offering (a "Rule
462(b) Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective upon
filing, no other document with respect to the Initial Registration Statement or
document incorporated by reference therein has heretofore been filed with the
Commission; and no stop order suspending the effectiveness of the Initial
Registration Statement, any post-effective amendment thereto or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Act is hereinafter called a "Preliminary Prospectus"; the
various parts of the Initial Registration Statement and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and including (A)
the information contained in the form of final prospectus filed with the
Commission pursuant to Rule 424(b) under the Act in accordance with Section 5(a)
hereof and deemed by virtue of Rule 430A under the Act to be part of the Initial
Registration Statement at the time it was declared effective and (B) the
documents incorporated by reference in the prospectus contained in the Initial
Registration Statement at the time such part of the Initial Registration
Statement
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became effective, each as amended at the time such part of the Initial
Registration Statement became effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective, are
hereinafter collectively called the "Registration Statement"; such final
prospectus, in the form first filed pursuant to Rule 424(b) under the Act, is
hereinafter called the "Prospectus"; and any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Act, as of the date of such Preliminary Prospectus or Prospectus, as
the case may be; and any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
any documents filed after the date of such Preliminary Prospectus or Prospectus,
as the case may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; and any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any annual report
of the Issuer filed pursuant to Section 13(a) or 15(d) of the Exchange Act after
the effective date of the Initial Registration Statement that is incorporated by
reference in the Registration Statement;
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary Prospectus,
at the time of filing thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Issuer by you expressly
for use therein;
(c) The documents incorporated by reference in the Prospectus
(including without limitation the registration statement filed by Transocean on
Form S-4 (File No. 333-46374) (the "Transocean S-4") and the documents filed by
Transocean and incorporated by reference in the Transocean S-4), when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder, and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Issuer by you expressly for use therein;
(d) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder and do not and will
not, as of the applicable effective date as to the Registration Statement and
any amendment thereto, and as of the applicable filing date as to the Prospectus
and any amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
this representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in writing to
the Issuer by you expressly for use therein;
(e) Except as set forth in the Prospectus, the Issuer and its
subsidiaries, taken as a whole, have not sustained since the date of the latest
audited financial statements included or incorporated by
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reference in the Prospectus any loss or interference with their respective
businesses from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, or otherwise, except as would not, individually or in the aggregate,
have a material adverse effect on the current or future consolidated financial
position, stockholders' equity or results of operations of the Issuer and its
subsidiaries, taken as a whole. Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, there has
not been any decrease in the capital stock or any material increase in the
long-term debt of the Issuer or any of its subsidiaries or any material adverse
change, or any development involving a prospective material adverse change, in
or affecting the general affairs, management, financial position, stockholders'
equity or results of operations of the Issuer and its subsidiaries, taken as a
whole;
(f) The Issuer and its subsidiaries have good and marketable title in
fee simple to all real property and good and marketable title to all personal
property owned by them, in each case free and clear of all liens, encumbrances
and defects except such as are described in the Prospectus or such as would not,
individually or in the aggregate, have a material adverse effect on the current
or future consolidated financial position, stockholders' equity or results of
operations of the Issuer and its subsidiaries, taken as a whole; and any real
property and buildings held under lease by the Issuer and its subsidiaries are
held by them under valid, subsisting and enforceable leases with such exceptions
as would not, individually or in the aggregate, have a material adverse effect
on the current or future consolidated financial position, stockholders' equity
or results of operations of the Issuer and its subsidiaries, taken as a whole;
(g) Each of the Issuer and its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. Each of the Issuer and its subsidiaries has full
power and authority (corporate and other) to own its properties and conduct its
business as presently conducted and is duly registered and qualified to conduct
its business and is in good standing in each jurisdiction or place in which the
Issuer or such subsidiary owns or leases property or where the nature of its
properties or the conduct of its business otherwise requires such registration
or qualification, except where the failure to so register or qualify would not,
individually or in the aggregate, have a material adverse effect on the current
or future consolidated financial position, stockholders' equity or results of
operations of the Issuer and its subsidiaries, taken as a whole;
(h) The Issuer has the requisite corporate power and authority and has
duly taken all necessary corporate action to authorize the execution, delivery
and performance of this Agreement; and this Agreement has been duly executed and
delivered by, and constitutes a valid and binding agreement of, the Issuer;
(i) The Issuer has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Issuer have
been duly and validly authorized and issued, are fully paid and non-assessable
and conform to the description of the Stock contained in the Prospectus; and all
of the issued shares of capital stock of each subsidiary of the Issuer have been
duly and validly authorized and issued, are fully paid and non-assessable and
(except for directors' qualifying shares and for minority interest shares as set
forth in the Prospectus) are owned directly or indirectly by the Issuer, free
and clear of all liens, encumbrances, equities or claims;
(j) The Shares have been duly and validly authorized and, when issued
and delivered against payment therefor as provided herein, will be duly and
validly issued and fully paid and non-assessable and will conform to the
description of the Stock contained in the Prospectus;
(k) The issue and sale of the Shares by the Issuer and the compliance
by the Issuer with all of the provisions of this Agreement and the consummation
of the transactions herein contemplated do not and will not conflict with, or
result in the acceleration of any obligation under or in a breach of, or
constitute a default under, any of the provisions of any indenture, agreement or
undertaking to which the
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Issuer or any of its subsidiaries is a party or by which any of them is bound or
to which any of their property or assets is subject, or of the Certificate of
Incorporation or By-laws, as amended as of the date hereof, of the Issuer and do
not and will not contravene any federal, state or local law, rule or regulation
known to the Issuer (based upon the best knowledge of the Issuer after
reasonable investigation), or any order applicable to the Issuer or any of its
subsidiaries of any court or of any other governmental agency or instrumentality
having jurisdiction over any of them or any of their property, except in each
case other than with respect to such Certificate of Incorporation or Bylaws or
any such law, rule, regulation or order, which conflict, breach or default or
violation would not, individually or in the aggregate, have a material adverse
effect on the current or future consolidated financial position, stockholders'
equity or results of operations of the Issuer and its subsidiaries, taken as a
whole, and would not, individually or in the aggregate, impair the Issuer's
ability to perform its material obligations hereunder or have any material
adverse effect upon the consummation of the transaction contemplated hereby;
(l) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Shares or the consummation by the Issuer
of the transactions contemplated by this Agreement, except for the registration
under the Act of the Shares and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Shares by
you;
(m) Neither the Issuer nor any of its subsidiaries is in violation of
its Certificate of Incorporation or By-laws or in default in the performance or
observance of any material obligation, agreement, 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 violations or defaults that
would not, individually or in the aggregate, have a material adverse effect on
the current or future consolidated financial position, stockholders' equity or
results of operations of the Issuer and its subsidiaries, taken as a whole;
(n) 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 Stock, and under the captions "Plan of Distribution" and
"Underwriting", 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;
(o) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Issuer or any of its subsidiaries
is a party or of which any property of the Issuer or any of its subsidiaries is
the subject which, if determined adversely the Issuer or any of its
subsidiaries, would individually or in the aggregate have a material adverse
effect on the current or future consolidated financial position, stockholders'
equity or results of operations of the Issuer and its subsidiaries; and, to the
best of the Issuer's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(p) The Issuer is not, nor will be as a result of the offering and sale
of the Shares, an "investment company" under the Investment Company Act of 1940,
as amended (the "Investment Company Act"), or controlled by an entity required
to be registered under the Investment Company Act as an "investment company";
(q) Each of Arthur Andersen LLP, who have certified certain financial
statements of the Issuer and its subsidiaries included, to be included or
incorporated by reference in the Prospectus, and Ernst & Young LLP and
PricewaterhouseCoopers LLP, who have certified certain financial statements of
Transocean and its subsidiaries incorporated by reference in the Prospectus, are
independent public accountants as required by the Act; and
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(r) Except as described in the Prospectus and except as would not,
individually or in the aggregate, have a material adverse effect on the current
or future consolidated financial position, stockholders' equity or results of
operations of the Issuer and its subsidiaries: (A) neither the Issuer nor any of
its subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common law,
or any judicial or administrative interpretation thereof, including without
limitation any judicial or administrative order, consent, decree or judgment,
relating to pollution or protection of human health, the environment (including
without limitation ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including without limitation laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively, "Environmental
Laws"); (B) each of the Issuer and its subsidiaries has all permits,
authorizations and approvals required under any applicable Environmental Laws
and is in compliance with their requirements; (C) there are no pending or
threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Issuer or any of its subsidiaries; and (D) there are no events or circumstances
that might reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or any
governmental agency or instrumentality, against or affecting the Issuer or any
of its subsidiaries relating to Hazardous Materials or any Environmental Laws.
2. Subject to the terms and conditions herein set forth, the Issuer
agrees to issue and sell to you, and you agree, to purchase from the Issuer, the
Shares at a purchase price per share of $24.55.
3. (a) The Shares to be purchased by you hereunder, in definitive form,
and in such authorized denominations and registered in such names as you may
request upon at least forty-eight hours' prior notice to the Issuer shall be
delivered by or on behalf of the Issuer to you, through the facilities of the
Depository Trust Company ("DTC"), for your account, against payment by or on
behalf of you of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified by the Issuer to you at least
forty-eight hours in advance. The Issuer will cause the certificates
representing the Shares to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery (as defined below) at the office
of DTC or its designated custodian (the "Designated Office"). The time and date
of such delivery and payment shall be 9:30 a.m., New York City time, on October
31, 2000 or such other time and date as you and the Issuer may agree upon in
writing. Such time and date are herein called the "Time of Delivery".
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 6 hereof, including the cross
receipt for the Shares and any additional documents requested by you pursuant to
Section 6(l) hereof, will be delivered at the offices of the Issuer, 901
Threadneedle, Houston, Texas (the "Closing Location"), and the Shares will be
delivered at the Designated Office, all at the Time of Delivery. A meeting will
be held at the Closing Location at 2:00 P.M., Houston time, on the New York
Business Day immediately preceding the Time of Delivery, at which meeting the
final drafts of the documents to be delivered pursuant to the preceding sentence
will be available for review by the parties hereto. For the purposes of this
Section 4, "New York Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in New York
are generally authorized or obligated by law or executive order to close.
4. The Issuer agrees with you:
(a) To prepare the Prospectus in a form approved by you and to
file such Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Act; to make no further
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amendment or any supplement to the Registration Statement or Prospectus
prior to the Time of Delivery which shall be disapproved by you
promptly after reasonable notice thereof; to advise you, promptly after
it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed
and to furnish you with copies thereof; to file promptly all reports
and any definitive proxy or information statements required to be filed
by the Issuer with the Commission pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of the Prospectus
and for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Shares; to advise you,
promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or prospectus, of the suspension
of the qualification of the Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending
or supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus or suspending any such
qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under
the securities laws of such jurisdictions as you may request and to
comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary
to complete the distribution of the Shares; provided that in connection
therewith the Issuer shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(c) As early as reasonably practicable on the New York Business
Day next succeeding the date of this Agreement and from time to time,
to furnish you with written and electronic copies of the Prospectus in
New York City in such quantities as you may reasonably request, and, if
the delivery of a prospectus is required at any time prior to the
expiration of six months after the time of issue of the Prospectus in
connection with the offering or sale of the Shares and if at such time
any event shall have occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading,
or, if for any other reason it shall be necessary during such period to
amend or supplement the Prospectus or to file under the Exchange Act
any document incorporated by reference in the Prospectus in order to
comply with the Act or the Exchange Act, to notify you and upon your
request to file such document and to prepare and furnish without charge
to you and to any dealer in securities as many written and electronic
copies as you may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance, and in case you are
required to deliver a prospectus in connection with sales of any of the
Shares at any time six months or more after the time of issue of the
Prospectus, upon your request but at your expense, to prepare and
deliver to you as many written and electronic copies as you may request
of an amended or supplemented Prospectus complying with Section
10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Issuer and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations thereunder (including, at the
option of the Issuer, Rule 158);
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(e) The Issuer hereby agrees that, without your prior written
consent, it will not, during the period ending 90 days after the date
of the Prospectus, (i) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of
Stock or any securities convertible into or exercisable or exchangeable
for 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 Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of
Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (X) the Shares to be sold hereunder, (Y)
the issuance by the Company of shares of Stock upon the exercise of an
option or warrant or the conversion of a security outstanding on the
date hereof of which you have been advised in writing or subsequently
issued pursuant to any employee benefit plan existing as of the date
hereof or (Z) transactions by any person other than the Company
relating to shares of Stock or other securities acquired in open market
transactions after the completion of the offering of the Shares. In
addition, the Issuer agrees that, without your prior written consent,
it will not, during the period ending 90 days after the date of the
Prospectus, make any demand for or exercise any right with respect to,
the registration of any shares of Stock or any security convertible
into or exercisable or exchangeable for Stock; provided, however, that
notwithstanding the foregoing, the Issuer may within such time period:
(i) issue additional shares of Stock in a private placement to any
affiliate of the Issuer that is an "unrestricted subsidiary" of the
Issuer under the indenture dated March 26, 1999 governing the Issuer's
12 1/4% Senior Notes due 2006 in order to use the cash proceeds from
such private placement to pay tender offer consideration and fees and
expenses in connection with the purchase of the Issuer's 13 7/8% Senior
Cumulative Redeemable Preferred Stock (the "Preferred Stock"); (ii)
issue additional shares of Stock in a public offering, the net profits
of which shall be used to redeem up to 105,000 shares of Preferred
Stock pursuant to the terms of the certificate of designation
establishing the Preferred Stock, if the Issuer does not give notice of
such redemption within 15 days of the Time of Delivery or such net
proceeds are insufficient to exercise such redemption; or (iii) issue
shares of Stock in connection with the transactions contemplated by,
and in accordance with, the Merger Agreement;
(f) Until the closing of the merger contemplated by the Merger
Agreement, to furnish to its stockholders as soon as practicable after
the end of each fiscal year an annual report (including a balance sheet
and statements of income, stockholders' equity and cash flows of the
Issuer and its consolidated subsidiaries certified by independent
public accountants) and, as soon as practicable after the end of each
of the first three quarters of each fiscal year (beginning with the
fiscal quarter ending after the effective date of the Registration
Statement), to make available to its stockholders consolidated summary
financial information of the Issuer and its subsidiaries for such
quarter in reasonable detail;
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or
other communications (financial or other) furnished to stockholders,
and to deliver to you, as soon as they are available, copies of any
reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which any class of
securities of the Issuer is listed;
(h) To use the net proceeds received by it from the sale of the
Shares pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds";
(i) To use its best efforts to list, subject to notice of
issuance, the Shares on the New York Stock Exchange (the "Exchange");
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(k) If the Issuer elects to rely upon Rule 462(b), the Issuer
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on
the date of this Agreement, and the Issuer shall at the time of filing
either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment
of such fee pursuant to Rule 111(b) under the Act; and
(l) Upon your request, to furnish, or cause to be furnished, to
you an electronic version of the Issuer's trademarks, servicemarks and
corporate logo for use on the website, if any, operated by you for the
purpose of facilitating the on-line offering of the Shares (the
"License"); provided, however, that the License shall be used solely
for the purpose described above, is granted without any fee and may not
be assigned or transferred.
5. The Issuer covenants and agrees with you that the Issuer will pay or
cause to be paid the following: (i) the fees, disbursements and expenses of the
Issuer's counsel and accountants in connection with the registration of the
Shares under the Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to you and dealers; (ii) the cost of printing or
producing this Agreement, the Blue Sky Memorandum, closing documents (including
any compilations thereof) and any other documents in connection with the
offering, purchase, sale and delivery of the Shares; (iii) all expenses in
connection with the qualification of the Shares for offering and sale under
state securities laws as provided in Section 5(b) hereof, including the fees and
disbursements of your counsel in connection with such qualification and in
connection with the Blue Sky survey; (iv) all fees and expenses in connection
with listing the Shares on the Exchange; (v) the filing fees incident to, and
the fees and disbursements of your counsel in connection with, securing any
required review by the National Association of Securities Dealers, Inc. of the
terms of the sale of the Shares; (vi) the cost of preparing stock certificates;
(vii) the cost and charges of any transfer agent or registrar; and (viii) all
other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section. It
is understood, however, that, except as provided in this Section, and Sections 7
and 10 hereof, you will pay all of your own costs and expenses, including the
fees of your counsel, stock transfer taxes on resale of any of the Shares by
you, and any advertising expenses connected with any offers you may make.
6. Your obligations hereunder shall be subject, in your discretion, to
the condition that all representations and warranties and other statements of
the Issuer herein are, at and as of the Time of Delivery, true and correct, the
condition that the Issuer shall have performed all of its obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 4(a) hereof; if the Issuer has elected to rely
upon Rule 462(b), the Rule 462(b) Registration Statement shall have
become effective by 10:00 P.M., Washington, D.C. time, on the date of
this Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened
by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Sullivan & Cromwell, your counsel, shall have furnished to
you such written opinion and letter (drafts of such opinion and letter
are attached as Annex II(a) hereto), dated the Time of Delivery, with
respect to the matters covered in paragraphs (i), (ii), (iii), (vi),
(vii) and (viii) of subsection (d) below, as well as such other related
matters as you may reasonably request, and
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such counsel shall have received such papers and information as they
may reasonably request to enable them to pass upon such matters;
(c) Wayne K. Hillin, Senior Vice President and General Counsel of
the Issuer, shall have furnished to you his written opinion (a draft of
such opinion is attached as Annex II(b) hereto), dated the Time of
Delivery, in form and substance satisfactory to you, to the effect
that:
(i) 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 Issuer or any
of its subsidiaries is a party or of which any property of
the Issuer or any of its subsidiaries is the subject which,
if determined adversely to the Issuer or any of its
subsidiaries, would individually or in the aggregate have a
material adverse effect on the current or future
consolidated financial position, stockholders' equity or
results of operations of the Issuer and its subsidiaries;
and, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(ii) Neither the Issuer nor any of its subsidiaries
is in violation of its Certificate of Incorporation or
By-laws or in default in the performance or observance of
any material obligation, agreement, 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;
(iii) The issue and sale of the Shares by the Issuer
and the compliance by the Issuer with all of the provisions
of this Agreement and the consummation of the transactions
herein contemplated do not and will not conflict with, or
result in the acceleration of any obligation under or in a
breach of, or constitute a default under, any of the
provisions of (A) any material indenture, agreement or
undertaking or (B) any other indenture, agreement or
undertaking known to such counsel, in each case to which the
Issuer or any of its subsidiaries is a party or by which any
of them is bound or to which any of their property or assets
is subject, or of the Certificate of Incorporation or
By-laws, as amended as of the date hereof, of the Issuer and
do not and will not contravene any federal, state or local
law, rule or regulation known to such counsel (based upon
the best knowledge of such counsel after reasonable
investigation), or any order known to such counsel (based
upon the best knowledge of such counsel after reasonable
investigation) applicable to the Issuer or any of its
subsidiaries of any court or of any other governmental
agency or instrumentality having jurisdiction over any of
them or any of their property;
(iv) The documents incorporated by reference in the
Prospectus (other than the Transocean S-4 and the documents
filed by Transocean and incorporated by reference in the
Transocean S-4, and the financial statements and related
schedules in any such documents, as to which such counsel
need express no opinion), when they became effective or were
filed with the Commission, as the case may be, complied as
to form in all material respects with the requirements of
the Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder; and such
counsel has no reason to believe that, except with respect
to the Transocean Information, any of such documents, when
such documents became effective or were so filed, as the
case may be, contained, in the case of a registration
statement which became effective under the Act, 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, in the case of other
documents which were filed under the Exchange Act with the
Commission, an untrue statement of a material fact or
omitted to
<PAGE> 10
state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made when such documents were so filed, not
misleading;
(v) The Registration Statement and the Prospectus and
any further amendments and supplements thereto made by the
Issuer prior to the Time of Delivery (other than the
financial statements and related schedules therein, as to
which such counsel need express no opinion) comply as to
form in all material respects with the requirements of the
Act and the rules and regulations thereunder; although such
counsel does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, such counsel has
no reason to believe that, except to the extent that any
statement in, or omissions from, the Transocean S-4 or the
documents filed by Transocean and incorporated by reference
into the Transocean S-4, relate to Transocean or its
subsidiaries (as opposed to the Issuer or its subsidiaries)
(such statements or omissions collectively, "Transocean
Information"), as of its effective date, the Registration
Statement or any further amendment thereto made by the
Issuer prior to the Time of Delivery (other than the
financial statements and related schedules therein, as to
which such counsel need express no opinion) contained an
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading or that, as of
its date, the Prospectus or any further amendment or
supplement thereto made by the Issuer prior to the Time of
Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading or that, as of the Time
of Delivery, either the Registration Statement or the
Prospectus or any further amendment or supplement thereto
made by the Issuer prior to the Time of Delivery (other than
the financial statements and related schedules therein, as
to which such counsel need express no opinion) contains an
untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in
the light of the circumstances under which they were made,
not misleading; and such counsel does not know of any
amendment to the Registration Statement required to be filed
or of any contracts or other documents of a character
required to be filed as an exhibit to the Registration
Statement or required to be incorporated by reference into
the Prospectus or required to be described in the
Registration Statement or the Prospectus which are not filed
or described as required;
(vi) Except as described in the Prospectus and except
as would not, individually or in the aggregate, have a
material adverse effect on the current or future
consolidated financial position, stockholders' equity or
results of operations of the Issuer and its subsidiaries, to
the best of such counsel's knowledge (after reasonable
investigation): (A) neither the Issuer nor any of its
subsidiaries is in violation of any Environmental Laws; (B)
each of the Issuer and its subsidiaries has all permits,
authorizations and approvals required under any applicable
Environmental Laws and is in compliance with their
requirements; (C) there are no pending or threatened
administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Issuer or any
of its subsidiaries; and (D) there are no events or
circumstances that might reasonably be expected to form the
basis of an order for clean-up or remediation, or an action,
suit or proceeding by any private party
<PAGE> 11
or any governmental agency or instrumentality, against or
affecting the Issuer or any of its subsidiaries relating to
Hazardous Materials or any Environmental Laws;
(vii) Each of the Issuer's significant subsidiaries
(as such term is defined in Rule 1-02 of Regulation S-X
promulgated by the Commission) and the Issuer's subsidiaries
that have net assets in excess of $100 million (all such
subsidiaries together, the "Significant Subsidiaries") is a
corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of
incorporation. Each of the Significant Subsidiaries has full
corporate power and authority to own its properties and
conduct its business as presently conducted and is duly
registered and qualified to conduct its business and is in
good standing in each jurisdiction or place in which such
subsidiary owns or leases property or where the nature of
its properties or the conduct of its business otherwise
requires such registration or qualification, except where
the failure to so register or qualify would not,
individually or in the aggregate, have a material adverse
effect on the current or future consolidated financial
position, stockholders' equity or results of operations of
the Issuer and its subsidiaries; and
(viii) All of the issued shares of capital stock of
each Significant Subsidiary of the Issuer have been duly and
validly authorized and issued, are fully paid and
non-assessable, and (except for directors' qualifying shares
and for minority interest shares as set forth in the
Prospectus) are owned directly or indirectly by the Issuer,
and to such counsel's knowledge, are owned free and clear of
all liens, encumbrances, equities or claims (such counsel
being entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect to
matters of fact upon certificates of officers of the Issuer
or its subsidiaries; provided that they shall state that
they believe that both you and they are justified in relying
upon such opinions and certificates).
(d) Gardere Wynne Sewell & Riggs, L.L.P., counsel for the Issuer,
shall have furnished to you their written opinion (a draft of such
opinion is attached as Annex II(c) hereto), dated the Time of Delivery,
in form and substance satisfactory to you, to the effect that:
(i) The Issuer is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware. The Issuer has full corporate power and
authority to own its properties and conduct its business as
presently conducted and is duly registered and qualified to
conduct its business and is in good standing in each
jurisdiction or place in which the Issuer owns or leases
property or where the nature of its properties or the
conduct of its business otherwise requires such registration
or qualification, except where the failure to so register or
qualify would not, individually or in the aggregate, have a
material adverse effect on the current or future
consolidated financial position, stockholders' equity or
results of operations of the Issuer and its subsidiaries;
(ii) The Issuer has the requisite corporate power and
authority and has duly taken all necessary corporate action
to authorize the execution, delivery and performance of this
Agreement; and this Agreement has been duly executed and
delivered by, and constitutes a valid and binding agreement
of, the Issuer;
(iii) The Issuer has an authorized capitalization as
set forth in the Prospectus, and all of the issued shares of
capital stock of the Issuer (including the Shares) have been
duly and validly authorized and issued and are fully paid
and non-assessable; and the Shares conform to the
description of the Stock contained in the Prospectus;
<PAGE> 12
(iv) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and
sale of the Shares or the consummation by the Issuer of the
transactions contemplated by this Agreement, except for the
registration under the Act of the Shares and such consents,
approvals, authorizations, registrations or qualifications
as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the
Shares by you;
(v) The Issuer is not, nor will be as a result of the
offering and sale of the Shares, an "investment company"
under the Investment Company Act, or controlled by an entity
required to be registered under the Investment Company Act
as an "investment company";
(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 Stock,
and under the captions "Plan of Distribution" and
"Underwriting", insofar as they purport to describe the
provisions of the laws and documents referred to therein,
are accurate, complete and fair;
(vii) The documents incorporated by reference in the
Prospectus (other than the Transocean S-4 and the documents
filed by Transocean and incorporated by reference in the
Transocean S-4, and the financial statements and related
schedules in any such documents, as to which such counsel
need express no opinion), when they became effective or were
filed with the Commission, as the case may be, complied as
to form in all material respects with the requirements of
the Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder; and they have
no reason to believe that any of such documents (including
for this purpose the Transocean S-4 and the documents filed
by Transocean and incorporated by reference in the
Transocean S-4), when such documents became effective or
were so filed, as the case may be, contained, in the case of
a registration statement which became effective under the
Act, 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,
in the case of other documents which were filed under the
Exchange Act with the Commission, an untrue statement of a
material fact or omitted to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made when such documents
were so filed, not misleading; and
(viii) The Registration Statement and the Prospectus
and any further amendments and supplements thereto made by
the Issuer prior to the Time of Delivery (other than the
financial statements and related schedules therein, as to
which such counsel need express no opinion) comply as to
form in all material respects with the requirements of the
Act and the rules and regulations thereunder; although they
do 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 subsection (vi) of this
section 6(d), they have no reason to believe that, as of its
effective date, the Registration Statement or any further
amendment thereto made by the Issuer prior to the Time of
Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or
omitted to state a material fact (including, in each case,
with respect to Transocean Information) required to be
stated therein or necessary to make the statements therein
not misleading or that, as of its date, the Prospectus or
any further amendment or supplement thereto made by the
Issuer prior
<PAGE> 13
to the Time of Delivery (other than the financial statements
and related schedules therein, as to which such counsel need
express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact necessary
to make the statements therein, in the light of the
circumstances under which they were made, not misleading or
that, as of the Time of Delivery, either the Registration
Statement or the Prospectus or any further amendment or
supplement thereto made by the Issuer prior to the Time of
Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no
opinion) contains an untrue statement of a material fact or
omits to state a material fact (including, in each case,
with respect to Transocean Information) necessary to make
the statements therein, in the light of the circumstances
under which they were made, not misleading; and they do not
know of any amendment to the Registration Statement required
to be filed or of any contracts or other documents of a
character required to be filed as an exhibit to the
Registration Statement or required to be incorporated by
reference into the Prospectus or required to be described in
the Registration Statement or the Prospectus which are not
filed or described as required;
(e) Eric B. Brown, Vice President and General Counsel of
Transocean, shall have furnished to you his written opinion (a draft of
such opinion is attached as Annex II(d) hereto), dated the Time of
Delivery, in form and substance satisfactory to you, to the effect
that:
The Transocean S-4 and the documents filed by
Transocean and incorporated therein by reference (other than
the financial statements and related schedules therein, the
notes thereto and the auditor's reports thereon, the other
financial data included or incorporated by reference
therein, or omitted therefrom, the exhibits thereto, the
filings with the Commission by the Issuer incorporated by
reference therein and any other statements in, or omissions
from, the Transocean S-4 that relate to the Issuer or its
subsidiaries, as to which such counsel need express no
opinion), in the case of the Transocean S-4, as of its
effective date (or the date of such opinion if the
Transocean S-4 is not effective as of such date), and in the
case of the documents filed by Transocean and incorporated
therein by reference, as of their respective filing dates,
complied as to form in all material respects to the
requirements of the Act and the rules and regulations of the
Commission thereunder; Such counsel has participated in
conferences with officers and other representatives of
Transocean, representatives of the independent public
accountants of Transocean, representatives of you and
counsel to you at which the contents of the Transocean S-4
and related matters were discussed. 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 Transocean S-4, such counsel advises you
that on the basis of the foregoing (relying as to
materiality in part upon statements of officers or other
representatives of Transocean) no facts have come to such
counsel's attention that lead him to believe that the
Transocean S-4 (other than the financial statements and
related schedules therein, the notes thereto and the
auditor's reports thereon, the other financial data included
or incorporated by reference therein, or omitted therefrom,
the exhibits thereto, the filings with the Commission by the
Issuer incorporated by reference therein and any other
statements in, or omissions from, the Transocean S-4 that
relate to the Issuer or its subsidiaries, as to which such
counsel need express no opinion), as of its effective date
(or the date of such opinion if the Transocean S-4 is not
effective as of such date), contained an untrue statement of
a material fact or omitted a material fact required to be
stated therein or necessary in order to make the statements
therein not misleading;
<PAGE> 14
(f) You shall have received, on each of the date hereof and the
Closing Date, a letter dated the date hereof or the Time of Delivery,
as the case may be, in form and substance satisfactory to you, from
each of Arthur Andersen LLP (with respect to the Issuer and its
subsidiaries) and Ernst & Young LLP and PricewaterhouseCoopers LLP
(with respect to Transocean and its subsidiaries) delivery thereof, in
form and substance satisfactory to you, to the effect set forth in
Annex I hereto (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as Annex I(a) hereto and a
draft of the form of letter to be delivered on the effective date of
any post-effective amendment to the Registration Statement and as of
the Time of Delivery is attached as Annex I(b) hereto); provided that
each of the letters delivered at the Time of Delivery shall use a
"cut-off date" not earlier than the date hereof;
(g) (i) Neither the Issuer nor Transocean, nor any of their respective
subsidiaries, shall have sustained since the date of the latest audited
financial statements included or incorporated by reference in the Prospectus any
loss or interference with their respective businesses from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth in the Prospectus, and (ii) since the respective dates as of which
information is given in the Prospectus or the Transocean S-4, as the case may
be, there shall not have been any change in the capital stock (or capital, in
the case of Transocean) or long-term debt of the Issuer or Transocean or any of
their respective subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Issuer or
Transocean or any of their respective subsidiaries, otherwise than as set forth
or contemplated in the Prospectus, the effect of which, in any such case
described in clause (i) or (ii) is in your judgment so material and adverse as
to make it impracticable or inadvisable to proceed with the public offering or
the delivery of the Shares on the terms and in the manner contemplated in the
Prospectus;
(h) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the debt securities or preferred stock
of the Issuer or Transocean by any "nationally recognized statistical
rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act, and (ii) no such organization
shall have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of any of the Issuer's
debt securities or preferred stock;
(i) On or after the date hereof there shall not have occurred any
of the following: (i) a suspension or material limitation in trading in
securities generally on the Exchange; (ii) a suspension or material
limitation in trading in the Issuer's or Transocean's securities on any
exchange or in any over-the-counter market; (iii) a general moratorium
on commercial banking activities declared by either Federal or New York
State authorities; or (iv) the outbreak or escalation of hostilities or
the declaration by the United States of a national emergency or war or
any change in financial markets or any calamity or crisis, if the
effect of any such event specified in this clause (iv) in your judgment
makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares on the terms and in the manner
contemplated in the Prospectus;
(j) The Shares to be sold at the Time of Delivery shall have been
duly listed, subject to notice of issuance, on the Exchange;
(k) The Issuer shall have complied with the provisions of Section
4(c) hereof with respect to the furnishing of prospectuses on the New
York Business Day next succeeding the date of this Agreement; and
(l) The Issuer shall have furnished or caused to be furnished to
you at the Time of Delivery certificates of officers of the Issuer
satisfactory to you as to the accuracy of the representations
<PAGE> 15
and warranties of the Issuer herein at and as of such Time of Delivery,
as to the performance by the Issuer of all of its obligations hereunder
to be performed at or prior to such Time of Delivery, as to the matters
set forth in subsections (a) and (g) of this Section and as to such
other matters as you may reasonably request.
7. (a) The Issuer will indemnify and hold you harmless against any
losses, claims, damages or liabilities, joint or several, to which you may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact,
including without limitation with respect to Transocean Information, contained
in any Preliminary Prospectus, the Registration Statement or the Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact, including without
limitation with respect to Transocean Information, required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by you in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Issuer shall not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the Issuer
by you expressly for use therein.
(b) You will indemnify and hold harmless the Issuer against any losses,
claims, damages or liabilities to which the Issuer may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Issuer by you expressly for use therein; and you will reimburse
the Issuer for any legal or other expenses reasonably incurred by the Issuer in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; 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. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an
<PAGE> 16
actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Issuer on the one hand and you on the other
from the offering of the Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Issuer on the one hand
and you on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Issuer, on the one hand and you on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Issuer bear to the total
underwriting discounts and commissions received by you, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault 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 Issuer on the one hand or
you on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Issuer and you agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (d) shall be deemed to include 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
subsection (d), you shall not be required to contribute any amount in excess of
the amount by which the total price at which the Shares underwritten by you and
distributed to the public were offered to the public exceeds the amount of any
damages which you have otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The obligations of the Issuer under this Section 7 shall be in
addition to any liability which the Issuer may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls you
within the meaning of the Act; and your obligations under this Section 7 shall
be in addition to any liability which you may otherwise have and shall extend,
upon the same terms and conditions, to each officer and director of the Issuer
and to each person, if any, who controls the Issuer within the meaning of the
Act.
8. The respective indemnities, agreements, representations, warranties
and other statements of the Issuer and you, as set forth in this Agreement or
made by or on behalf of the issuer or you, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of you or any controlling person of you, or the Issuer, or any officer or
director or controlling person of the Issuer, and shall survive delivery of and
payment for the Shares.
<PAGE> 17
9. If this Agreement shall be terminated for any reason or the Shares
are not delivered by or on behalf of the Issuer as provided herein, other than
as a result of a default in your obligation to purchase the shares (except in a
situation where any of the conditions set forth in Section 6 has not been
satisfied), the Issuer will reimburse you for all out-of-pocket expenses
approved in writing by you, including fees and disbursements of counsel,
reasonably incurred by you in making preparations for the purchase, sale and
delivery of the Shares, but the Issuer shall not then be under any further
liability to you except as provided in Sections 5 and 7 hereof.
10. All statements, requests, notices and agreements hereunder shall be
in writing, and if to you shall be delivered or sent by mail, telex or facsimile
transmission to you at [address]; and if to the Issuer shall be delivered or
sent by mail to the address of the Issuer set forth in the Registration
Statement, Attention: Secretary. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
11. This Agreement shall be binding upon, and inure solely to the
benefit of, you, the Issuer and, to the extent provided in Sections 7 and 9
hereof, the officers and directors of the Issuer and each person who controls
the Issuer or you, and your and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Shares from you shall be deemed a successor or assign by reason merely of such
purchase.
12. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
13. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
14. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
<PAGE> 18
If the foregoing is in accordance with your understanding, please sign
and return to us four counterparts hereof, and upon the acceptance hereof by
you, this letter and such acceptance hereof shall constitute a binding agreement
between you and the Issuer.
Very truly yours,
R&B FALCON CORPORATION
By: /s/ Tim W. Nagle
Name: Tim W. Nagle
Title: Executive Vice President
Accepted as of the date hereof:
GOLDMAN, SACHS & CO.
By: /s/ Goldman, Sachs & Co.
Goldman, Sachs & Co.
