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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report: APRIL 15, 1997
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Date of earliest event reported: APRIL 14, 1997
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DIAMOND OFFSHORE DRILLING, INC.
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(Exact Name of Registrant as Specified in Charter)
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<S> <C> <C>
DELAWARE 1-13926 76-0321760
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
15415 KATY FREEWAY, HOUSTON, TEXAS 77094
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(Address of Principal Executive Offices) (Zip Code)
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Registrant's telephone number, including area code (281) 492-5300
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NOT APPLICABLE
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(Former name or former address, if changed since last report)
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INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 5. OTHER EVENTS
On April 14, 1997, Diamond Offshore Drilling, Inc. ("Diamond
Offshore") issued a press release announcing Diamond Offshore's earnings for
its fiscal quarter ended March 31, 1997 and a press release announcing Diamond
Offshore's plans to acquire the semisubmersible accommodation vessel
"Polyconfidence" and, to finance the purchase price of such vessel, to offer
approximately 1.25 million shares of Diamond Offshore's common stock, par value
$.01 per share ("Common Stock"), in a public offering. Filed herewith are (i)
both such press releases and (ii) the form of Underwriting Agreement proposed
to be entered into between Diamond Offshore and the underwriter(s) of
securities that may be issued pursuant to Diamond Offshore's Post-Effective
Amendment No. 1 to its Registration Statement on Form S-3 (No. 333-19987), as
filed with the Securities and Exchange Commission on March 28, 1997, which may
include Common Stock.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
Exhibit number Description
1.1 Form of Underwriting Agreement.
20.1 Press Release of Diamond Offshore Drilling, Inc. of
April 14, 1997 regarding earnings.
20.2 Press Release of Diamond Offshore Drilling, Inc. of
April 14, 1997 regarding acquisition of accommodation
service vessel and public offering.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
DIAMOND OFFSHORE DRILLING, INC.
By: /s/ RICHARD L. LIONBERGER
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Richard L. Lionberger
Vice President, General Counsel
and Secretary
Dated: April 15, 1997
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EXHIBIT INDEX
Exhibit number Description
1.1 Form of Underwriting Agreement.
20.1 Press Release of Diamond Offshore Drilling, Inc. of
April 14, 1997 regarding earnings.
20.2 Press Release of Diamond Offshore Drilling, Inc. of
April 14, 1997 regarding acquisition of accommodation
service vessel and public offering.
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EXHIBIT 1.1
DIAMOND OFFSHORE DRILLING, INC.
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
WARRANTS
UNDERWRITING AGREEMENT
SECTION 1. Introductory.
Diamond Offshore Drilling, Inc., a Delaware corporation ("Company"),
proposes to issue and sell from time to time certain of its unsecured debt
securities, preferred stock, common stock, par value $.01 per share ("Common
Stock") and warrants to purchase debt securities and warrants to purchase
preferred stock (and any debt securities, preferred stock or Common Stock
issuable upon conversion or exercise of such securities) registered under the
registration statement referred to in Section 2(a) ("Registered Securities").
The Registered Securities constituting debt securities will be issued under one
or more indentures or supplemental indentures (each, an "Indenture"), between
the Company and a trustee selected by the Company, in one or more series, which
series may vary as to interest rates, maturities, redemption provisions, selling
prices and other terms. The Registered Securities constituting warrants will be
issued under one or more Warrant Agreements (each, a "Warrant Agreement"),
between the Company and a warrant agent to be selected by the Company, in one or
more series, which series may vary as to exercise price, exercise date,
expiration date and other terms. The Registered Securities constituting
preferred stock may be issued in one or more series, which series may vary as to
dividend rates, redemption provisions, selling prices and other terms.
Particular series or offerings of Registered Securities will be sold pursuant to
a Terms Agreement referred to in Section 3, for resale in accordance with terms
of offering determined at the time of sale.
The Registered Securities involved in any such offering are hereinafter
referred to as the "Firm Securities" and, together with any Optional Securities
(as defined in Section 3 below), the "Offered Securities". The firm or firms
which agree to purchase the Offered Securities are hereinafter referred to as
the "Underwriters" of such securities, and the representative or
representatives of the Underwriters, if any, specified in a Terms Agreement
referred to in Section 3 are hereinafter referred to as the "Representatives";
provided, however, that if the Terms Agreement does not specify any
representative of the Underwriters, the term "Representatives", as used in this
Agreement (other than in Sections 2(b), 5(c) and 6 and the second sentence of
Section 3), shall mean the Underwriters.
SECTION 2. Representations and Warranties of the Company.
The Company, as of the date of each Terms Agreement referred to in
Section 3, represents and warrants to, and agrees with, each Underwriter that:
(a) A registration statement (No. 333-19987), including a
prospectus, relating to the Registered Securities has been filed with the
Securities and Exchange Commission ("Commission") and has become effective.
Such registration statement, as amended at the time of any Terms Agreement
referred to in Section 3, is hereinafter referred to as the "Registration
Statement", and the prospectus included in such Registration Statement, as
supplemented as contemplated by Section 3 to reflect the terms of the Offered
Securities (if they are debt securities, warrants or preferred stock) and the
terms of the offering of the Offered Securities, as first filed with the
Commission pursuant to and in accordance with Rule 424(b) ("Rule 424(b)") under
the Securities Act of 1933 ("Act"), including all material incorporated by
reference therein, is hereinafter referred to as the "Prospectus". No document
has been or will be prepared or distributed in reliance on Rule 434 under the
Act.
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(b) On the effective date of the registration statement
relating to the Registered Securities, such registration statement conformed in
all respects to the requirements of the Act, the Trust Indenture Act of 1939
("Trust Indenture Act") and the rules and regulations of the Commission ("Rules
and Regulations") and did not include any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading, and on the date of each Terms
Agreement referred to in Section 3, the Registration Statement and the
Prospectus will conform in all respects to the requirements of the Act, the
Trust Indenture Act and the Rules and Regulations, and neither of such
documents will include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, except that the foregoing does not apply to
statements in or omissions from any of such documents based upon written
information furnished to the Company by any Underwriter through the
Representatives, if any, specifically for use therein.
(c) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus; and the Company is duly
qualified to do business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct of its
business requires such qualification, except where the failure of the Company
to be so qualified would not have a material adverse effect on the business,
operations or financial condition of the Company and its subsidiaries, taken as
a whole.
(d) Each subsidiary of the Company has been duly
incorporated and is an existing corporation in good standing under the laws of
the jurisdiction of its incorporation, with power and authority (corporate and
other) to own its properties and conduct its business as described in the
Prospectus; and each subsidiary of the Company is duly qualified to do business
as a foreign corporation in good standing in all other jurisdictions in which
its ownership or lease of property or the conduct of its business requires such
qualification, except where the failure of such subsidiary to be so qualified
would not have a material adverse effect on the business, operations or
financial condition of the Company and its subsidiaries, taken as a whole; all
of the issued and outstanding capital stock of each subsidiary of the Company
has been duly authorized and validly issued and is fully paid and
nonassessable, except where the failure of such capital stock to have been so
authorized and issued would not have a material adverse effect on the business,
operations or financial condition of the Company and its subsidiaries, taken as
a whole; and the capital stock of each subsidiary owned by the Company,
directly or through subsidiaries, is owned free from liens, encumbrances and
defects, except where the failure of the Company to so own such capital stock
would not have a material adverse effect on the business, operations,
properties or financial condition of the Company and its subsidiaries, taken as
a whole.
(e) If the Offered Securities are debt securities: The
Indenture has been duly authorized and has been duly qualified under the Trust
Indenture Act; the Firm Securities and any Optional Securities have been duly
authorized; and when the Offered Securities are delivered and paid for pursuant
to the Terms Agreement on each Closing Date (as defined below) or pursuant to
Delayed Delivery Contracts (as hereinafter defined), the Indenture will have
been duly executed and delivered, such Offered Securities will have been duly
executed, authenticated, issued and delivered and will conform to the
description thereof contained in the Prospectus and the Indenture and such
Offered Securities will constitute valid and legally binding obligations of the
Company, enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
(f) If the Offered Securities are warrants: The Warrant
Agreement has been duly authorized; the Firm Securities and any Optional
Securities have been duly authorized; and when the Offered Securities are
delivered and paid for pursuant to the Terms Agreement on each Closing Date (as
defined below) or pursuant to Delayed Delivery Contracts (as hereinafter
defined), the Warrant Agreement will have been duly executed and delivered,
such Offered Securities will have been duly executed, countersigned, issued and
delivered and will conform to the description thereof contained in the
Prospectus and the Warrant Agreement and such Offered Securities will
constitute valid and legally binding obligations of the Company, enforceable in
accordance with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
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(g) If the Offered Securities are preferred stock: The
Firm Securities and any Optional Securities have been duly authorized and, when
the Offered Securities have been delivered and paid for in accordance with the
Terms Agreement on each Closing Date (as defined below), such Offered
Securities will have been validly issued, fully paid and nonassessable and will
conform to the description thereof contained in the Prospectus; and the
stockholders of the Company have no preemptive rights with respect to the
Offered Securities.
(h) If the Offered Securities are Common Stock: The Firm
Securities and any Optional Securities and all other outstanding shares of
capital stock of the Company have been duly authorized; all outstanding shares
of Capital Stock of the Company are, and when the Offered Securities have been
delivered and paid for in accordance with the Terms Agreement on each Closing
Date (as defined below), such Offered Securities will have been, validly
issued, fully paid and nonassessable and will conform to the description
thereof contained in the Prospectus; and the stockholders of the Company have
no preemptive rights with respect to the Offered Securities.
(i) If the Offered Securities are convertible or (if the
Offered Securities are warrants) exercisable: When the Offered Securities are
delivered and paid for pursuant to the Terms Agreement on each Closing Date,
such Offered Securities will be convertible into, or exercisable for, Common
Stock, preferred stock or debt securities of the Company, as the case may be,
in accordance with their terms (if the Offered Securities are preferred stock)
or the Indenture (if the Offered Securities are debt securities) or the Warrant
Agreement (if the Offered Securities are warrants); the shares of Common Stock,
preferred stock and debt securities, as the case may be, initially issuable
upon conversion or exercise of such Offered Securities have been duly
authorized and (if the conversion or exercise securities are Common Stock or
preferred stock) reserved for issuance upon such conversion or exercise; if the
conversion securities are Common Stock, such Common Stock initially issuable
upon conversion thereof, when issued upon such conversion, and upon receipt by
the Company of the conversion price therefor, will be validly issued and fully
paid and nonassessable; the outstanding shares of Common Stock have been duly
authorized and validly issued, are fully paid and nonassessable and conform to
the description thereof contained in the Prospectus; and the stockholders of
the Company have no preemptive rights with respect to the Common Stock or
preferred stock; if the conversion or exercise securities are preferred stock,
the preferred stock initially issuable upon conversion or exercise thereof,
when issued upon such conversion or exercise, and upon receipt by the Company
of the conversion or exercise price therefor, will have been validly issued and
fully paid and nonassessable and will conform to the description thereof
contained in the Prospectus; if the conversion or exercise securities are debt
securities, the debt securities initially issuable upon conversion or exercise
thereof, when issued upon such conversion or exercise, and upon receipt by the
Company of the conversion or exercise price therefor, will have been duly
executed, authenticated, issued and delivered and will conform to the
description thereof contained in the Prospectus and the Indenture; such
Indenture has been duly qualified under the Trust Indenture Act and will have
been duly executed and delivered; and the Indenture and such debt securities
will constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
(j) If the Offered Securities are Common Stock or are
convertible into Common Stock: Except as disclosed in the Prospectus, there
are no contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or any
Underwriter for a brokerage commission, finder's fee or other like payment.
(k) If the Offered Securities are Common Stock or are
convertible into Common Stock: Except for the Registration Rights Agreement
dated October 10, 1995 between the Company and Loews Corporation (the "Loews
Registration Rights Agreement") 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 Act
with respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the Company
under the Act.
(l) If the Offered Securities are Common Stock or are
convertible into Common Stock, the outstanding shares of Common Stock are
listed on The New York Stock Exchange (the "Stock Exchange") and the Offered
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Securities or the Common Stock into which the Offered Securities are
convertible (if they are convertible) has been approved for listing on the
Stock Exchange, subject to notice of issuance. If the Offered Securities are
debt securities or preferred stock, they have been approved for listing on the
stock exchange indicated in the Terms Agreement, subject to notice of issuance.
(m) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by the Terms Agreement (including
the provisions of this Agreement) in connection with the issuance and sale of
the Offered Securities by the Company, except such as have been obtained and
made under the Act and, if the Offered Securities are debt securities, the
Trust Indenture Act and such as may be required under state securities laws.
(n) The execution, delivery and performance of the
Indenture (if the Offered Securities are debt securities), the Warrant
Agreement (if the Offered Securities are warrants), the Terms Agreement
(including the provisions of this Agreement) and any Delayed Delivery Contracts
and the issuance and sale of the Offered Securities and compliance with the
terms and provisions thereof and, if the Offered Securities are debt
securities, warrants or preferred stock, compliance with the terms and
provisions thereof 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
property 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 charter or
bylaws of the Company or any of its subsidiaries 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 the property of the
Company or any of its subsidiaries except, in each case other than with respect
to such charter or bylaws, which conflict, breach or default or violation would
not impair the Company's or any of its subsidiaries' ability to perform the
obligations hereunder or have any material adverse effect upon the consummation
of the transactions contemplated hereby or any Underwriter; and the Company has
full power and authority to authorize, issue and sell the Offered Securities as
contemplated by the Terms Agreement (including the provisions of this
Agreement).
(o) The Terms Agreement (including the provisions of this
Agreement) and, if the Offered Securities are debt securities, warrants or
preferred stock, any Delayed Delivery Contracts have been duly authorized,
executed and delivered by the Company.
(p) Except as disclosed in the Prospectus and except for
Permitted Liens, as such term is defined below, the Company and its
subsidiaries have good and marketable title to all offshore drilling rigs
described as being owned by them in the Prospectus, and good and marketable
title to all real property and all other properties and assets owned by them,
in each case free from liens, encumbrances and defects that would materially
affect the value thereof, taken as a whole, or materially interfere with the
use made or to be made thereof by them; and except as disclosed in the
Prospectus, the Company and its subsidiaries hold any leased real or personal
property under valid and enforceable leases with no exceptions to such validity
or enforceability that would materially interfere with the use made or to be
made thereof by them. "Permitted Liens" means (i) liens for taxes not yet due
or liens that have not been filed for taxes that are being contested in good
faith and by appropriate proceedings diligently prosecuted; (ii) carriers',
warehousemen's, mechanics', materialmen's, repairmen's, maritime, statutory or
other like liens arising in the ordinary course of business that are not
overdue for more than 30 days or that are being contested in good faith and by
appropriate proceedings diligently prosecuted; (iii) pledges or deposits in
connection with workmen's compensation, unemployment insurance and other social
security legislation; and (iv) deposits to secure the performance of bids,
contracts in the ordinary course of business (other than for borrowed money),
leases, statutory obligations, surety and appeal bonds and performance bonds,
and other obligations of a like nature that are incurred in the ordinary course
of business.
(q) The Company and its subsidiaries possess adequate
certificates, authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated by them in
all material respects and have not received any notice of proceedings relating
to the revocation or modification of any such certificate, authority or permit
that, if determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the Company
and its subsidiaries taken as a whole.
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(r) No labor dispute with the employees of the Company or
any subsidiary exists or, to the knowledge of the Company, is imminent that
might have a material adverse effect on the Company and its subsidiaries taken
as a whole.
(s) The Company and its subsidiaries own, possess or can
acquire on reasonable terms, adequate trademarks, trade names and other rights
to inventions, know-how, patents, copyrights, confidential information and
other intellectual property (collectively, "intellectual property rights")
necessary to conduct the business now operated by them, or presently employed
by them, and have not received any notice of infringement of or conflict with
asserted rights of others with respect to any intellectual property rights
that, if determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the Company
and its subsidiaries taken as a whole.
(t) Except as disclosed in the Prospectus, neither the
Company nor any of its subsidiaries is in violation of any statute, any rule,
regulation, decision or order of any governmental agency or body or any court,
domestic or foreign, relating to the use, disposal or release of hazardous or
toxic substances or relating to the protection or restoration of the
environment or human exposure to hazardous or toxic substances (collectively,
"environmental laws"), owns or operates any real property contaminated with any
substance that is subject to any environmental laws, is liable for any off-site
disposal or contamination pursuant to any environmental laws, or is subject to
any claim relating to any environmental laws, which violation, contamination,
liability or claim would individually or in the aggregate have a material
adverse effect on the Company and its subsidiaries taken as a whole; and the
Company is not aware of any pending investigation which might lead to such a
claim.
(u) There are no pending actions, suits or proceedings
against or affecting the Company, any of its subsidiaries or any of their
respective properties except as disclosed in the Prospectus, or as individually
or in the aggregate do not now have and, to the best knowledge of the Company,
are not reasonably expected in the future to have a material adverse effect on
the condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries taken as a whole, or would
materially and adversely affect the ability of the Company to perform its
obligations under the Indenture (if the Offered Securities are debt
securities), the Warrant Agreement (if the Offered Securities are warrants),
the Terms Agreement (including the provisions of this Agreement) or any Delayed
Delivery Contracts, or which are otherwise material in the context of the sale
of the Offered Securities; and no such actions, suits or proceedings are, to
the Company's knowledge, threatened or contemplated.
(v) The financial statements included in the Registration
Statement and Prospectus present fairly in all material respects the financial
position of the Company and its consolidated subsidiaries as of the dates shown
and their results of operations and cash flows for the periods shown, and such
financial statements have been prepared in conformity with the generally
accepted accounting principles in the United States applied on a consistent
basis; any schedules included in the Registration Statement present fairly the
information required to be stated therein; and if pro forma financial
statements are included in the Registration Statement and Prospectus: the
assumptions used in preparing the pro forma financial statements included in
the Registration Statement and the Prospectus provide a reasonable basis for
presenting the significant effects directly attributable to the transactions or
events described therein, the related pro forma adjustments give appropriate
effect to those assumptions in all material respects, and the pro forma columns
therein reflect the proper application in all material respects of those
adjustments to the corresponding historical financial statement amounts.
(w) Except as disclosed in the Prospectus, since the date
of the latest audited financial statements included in the Prospectus there has
been no material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries taken as a whole, and there has been no dividend or distribution
of any kind declared, paid or made by the Company on any class of its capital
stock.
(x) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of the proceeds
thereof as described in the Prospectus, will not be (i) an "investment company"
or a company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as
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amended (the "Investment Company Act"), or (ii) a "holding company" or a
"subsidiary company" or an "affiliate" of a holding company within the meaning
of the Public Utility Holding Company Act of 1935, as amended (the "Holding
Company Act").
(y) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate located in
Cuba within the meaning of Section 517.075, Florida Statutes and the Company
agrees to comply with such Section if prior to the completion of the
distribution of the Offered Securities it commences doing such business.
(z) No consent or approval of any federal governmental
agency with respect to any federal maritime law matter is required in
connection with performance by the Company of its obligations under the Terms
Agreement (including the provisions of this Agreement) or the issuance and sale
of the Offered Securities; and neither the issue, offer, sale or delivery by
the Company of the Offered Securities pursuant to the Terms Agreement
(including the provisions of this Agreement) or the execution, delivery, and
performance by the Company and the consummation of the transactions
contemplated thereby will violate any existing federal maritime laws,
including, without limitation, the Shipping Act, 1916, as amended, and the
rules and regulations of the Maritime Administration (MarAd) and the United
States Coast Guard.
Section 3. Purchase and Offering of Offered Securities.
The obligation of the Underwriters to purchase the Firm Securities will
be evidenced by an agreement or exchange of other written communications
("Terms Agreement") at the time the Company determines to sell the Firm
Securities. The Terms Agreement will incorporate by reference the provisions
of this Agreement, except as otherwise provided therein, and will specify the
firm or firms which will be Underwriters, the names of any Representatives, the
aggregate principal amount or number of Firm Securities to be purchased by each
Underwriter, the purchase price to be paid by the Underwriters and (if the Firm
Securities are debt securities, warrants or preferred stock) the terms of the
Firm Securities not already specified (in the Indenture, in the case of Firm
Securities that are debt securities or in the Warrant Agreement, in the case of
Firm Securities that are warrants), including, but not limited to, interest
rate (if debt securities), dividend rate (if preferred stock), maturity (if
debt securities), any redemption, conversion or exercise provisions and any
sinking fund requirements and whether any of the Firm Securities may be sold to
institutional investors pursuant to Delayed Delivery Contracts (as defined
below). The Terms Agreement will also specify the time and date of delivery
and payment (such time and date, or such other time not later than seven full
business days thereafter as the Underwriter first named in the Terms Agreement
(the "Lead Underwriter") and the Company agree as the time for payment and
delivery, being herein and in the Terms Agreement referred to as the "First
Closing Date"), the place of delivery and payment and any details of the terms
of offering that should be reflected in the prospectus supplement relating to
the offering of the Offered Securities. For purposes of Rule 15c6-1 under the
Securities Exchange Act of 1934, the First Closing Date (if later than the
otherwise applicable settlement date) shall be the date for payment of funds
and delivery of securities for all the Offered Securities sold pursuant to the
offering, other than Contract Securities for which payment of funds and
delivery of securities shall be as hereinafter provided. The obligations of
the Underwriters to purchase the Firm Securities will be several and not joint.
It is understood that the Underwriters propose to offer the Offered Securities
for sale as set forth in the Prospectus.
If the Firm Securities are debt securities and the Terms Agreement
specifies "Book-Entry Only" settlement or otherwise states that the
provisions of this paragraph shall apply, the Company will deliver against
payment of the purchase price the Firm Securities being purchased on such
Closing Date in the form of one or more permanent global Securities in
definitive form (the "Global Securities") deposited with the Trustee as
custodian for The Depository Trust Company ("DTC") and registered in the name
of Cede & Co., as nominee for DTC. Interests in any permanent Global Securities
will be held only in book-entry form through DTC, except in the limited
circumstances described in the Prospectus. Payment for the Firm Securities
shall be made by the Underwriters in Federal (same day) funds by official check
or checks or wire transfer to an account previously designated to the Lead
Underwriter by the Company at a bank acceptable to the Lead Underwriter, in
each case drawn to the order of the Company at the place of payment specified
in the Terms Agreement on such Closing Date, against delivery to the Trustee as
custodian for DTC of the Global Securities representing all of the Firm
Securities.
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The Company may specify in the Terms Agreement applicable to any
Offered Securities that the Company thereby grants to the Underwriters the
right to purchase at their election up to the aggregate principal amount of
debt securities, number of shares of preferred stock or Common Stock or number
of warrants ("Optional Securities") set forth in such Terms Agreement, on the
terms set forth in the first paragraph of this Section 3. Any such election
may be exercised only by written notice from the Lead Underwriter to the
Company, given within the period specified in the Terms Agreement, setting
forth the aggregate principal amount or number of Optional Securities purchased
and the date on which such Optional Securities are to be delivered as
determined by the Lead Underwriter.
The Company agrees to sell to the Underwriters the aggregate principal
amount or number of Optional Securities specified in such notice and the
Underwriters agree, severally and not jointly, to purchase such Optional
Securities. Such Optional Securities shall be purchased for the account of
each Underwriter in the same proportion as the aggregate principal amount or
number of Firm Securities set forth opposite such Underwriter's name in such
Terms Agreement bears to the aggregate principal amount or number of Firm
Securities (subject to adjustment by the Lead Underwriter to eliminate
fractions) and may be purchased by the Underwriters only for the purpose of
covering over-allotments made in connection with the sale of the Firm
Securities. No Optional Securities shall be sold or delivered unless the Firm
Securities previously have been, or simultaneously are, sold and delivered.
The right to purchase the Optional Securities or any portion thereof may be
exercised from time to time and to the extent not previously exercised may be
surrendered and terminated at any time upon notice by the Lead Underwriter to
the Company.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "Optional Closing Date", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "Closing Date"), shall be determined by the
Lead Underwriter but shall be not later than five full business days after
written notice of election to purchase Optional Securities is given. The
Company will deliver the Optional Securities being purchased on each Optional
Closing Date to the Representatives for the accounts of the several
Underwriters against payment of the purchase price therefor in the same manner
as the Firm Securities.
If the Terms Agreement provides for sales of Offered Securities
pursuant to delayed delivery contracts, the Company authorizes the Underwriters
to solicit offers to purchase Offered Securities pursuant to delayed delivery
contracts substantially in the form of Annex I attached hereto ("Delayed
Delivery Contracts") with such changes therein as the Company may authorize or
approve. Delayed Delivery Contracts are to be with institutional investors,
including commercial and savings banks, insurance companies, pension funds,
investment companies and educational and charitable institutions. On the
Closing Date the Company will pay, as compensation, to the Representatives for
the accounts of the Underwriters, the fee set forth in such Terms Agreement in
respect of the principal amount, number, or number of shares of Offered
Securities to be sold pursuant to Delayed Delivery Contracts ("Contract
Securities"). The Underwriters will not have any responsibility in respect of
the validity or the performance of Delayed Delivery Contracts. If the Company
executes and delivers Delayed Delivery Contracts, the Contract Securities will
be deducted from the Offered Securities to be purchased by the several
Underwriters and the aggregate principal amount, number or number of shares of
Offered Securities to be purchased by each Underwriter will be reduced pro rata
in proportion to the principal amount, number or number of shares of Offered
Securities set forth opposite each Underwriter's name in such Terms Agreement,
except to the extent that the Lead Underwriter determines that such reduction
shall be otherwise than pro rata and so advise the Company. The Company will
advise the Lead Underwriter not later than the business day prior to the
Closing Date of the principal amount or number of shares of Contract
Securities.
SECTION 4. Certain Agreements of the Company.
The Company agrees with the several Underwriters that it will furnish
to counsel for the Underwriters, one signed copy of the registration statement
relating to the Registered Securities, including all exhibits, in the form it
became effective and of all amendments thereto and that, in connection with
each offering of Offered Securities:
(a) The Company will file the Prospectus with the
Commission pursuant to and in accordance with Rule 424(b)(2) (or, if applicable
and if consented to by the Lead Underwriter, subparagraph (5)) not later than
the second business day following the execution and delivery of the Terms
Agreement.
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(b) The Company will advise the Lead Underwriter promptly
of any proposal to amend or supplement the Registration Statement or the
Prospectus and will afford the Lead Underwriter a reasonable opportunity to
comment on any such proposed amendment or supplement; and the Company will also
advise the Lead Underwriter promptly of the filing of any such amendment or
supplement and of the institution by the Commission of any stop order
proceedings in respect of the Registration Statement or of any part thereof and
will use its best efforts to prevent the issuance of any such stop order and to
obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the
Offered Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs 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 to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the Prospectus
to comply with the Act, the Company promptly will notify the Lead Underwriter
of such event and will promptly prepare and file with the Commission, at its
own expense, an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance. Neither the Lead
Underwriter's consent to, nor the Underwriters' delivery of, any such amendment
or supplement shall constitute a waiver of any of the conditions set forth in
Section 5.
(d) As soon as practicable, but not later than 16 months,
after the date of each Terms Agreement, the Company will make generally
available to its securityholders an earnings statement covering a period of at
least 12 months beginning after the later of (i) the effective date of the
registration statement relating to the Registered Securities, (ii) the
effective date of the most recent post-effective amendment to the Registration
Statement to become effective prior to the date of such Terms Agreement and
(iii) the date of the Company's most recent Annual Report on Form 10-K filed
with the Commission prior to the date of such Terms Agreement, which will
satisfy the provisions of Section 11(a) of the Act.
(e) The Company will furnish to the Representatives copies
of the Registration Statement, including all exhibits, any related preliminary
prospectus, any related preliminary prospectus supplement, the Prospectus and
all amendments and supplements to such documents, in each case as soon as
available and in such quantities as the Lead Underwriter reasonably requests.
The Company will pay the expenses of printing and distributing to the
Underwriters all such documents.
(f) The Company will arrange for the qualification of the
Offered Securities for sale and the determination of their eligibility for
investment under the laws of such jurisdictions as the Lead Underwriter
designates and will continue such qualifications in effect so long as required
for the distribution.
(g) During the period of five years after the date of any
Terms Agreement, the Company will furnish to the Representatives and, upon
request, to each of the other Underwriters, if any, as soon as practicable
after the end of each fiscal year, a copy of its annual report to stockholders
for such year; and the Company will furnish to the Representatives as soon as
available, a copy of each report and any definitive proxy statement of the
Company filed with the Commission under the Securities Exchange Act of 1934 or
mailed to stockholders.
(h) The Company will pay all expenses incident to the
performance of its obligations under the Terms Agreement (including the
provisions of this Agreement), for any filing fees or other expenses (including
fees and disbursements of counsel not to exceed $5,000) in connection with
qualification of the Offered Securities for sale and any determination of their
eligibility for investment under the laws of such jurisdictions as the Lead
Underwriter may designate and the printing of memoranda relating thereto, for
any fees charged by investment rating agencies for the rating of the Offered
Securities (if they are debt securities or preferred stock), for any applicable
filing fee incident to, and the reasonable fees and disbursements of counsel
for the Underwriters in connection with, the review by the National Association
of Securities Dealers, Inc. of the Registered Securities, for any travel
expenses of the Company's officers and employees and any other expenses of the
Company in connection with attending or hosting meetings with prospective
purchasers of Registered Securities and for expenses incurred in distributing
the Prospectus, any preliminary prospectuses, any preliminary prospectus
supplements or any other amendments or supplements to the Prospectus to the
Underwriters. Except
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<PAGE> 9
as provided in the preceding sentence, the Underwriters will pay the expenses
incident to the performance of their obligations under this Agreement and will
reimburse the Company (if and to the extent incurred by the Company) for any
travel expenses of the Underwriters' representatives and any other expenses of
the Underwriters in connection with attending or hosting meetings with
prospective purchasers of the Offered Securities.
(i) If the Offered Securities are debt securities or
preferred stock, the Company will not offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, or file with the Commission a
registration statement under the Act relating to United States
dollar-denominated debt securities issued or guaranteed by the Company and
having a maturity of more than one year from the date of issue (if the Offered
Securities are debt securities) or any series of preferred stock issued or
guaranteed by the Company (if the Offered Securities are preferred stock), or
publicly disclose the intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of the Lead
Underwriter for a period beginning at the time of execution of the Terms
Agreement and ending the number of days after the Closing Date specified under
"Blackout" in the Terms Agreement.
(j) If the Offered Securities are Common Stock or are
convertible into Common Stock, the Company will not offer, sell, contract to
sell, pledge or otherwise dispose of, directly or indirectly, or file with the
Commission a registration statement under the Act relating to, any additional
shares of its Common Stock or securities convertible into or exchangeable or
exercisable for any shares of its Common Stock, or publicly disclose the
intention to make any such offer, sale, pledge, disposition or filing, without
the prior written consent of the Lead Underwriter for a period beginning at the
time of execution of the Terms Agreement and ending the number of days after
the Closing Date specified under "Blackout" in the Terms Agreement, except
issuances of Common Stock pursuant to the conversion or exchange of convertible
or exchangeable securities or the exercise of warrants in each case outstanding
on the date of the Terms Agreements, grants of employee stock options pursuant
to the terms of a plan in effect on the date of the Terms Agreement, issuances
of Common Stock pursuant to the exercise of such options or the exercise of any
other employee stock options outstanding on the date of the Terms Agreement or
issuances of Common Stock pursuant to registration statements on Form S-8 or
successor forms thereto.
SECTION 5. Conditions of the Obligations of the Underwriters.
The obligations of the several Underwriters to purchase and pay for Firm
Securities on the First Closing Date and the Optional Securities to be
purchased on each Optional Closing Date will be subject to the accuracy of the
representations and warranties on the part of the Company herein, to the
accuracy of the statements of Company officers made pursuant to the provisions
hereof, to the performance by the Company of its obligations hereunder and to
the following additional conditions precedent:
(a) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of delivery
thereof, of Deloitte & Touche LLP or any successor firm (and any other firm of
independent public accountants who have audited financial statements that are
included in the Registration Statement and the Prospectus) confirming that they
are independent public accountants within the meaning of the Act and the
applicable published Rules and Regulations thereunder and stating to the effect
that:
(i) in their opinion the financial statements and
any financial statement schedules audited by them and included in the
Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act and the related published
Rules and Regulations;
(ii) they have performed the procedures specified
by the American Institute of Certified Public Accountants for a review
of interim financial information as described in Statement of Auditing
Standards No. 71, Interim Financial Information, on any unaudited
financial statements included in the Registration Statement;
(iii) on the basis of the review referred to in
clause (ii) above, a reading of the latest available interim financial
statements of the Company, inquiries of officials of the Company who
have
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<PAGE> 10
responsibility for financial and accounting matters and other specified
procedures, nothing came to their attention that caused them to believe
that:
(A) the unaudited financial statements, if any,
and any summary of earnings included in the Prospectus do not
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published
Rules and Regulations or any material modifications should be
made to such unaudited financial statements and summary of
earnings for them to be in conformity with generally accepted
accounting principles;
(B) if any unaudited "capsule" information is
contained in the Prospectus, the unaudited consolidated net
sales, net operating income, net income and net income per
share amounts or other amounts constituting such "capsule"
information and described in such letter do not agree with the
corresponding amounts set forth in the unaudited consolidated
financial statements or were not determined on a basis
substantially consistent with that of the corresponding
amounts in the audited statements of income;
(C) at the date of the latest available balance
sheet read by such accountants, or at a subsequent specified
date not more than three business days prior to the date of
the Terms Agreement, there was any change in the capital stock
or any increase in short-term indebtedness or long-term debt
of the Company and its consolidated subsidiaries or, at the
date of the latest available balance sheet read by such
accountants, there was any decrease in working capital or
stockholders' equity, as compared with amounts shown on the
latest balance sheet included in the Prospectus; or
(D) for the period from the closing date of the
latest income statement included in the Prospectus to the
closing date of the latest available income statement read by
such accountants there were any decreases, as compared with
the corresponding period of the previous year and with the
period of corresponding length ended the date of the latest
income statement included in the Prospectus, in contract
drilling revenue, net operating income, in the total or (if
the Offered Securities are Common Stock or are convertible
into Common Stock) per share amounts of consolidated income
before extraordinary items or net income or (if the Offered
Securities are debt securities) in the ratio of earnings to
fixed charges or (if the Offered Securities are preferred
stock) in the ratio of earnings to fixed charges and preferred
stock dividends combined;
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information contained in the Prospectus (in each case to the extent
that such dollar amounts, percentages and other financial information
are derived from the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by analysis
or computation) with the results obtained from inquiries, a reading of
such general accounting records and other procedures specified in such
letter and have found such dollar amounts, percentages and other
financial information to be in agreement with such results, except as
otherwise specified in such letter.
All financial statements and schedules included in material
incorporated by reference into the Prospectus shall be deemed included
in the Prospectus for purposes of this subsection.
(b) The Prospectus shall have been filed with the
Commission in accordance with the Rules and Regulations and Section 4(a) of
this Agreement. No stop order suspending the effectiveness of the Registration
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<PAGE> 11
Statement or of any part thereof shall have been issued and no proceedings for
that purpose shall have been instituted or, to the knowledge of the Company or
any Underwriter, shall be contemplated by the Commission.
(c) Subsequent to the execution of the Terms Agreement,
there shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or other),
business, properties or results of operations of the Company or its
subsidiaries which, in the judgment of a majority in interest of the
Underwriters including any Representatives, is material and adverse and makes
it impractical or inadvisable to proceed with completion of the public offering
or the sale of and payment for the Offered Securities; (ii) any downgrading in
the rating of any debt securities or preferred stock of the Company by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act), or any public announcement that any
such organization has under surveillance or review its rating of any debt
securities or preferred stock of the Company (other than an announcement with
positive implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); (iii) any suspension or limitation of trading in
securities generally on the New York Stock Exchange, or any setting of minimum
prices for trading on such exchange, or any suspension of trading of any
securities of the Company on any exchange or in the over-the-counter market;
(iv) any banking moratorium declared by U.S. Federal or New York authorities;
or (v) any outbreak or escalation of major hostilities in which the United
States is involved, any declaration of war by Congress or any other substantial
national or international calamity or emergency if, in the judgment of a
majority in interest of the Underwriters including any Representatives, the
effect of any such outbreak, escalation, declaration, calamity or emergency
makes it impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Offered Securities.
(d) The Representatives shall have received an opinion,
dated such Closing Date, of the Vice President and General Counsel of the
Company or other counsel satisfactory to the Lead Underwriter, to the effect
that:
(i) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware, and has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as
described in the Prospectus; and the Company is duly qualified to
transact business as a foreign corporation in good standing in all
other jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except those
jurisdictions where the failure to be so qualified would not have a
material adverse effect on the business, operations or financial
condition of the Company and its subsidiaries taken as a whole;
(ii) If the Offered Securities delivered on such
Closing Date are debt securities: The Indenture has been duly
authorized, executed and delivered by the Company and has been duly
qualified under the Trust Indenture Act; the Offered Securities
delivered on such Closing Date have been duly authorized; the Offered
Securities delivered on such Closing Date other than any Contract
Securities have been duly executed, authenticated, issued and
delivered; the Indenture and the Offered Securities delivered on such
Closing Date other than any Contract Securities constitute, and any
Contract Securities, when executed, authenticated, issued and delivered
in the manner provided in the Indenture and sold pursuant to Delayed
Delivery Contracts, will constitute, valid and legally binding
obligations of the Company enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Offered Securities delivered on such Closing Date other than any
Contract Securities conform, and any Contract Securities, when so
issued and delivered and sold will conform, to the description thereof
contained in the Prospectus;
(iii) If the Offered Securities delivered on such
Closing Date are warrants: The Warrant Agreement has been duly
authorized, executed and delivered by the Company; the Offered
Securities delivered on such Closing Date have been duly authorized;
the Offered Securities delivered on such Closing Date other than any
Contract Securities have been duly executed, countersigned, issued and
delivered; the Warrant Agreement and the Offered Securities delivered
on such Closing Date other than any Contract Securities constitute, and
any Contract Securities, when executed, countersigned, issued and
delivered in the manner provided in the Warrant Agreement and sold
pursuant to Delayed Delivery Contracts, will constitute, valid and
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legally binding obligations of the Company enforceable in accordance
with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; and the Offered Securities delivered on such Closing
Date other than any Contract Securities conform, and any Contract
Securities, when so issued and delivered and sold will conform, to the
description thereof contained in the Prospectus;
(iv) If the Offered Securities delivered on such
Closing Date are preferred stock: The Offered Securities delivered on
such Closing Date have been duly authorized; the Offered Securities
delivered on such Closing Date other than any Contract Securities, upon
receipt by the Company of the purchase price therefor, will have been
validly issued and will be fully paid and nonassessable; any Contract
Securities, when issued, delivered and sold pursuant to Delayed
Delivery Contracts, upon receipt by the Company of the purchase price
therefor, will be validly issued, fully paid and non-assessable; and
the Offered Securities delivered on such Closing Date other than any
Contract Securities conform, and any Contract Securities, when so
issued, delivered and sold, will conform, to the description thereof
contained in the Prospectus; and the stockholders of the Company have
no preemptive rights with respect to the Offered Securities;
(v) If the Offered Securities delivered on such
Closing Date are Common Stock: The Offered Securities delivered on such
Closing Date and all other outstanding shares of the Common Stock of
the Company have been duly authorized and validly issued, are fully
paid and nonassessable and conform to the description thereof contained
in the Prospectus; and the stockholders of the Company have no
preemptive rights with respect to the Offered Securities;
(vi) If the Offered Securities delivered on such
Closing Date are convertible or (if the Offered Securities are
warrants) exercisable: The Offered Securities delivered on such
Closing Date other than any Contract Securities are, and any Contract
Securities, when (if the Offered Securities are debt securities)
executed, authenticated, issued and delivered in the manner provided in
the Indenture and sold pursuant to Delayed Delivery Contracts, (if the
Offered Securities are warrants) executed, countersigned, issued and
delivered in the manner provided in the Warrant Agreement and sold
pursuant to Delayed Delivery Contracts or (if the Offered Securities
are preferred stock) when issued, delivered and sold pursuant to
Delayed Delivery Contracts, will be convertible into or exercisable for
Common Stock, preferred stock or debt securities of the Company, as the
case may be, in accordance with (if they are debt securities) the
Indenture, (if they are warrants) the Warrant Agreement or (if they are
preferred stock) their terms; the shares of Common Stock, preferred
stock or debt securities, initially issuable upon conversion or
exercise of the Offered Securities have been duly authorized and (if
the conversion or exercise securities are Common Stock or preferred
stock) reserved for issuance upon such conversion or exercise and, if
the conversion securities are Common Stock, such Common Stock initially
issuable upon conversion thereof, when issued upon such conversion and
upon receipt by the Company of the conversion price therefor, will be
validly issued, fully paid and nonassessable; the outstanding shares of
Common Stock have been duly authorized and validly issued, are fully
paid and nonassessable and conform to the description thereof contained
in the Prospectus; and the stockholders of the Company have no
preemptive rights with respect to the Common Stock or preferred stock;
if the conversion or exercise securities are preferred stock, the
preferred stock initially issuable upon conversion or exercise thereof,
when issued upon such conversion or exercise, and upon receipt by the
Company of the conversion or exercise price therefor, will have been
validly issued, fully paid and nonassessable and will conform to the
description thereof contained in the Prospectus; if the conversion or
exercise securities are debt securities, the debt securities initially
issuable upon conversion or exercise thereof, when issued upon such
conversion or exercise, and upon receipt by the Company of the
conversion or exercise price therefor, will have been duly executed,
authenticated, issued and delivered and will conform to the description
thereof contained in the Prospectus and the Indenture; such Indenture
has been duly qualified under the Trust Indenture Act and will have
been duly executed and delivered; and the Indenture and such debt
securities will constitute valid and legally binding obligations of the
Company, enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
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(vii) If the Offered Securities delivered on such
Closing Date are Common Stock or are convertible into Common Stock:
Except for the Loews Registration Rights Agreement, there are no
contracts, agreements or understandings known to such counsel between
the Company and any person granting such person the right to require
the Company to file a registration statement under the Act with respect
to any securities of the Company owned or to be owned by such person or
to require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by
the Company under the Act;
(viii) The Company is not (A) an "investment
company" or an entity "controlled" by an "investment company" under the
Investment Company Act and the rules and regulations promulgated by the
Commission thereunder or (B) a "holding company" or a "subsidiary
company" or an "affiliate" of a holding company within the meaning of
the Holding Company Act and the rules and regulations promulgated by
the Commission thereunder;
(ix) No consent, approval, authorization or order
of, or filing with, any governmental agency or body or any court is
required for the consummation of the transactions contemplated by the
Terms Agreement (including the provisions of this Agreement) in
connection with the issuance or sale of the Offered Securities by the
Company, except such as have been obtained and made under the Act and,
if the Offered Securities are debt securities, the Trust Indenture Act,
and such as may be required under state securities laws;
(x) The execution, delivery and performance of
the Indenture (if the Offered Securities are debt securities), the
Warrant Agreement (if the Offered Securities are warrants), the Terms
Agreement (including the provisions of this Agreement) and, if the
Offered Securities are debt securities, warrants or preferred stock,
any Delayed Delivery Contracts and the issuance and sale of the Offered
Securities and, if the Offered Securities are debt securities, warrants
or preferred stock, compliance with the terms and provisions thereof
will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, any rule,
regulation or order of any governmental agency or body or any court
having jurisdiction over the Company or any subsidiary of the Company
or any of their properties, or any material agreement or instrument to
which the Company or any such subsidiary is a party or by which the
Company or any such subsidiary is bound or to which any of the
properties of the Company or any such subsidiary is subject, or the
charter or by-laws of the Company or any such subsidiary, and the
Company has full power and authority to authorize, issue and sell the
Offered Securities as contemplated by the Terms Agreement (including
the provisions of this Agreement). In the case of breaches or
violations of any terms or provisions of, or defaults under, any
agreement or instrument of Arethusa (Off-Shore) Limited or any of its
former subsidiaries entered into by any such entity prior to its
acquisition by the Company, such opinion may be limited to the
knowledge of such counsel;
(xi) The Registration Statement has become
effective under the Act, the Prospectus was filed with the Commission
pursuant to the subparagraph of Rule 424(b) specified in such opinion
on the date specified therein, and, to the best of the knowledge of
such counsel, no stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Act, and the registration statement relating to
the Registered Securities, as of its effective date, the Registration
Statement and the Prospectus, as of the date of the Terms Agreement,
and any amendment or supplement thereto, as of its date, complied as to
form in all material respects with the requirements of the Act, the
Trust Indenture Act and the Rules and Regulations; such counsel has no
reason to believe that such registration statement, as of its effective
date, the Registration Statement, as of the date of the Terms Agreement
or as of such Closing Date, or any amendment thereto, as of its date or
as of such Closing Date, contained any untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or
that the Prospectus, as of the date of the Terms Agreement or as of
such Closing Date, or any amendment or supplement thereto, as of its
date or as of such Closing Date, contained any untrue statement of a
material fact or omitted to state any material fact necessary in order
to make the statements therein, in the light of the
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circumstances under which they were made, not misleading; the
descriptions in the Registration Statement and Prospectus of statutes,
legal and governmental proceedings and contracts and other documents
are accurate and fairly present the information required to be shown;
and such counsel does not know of any legal or governmental proceedings
required to be described in the Prospectus which are not described as
required or of any contracts or documents of a character required to be
described in the Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement which are not described and
filed as required; it being understood that such counsel need express
no opinion as to the financial statements and related notes or the
other financial, statistical and accounting data contained in the
Registration Statement or the Prospectus;
(xii) The Terms Agreement (including the provisions
of this Agreement) and, if the Offered Securities are debt securities,
warrants or preferred stock, any Delayed Delivery Contracts have been
duly authorized, executed and delivered by the Company;
(xiii) All of the issued and outstanding shares of
capital stock of each subsidiary of the Company designated by the
Company on Annex I to the Terms Agreement (each, a "Subsidiary" and
collectively, the "Subsidiaries"), are owned, directly or indirectly,
of record and beneficially by the Company, free and clear of all liens,
claims, limitations on voting rights, options, security interests and
other encumbrances and have been duly authorized, validly issued, and
are fully paid and nonassessable, except to the extent that any such
liens, claims, limitations, options, security interests and other
encumbrances, individually or in the aggregate, would not have a
material adverse effect on the business, operations or financial
condition of the Company and its subsidiaries, taken as a whole;
(xiv) Each Subsidiary is a corporation, duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. Each Subsidiary is duly qualified to
transact business and is in good standing as a foreign corporation in
each state in which such Subsidiaries are required to be qualified,
except where the failure to be so qualified would not have a material
adverse effect on the business, operations or financial condition of
the Company and its subsidiaries, taken as a whole;
(xv) No consent or approval of any federal
governmental agency with respect to any federal maritime law matter is
required in connection with performance by the Company of its
obligations under the Terms Agreement (including the provisions of this
Agreement) or the issuance and sale of the Offered Securities; and
neither the issue, offer, sale or delivery by the Company of the
Offered Securities pursuant to the Terms Agreement (including the
provisions of this Agreement) or the execution, delivery, and
performance by the Company and the consummation of the transactions
contemplated thereby will violate any existing federal maritime laws,
including, without limitation, the Shipping Act, 1916, as amended, and
the rules and regulations of the Maritime Administration (MarAd) and
the United States Coast Guard; and
(xvi) Except as described in the Registration
Statement and the Prospectus, there is no litigation, proceeding or
governmental investigation pending or, to such counsel's knowledge,
overtly threatened against the Company or any of its subsidiaries or to
which any of the property of the Company or any of its subsidiaries is
subject, which, in such counsel's judgment is likely, individually or
in the aggregate, to have a material adverse effect on the business,
assets or financial condition of the Company and its subsidiaries,
taken as a whole.
In rendering such opinion, such Vice President and General Counsel or
other counsel may rely as to the incorporation of the Company, the
authorization, execution and delivery of the Terms Agreement and all
other matters acceptable to the Representatives upon an opinion of
counsel satisfactory to the Representatives, a copy of which shall be
delivered concurrently with the opinion of the Vice President and
General Counsel or such other counsel.
(e) The Representatives shall have received from Andrews &
Kurth L.L.P., special counsel for the Underwriters (or any other counsel named
as counsel for the Underwriters in the Terms Agreement), such opinion
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<PAGE> 15
or opinions, dated such Closing Date, with respect to the incorporation of the
Company, the validity of the Offered Securities delivered on such Closing Date,
the Registration Statement, the Prospectus and other related matters as the
Representatives may require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them to pass
upon such matters.
(f) The Representatives shall have received a certificate,
dated such Closing Date, of the President, any Senior Vice President, the
Treasurer or any Vice President and a principal financial or accounting officer
of the Company in which such officers, to the best of their knowledge after
reasonable investigation, shall state that the representations and warranties
of the Company in this Agreement are true and correct, that the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to such Closing Date, that no stop
order suspending the effectiveness of the Registration Statement or of any part
thereof has been issued and no proceedings for that purpose have been
instituted or are contemplated by the Commission and that, subsequent to the
date of the most recent financial statements in the Prospectus, there has been
no material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries taken as a whole except as set forth in or contemplated by the
Prospectus or as described in such certificate.
(g) The Representatives shall have received a letter,
dated such Closing Date, of Deloitte & Touche LLP (and any other firm of
independent public accountants who have audited financial statements that are
included in the Registration Statement and the Prospectus) which meets the
requirements of subsection (a) of this Section, except that the specified date
referred to in such subsection will be a date not more than three business days
prior to such Closing Date for the purposes of this subsection.
The Company will furnish the Representatives with such conformed copies
of such opinions, certificates, letters and documents as the Representatives
reasonably request. The Lead Underwriter may in its sole discretion waive on
behalf of the Underwriters compliance with any conditions to the obligations of
the Underwriters under this Agreement and the Terms Agreement.
SECTION 6. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter 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 any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, the Prospectus, or any amendment or supplement thereto, or any
related preliminary prospectus or preliminary prospectus supplement, 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, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Company will 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 in or omission or alleged omission from any of such documents in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives, if any, specifically
for use therein, it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as such in
the Terms Agreement, provided that this 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 Offered Securities, or any person controlling such Underwriter, if
the Company shall have sustained the burden of proving that a copy of the
Prospectus (as then amended or supplemented if the Company shall have furnished
any such amendments or supplements thereto) was not sent or given by or on
behalf of the Underwriter to such person if such is required by law at or prior
to the written confirmation of the sale of such Offered Securities to such
person and if the Prospectus (as so amended or supplemented) would have
corrected any untrue statement or omission, or alleged untrue statement or
omission, giving
15
<PAGE> 16
rise to such loss, claim, damage or liability (provided the Company has
delivered the Prospectus to the several Underwriters in requisite quantity on a
timely basis to permit such delivery or sending).
(b) Each Underwriter will severally and not jointly
indemnify and hold harmless the Company against any losses, claims, damages or
liabilities to which the Company 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 any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, the Prospectus, or any amendment or supplement thereto, or any
related preliminary prospectus or preliminary prospectus supplement, or arise
out of or are based upon the omission or the 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 reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives, if any, specifically for use therein, and will reimburse any
legal or other expenses reasonably incurred by the Company in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred, it being understood and agreed that the only such
information furnished by any Underwriter consists of the information described
as such in the Terms Agreement.
(c) Promptly after receipt by an indemnified party under
this Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a) or (b) above, notify the indemnifying
party of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party otherwise than under subsection (a) or (b) above, except
to the extent a defense or counterclaim has been foreclosed. In case any such
action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may 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 will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action 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 any claims that are the subject matter
of such action.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other from the
offering of the Offered Securities or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters 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 Company bear to the total underwriting
discounts and commissions received by the Underwriters. 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 Company or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (d) shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party
16
<PAGE> 17
in connection with investigating or defending any action or claim which is the
subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Offered Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which 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 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section
shall be in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each director of the Company, to each officer of the
Company who has signed the Registration Statement and to each person, if any,
who controls the Company within the meaning of the Act.
SECTION 7. Default of Underwriters.
If any Underwriter or Underwriters default in their obligations to
purchase Offered Securities on the First or any Optional Closing Date under the
Terms Agreement and the aggregate principal amount (if debt securities), number
(if warrants) or number of shares (if preferred stock or Common Stock) of
Offered Securities that such defaulting Underwriter or Underwriters agreed but
failed to purchase does not exceed 10% of the total principal amount (if debt
securities), number (if warrants) or number of shares (if preferred stock or
Common Stock) of Offered Securities, the Lead Underwriter may make arrangements
satisfactory to the Company for the purchase of such Offered Securities by
other persons, including any of the Underwriters, but if no such arrangements
are made by such Closing Date, the non- defaulting Underwriters shall be
obligated severally, in proportion to their respective commitments under the
Terms Agreement (including the provisions of this Agreement), to purchase the
Offered Securities that such defaulting Underwriters agreed but failed to
purchase on such Closing Date. If any Underwriter or Underwriters so default
and the aggregate principal amount (if debt securities), number (if warrants)
or number of shares (if preferred stock or Common Stock) of Offered Securities
with respect to which such default or defaults occur exceeds 10% of the total
principal amount (if debt securities), number (if warrants) or number of shares
(if preferred stock or Common Stock) of Offered Securities that the
Underwriters are obligated to purchase on such Closing Date and arrangements
satisfactory to the Lead Underwriter and the Company for the purchase of such
Offered Securities by other persons are not made within 36 hours after such
default, the Terms Agreement will terminate without liability on the part of
any non-defaulting Underwriter or the Company, except as provided in Section 8
(provided that if such default occurs with respect to Optional Securities after
the First Closing Date, such Terms Agreement will not terminate as to the Firm
Securities or any Optional Securities purchased prior to such termination). As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section. Nothing herein will relieve a
defaulting Underwriter from liability for its default. If the Offered
Securities are debt securities,warrants or preferred stock, the respective
commitments of the several Underwriters for the purposes of this Section shall
be determined without regard to reduction in the respective Underwriters'
obligations to purchase the principal amounts (if debt securities), number (if
warrants) or numbers of shares (if preferred stock) of the Offered Securities
set forth opposite their names in the Terms Agreement as a result of Delayed
Delivery Contracts entered into by the Company.
SECTION 8. Survival of Certain Representations and Obligations.
The respective indemnities, agreements, representations, warranties and
other statements of the Company or its officers and of the several Underwriters
set forth in or made pursuant to the Terms Agreement (including the provisions
of this Agreement) will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If the Terms Agreement is terminated
pursuant to Section 7 or if for any reason the purchase of the Offered
Securities by
17
<PAGE> 18
the Underwriters is not consummated, the Company shall remain responsible for
the expenses to be paid or reimbursed by it pursuant to Section 4 and the
respective obligations of the Company and the Underwriters pursuant to Section
6 shall remain in effect, and if any Offered Securities have been purchased
hereunder, the representations in Section 2 and all obligations under Section 4
shall also remain in effect. If the purchase of the Offered Securities by the
Underwriters is not consummated for any reason other than solely because of the
termination of the Terms Agreement pursuant to Section 7 or the occurrence of
any event specified in clause (iii), (iv) or (v) of Section 5(c), the Company
will reimburse the Underwriters for all out-of-pocket expenses (including fees
and disbursements of counsel) reasonably incurred by them in connection with
the offering of the Offered Securities.
SECTION 9. Notices.
All communications hereunder will be in writing and, if sent to the
Underwriters, will be mailed, delivered or telecopied and confirmed to them at
their address furnished to the Company in writing for the purpose of
communications hereunder or, if sent to the Company, will be mailed, delivered
or telegraphed and confirmed to it at 15415 Katy Freeway, Houston, Texas
77094, Attention: Richard L. Lionberger, telecopy (281) 647-2223.
SECTION 10. Successors.
The Terms Agreement (including the provisions of this Agreement) will
inure to the benefit of and be binding upon the Company and such Underwriters
as are identified in the Terms Agreement and their respective successors and
the officers and directors and controlling persons referred to in Section 6,
and no other person will have any right or obligation hereunder.
SECTION 11. Representation of Underwriters.
Any Representatives will act for the several Underwriters in connection
with the financing described in the Terms Agreement, and any action under such
Terms Agreement (including the provisions of this Agreement) taken by the
Representatives jointly or by the Lead Underwriter will be binding upon all the
Underwriters.
SECTION 12. Counterparts.
The Terms Agreement may be executed 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 Agreement.
SECTION 13. APPLICABLE LAW.
THIS AGREEMENT AND THE TERMS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to the Terms Agreement
(including the provisions of this Agreement) or the transactions contemplated
thereby.
18
<PAGE> 19
ANNEX I
(Three copies of this Delayed Delivery Contract should be signed and returned
to the address shown below so as to arrive not later than 9:00 A.M.,
New York time, on ........................ ............, 19...(1))
DELAYED DELIVERY CONTRACT
[Insert date of initial public offering]
DIAMOND OFFSHORE DRILLING, INC.
c/o CREDIT SUISSE FIRST BOSTON CORPORATION
Eleven Madison Avenue
New York, N.Y. 10010-3629
Attention: Investment Banking Department - Transactions Advisory Group
Gentlemen:
The undersigned hereby agrees to purchase from Diamond Offshore
Drilling, Inc., a Delaware corporation ("Company"), and the Company agrees to
sell to the undersigned, [If one delayed closing, insert--as of the date hereof,
for delivery on , 199 ("Delivery Date"),]
[$]..............[shares]
- --principal amount--of the Company's [Insert title of securities]
("Securities"), offered by the Company's Prospectus dated , 199 and
a Prospectus Supplement dated , 199 relating thereto,
receipt of copies of which is hereby acknowledged, at-- % of the principal
amount thereof plus accrued interest, if any,--$ per warrant--$ per
share plus accrued dividends, if any,--and on the further terms and conditions
set forth in this Delayed Delivery Contract ("Contract").
[If two or more delayed closings, insert the following:
The undersigned will purchase from the Company as of the date hereof,
for delivery on the dates set forth below, Securities in the--principal--
amounts set forth below:
- -----------------------------
(1) Insert date which is third full business day prior to Closing Date
under the Terms Agreement.
19
<PAGE> 20
<TABLE>
<CAPTION>
Principal Amount
----------------
Number of
Warrants
--------
Number of
Delivery Date Shares
------------- ------
<S> <C>
. . . . . . . . . . . . . . . . .
------------------- -------------------
. . . . . . . . . . . . . . . . .
------------------- -------------------
</TABLE>
Each of such delivery dates is hereinafter referred to as a Delivery Date.]
Payment for the Securities that the undersigned has agreed to purchase
for delivery on--the--each--Delivery Date shall be made to the Company or its
order by certified or official bank check in New York Clearing House (next day)
funds at the office of at .M.
on--the--such--Delivery Date upon delivery to the undersigned of the Securities
to be purchased by the undersigned--for delivery on such Delivery Date--in
definitive [If debt issue, insert--fully registered] form and in such
denominations and registered in such names as the undersigned may designate by
written or telegraphic communication addressed to the Company not less than
five full business days prior to--the--such--Delivery Date.
It is expressly agreed that the provisions for delayed delivery and
payment are for the sole convenience of the undersigned; that the purchase
hereunder of Securities is to be regarded in all respects as a purchase as of
the date of this Contract; that the obligation of the Company to make delivery
of and accept payment for, and the obligation of the undersigned to take
delivery of and make payment for, Securities on--the--each--Delivery Date shall
be subject only to the conditions that (1) investment in the Securities shall
not at--the--such--Delivery Date be prohibited under the laws of any
jurisdiction in the United States to which the undersigned is subject and (2)
the Company shall have sold to the Underwriters the total--principal
amount--number of shares--of the Securities less the--principal amount---number
of shares--thereof covered by this and other similar Contracts. The
undersigned represents that its investment in the Securities is not, as of the
date hereof, prohibited under the laws of any jurisdiction to which the
undersigned is subject and which governs such investment.
Promptly after completion of the sale to the Underwriters the Company
will mail or deliver to the undersigned at its address set forth below notice
to such effect, accompanied by--a copy--copies--of the opinion[s] of counsel
for the Company delivered to the Underwriters in connection therewith.
This Contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
It is understood that the acceptance of any such Contract is in the
Company's sole discretion and, without limiting the foregoing, need not be on a
first-come, first-served basis. If this Contract is acceptable to the Company,
it is requested that the Company sign the form of acceptance below and mail or
deliver one of the counterparts hereof to the undersigned at its address set
forth below. This will become a binding contract between the Company and the
undersigned when such counterpart is so mailed or delivered.
Yours very truly,
--------------------------------------
(Name of Purchaser)
20
<PAGE> 21
By
-----------------------------
-----------------------------
(Title of Signatory)
-----------------------------
-----------------------------
(Address of Purchaser)
Accepted, as of the above date.
DIAMOND OFFSHORE DRILLING, INC.
By
---------------------------------------------
[Insert Title]
21
<PAGE> 1
[DIAMOND OFFSHORE LETTERHEAD]
EXHIBIT 20.1
FOR IMMEDIATE RELEASE CONTACT: Caren W. Steffes
Monday, April 14, 1997 (281) 492-5393
DIAMOND OFFSHORE DRILLING, INC.
ANNOUNCES EARNINGS
Houston, Texas, April 14, 1997 -- Diamond Offshore Drilling, Inc.
(NYSE:DO) today reported net income of $56.2 million, or $0.79 per share and
common equivalent share, on revenues of $204.7 million for the quarter ended
March 31, 1997 compared to net income of $18.7 million, or $0.37 per share, on
revenues of $106.9 million for the quarter ended March 31, 1996.
"Our quarterly earnings reflect the positive dayrate environment,"
commented Robert E. Rose, President and Chief Executive Officer of Diamond
Offshore, "as well as revenues from deliveries of two of our fourth generation
capable upgrades. The current quarter reflects the March 4, 1997 delivery of
the Ocean Star, which is currently drilling in approximately 4,300 feet of
water, as well as a full quarter for the Ocean Quest, which is currently
drilling in approximately 3,200 feet of water." Both of these fourth generation
capable rigs are operating under three-year contracts in the Gulf of Mexico.
Separately, Diamond Offshore's Ocean Crusader has been awarded the 1996
Safety Award for Excellence ("SAFE" Award) by the Houma District of the U.S.
Department of the Interior, Minerals Management Service (MMS). The award
recognizes companies for their record of performance in safety and
environmental protection. This is the fifth consecutive district SAFE Award
presented to the Company since 1992 when the Company implemented its quality
program, the Global Excellence Management System. Diamond Offshore was the
recipient of the 1993 and 1994 MMS National SAFE Award.
Diamond Offshore is a leader in deep water drilling. The Company owns
46 offshore major mobile drilling rigs, including 30 semisubmersibles, 15
jack-ups and one drillship. The fleet operates in the waters of six of the
world's seven continents.
<PAGE> 2
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
---------- ----------
1997 1996
---------- ----------
<S> <C> <C>
ASSETS
Current assets:
Cash items ........................... $ 39,258 $ 28,180
Investment securities ................ 213,465 --
Accounts receivable .................. 180,318 172,214
Rig inventory and supplies ........... 30,754 30,407
Prepaid expenses and other ........... 16,873 12,166
---------- ----------
Total current assets ......... 480,668 242,967
Drilling and other property and equipment,
less accumulated depreciation ............. 1,247,561 1,198,160
Other investments ............................ 98,912 --
Goodwill, net of amortization, and other
assets .................................... 136,618 133,373
---------- ----------
Total ........................ $1,963,759 $1,574,500
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities .......................... $ 108,532 $ 128,000
Long-term debt ............................... 400,000 63,000
Deferred tax and other liabilities ........... 204,643 188,768
Stockholders' equity ......................... 1,250,584 1,194,732
---------- ----------
Total ........................ $1,963,759 $1,574,500
========== ==========
</TABLE>
<PAGE> 3
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------
1997 1996
--------- ---------
<S> <C> <C>
Revenues .......................................... $ 204,733 $ 106,868
Operating expenses:
Contract drilling............................... 89,739 66,157
Depreciation and amortization................... 25,813 12,069
General and administrative...................... 4,941 3,103
Gain on sale of assets.......................... (66) (157)
--------- ---------
Total operating expenses.................... 120,427 81,172
--------- ---------
Operating income................................... 84,306 25,696
Other income (expense):
Interest expense................................ -- --
Other........................................... 2,708 434
--------- ---------
Income before income tax expense................... 87,014 26,130
Income tax expense................................. (30,784) (7,398)
--------- ---------
Net income......................................... $ 56,230 $ 18,732
========= =========
Net income per share and common equivalent share... $ 0.79 $ 0.37
========= =========
Shares outstanding:
Weighted average common shares.................. 68,384 50,000
Weighted average common share equivalents(1).... 3,018 --
--------- ---------
Adjusted........................................ 71,402 50,000
========= =========
(1) On February 4, 1997, the Company issued
$400.0 million of 3 3/4 percent convertible
subordinated notes due February 15, 2007.
The notes are convertible into approximately
4.9 million shares of the Company's common
stock at any time prior to February 15, 2007
at a conversion price of $81.00 per share.
</TABLE>
<PAGE> 4
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
QUARTER ENDED
MARCH 31,
------------------------
1997 1996
-------- --------
(in thousands)
<S> <C> <C>
REVENUES
Fourth-Generation Semisubmersibles....... $ 42,643 $ 21,465
Other Semisubmersibles................... 116,833 52,995
Jack-ups................................. 43,554 20,136
Turnkey.................................. 4,311 13,626
Land..................................... - 5,102
Other.................................... - -
Eliminations............................. (2,608) (6,456)
-------- --------
Total Revenues......................... $204,733 $106,868
======== ========
CONTRACT DRILLING EXPENSE
Fourth-Generation Semisubmersibles....... 11,473 7,898
Other Semisubmersibles................... 55,336 31,490
Jack-ups................................. 21,260 14,927
Turnkey.................................. 4,259 14,128
Land..................................... - 4,772
Other.................................... 361 102
Eliminations............................. (2,950) (7,160)
-------- --------
Total Contract Drilling Expense........ $ 89,739 $ 66,157
======== ========
OPERATING INCOME (LOSS)
Fourth-Generation Semisubmersibles....... $ 31,170 $ 13,567
Other Semisubmersibles................... 61,497 21,504
Jack-ups................................. 22,294 5,210
Turnkey.................................. 52 (502)
Land..................................... - 330
Other.................................... (361) (102)
Eliminations............................. 342 704
General and Administrative Expense....... (4,941) (3,103)
Depreciation and Amortization Expense.... (25,813) (12,069)
Gain on Sale of Assets................... 66 157
-------- --------
Total Operating Income............... $ 84,306 $ 25,696
======== ========
</TABLE>
<PAGE> 1
EXHIBIT 20.2
[DIAMOND OFFSHORE LETTERHEAD]
NEWS RELEASE
FOR IMMEDIATE RELEASE CONTACT: Caren Steffes
Monday, April 14, 1997 (281) 492-5393
DIAMOND OFFSHORE DRILLING, INC.
AGREEMENT TO A ACQUIRE ACCOMMODATION VESSEL
Diamond Offshore Drilling, Inc. (NYSE:DO) announced today that it has reached
an agreement in principle to acquire the Polyconfidence, a semisubmersible
accommodation vessel currently working in the U.K. sector of the North Sea.
Diamond Offshore's cost to acquire the vessel is expected to be approximately
$81 million payable in cash.
The Polyconfidence was constructed in 1987 and has Class III dynamic
positioning capabilities. The Company is in discussions with several oil
companies regarding conversion of the Polyconfidence to a semisubmersible
drilling unit with fourth or fifth-generation capabilities. Such a conversion
would be dependent upon the receipt of a term contract commitment at favorable
dayrates. Although the extent of the conversion would be dependent upon the
particular demands of the customer, the Company's preliminary estimate of
conversion cost is approximately $160 - $175 million. The Polyconfidence would
begin its conversion at the conclusion of its present accommodation unit
contract, which is estimated to occur no later than March 1998. Prior to
expiration of this contract, the Company will receive approximately $15,000 per
day under a bareboat charter of the vessel.
The Company expects to finance the conversion of the Polyconfidence through the
use of cash on hand or internally generated funds. The vessel purchase is
expected to be financed through a public offering of approximately 1.25 million
shares of the Company's Common Stock.
Diamond Offshore is a leader in deep water drilling. The Company owns 46 mobile
offshore drilling rigs, including 30 semisubmersibles, 15 jack-ups and one
drillship. The fleet currently operates in the waters of six of the world's
seven continents.
<PAGE> 2
A written prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended, related to the offering of Common Stock of Diamond
Offshore Drilling, Inc. described above may be obtained from Investor
Relations, 15415 Katy Freeway, Houston, Texas 77094, telephone (281) 492-5393.
This press release contains forward looking statements. Such statements
inherently are subject to a variety of risks and uncertainties that could cause
actual results to differ materially from those projected. Such risks and
uncertainties include, among others, general economic and business conditions,
industry fleet capacity, changes in foreign and domestic oil and gas
exploration and production activity, competition, changes in foreign political,
social and economic conditions, regulatory initiatives and compliance with
governmental regulations, customer preferences and various other matters, many
of which are beyond the Company's control. These forward looking statements
speak only as of the date of this press release. The Company expressly
disclaims any obligation or undertaking to release publicly any updates or
revisions to any forward looking statement contained herein to reflect any
change in the Company's expectations with regard thereto or any change in
events, conditions or circumstances on which any such statement is based.
