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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: JANUARY 29, 1997
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Date of earliest event reported: JANUARY 23, 1997
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DIAMOND OFFSHORE DRILLING, INC.
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(Exact Name of Registrant as Specified in Charter)
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)
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 January 23, 1997, Diamond Offshore Drilling, Inc. ("Diamond
Offshore") issued a press release announcing Diamond Offshore's earnings
for its fiscal year and fiscal quarter ended December 31, 1996 and
Diamond Offshore's plans to offer $300 million of Convertible Subordinated
Notes Due 2007 (the "Notes") in a public offering to be underwritten by Credit
Suisse First Boston Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Salomon Brothers Inc. (the "Underwriters"). Filed herewith
are (i) the form of Underwriting Agreement proposed to be entered into between
Diamond Offshore and Credit Suisse First Boston Corporation, individually and
as the Representative of the Underwriters, (ii) the form of Supplemental
Indenture proposed to be entered into between Diamond Offshore and The Chase
Manhattan Bank, as Trustee (the "Trustee"), relating to the Notes, (iii) such
press release and (iv) the Statement of Eligibility of the Trustee on Form T-1.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
<TABLE>
<CAPTION>
Exhibit number Description
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<S> <C>
1.1 Form of Underwriting Agreement between Diamond
Offshore Drilling, Inc. and Credit Suisse First Boston
Corporation, individually and as the Representative of
the Underwriters named therein (filed herewith).
4.1 Form of Supplemental Indenture between Diamond
Offshore Drilling, Inc. and The Chase Manhattan Bank,
as Trustee (filed herewith).
20.1 Press Release of Diamond Offshore Drilling, Inc. dated
January 23, 1997 (filed herewith).
25.1 Statement of Eligibility of Trustee on Form T-1 (filed
herewith).
</TABLE>
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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: January 29, 1997
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit number Description
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<S> <C>
1.1 Form of Underwriting Agreement between Diamond
Offshore Drilling, Inc. and Credit Suisse First Boston
Corporation, individually and as the Representative of
the Underwriters named therein (filed herewith).
4.1 Form of Supplemental Indenture between Diamond
Offshore Drilling, Inc. and The Chase Manhattan Bank,
as Trustee (filed herewith).
20.1 Press Release of Diamond Offshore Drilling, Inc. of
January 23, 1997 (filed herewith).
25.1 Statement of Eligibility of Trustee on Form T-1 (filed
herewith).
</TABLE>
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EXHIBIT 1.1
DIAMOND OFFSHORE DRILLING, INC.
DEBT SECURITIES
PREFERRED 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 and warrants to purchase debt securities and
warrants to purchase preferred stock (and any debt securities, preferred stock
or common stock, par value $.01 per share, of the Company ("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 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 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.
(i) If the Offered Securities 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.
(j) If the Offered Securities 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.
(k) If the Offered Securities are convertible into Common Stock,
the outstanding shares of Common Stock are listed on The New York Stock
Exchange (the "Stock Exchange") and 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.
(l) 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
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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.
(m) 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
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).
(n) The Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts have been duly authorized,
executed and delivered by the Company.
(o) Except as disclosed in the Prospectuses 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.
(p) 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.
(q) 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.
(r) 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
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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.
(s) 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.
(t) 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.
(u) 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.
(v) 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.
(w) 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 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").
(x) 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.
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(y) 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 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.
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 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.
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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.
(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.
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(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
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
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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 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 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
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;
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(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 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 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
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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 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
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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 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;
(vi) If the Offered Securities 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;
(vii) 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;
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(viii) 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;
(ix) 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 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;
(x) 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 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;
(xi) The Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts have been duly
authorized, executed and delivered by the Company;
(xii) 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
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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;
(xiii) 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;
(xiv) 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
(xv) 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 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.
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(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 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.
15
<PAGE> 16
(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 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.
16
<PAGE> 17
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) 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) 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) 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) 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.
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 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.
17
<PAGE> 18
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
EXHIBIT 4.1
================================================================================
SUPPLEMENTAL INDENTURE
BETWEEN
DIAMOND OFFSHORE DRILLING, INC.
AND
THE CHASE MANHATTAN BANK
DATED AS OF FEBRUARY __, 1997
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I. SCOPE OF THIS SUPPLEMENTAL INDENTURE
Section 1.1 Changes, etc. Applicable Only to the 1997A Notes . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II. AMENDMENTS TO THE INDENTURE; DEFINITION OF TERMS
Section 2.1 Amendment to Section 101 of the Indenture . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.2 Amendment to Article Ten of the Indenture . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.3 Amendment to Section 501 of the Indenture . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.4 Amendment of Section 403 of the Indenture . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE III. 1997A NOTE FORM
Section 3.1 Form of 1997A Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE IV. GENERAL TERMS AND CONDITIONS OF THE 1997A NOTES
Section 4.1 Designation, Title and Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.2 Amendments to Section 305 of the Indenture . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 4.3 Amendment to Section 307 of the Indenture . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 4.4 Form of Legend for Global Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE V. REDEMPTION OF THE 1997A NOTES
Section 5.1 Right of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 5.2 Amendment to Section 1103 of the Indenture . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.3 Amendment to Section 1104 of the Indenture . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.4 Amendment to Section 1105 of the Indenture . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.5 No Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VI. CONVERSION OF 1997A NOTES
Section 6.1 Conversion Privilege and Conversion Price . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 6.2 Exercise of Conversion Privilege . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 6.3 Fractions of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.4 Adjustment of Conversion Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.5 Notice of Adjustments of Conversion Price . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 6.6 Notice of Certain Corporate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
Section 6.7 Company to Reserve Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 6.8 Taxes on Conversions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 6.9 Covenant as to Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 6.10 Cancellation of Converted 1997A Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 6.11 Provisions in Case of Reclassification . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE VII. SUBORDINATION OF 1997A NOTES
Section 7.1 1997A Notes Subordinate to Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . 30
Section 7.2 Payment Over of Proceeds upon Dissolution, Etc . . . . . . . . . . . . . . . . . . . . . . 31
Section 7.3 No Payment When Senior Indebtedness in Default . . . . . . . . . . . . . . . . . . . . . . 32
Section 7.4 Payment Permitted If No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 7.5 Subrogation to Rights of Holders of Senior Indebtedness . . . . . . . . . . . . . . . . . . 33
Section 7.6 Provisions Solely To Define Relative Rights . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 7.7 Trustee To Effectuate Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 7.8 No Waiver of Subordination Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 7.9 Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 7.10 Reliance on Judicial Order or Certificate of Liquidating Agent . . . . . . . . . . . . . . 36
Section 7.11 Trustee Not Fiduciary for Holders of Senior Indebtedness . . . . . . . . . . . . . . . . . 37
Section 7.12 Rights of Trustee as Holder of Senior Indebtedness; Preservation of Trustee's Rights . . . 37
Section 7.13 Article Applicable to Paying Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 7.14 Certain Conversions Deemed Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE VIII. RIGHT TO REQUIRE REPURCHASE
Section 8.1 Right to Require Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 8.2 Notice; Method of Exercising Repurchase Right . . . . . . . . . . . . . . . . . . . . . . . 39
Section 8.3 Deposit of Repurchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 8.4 1997A Notes Not Repurchased on Repurchase Date . . . . . . . . . . . . . . . . . . . . . . 40
Section 8.5 1997A Notes Repurchased in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 8.6 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE IX. MISCELLANEOUS
Section 9.1 Conflict of Any Provision of Indenture with Trust Indenture Act of 1939 . . . . . . . . . . 42
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
Section 9.2 New York Law to Govern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 9.3 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 9.4 Effect of Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 9.5 Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 9.6 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 9.7 Benefit of Supplemental Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 9.8 Acceptance by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 9.9 Ratification of Indenture; Supplemental Indenture Controls; Scope of Supplemental
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
</TABLE>
iii
<PAGE> 5
SUPPLEMENTAL INDENTURE
THIS SUPPLEMENTAL INDENTURE dated as of February ___, 1997 (the
"Supplemental Indenture"), to the Indenture, dated as of February ___, 1997
(the "Indenture"), between DIAMOND OFFSHORE DRILLING, INC., a Delaware
corporation (hereinafter called the "Company"), and THE CHASE MANHATTAN BANK, a
bank incorporated and existing under the laws of the State of New York
(hereinafter called the "Trustee").
RECITALS
WHEREAS, the Company has duly authorized the execution and delivery of
the Indenture to provide for the issuance from time to time of its debentures,
notes, bonds or other evidences of indebtedness (hereinafter called the
"Securities") to be issued in one or more fully registered series, as in the
Indenture provided;
WHEREAS, the Company desires and has requested the Trustee to join it
in the execution and delivery of this Supplemental Indenture in order to
establish and provide for the issuance by the Company of a series of Securities
designated as its ____% Convertible Subordinated Notes due 2007 (the "1997A
Notes"), a specimen copy of which is attached hereto as Exhibit A, on the terms
set forth herein;
WHEREAS, Section 901 of the Indenture provides that a supplemental
indenture may be entered into by the Company and the Trustee without the
consent of any holder of any Securities to, inter alia, establish any form of
Security as provided in Article Two of the Indenture and to provide for the
issuance of any series of Securities as provided in Article Three of the
Indenture and to set forth the terms thereof, provided certain conditions are
met;
WHEREAS, the conditions set forth in the Indenture for the execution
and delivery of this Supplemental Indenture have been complied with; and
WHEREAS, all things necessary to make this Supplemental Indenture a
valid agreement of the Company and the Trustee, in accordance with its terms,
and a valid amendment of, and supplement to, the Indenture have been done.
NOW, THEREFORE:
There is hereby established a series (as that term is used in Article
Two of the Indenture) of Securities to be issued under the Indenture, which
series of Securities shall
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<PAGE> 6
have the terms set forth herein and in the 1997A Notes, and in consideration of
the premises and the purchase and acceptance of the 1997A Notes by the holders
thereof, the Company mutually covenants and agrees with the Trustee, for the
equal and proportionate benefit of all holders of the 1997A Notes, that the
Indenture is supplemented and amended, to the extent and for the purposes
expressed herein, as follows:
ARTICLE I.
SCOPE OF THIS SUPPLEMENTAL INDENTURE
Section 1.1 Changes, etc. Applicable Only to the 1997A Notes.
The changes, modifications and supplements to the Indenture effected
by this Supplemental Indenture shall be applicable only with respect to, and
govern the terms of, the 1997A Notes, which shall be limited in aggregate
principal amount to (a) $350,000,000 plus (b) such aggregate principal amount
(which may not exceed $50,000,000 principal amount) of 1997A Notes as shall
be purchased by the Underwriters (as such term is defined in the Underwriting
Agreement) on the Optional Closing Date (as such term is defined in the
Underwriting Agreement) pursuant to the Underwriting Agreement dated January
___, 1997 (the "Underwriting Agreement") between the Company and Credit Suisse
First Boston Corporation, Merrill Lynch, Pierce Fenner & Smith Incorporated and
Salomon Brothers Inc, and shall not apply to any other Securities which may be
issued under the Indenture unless a supplemental indenture with respect to such
other Securities specifically incorporates such changes, modifications and
supplements. Capitalized terms used but not otherwise defined in this
Supplemental Indenture shall have the meaning assigned to such terms in the
Indenture.
ARTICLE II.
AMENDMENTS TO THE INDENTURE; DEFINITION OF TERMS
Section 2.1 Amendment to Section 101 of the Indenture.
Section 101 of the Indenture is hereby amended by adding the following
definitions in their proper alphabetical order:
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<PAGE> 7
"Beneficial Owner" shall have the meaning set forth in Section 8.6.
"Change in Control" shall have the meaning set forth in Section 8.6.
"Closing Price" of any common stock on any day shall mean the last
reported sale price regular way on such day or, in case no such sale takes
place on such day, the average of the reported closing bid and asked prices
regular way of such common stock, in each case on the New York Stock Exchange
or, if the common stock is not listed or admitted to trading on such exchange,
on the principal national securities exchange on which such common stock is
listed or admitted to trading, or, if not listed or admitted to trading on any
national securities exchange, the average of the closing bid and asked prices
as furnished by any New York Stock Exchange member firm selected from time to
time by the Board of Directors of the Company for that purpose or, if not so
available in such manner, as otherwise determined in good faith by the Board of
Directors.
"Commencement Date" shall have the meaning set forth in Section 6.4.
"Common Stock" includes any stock of any class of the Company which
has no preference in respect of dividends or of amounts payable in the event of
any voluntary or involuntary liquidation, dissolution or winding-up of the
Company and which is not subject to redemption by the Company. However,
subject to the provisions of Section 6.4, shares issuable on conversion of a
1997A Note shall include only shares of the class designated as Common Stock of
the Company at the date of this instrument or shares of any class or classes
resulting from any reclassification or reclassifications thereof and which have
no preference in respect of the payment of dividends or of amounts payable in
the event of any voluntary or involuntary liquidation, dissolution or
winding-up of the Company and which are not subject to redemption by the
Company; provided that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares
of all such classes resulting from all such reclassifications.
"Company" shall have the meaning set forth in the introductory
paragraph hereto.
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<PAGE> 8
"Consolidated Net Worth" shall mean, at any time, the Net Worth of the
Company and its Subsidiaries on a consolidated basis determined in accordance
with GAAP.
"corporation" shall means a corporation, association, joint-stock
company or business trust.
"Current Event" shall have the meaning set forth in Section 6.4.
"Exchange Act" shall mean the Securities and Exchange Act of 1934, as
amended.
"Expiration Time" shall have the meaning set forth in Section 6.4.
"Fleet Rigs" shall mean any offshore drilling rig or vessel owned from
time to time by the Company and its Subsidiaries.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect on the date of this Supplemental
Indenture.
"Group" shall have the meaning set forth in Section 8.6.
"Indenture" shall have the meaning set forth in the introductory
paragraph hereto.
"Issue Date" shall mean the date of first issuance of the 1997A Notes.
"Net Worth" shall mean, at any time with respect to the Company or a
Subsidiary thereof, the net worth of the Company or such Subsidiary, as the
case may be, determined in accordance with GAAP.
"1997A Notes" shall have the meaning assigned to such term in the
recitals hereto.
"Notice of Default" shall mean a written notice of the kind specified
in Section 501(4) or 501(5).
"Other Event" shall have the meaning set forth in Section 6.4.
"Permitted Holders" shall have the meaning set forth in Section 8.6.
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<PAGE> 9
"Purchased Shares" shall have the meaning set forth in Section 6.4.
"Reference Date" shall have the meaning set forth in Section 6.4.
"Repurchase Date" shall have the meaning set forth in Section 8.1.
"Repurchase Price" shall have the meaning set forth in Section 8.1.
"Securities" shall have the meaning set forth in the recitals hereto.
"Senior Indebtedness" shall mean the principal of and premium, if any,
and interest on all indebtedness of the Company for money borrowed, other than
the 1997A Notes, whether outstanding on the date of execution of the Indenture
or thereafter created, incurred, guaranteed or assumed, except such
indebtedness that by the terms of the instrument or instruments by which such
indebtedness was created or incurred expressly provides that it (1) is junior
in right of payment to the 1997A Notes or any other indebtedness of the Company
for borrowed money or (2) ranks pari passu in right of payment to the 1997A
Notes. The term "indebtedness for money borrowed" when used with respect to
the Company means (1) any obligation of, or any obligation guaranteed by, the
Company for the repayment of borrowed money, whether or not evidenced by bonds,
debentures, notes or other written instruments, (2) all obligations of the
Company with respect to interest rate hedging agreements to hedge interest
rates relating to Senior Indebtedness of the Company, (3) any deferred payment
obligation of, or any such obligation guaranteed by, the Company for the
payment of the purchase price of property or assets evidenced by a note or
similar instrument, and (4) any obligation of, or any such obligation
guaranteed by, the Company for the payment of rent or other amounts under a
lease of property or assets which obligation is required to be classified and
accounted for as a capitalized lease on the balance sheet of the Company under
GAAP.
"Significant Subsidiary" shall mean any Subsidiary, the Net Worth of
which represents not more than 10% of the Consolidated Net Worth of the Company
and its Subsidiaries.
"Supplemental Indenture" shall have the meaning set forth in the
introductory paragraph hereto.
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<PAGE> 10
"Trading Day" shall mean a Monday, Tuesday, Wednesday, Thursday and
Friday, other than any day on which securities are not traded on the applicable
securities exchange in the applicable securities market.
"Trustee" shall have the meaning set forth in the introductory
paragraph hereto.
"Underwriting Agreement" shall have the meaning set forth in Section
1.1.
"United States" shall mean the United States of America (including the
States thereof and the District of Columbia), its territories, its possessions
and other areas subject to its jurisdiction.
Section 2.2 Amendment to Article Ten of the Indenture.
Article Ten of the Indenture is hereby amended by adding the following
sections thereto:
Section 1006. Maintenance of Properties. The Company will cause all
properties used or useful in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and working
order, normal wear and tear excepted, and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section 1006 shall prevent the Company from discontinuing the
operation or maintenance of any of such properties, or disposing of any of
them, if such discontinuance or disposition is, in the judgment of the Company,
desirable in the conduct of its business or the business of any Subsidiary.
Section 1007. Payment of Taxes and Other Claims. The Company will pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (1) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Subsidiary or upon the income, profits or
property of the Company or any Subsidiary, and (2) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a material lien
upon the property of the Company or any Subsidiary; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or
6
<PAGE> 11
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings.
Section 1008. Waiver of Certain Covenants. The Company may omit in any
particular instance to comply with any covenant or condition set forth in
Sections 1005 to 1007, inclusive, if before the time for such compliance the
Holders of at least a majority in principal amount of the Outstanding 1997A
Notes shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such covenant or condition, but no
such waiver shall extend to or affect such covenant or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any such
covenant or condition shall remain in full force and effect.
Section 2.3 Amendment to Section 501 of the Indenture.
Section 501 of the Indenture is hereby amended by deleting subsections
(1), (2), (3), (4), (5) and (6) thereof, and inserting the following as new
subsections (1), (2), (3), (4), (5) and (6) thereof:
(1) default in the payment of any interest upon any 1997A
Note when it becomes due and payable, and continuance of such default
for a period of 30 days, whether or not such payment is prohibited by
the terms of Article VII of this Supplemental Indenture; or
(2) default in the payment of the principal of (or
premium, if any, on) any 1997A Note at its Maturity, whether or not
such payment is prohibited by the terms of Article VII of this
Supplemental Indenture; or
(3) default by the Company in the performance, or breach,
of any covenant or warranty of the Company in this Indenture (other
than a covenant or warranty a default in whose performance or whose
breach is elsewhere in this Section 501 specifically dealt with), and
continuance of such default or breach for a period of 60 days after
there has been given, by registered or certified mail, to the Company
by the Trustee or to the Company and the Trustee by the Holders of at
least 25% in principal amount of the Outstanding 1997A Notes a written
notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder; or
7
<PAGE> 12
(4) a default under any bonds, debentures, notes or other
evidences of indebtedness for money borrowed by the Company or a
Subsidiary or under any mortgages, indentures or instruments under
which there may be issued or by which there may be secured or
evidenced any indebtedness for money borrowed by the Company or a
Subsidiary, whether such indebtedness now exists or shall hereafter be
created, which indebtedness, individually or in the aggregate, is in
excess of $25.0 million principal amount (excluding any such
indebtedness of any Significant Subsidiary, which indebtedness of such
Significant Subsidiary is nonrecourse to the Company or any other
Subsidiary), which default shall constitute a failure to pay any
portion of the principal of such indebtedness when due and payable
after the expiration of any applicable grace or cure period with
respect thereto or shall have resulted in such indebtedness becoming
or being declared due and payable prior to the date on which it would
otherwise have become due and payable, without such indebtedness
having been discharged, or such acceleration having been rescinded or
annulled, within a period of 10 days after there shall have been
given, by registered or certified mail, to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding 1997A Notes a written notice
specifying such default and requiring the Company to cause such
indebtedness to be discharged or cause such acceleration to be
rescinded or annulled and stating that such notice is a "Notice of
Default" hereunder; or
(5) the entry by a court having jurisdiction in the
premises of (A) a decree or order for relief in respect of the Company
or a Significant Subsidiary in an involuntary case or proceeding under
any applicable Federal or State bankruptcy, insolvency, reorganization
or other similar law or (B) a decree or order adjudging the Company or
a Significant Subsidiary a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or a
Significant Subsidiary under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or a Significant
Subsidiary or of any substantial part of their respective properties,
or ordering the winding up or liquidation of the affairs of the
Company or a Significant Subsidiary, and the continuance of any such
decree or order for relief or any such other decree or
8
<PAGE> 13
order unstayed and in effect for a period of 60 consecutive days; or
(6) the commencement by the Company or a Significant
Subsidiary of a voluntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by either the Company or a
Significant Subsidiary to the entry of a decree or order for relief in
respect of the Company or a Significant Subsidiary in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement
of any bankruptcy or insolvency case or proceeding against either the
Company or a Significant Subsidiary, or the filing by either the
Company or a Significant Subsidiary of a petition or answer or consent
seeking reorganization or relief under any applicable Federal or State
law, or the consent by either the Company or a Significant Subsidiary
to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or a Significant
Subsidiary or of any substantial part of their respective properties,
or the making by either the Company or a Significant Subsidiary of an
assignment for the benefit of creditors, or the admission by either
the Company or a Significant Subsidiary in writing of an inability to
pay the debts of either the Company or a Significant Subsidiary
generally as they become due, or the taking of corporate action by the
Company or a Significant Subsidiary in furtherance of any such action;
or
Section 2.4 Amendment of Section 403 of the Indenture.
Section 403(1) shall be amended by adding the following sentence to
the end thereof:
Notwithstanding the foregoing, upon the Company's exercise of the
option set forth in this Section 403(1), the Company shall be deemed
to have been discharged from its obligations with respect to the
Outstanding 1997A Notes (other than those specified below), and the
provisions of Article VII of this Supplemental Indenture shall cease
to be effective, on the date the conditions set forth in this Section
403(1) are satisfied (hereinafter, "defeasance"). For this purpose,
such defeasance
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<PAGE> 14
means that the Company shall be deemed to have paid and discharged the
entire indebtedness represented by the Outstanding 1997A Notes and to
have satisfied all its other obligations under such 1997A Notes and
this Indenture insofar as such 1997A Notes are concerned (and the
Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following which
shall survive until otherwise terminated or discharged hereunder: (A)
the rights of Holders of the 1997A Notes to receive, solely from the
trust fund described in Section 403(1)(a) and as more fully set forth
in such Section, payments in respect of the principal of, premium, if
any, and interest on, such 1997A Notes when such payments are due, (B)
the Company's obligations with respect to such 1997A Notes under
Sections 304, 305, 306, 1002 and 1003 of the Indenture and Article VI
and Article VIII of this Supplemental Indenture, (C) the rights,
powers, trusts, duties and immunities of the Trustee set forth in
Section 403(3) of the Indenture and (D) this Article IV. Subject to
compliance with this Article IV, the Company may exercise its option
under this Section 403(1) notwithstanding its prior exercise of its
option under Section 403(2).
Section 403(2) shall be amended by adding the following sentence at
the end thereof:
Notwithstanding the foregoing, upon the Company's exercise of the
option set forth in this Section 403(2), (i) the Company shall be
released from its obligations under Sections 1004, 1005, 1006 and
1007, (ii) the occurrence of an event specified in Section 501(4)
(with respect to any of Sections 1004, 1005, 1006 or Section 1007) and
501(5) shall not be deemed to be an Event of Default and (iii) the
provisions of Article VII of this Supplemental Indenture shall cease
to be effective on and after the date the conditions set forth in this
Section 403(2) are satisfied (hereinafter, "covenant defeasance").
For this purpose, such covenant defeasance means that the Company may
omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such Section or
Article, whether directly or indirectly by reason of any reference
elsewhere herein to any such Section or Article or by reason
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<PAGE> 15
of any reference in any such Section or Article to any other provision
herein or in any other document, but the remainder of this Indenture
and such 1997A Notes shall be unaffected thereby.
Each of Section 403(1)(c) and 403(2)(c) of the Indenture shall be
amended to read in its entirety as follows:
(c) no Event of Default or event which, after notice or
lapse of time or both, would become an Event of Default, shall have
occurred and be continuing on the date of deposit or, in the case of
an Event of Default set forth in Section 501(5) or (6) with respect to
the Company, at any time during the 91-day period beginning on the
date of deposit; and
Section 403 shall be amended by the addition of paragraphs (4) and
(5), which shall read in their entirety as follows:
(4) Subject to the provisions of the penultimate paragraph of Section
1003, all money and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee (or other qualifying
trustee -- collectively, for purposes of this Section 403, the
"Trustee") pursuant to this Section 403 in respect of the 1997A Notes
shall be held in trust and applied by the Trustee, in accordance with
the provisions of such 1997A Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the
Holders of such 1997A Notes, of all sums due and to become due thereon
in respect of principal, premium, if any, and interest. Money so held
in trust shall not be subject to the provisions of Article VII of this
Supplemental Indenture.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to this Section 403 or the principal
and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of the
Outstanding 1997A Notes.
Anything in this Article IV to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon
Company Request any money or U.S. Government Obligations held by it as
provided in this Section 403 which, in the opinion of a nationally
11
<PAGE> 16
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess
of the amount thereof which would then be required to be deposited to
effect an equivalent defeasance or covenant defeasance.
(5) If the Trustee or the Paying Agent is unable to apply any money in
accordance with Section 403(1) or 403(2) by reason of any order or
judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the Company's
obligations under this Indenture and the 1997A Notes shall be revived
and reinstated as though no deposit had occurred pursuant to this
Article IV until such time as the Trustee or Paying Agent is permitted
to apply all such money in accordance with Section 403(1) or 403(2);
provided, however, that if the Company makes any payment of principal
of, premium, if any, or interest on any 1997A Note following the
reinstatement of its obligations, the Company shall be subrogated to
the rights of the Holders of such 1997A Notes to receive such payment
from the money held by the Trustee or the Paying Agent.
ARTICLE III.
1997A NOTE FORM
Section 3.1 Form of 1997A Note.
The 1997A Note and the Trustee's Certificate of Authentication to be
endorsed thereon shall be substantially in the form of Exhibit A to this
Supplemental Indenture.
ARTICLE IV.
GENERAL TERMS AND CONDITIONS OF THE 1997A NOTES
Section 4.1 Designation, Title and Terms.
There is hereby authorized a series of Securities designated the
"____% Convertible Subordinated Notes due 2007", limited in aggregate principal
amount to (a) $350,000,000 plus (b) such aggregate principal amount (which
may not exceed $50,000,000 principal amount) of 1997A Notes as may be
purchased by the Underwriters on the Optional Closing Date pursuant to the
Underwriting Agreement, which amount shall be as set forth in any Company Order
for
12
<PAGE> 17
the authentication and delivery of 1997A Notes. The 1997A Notes will mature on
February 15, 2007 and bear interest at a rate of ____% per annum from
_____________, 1997, or from the most recent Interest Payment Date on which
interest has been paid or provided for, payable semi-annually on February 15
and August 15 of each year, commencing August 15, 1997, to the Holder at the
close of business on the preceding February 1 or August 1 (whether or not a
Business Day), as the case may be. Interest on the 1997A Notes will be computed
on the basis of a 360-day year comprised of twelve, 30-day months.
Principal of, and premium, if any, and interest on the 1997A Notes
will be payable, 1997A Notes may be presented for conversion and transfers of
the 1997A Notes will be registrable at the office or agency of the Company in
the Borough of Manhattan, The City of New York, and transfers of the 1997A
Notes will also be registrable at such other office or agency of the Company as
may be maintained for such purpose. In addition, payment of interest may be
made, at the option of the Company, by check mailed to the address of the
person entitled thereto as shown on the 1997A Notes Security Register.
The 1997A Notes will be redeemable as provided in Article V hereof.
The 1997A Notes will be convertible as provided in Article VI hereof.
The 1997A Notes will be subordinated in right of payment to Senior
Indebtedness of the Company as provided in Article VII hereof.
The 1997A Notes will be subject to repurchase by the Company, at the
option of the Holders, as provided in Article VIII hereof.
Section 4.2 Amendments to Section 305 of the Indenture.
Section 305 of the Indenture is hereby amended by inserting the
following at the end of such section:
Each Global Security representing 1997A Notes authenticated
under this Indenture shall be registered in the name of the Depositary
designated for such Global Security or a nominee thereof and delivered
to such Depositary or a nominee thereof or custodian therefor, and
each such Global Security shall constitute a single Security for all
purposes of this Indenture.
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<PAGE> 18
Any exchange of a Global Security representing 1997A Notes for
other Securities may be made in whole or in part, and all Securities
issued in exchange for a Global Security representing 1997A Notes or
any portion thereof shall be registered in such names as the
Depositary for such Global Security shall direct.
If at any time the Depositary for the 1997A Notes notifies the
Company that it is unwilling or unable to continue as Depositary for
the 1997A Notes or if at any time the Depositary for the 1997A Notes
shall no longer be qualified to serve as the Depositary, the Company
shall appoint a successor Depositary with respect to the 1997A Notes.
If a successor Depositary for the 1997A Notes is not appointed by the
Company within 90 days after the Company receives such notice or
becomes aware of such ineligibility, the Company will execute, and the
Trustee, upon receipt of a Company Order for the authentication and
delivery of definitive 1997A Notes, will authenticate and deliver
1997A Notes of like tenor and terms in definitive form in an aggregate
principal amount equal to the principal amount of the Global Security
or Securities representing 1997A Notes in exchange for such Global
Security or Securities.
The Company may at any time and in its sole discretion
determine that 1997A Notes issued in the form of one or more Global
Securities shall no longer be represented by such Global Securities.
In such event, the Company will execute, and the Trustee, upon receipt
of a Company Order for the authentication and delivery of definitive
1997A Notes, will authenticate and deliver 1997A Notes of like tenor
and terms in definitive form in an aggregate principal amount equal to
the principal amount of the Global Security or Securities representing
1997A Notes in exchange for such Global Security or Securities.
Notwithstanding any other provision in this Indenture, no
Global Security representing 1997A Notes may be transferred to, or
registered or exchanged for 1997A Notes registered in the name of, any
Person other than the Depositary for such Global Security or any
nominee thereof, and no such transfer may be registered, unless (1)
such Depositary (A) notifies the Company that it is unwilling or
unable to continue as Depositary for such Global Security or (B)
ceases to be qualified to serve as Depositary, (2) the Company
executes and delivers to the Trustee a Company Order that such Global
Security shall be so transferable, registrable and
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<PAGE> 19
exchangeable, and such transfers shall be registrable, or (3) there
shall have occurred and be continuing an Event of Default.
Notwithstanding any other provision in this Indenture, a Global
Security representing 1997A Notes to which the restriction set forth
in the preceding sentence shall have ceased to apply may be
transferred only to, and may be registered and exchanged for 1997A
Notes registered only in the name or names of, such Person or Persons
as the Depositary for such Global Security shall have directed and no
transfer thereof other than such a transfer may be registered.
Every 1997A Note authenticated and delivered upon registration
of transfer, or in exchange for or in lieu of, a Global Security
representing 1997A Notes to which the restriction set forth in the
first sentence of the preceding paragraph shall apply, whether
pursuant to this Section 305, Sections 304, 306 or otherwise, shall be
authenticated and delivered in the form of, and shall be, a Global
Security unless such 1997A Note Security is registered in the name of
a Person other than the Depositary for such Global Security or a
nominee thereof.
Section 4.3 Amendment to Section 307 of the Indenture.
Section 307 of the Indenture is hereby amended by inserting the
following at the end of such section:
In the case of any 1997A Note which is converted after any
Regular Record Date and on or prior to the corresponding Interest
Payment Date, interest on such 1997A Note whose Stated Maturity is
on such Interest Payment Date shall be deemed to continue to accrue
and shall be payable on such Interest Payment Date notwithstanding
such conversion and notwithstanding that such 1997A Note may have been
called for redemption on a Redemption Date within such period, and
such interest (whether or not punctually paid or duly provided for)
shall be paid to the Person in whose name that 1997A Note (or one or
more Predecessor Securities) is registered at the close of business on
such Regular Record Date. Except as otherwise expressly provided in
the immediately preceding sentence, in the case of any 1997A Note
which is converted, interest whose Stated Maturity is after the date
of conversion of such 1997A Note shall not be payable (although such
accrued and unpaid interest will be deemed paid by the appropriate
portion of the Common Stock received by the holders upon such
conversion).
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<PAGE> 20
Section 4.4 Form of Legend for Global Securities.
Every Global Security authenticated and delivered hereunder shall bear
a legend in substantially the following form:
This Security is a Global Security within the meaning of the
Indenture and Supplemental Indenture hereinafter referred to and is
registered in the name of a Depositary or a nominee of a Depositary.
This Security is exchangeable for Securities registered in the name of
a Person other than the Depositary or its nominee only in the limited
circumstances described in the Indenture and Supplemental Indenture
and no transfer of this Security (other than a transfer of this
Security as a whole by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee
of the Depositary) may be registered except in such limited
circumstances.
ARTICLE V.
REDEMPTION OF THE 1997A NOTES
Section 5.1 Right of Redemption.
(a) Subject to the provisions of Article Eleven of the Indenture,
the Company shall have the right to redeem the 1997A Notes, in whole or in
part, at any time and from time to time, on or after February 15, 2001. Any
redemption pursuant to this paragraph will be made upon not less than 30 days
nor more than 60 days notice to the Holders of the 1997A Notes, at the
following Redemption Prices (expressed as percentages of the principal amount
of the 1997A Notes), if redeemed during the 12-month period beginning on
February 15 of the years set forth below:
<TABLE>
<CAPTION>
Year Redemption Price
---- ----------------
<S> <C>
2001 %
2002
2003
2004
2005
</TABLE>
and thereafter at 100% of the principal amount thereof; in each case together
with accrued and unpaid interest to (but not including) the Redemption Date
(subject to the rights of Holders on any Regular Record Date to receive
interest due on
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<PAGE> 21
any Interest Payment Date that is on or prior to such Redemption Date).
Section 5.2 Amendment to Section 1103 of the Indenture.
Section 1103 of the Indenture is hereby amended by inserting the
following as the end of such section:
If any Security selected for partial redemption is converted
in part before termination of the conversion right with respect to the
portion of the Security so selected, the converted portion of such
Security shall be deemed (so far as may be) to be the portion selected
for redemption. Securities which have been converted during a
selection of Securities to be redeemed shall be treated by the Trustee
as Outstanding for the purpose of such selection.
Section 5.3 Amendment to Section 1104 of the Indenture.
Section 1104 of the Indenture is hereby amended by inserting the
following clause (5) and renumbering clauses (5) and (6) thereof accordingly:
(5) The conversion price, the date on which the right to convert
the 1997A Notes will terminate and the place where such 1997A Notes
may be surrendered for conversion;
Section 5.4 Amendment to Section 1105 of the Indenture.
Section 1105 of the Indenture is hereby amended by inserting the
following at the end of such section:
If any Security called for redemption is converted, any money
deposited with the Trustee or with any Paying Agent or so segregated
and held in trust for the redemption of such Security shall (subject
to any right of the Holder of such Security or any Predecessor
Security to receive interest as provided in the last paragraph of
Section 307 of the Indenture) be paid to the Company upon Company
Request or, if then held by the Company, shall be released from such
trust.
Section 5.5 No Sinking Fund.
The 1997A Notes are not entitled to the benefit of any sinking fund.
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ARTICLE VI.
CONVERSION OF 1997A NOTES
Section 6.1 Conversion Privilege and Conversion Price.
Subject to and upon compliance with the provisions of this Article VI,
at the option of the Holder thereof, any 1997A Note or any portion of the
principal amount thereof which is $1,000 or an integral multiple of $1,000 may
be converted at the principal amount thereof, or of such portion thereof, into
fully paid and nonassessable shares of Common Stock of the Company at any time
following the date of original issuance of 1997A Notes at the conversion price,
determined as hereinafter provided, in effect at the time of conversion. Such
conversion right shall expire at the close of business on the Business Day
immediately preceding February 15, 2007. In case a 1997A Note or portion
thereof is called for redemption, such conversion right in respect of the 1997A
Note or portion so called shall expire at the close of business on the Business
Day immediately preceding the corresponding Redemption Date, unless the Company
defaults in making the payment due upon redemption.
The price at which shares of Common Stock shall be delivered upon
conversion (herein called the "conversion price") shall be initially $_____ per
share of Common Stock. The conversion price shall be adjusted in certain
instances as provided in Section 6.4.
In case the Company shall, by dividend or otherwise, declare or make a
distribution on its Common Stock referred to in paragraph (4) or (5) of Section
6.4, including without limitation, dividends or distributions referred to in
the last sentence of paragraph (4) of Section 6.4, the Holder of each 1997A
Note, upon the conversion thereof pursuant to this Article VI subsequent to the
close of business on the date fixed for the determination of stockholders
entitled to receive such distribution and prior to the effectiveness of the
conversion price adjustment in respect of such distribution pursuant to
paragraph (4) or (5) of Section 6.4, shall also be entitled to receive for each
share of Common Stock into which such 1997A Note is converted, the portion of
the evidences of indebtedness, shares of capital stock, securities, cash and
assets so distributed applicable to one share of Common Stock, provided that,
at the election of the Company (whose election shall be evidenced by a Board
Resolution) with respect to all Holders so converting, the Company may, in lieu
of distributing to such Holder any portion of such distribution not consisting
of cash or
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<PAGE> 23
securities of the Company, pay such Holder an amount in cash equal to the fair
market value thereof (as determined in good faith by the Board of Directors,
whose determination shall be conclusive and described in a Board Resolution).
If any conversion of a 1997A Note described in the immediately preceding
sentence occurs prior to the payment date for a distribution to holders of
Common Stock which the Holder of the 1997A Note so converted is entitled to
receive in accordance with the immediately preceding sentence, the Company may
elect (such election to be evidenced by a Board Resolution) to distribute to
such Holder a due bill for the evidences of indebtedness, shares of capital
stock, securities, cash or assets to which such Holder is so entitled, provided
that such due bill (i) meets any applicable requirements of the principal
national securities exchange or other market on which the Common Stock is then
traded and (ii) requires payment or delivery of such evidences of indebtedness,
shares of capital stock, securities, cash or assets no later than the date of
payment or delivery thereof to holders of Common Stock receiving such
distribution.
Section 6.2 Exercise of Conversion Privilege.
In order to exercise the conversion privilege, the Holder of any 1997A
Note to be converted shall surrender such 1997A Note, duly endorsed or assigned
to the Company or in blank, at any office or agency maintained by the Company
pursuant to Section 1002 of the Indenture, accompanied by written notice (as
set forth in the form of Conversion Notice set forth as part of Exhibit A) to
the Company at such office or agency that the Holder elects to convert such
1997A Note or portion thereof.
Except as described in the last paragraph of Section 307 of the
Indenture (as amended hereby), no Holder of Securities will be entitled upon
conversion thereof to any payment or adjustment on account of accrued and
unpaid interest thereon (although such accrued and unpaid interest will be
deemed paid by the appropriate portion of the Common Stock received by the
holders upon such conversion) or on account of dividends on the shares of
Common Stock issued in connection therewith. Securities surrendered for
conversion during the period from the close of business on any Regular Record
Date to the opening of business on the corresponding Interest Payment Date
(except Securities called for redemption on a Redemption Date within such
period between and including such Regular Record Date and such Interest Payment
Date) must be accompanied by payment to the Company in New York Clearing House
Funds or other funds acceptable to the Company of an
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<PAGE> 24
amount equal to the interest payable on such Interest Payment Date on the
principal amount converted.
Securities shall be deemed to have been converted immediately prior to
the close of business on the day of surrender of such Securities for conversion
in accordance with the foregoing provisions, and at such time the rights of the
Holders of such Securities as Holders shall cease, and the Person or Persons
entitled to receive the Common Stock issuable upon conversion shall be treated
for all purposes as the record holder or holders of such Common Stock at such
time. As promptly as practicable on or after the conversion date, the Company
shall issue and shall deliver at such office or agency a certificate or
certificates for the number of full shares of Common Stock issuable upon
conversion, together with payment in lieu of any fraction of a share as
provided in Section 6.3.
In the case of any 1997A Note which is converted in part only, upon
such conversion the Company shall execute and the Trustee shall authenticate
and deliver to the Holder thereof, at the expense of the Company, a new 1997A
Note of authorized denominations in aggregate principal amount equal to the
unconverted portion of the principal amount of such 1997A Note.
Section 6.3 Fractions of Shares.
No fractional shares of Common Stock shall be issued upon conversion
of 1997A Notes. If more than one 1997A Note shall be surrendered for conversion
at one time by the same Holder, the number of full shares which shall be
issuable upon conversion thereof shall be computed on the basis of the
aggregate principal amount of the 1997A Notes (or specified portions thereof)
so surrendered. Instead of any fractional share of Common Stock which would
otherwise be issuable upon conversion of any 1997A Note (or specified portions
thereof), the Company shall pay a cash adjustment in respect of such fraction
in an amount equal to the same fraction of the Closing Price per share of the
Common Stock at the close of business on the day of conversion (or, if such day
is not a Trading Day, on the Trading Day immediately preceding such day).
Section 6.4 Adjustment of Conversion Price.
(1) In case the Company shall pay or make a dividend or other
distribution on its Common Stock exclusively in Common Stock or shall pay or
make a dividend or other distribution on any other class of capital stock of
the Company which
20
<PAGE> 25
dividend or distribution includes Common Stock, the conversion price in effect
at the opening of business on the day next following the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution shall be reduced by multiplying such conversion price by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such determination
and the denominator shall be the sum of such number of shares and the total
number of shares constituting such dividend or other distribution, such
reduction to become effective immediately after the opening of business on the
day next following the date fixed for such determination. For the purposes of
this paragraph (1), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company but
shall include shares issuable in respect of scrip certificates issued in lieu
of fractions of shares of Common Stock. The Company shall not pay any dividend
or make any distribution on shares of Common Stock held in the treasury of the
Company.
(2) In case the Company shall pay or make a dividend or other
distribution on its Common Stock consisting exclusively of, or shall otherwise
issue to all holders of its Common Stock, rights, warrants or options entitling
the holders thereof to subscribe for or purchase shares of Common Stock at a
price per share less than the current market price per share (determined as
provided in paragraph (7) of this Section 6.4) of the Common Stock on the date
fixed for the determination of stockholders entitled to receive such rights,
warrants or options, the conversion price in effect at the opening of business
on the day following the date fixed for such determination shall be reduced by
multiplying such conversion price by a fraction of which the numerator shall be
the number of shares of Common Stock outstanding at the close of business on
the date fixed for such determination plus the number of shares of Common Stock
which the aggregate of the offering price of the total number of shares of
Common Stock so offered for subscription or purchase would purchase at such
current market price and the denominator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase, such reduction to become effective immediately after
the opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (2), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of
21
<PAGE> 26
fractions of shares of Common Stock. The Company shall not issue any rights,
warrants or options in respect of shares of Common Stock held in the treasury
of the Company.
(3) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the conversion price in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and,
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the conversion price in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately increased, such
reduction or increase, as the case may be, to become effective immediately
after the opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(4) Subject to the last sentence of this paragraph (4), in case
the Company shall, by dividend or otherwise, distribute to all holders of its
Common Stock evidences of its indebtedness, shares of any class of capital
stock, securities, cash or property (excluding any rights, warrants or options
referred to in paragraph (2) of this Section 6.4, any dividend or distribution
paid exclusively in cash and any dividend or distribution referred to in
paragraph (1) of this Section 6.4), the conversion price shall be reduced so
that the same shall equal the price determined by multiplying the conversion
price in effect immediately prior to the effectiveness of the conversion price
reduction contemplated by this paragraph (4) by a fraction of which the
numerator shall be the current market price per share (determined as provided
in paragraph (7) of this Section) of the Common Stock on the date of such
effectiveness less the fair market value (as determined in good faith by the
Board of Directors, whose determination shall be conclusive and described in a
Board Resolution and shall, in the case of securities being distributed for
which prior thereto there is an actual or when issued trading market, be no
less than the value determined by reference to the average of the closing
prices in such market over the period specified in the succeeding sentence), on
the date of such effectiveness, of the portion of the evidences of
indebtedness, shares of capital stock, securities, cash and property so
distributed applicable to one share of Common Stock and the denominator shall
be such current market price per share of the Common Stock, such reduction to
become effective immediately prior to the opening of business on the day next
following the later of (a) the date fixed for the payment of such distribution
and
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<PAGE> 27
(b) the date 20 days after the notice relating to such distribution is given
pursuant to Section 6.6(a) (such later date of (a) and (b) being referred to as
the "Reference Date"). If the Board of Directors determines the fair market
value of any distribution for purposes of this paragraph (4) by reference to
the actual or when issued trading market for any securities comprising such
distribution, it must in doing so consider the prices in such market over the
same period used in computing the current market price per share pursuant to
paragraph (7) of this Section. For purposes of this paragraph (4), any dividend
or distribution that includes shares of Common Stock or rights, warrants or
options to subscribe for or purchase shares of Common Stock shall be deemed
instead to be (a) a dividend or distribution of the evidences of indebtedness,
cash, property, shares of capital stock or securities other than such shares of
Common Stock or such rights, warrants or options (making any conversion price
reduction required by this paragraph (4)) immediately followed by (b) a
dividend or distribution of such shares of Common Stock or such rights,
warrants or options (making any further conversion price reduction required by
paragraph (1) or (2) of this Section 6.4, except (i) the Reference Date of such
dividend or distribution as defined in this paragraph (4) shall be substituted
as "the date fixed for the determination of stockholders entitled to receive
such dividend or other distribution", "the date fixed for the determination of
stockholders entitled to receive such rights, warrants or options" and "the
date fixed for such determination" within the meaning of paragraphs (1) and (2)
of this Section 6.4 and (ii) any shares of Common Stock included in such
dividend or distribution shall not be deemed "outstanding at the close of
business on the date fixed for such determination" within the meaning of
paragraph (1) of this Section 6.4).
(5) In case the Company shall, by dividend or otherwise, make a
distribution to all holders of its Common Stock exclusively in cash in an
aggregate amount that, together with (i) the aggregate amount of any other
distributions to all holders of its Common Stock made exclusively in cash
within the 12 months preceding the date of payment of such distribution and in
respect of which no conversion price adjustment pursuant to this paragraph (5)
has been made and (ii) the aggregate of any cash plus the fair market value (as
determined in good faith by the Board of Directors, whose determination shall
be conclusive and described in a Board Resolution), as of the expiration of the
tender or exchange offer referred to below, of consideration payable in respect
of any tender or exchange offer by the Company or a Subsidiary for all or any
portion of the Common
23
<PAGE> 28
Stock concluded within the 12 months preceding the date of payment of such
distribution and in respect of which no conversion price adjustment pursuant to
paragraph (6) of this Section 6.4 has been made, exceeds 12.5% of the product
of the current market price per share (determined as provided in paragraph (7)
of this Section 6.4) of the Common Stock on the date fixed for stockholders
entitled to receive such distribution times the number of shares of Common
Stock outstanding on such date, the conversion price shall be reduced so that
the same shall equal the price determined by multiplying the conversion price
in effect immediately prior to the effectiveness of the conversion price
reduction contemplated by this paragraph (5) by a fraction of which the
numerator shall be the current market price per share (determined as provided
in paragraph (7) of this Section 6.4) of the Common Stock on the date of such
effectiveness less the amount of cash so distributed applicable to one share of
Common Stock and the denominator shall be such current market price per share
of the Common Stock, such reduction to become effective immediately prior to
the opening of business on the later of (a) the day following the date fixed
for the payment of such distribution and (b) the date 20 days after the notice
relating to such distribution is given pursuant to Section 6.6(a).
(6) In case a tender or exchange offer made by the Company or any
Subsidiary for all or any portion of the Common Stock shall expire and such
tender or exchange offer shall involve an aggregate consideration having a fair
market value (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution) at the
last time (the "Expiration Time") tenders or exchanges may be made pursuant to
such tender or exchange offer (as it may be amended) that, together with (i)
the aggregate of the cash plus the fair market value (as determined in good
faith by the Board of Directors, whose determination shall be conclusive and
described in a Board Resolution), as of the expiration of the other tender or
exchange offer referred to below, of consideration payable in respect of any
other tender or exchange offer by the Company or a Subsidiary for all or any
portion of the Common Stock concluded within the preceding 12 months and in
respect of which no conversion price adjustment pursuant to this paragraph (6)
has been made and (ii) the aggregate amount of any distributions to all holders
of the Common Stock made exclusively in cash within the preceding 12 months and
in respect of which no conversion price adjustment pursuant to paragraph (5) of
this Section 6.4 has been made, exceeds 12.5% of the product of the current
market price per share (determined as provided in paragraph (7) of this Section
6.4)
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<PAGE> 29
of the Common Stock on the Expiration Time times the number of shares of Common
Stock outstanding (including any tendered shares) on the Expiration Time, the
conversion price shall be reduced (but not increased) so that the same shall
equal the price determined by multiplying the conversion price in effect
immediately prior to the Expiration Time by a fraction of which the numerator
shall be (i) the product of the current market price per share (determined as
provided in paragraph (7) of this Section 6.4) of the Common Stock at the
Expiration Time times the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) at the Expiration Time minus (ii)
the fair market value (determined as aforesaid) of the aggregate consideration
payable to stockholders based on the acceptance (up to any maximum specified in
the terms of the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchased Shares")
and the denominator shall be the product of (i) such current market price per
share at the Expiration Time times (ii) such number of outstanding shares at
the Expiration Time less the number of Purchased Shares, such reduction to
become effective immediately prior to the opening of business on the day
following the Expiration Time.
(7) For the purpose of any computation under this paragraph and
paragraphs (2), (4) and (5) of this Section 6.4, the current market price per
share of Common Stock on any date in question shall be deemed to be the average
of the daily Closing Prices for the 5 consecutive Trading Days selected by the
Company commencing not more than 20 Trading Days before, and ending not later
than, the date in question; provided, however, that (i) if the "ex" date (as
hereinafter defined) for any event (other than the issuance or distribution
requiring such computation) that requires an adjustment to the conversion price
pursuant to paragraph (1), (2), (3), (4), (5) or (6) above ("Other Event")
occurs on or after the 20th Trading Day prior to the date in question and prior
to the "ex" date for the issuance or distribution requiring such computation
(the "Current Event"), the Closing Price for each Trading Day prior to the "ex"
date for such Other Event shall be adjusted by multiplying such Closing Price
by the same fraction by which the conversion price is so required to be
adjusted as a result of such Other Event, (ii) if the "ex" date for any Other
Event occurs after the "ex" date for the Current Event and on or prior to the
date in question, the Closing Price for each Trading Day on and after the "ex"
date for such Other Event shall be adjusted by multiplying such Closing Price
by the reciprocal of the fraction by which the conversion price is so required
to be
25
<PAGE> 30
adjusted as a result of such Other Event, (iii) if the "ex" date for any Other
Event occurs on the "ex" date for the Current Event, one of those events shall
be deemed for purposes of clauses (i) and (ii) of this proviso to have an "ex"
date occurring prior to the "ex" date for the other event, and (iv) if the "ex"
date for the Current Event is on or prior to the date in question, after taking
into account any adjustment required pursuant to clause (ii) of this proviso,
the Closing Price for each Trading Day on or after such "ex" date shall be
adjusted by adding thereto the amount of any cash and the fair market value on
the date in question (as determined in good faith by the Board of Directors in
a manner consistent with any determination of such value for purposes of
paragraph (4) or (5) of this Section 6.4, whose determination shall be
conclusive and described in a Board Resolution) of the portion of the rights,
warrants, options, evidences of indebtedness, shares of capital stock,
securities, cash or property being distributed applicable to one share of
Common Stock. For the purpose of any computation under paragraph (6) of this
Section 6.4, the current market price per share of Common Stock on any date in
question shall be deemed to be the average of the daily Closing Prices for the
5 consecutive Trading Days selected by the Company commencing on or after the
latest (the "Commencement Date") of (i) the date 20 Trading Days before the
date in question, (ii) the date of commencement of the tender or exchange offer
requiring such computation and (iii) the date of the last amendment, if any, of
such tender or exchange offer involving a change in the maximum number of
shares for which tenders are sought or a change in the consideration offered,
and ending not later than the date of the Expiration Time of such tender or
exchange offer (or, if such Expiration Time occurs before the close of trading
on a Trading Day, not later than the Trading Day immediately preceding the date
of such Expiration Time); provided, however, that if the "ex" date for any
Other Event (other than the tender or exchange offer requiring such
computation) occurs on or after the Commencement Date and on or prior to the
date of the Expiration Time for the tender or exchange offer requiring such
computation, the Closing Price for each Trading Day prior to the "ex" date for
such Other Event shall be adjusted by multiplying such Closing Price by the
same fraction by which the conversion price is so required to be adjusted as a
result of such other event. For purposes of this paragraph, the term "ex" date,
(i) when used with respect to any issuance or distribution, means the first
date on which the Common Stock trades regular way on the relevant exchange or
in the relevant market from which the Closing Price was obtained without the
right to receive such issuance or distribution, (ii) when used with respect to
any subdivision
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<PAGE> 31
or combination of shares of Common Stock, means the first date on which the
Common Stock trades regular way on such exchange or in such market after the
time at which such subdivision or combination becomes effective, and (iii) when
used with respect to any tender or exchange offer means the first date on which
the Common Stock trades regular way on such exchange or in such market after
the Expiration Time of such tender or exchange offer.
(8) The Company may make such reductions in the conversion price,
in addition to those required by paragraphs (1), (2), (3), (4), (5) and (6) of
this Section, as it considers to be advisable in order that any event treated
for Federal income tax purposes as a dividend of stock or stock rights shall
not be taxable to the recipients.
(9) No adjustment in the conversion price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
conversion price; provided, however, that any adjustments which by reason of
this paragraph (9) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment.
Section 6.5 Notice of Adjustments of Conversion Price.
Whenever the conversion price is adjusted as herein provided:
(a) the Company shall compute the adjusted conversion price in
accordance with Section 6.4 and shall prepare a certificate signed by the
Treasurer of the Company setting forth the adjusted conversion price and
showing in reasonable detail the facts upon which such adjustment is based, and
such certificate shall forthwith be filed (with a copy to the Trustee) at each
office or agency maintained for the purpose of conversion of 1997A Notes
pursuant to Section 1002 of the Indenture; and
(b) a notice stating that the conversion price has been adjusted
and setting forth the adjusted conversion price shall forthwith be required,
and as soon as practicable after it is required, such notice shall be mailed by
the Company to all Holders at their last addresses as they shall appear in the
1997A Note Register.
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<PAGE> 32
Section 6.6 Notice of Certain Corporate Action.
In case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock payable (i) otherwise than exclusively in
cash or (ii) exclusively in cash in an amount that would require a conversion
price adjustment pursuant to paragraph (5) of Section 6.4; or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights, warrants or options to subscribe for or purchase any
shares of capital stock of any class or of any other rights (excluding employee
stock options); or
(c) of any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding shares of Common
Stock), or of any consolidation or merger to which the Company is a party and
for which approval of any stockholders of the Company is required, or of the
sale or transfer of all or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(e) the Company or any Subsidiary of the Company shall commence a
tender or exchange offer for all or a portion of the Company's outstanding
shares of Common Stock (or shall amend any such tender or exchange offer);
then the Company shall cause to be filed at each office or agency maintained
for the purpose of conversion of 1997A Notes pursuant to Section 1002 of the
Indenture, and shall cause to be mailed to all Holders at their last addresses
as they shall appear in the 1997A Note Register, at least 20 days (or 10 days
in any case specified in clause (a) or (b) above) prior to the applicable
record, effective or expiration date hereinafter specified, a notice stating
(x) the date on which a record is to be taken for the purpose of such dividend,
distribution or granting of rights, warrants or options, or, if a record is not
to be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution, rights, warrants or options are to be
determined, or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that
28
<PAGE> 33
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up, or (z) the date on which such tender offer
commenced, the date on which such tender offer is scheduled to expire unless
extended, the consideration offered and the other material terms thereof (or
the material terms of any amendment thereto).
Section 6.7 Company to Reserve Common Stock.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, solely for
the purpose of effecting the conversion of 1997A Notes, the whole number of
shares of Common Stock then issuable upon the conversion in full of all
outstanding 1997A Notes.
Section 6.8 Taxes on Conversions.
The Company will pay any and all taxes that may be payable in respect
of the issue or delivery of shares of Common Stock on conversion of 1997A Notes
pursuant hereto. The Company shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that of the Holder of
the 1997A Note to be converted, and no such issue or delivery shall be made
unless and until the Person requesting such issue has paid to the Company the
amount of any such tax, or has established to the satisfaction of the Company
that such tax has been paid.
Section 6.9 Covenant as to Common Stock.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of 1997A Notes in accordance herewith will upon issue be
newly issued (and not treasury shares) and be duly authorized, validly issued,
fully paid and nonassessable and, except as provided in Section 6.8, the
Company will pay all taxes, liens and charges with respect to the issue
thereof.
Section 6.10 Cancellation of Converted 1997A Notes.
All 1997A Notes delivered for conversion shall be delivered to the
Trustee to be canceled by or at the direction of the Trustee, which shall
dispose of the same as provided in Section 309 of the Indenture.
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<PAGE> 34
Section 6.11 Provisions in Case of Reclassification.
In the event that the Company shall be a party to any transaction
(including without limitation any (i) recapitalization or reclassification of
the Common Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination of the Common Stock), (ii) any consolidation of the Company with,
or merger of the Company into, any other person, any merger of another person
into the Company (other than a merger which does not result in a
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock of the Company), (iii) any sale or transfer of all or
substantially all of the assets of the Company, or (iv) any compulsory share
exchange pursuant to which the Common Stock is converted into the right to
receive other securities, cash or other property, then lawful provision shall
be made as part of the terms of such transaction whereby the Holder of each
1997A Note then outstanding shall have the right thereafter to convert such
1997A Note only into (subject to funds being legally available for such purpose
under applicable law at the time of such conversion) the kind and amount of
1997A Notes, cash and other property receivable upon such transaction by a
holder of the number of shares of Common Stock into which such 1997A Note might
have been converted immediately prior to such transaction. The Company or the
person formed by such consolidation or resulting from such merger or which
acquired such assets or which acquired the Company's shares, as the case may
be, shall execute and deliver to the Trustee a supplemental indenture
establishing such rights. Such supplemental indenture shall provide for
adjustments which, for events subsequent to the effective date of such
supplemental indenture, shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Article. The above provisions of this
Section 6.11 shall similarly apply to successive transactions of the foregoing
type.
ARTICLE VII.
SUBORDINATION OF 1997A NOTES
Section 7.1 1997A Notes Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a 1997A Note, by
his acceptance thereof, likewise covenants and agrees, that, to the extent and
in the manner hereinafter set
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forth in this Article VII, the indebtedness represented by the 1997A Notes and
the payment of the principal of (and premium, if any) and interest on each and
all of the 1997A Notes and all obligations of the Company under the Indenture
and this Supplemental Indenture are hereby expressly made subordinate and
junior in right of payment to the prior payment in full of all Senior
Indebtedness and that said subordination is for the benefit of the holders of
Senior Indebtedness and they and or each of them severally may enforce such
subordination.
Section 7.2 Payment Over of Proceeds upon Dissolution, Etc.
In the event of (1) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its
creditors, as such, or to its assets, or (2) any liquidation, dissolution or
other winding up of the Company, whether voluntary or involuntary and whether
or not involving insolvency or bankruptcy, or (3) any assignment for the
benefit of creditors or any other marshalling of assets and liabilities of the
Company, then and in any such event the holders of Senior Indebtedness shall be
entitled to receive payment in full of all amounts due or to become due on or
in respect of all Senior Indebtedness, or provision shall be made for such
payment in money or money's worth, before the Holders of the 1997A Notes are
entitled to receive any payment on account of principal of (or premium, if any)
or interest on the 1997A Notes, and to that end the holders of Senior
Indebtedness shall be entitled to receive, for application to the payment
thereof, any payment or distribution of any kind or character, whether in cash,
property or securities, which may be payable or deliverable in respect of the
1997A Notes in any such case, proceeding, dissolution, liquidation or other
winding up or event.
In the event that, notwithstanding the foregoing provisions of this
Section 7.2, the Trustee or the Holder of any 1997A Note shall have received
any payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, before all Senior Indebtedness is paid
in full or payment thereof provided for, and if such fact shall, at or prior to
the time of such payment or distribution, have been made known to the Trustee
or, as the case may be, such Holder, then and in such event such payment or
distribution shall be paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other
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Person making payment or distribution of assets of the Company for application
to the payment of all Senior Indebtedness remaining unpaid, to the extent
necessary to pay all Senior Indebtedness in full, after giving effect to any
concurrent payment or distribution to or for the holders of Senior
Indebtedness.
For purposes of this Article VII only, the words "cash, property or
securities" shall not be deemed to include shares of capital stock of the
Company as reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment which in
either case are subordinated in right of payment to all Senior Indebtedness
which may at the time be outstanding to substantially the same extent as, or to
a greater extent than, the 1997A Notes are so subordinated as provided in this
Article VII. The consolidation of the Company with, or the merger of the
Company into, another Person or the liquidation or dissolution of the Company
following the conveyance or transfer of its properties and assets substantially
as an entirety to another Person upon the terms and conditions set forth in
Article Eight of the Indenture shall not be deemed a dissolution, winding up,
liquidation, reorganization, assignment for the benefit of creditors or
marshalling of assets and liabilities of the Company for the purposes of this
Section 7.2 if the Person formed by such consolidation or into which the
Company is merged or which acquires by conveyance or transfer such properties
and assets substantially as an entirety, as the case may be, shall, as a part
of such consolidation, merger, conveyance or transfer, comply with the
conditions set forth in Article Eight of the Indenture.
Section 7.3 No Payment When Senior Indebtedness in Default.
(a) In the event and during the continuation of any default in the
payment of principal of (or premium, if any) or interest on any Senior
Indebtedness beyond any applicable grace period with respect thereto (unless
and until such payment default shall have been cured or waived in writing by
the holders of such Senior Indebtedness), or (b) in the event any judicial
proceeding shall be pending with respect to any such default, then no payment
shall be made by the Company on account of principal of (or premium, if any) or
interest on the 1997A Notes or on account of the purchase or other acquisition
of 1997A Notes (including pursuant to Articles V and VIII hereof).
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In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any 1997A Note prohibited by
the foregoing provisions of this Section 7.3, and if such fact shall, at or
prior to the time of such payment, have been made known to the Trustee or, as
the case may be, such Holder, then and in such event such payment shall be paid
over and delivered forthwith to the Company.
The provisions of this Section 7.3 shall not apply to any payment with
respect to which Section 7.2 would be applicable.
Section 7.4 Payment Permitted If No Default.
Nothing contained in this Article VII or elsewhere in this
Supplemental Indenture or the Indenture or in any of the 1997A Notes shall
prevent (1) the Company, at any time except during the pendency of any case,
proceeding, dissolution, liquidation or other winding up, assignment for the
benefit of creditors or other marshalling of assets and liabilities of the
Company referred to in Section 7.2 or under the conditions described in Section
7.3, from making payments at any time of principal of (and premium, if any) or
interest on the 1997A Notes, or (2) the application by the Trustee of any money
deposited with it hereunder to the payment of or on account of the principal of
(and premium, if any) or interest on the 1997A Notes or the retention of such
payment by the Holders, if, at the time of such application by the Trustee, it
did not have knowledge that such payment would have been prohibited by the
provisions of this Article VII.
Section 7.5 Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness, and until
the 1997A Notes are paid in full, the Holders of the 1997A Notes shall be
subrogated (equally and ratably with the holders of all indebtedness of the
Company which by its express terms is subordinated to indebtedness of the
Company to substantially the same extent as the 1997A Notes are subordinated
and is entitled to like rights of subrogation) to the rights of the holders of
such Senior Indebtedness to receive payments and distributions of cash,
property and securities applicable to the Senior Indebtedness to the extent
that payments and distributions otherwise payable to Holders of 1997A Notes
have been applied to the payment of Senior Indebtedness as provided by this
Article VII. For purposes of such subrogation, no payments or distributions to
the holders of the Senior Indebtedness of
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any cash, property or securities to which the Holders of the 1997A Notes or the
Trustee would be entitled, except for the provisions of this Article VII, and
no payments over pursuant to the provisions of this Article VII to the holders
of Senior Indebtedness by Holders of the 1997A Notes or the Trustee, shall, as
among the Company, its creditors other than holders of Senior Indebtedness and
the Holders of the 1997A Notes, be deemed to be a payment or distribution by
the Company to or on account of the Senior Indebtedness.
Section 7.6 Provisions Solely To Define Relative Rights.
The provisions of this Article VII are and are intended solely for the
purpose of defining the relative rights of the Holders of the 1997A Notes on
the one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article VII or elsewhere in this Supplemental Indenture or
the Indenture or in the 1997A Notes is intended to or shall (1) impair, as
among the Company, its creditors other than holders of Senior Indebtedness and
the Holders of the 1997A Notes, the obligation of the Company, which is
absolute and unconditional (and which, subject to the rights under this Article
VII of the holders of Senior Indebtedness, is intended to rank equally with all
other general obligations of the Company), to pay to the Holders of the 1997A
Notes the principal of (and premium, if any) and interest on the 1997A Notes as
and when the same shall become due and payable in accordance with their terms;
or (2) affect the relative rights against the Company of the Holders of the
1997A Notes and creditors of the Company other than the holders of Senior
Indebtedness; or (3) prevent the Trustee or the Holder of any 1997A Note from
exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article VII of
the holders of Senior Indebtedness to receive cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder.
Section 7.7 Trustee To Effectuate Subordination.
Each holder of a 1997A Note by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article VII and
appoints the Trustee his attorney-in-fact for any and all such purposes.
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Section 7.8 No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
non-compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the 1997A
Notes, without incurring responsibility to the Holders of the 1997A Notes and
without impairing or releasing the subordination provided in this Article VII
or the obligations hereunder of the Holders of the 1997A Notes to the holders
of Senior Indebtedness, do any one or more of the following: (1) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, Senior Indebtedness, or otherwise amend or supplement in any manner
Senior Indebtedness or any instrument evidencing the same or any agreement
under which Senior Indebtedness is outstanding; (2) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing
Senior Indebtedness; (3) release any Person liable in any manner for the
collection of Senior Indebtedness; (4) exercise or refrain from exercising any
rights against the Company and any other Person; and (5) apply any and all sums
received from time to time to the Senior Indebtedness.
Section 7.9 Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the 1997A Notes. Notwithstanding the provisions of
this Article VII or any other provision of this Supplemental Indenture or the
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment to or by the Trustee
in respect of the 1997A Notes, unless and until the Trustee shall have received
written notice thereof from the Company or a holder of Senior Indebtedness or
from any trustee therefor; and, prior to the receipt of any such written
notice, the Trustee, subject to the provisions of Section 601 of the Indenture,
shall be entitled in all respects to assume
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that no such facts exist; provided, however, that if the Trustee shall not have
received the notice provided for in this Section 7.9 at least two Business Days
prior to the date upon which by the terms hereof any money may become payable
for any purpose (including, without limitation, the payment of the principal of
(and premium, if any) or interest on any 1997A Note), then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power
and authority to receive such money and to apply the same to the purpose for
which such money was received and shall not be affected by any notice to the
contrary which may be received by it within two Business Days prior to such
date.
Subject to the provisions of Section 601 of the Indenture, the Trustee
shall be entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee
therefor) to establish that such notice has been given by a holder of Senior
Indebtedness (or a trustee therefor). In the event that the Trustee determines
in good faith that further evidence is required with respect to the right of
any Person as a holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article VII, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article VII, and if
such evidence is not furnished, the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to receive
such payment.
Section 7.10 Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets of the Company referred to
in this Article VII, the Trustee, subject to the provisions of Section 601 of
the Indenture, and the Holders of the 1997A Notes shall be entitled to rely
upon any order or decree entered by any court of competent jurisdiction in
which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders of
1997A Notes, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the
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holders of the Senior Indebtedness and other indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article VII.
Section 7.11 Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if
it shall in good faith mistakenly pay over or distribute to Holders of 1997A
Notes or to the Company or to any other Person cash, property or securities to
which any holders of Senior Indebtedness shall be entitled by virtue of this
Article VII or otherwise.
Section 7.12 Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article VII with respect to any Senior Indebtedness
which may at any time be held by it, to the same extent as any other holder of
Senior Indebtedness, and nothing in this Supplemental Indenture shall deprive
the Trustee of any of its rights as such holder.
Nothing in this Article VII shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 607 of the Indenture.
Section 7.13 Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article VII shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article VII in addition to or in place of the Trustee; provided,
however, that Section 7.12 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
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Section 7.14 Certain Conversions Deemed Payment.
For the purposes of this Article VII only, (1) the issuance and
delivery of junior securities upon conversion of 1997A Notes in accordance with
Article VI hereof shall not be deemed to constitute a payment or distribution
on account of the principal of or premium or interest on 1997A Notes or on
account of the purchase or other acquisition of 1997A Notes, and (2) the
payment, issuance or delivery of cash, property or securities (other than
junior securities) upon conversion of a 1997A Note shall be deemed to
constitute payment on account of the principal of such 1997A Note. For the
purposes of this Section 7.14, the term "junior securities" means (1) shares of
any stock of any class of the Company and (2) securities of the Company which
are subordinated in right of payment to the prior payment in full of all Senior
Indebtedness which may be outstanding at the time of issuance or delivery of
such securities to substantially the same extent as, or to a greater extent
than, the 1997A Notes are so subordinated as provided in this Article VII.
Nothing contained in this Article VII or elsewhere in this Supplemental
Indenture or the Indenture or in the 1997A Notes is intended to or shall
impair, as among the Company, its creditors other than holders of Senior
Indebtedness and the Holders of the 1997A Notes, the right, which is absolute
and unconditional, of the Holder of any 1997A Note to convert such 1997A Note
in accordance with Article VI hereof.
ARTICLE VIII.
RIGHT TO REQUIRE REPURCHASE
Section 8.1 Right to Require Purchase.
In the event that there shall occur a Change in Control (as defined in
Section 8.6), then each Holder shall have the right, at such Holder's option,
to require the Company, subject to the provisions of Section 7.3, to repurchase
all or any designated part of such Holder's 1997A Notes on the date (the
"Repurchase Date") that is 75 days after the date the Company gives notice of
the Change in Control as contemplated in Section 8.2(a) at a price (the
"Repurchase Price") equal to 100% of the principal amount thereof, together
with accrued and unpaid interest through the Repurchase Date. Such right to
require the repurchase of 1997A Notes shall continue notwithstanding a
discharge of the Company from its obligations with respect to the 1997A Notes
in accordance with Article Four of the Indenture.
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Section 8.2 Notice; Method of Exercising Repurchase Right.
(a) On or before the 15th day after the Company knows or
reasonably should know a Change in Control has occurred, the Company, or at the
request of the Company, the Trustee (in the name and at the expense of the
Company), shall give notice of the occurrence of the Change in Control and of
the repurchase right set forth herein arising as a result thereof by
first-class mail, postage prepaid, to each Holder of the 1997A Notes at such
Holder's address appearing in the Security Register for the 1997A Notes. The
Company shall also deliver a copy of such notice of a repurchase right to the
Trustee.
Each notice of a repurchase right shall state:
(1) the Repurchase Date,
(2) the date by which the repurchase right must be
exercised,
(3) the Repurchase Price, and
(4) the instructions a Holder must follow to exercise its
repurchase right.
No failure of the Company to give the foregoing notice shall limit any
Holder's right to exercise a repurchase right. The Trustee shall have no
affirmative obligation to determine if there shall have occurred a Change in
Control.
(b) To exercise a repurchase right, a Holder shall deliver to the
Company (or an agent designated by the Company for such purpose in the notice
referred to in (a) above) and to the Trustee on or before the second Business
Day prior to the Repurchase Date (1) written notice of the Holder's exercise of
such right, which notice shall set forth the name of the Holder, the principal
amount of the 1997A Note (or portion of a 1997A Note) to be repurchased, and a
statement that an election to exercise the repurchase right is being made
thereby, and (2) the 1997A Note with respect to which the repurchase right is
being exercised, duly endorsed for transfer to the Company. Such written notice
shall be irrevocable. If the Repurchase Date falls between any Regular Record
Date and the corresponding succeeding Interest Payment Date, 1997A Notes to be
repurchased must be accompanied by payment from the Holder of an amount equal
to the interest thereon which the registered Holder thereof is to receive on
such Interest Payment Date.
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(c) In the event a repurchase right shall be exercised in
accordance with the terms hereof, the Company shall on the Repurchase Date pay
or cause to be paid in cash to the Holder thereof the Repurchase Price of the
1997A Note as to which the repurchase right had been exercised.
Section 8.3 Deposit of Repurchase Price.
On or prior to the Repurchase Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003 of the
Indenture) an amount of money sufficient to pay the Repurchase Price of the
1997A Notes which are to be repurchased on the Repurchase Date.
Section 8.4 1997A Notes Not Repurchased on Repurchase Date.
If any 1997A Note surrendered for repurchase shall not be so paid on
the Repurchase Date, the principal of such 1997A Note shall, until paid, bear
interest from the Repurchase Date at a rate borne by such 1997A Note.
Section 8.5 1997A Notes Repurchased in Part.
Any 1997A Note which is to be repurchased only in part shall be
surrendered at any office or agency of the Company designated for that purpose
pursuant to Section 1002 of the Indenture (with, if the Company or the Trustee
so requires, due endorsement by, or written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
1997A Note without service charge, a new 1997A Note of any authorized
denomination as requested by such Holder, in aggregate principal amount equal
to and in exchange for the unrepurchased portion of the principal of the 1997A
Note so surrendered.
Section 8.6 Certain Definitions.
For purposes of this Article VIII:
A "Change in Control" shall be deemed to have occurred at such time as
(a) any Person, or any Persons acting together in a manner which would
constitute a "group" (a "Group") for purposes of Section 13(d) of the Exchange
Act, or any successor provision thereto, together with any
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Affiliates thereof (in each case, excluding Permitted Holders) become the
Beneficial Owners, directly or indirectly, of capital stock of the Company,
entitling such Person or Persons and its or their Affiliates to exercise more
than 50% of the total voting power of all classes of the Company's capital
stock entitled to vote generally in the election of the Company's directors or
(b) the Company shall consolidate with or merge into any other Person (other
than a Subsidiary), or any other Person (other than a Subsidiary) shall
consolidate with or merge into the Company, or the Company shall sell, convey,
transfer or lease its properties and assets substantially as an entirety to any
Person other than a Subsidiary, and, in the case of any such transaction the
outstanding Common Stock is reclassified into, exchanged for or converted into
the right to receive any other property or security, unless the stockholders of
the Company immediately before such transaction own, directly or indirectly,
immediately following such transaction, at least a majority of the combined
voting power of the outstanding voting securities of the Person resulting from
such transaction or the Person acquiring such properties and assets, entitled
to vote generally in the election of such resulting or acquiring Person's
directors, in substantially the same proportion as their ownership of the
Common Stock immediately before such transaction, provided that, with respect
to both clause (a) and (b), a Change in Control shall not be deemed to have
occurred if at least 50% of the consideration (excluding cash payments for
fractional shares) in the transaction or transactions constituting the Change
in Control consists of shares of voting common stock that are, or upon issuance
will be, traded on a United States national securities exchange or approved for
trading on an established automated over-the-counter trading market in the
United States.
The term "Beneficial Owner" shall be determined in accordance with
Rules 13d-3 and 13d-5 promulgated by the Securities and Exchange Commission
under the Exchange Act or any successor provision thereto, except that a Person
shall be deemed to have "beneficial ownership" of all shares that such Person
has the right to acquire, whether such right is exercisable immediately or only
after the passage of time.
"Permitted Holders" means Loews Corporation, a Delaware corporation,
and any of its Subsidiaries.
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ARTICLE IX.
MISCELLANEOUS
Section 9.1 Conflict of Any Provision of Indenture with Trust Indenture
Act of 1939.
If and to the extent that any provision of this Supplemental Indenture
limits, qualifies or conflicts with another provision included in this
Supplemental Indenture or in the Indenture which is required to be included
herein or therein by any of Sections 310 to 317, inclusive, of the Trust
Indenture Act of 1939, as amended, such required provision shall control.
Section 9.2 New York Law to Govern.
THIS SUPPLEMENTAL INDENTURE AND THE 1997A NOTES SHALL BE DEEMED TO BE
CONTRACTS MADE AND TO BE PERFORMED ENTIRELY IN THE STATE OF NEW YORK, AND FOR
ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
SAID STATE WITHOUT REGARD TO THE CONFLICTS OF LAW RULES OF SAID STATE.
Section 9.3 Counterparts.
This Supplemental Indenture may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.
Section 9.4 Effect of Headings.
The Article and Section headings herein are for convenience only and
shall not affect the construction hereof.
Section 9.5 Severability of Provisions.
In case any provision in this Supplemental Indenture or in the 1997A
Notes shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 9.6 Successors and Assigns.
All covenants and agreements in this Supplemental Indenture by the
parties hereto shall bind their respective successors and assigns and inure to
the benefit of their
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respective successors and assigns, whether so expressed or not.
Section 9.7 Benefit of Supplemental Indenture.
Nothing in this Supplemental Indenture, express or implied, shall give
to any Person, other than the parties hereto, any Security Registrar, any
Paying Agent and their successors hereunder, and the Holders of the 1997A
Notes, any benefit or any legal or equitable right, remedy or claim under this
Supplemental Indenture.
Section 9.8 Acceptance by Trustee.
The Trustee accepts the amendments to the Indenture effected by this
Supplemental Indenture and agrees to execute the trusts created by the
Indenture as hereby amended, but only upon the terms and conditions set forth
in this Supplemental Indenture and the Indenture. Without limiting the
generality of the foregoing, the Trustee assumes no responsibility for the
correctness of the recitals contained herein, which shall be taken as the
statements of the Company and except as provided in the Indenture the Trustee
shall not be responsible or accountable in any way whatsoever for or with
respect to the validity or execution or sufficiency of this Supplemental
Indenture and the Trustee makes no representation with respect thereto.
Section 9.9 Ratification of Indenture; Supplemental Indenture Controls;
Scope of Supplemental Indenture.
(a) The Indenture, as supplemented by this Supplemental Indenture,
is in all respects ratified and confirmed, and this Supplemental Indenture
shall be deemed part of the Indenture in the manner and to the extent herein
and therein provided. The provisions of this Supplemental Indenture shall,
subject to Section 9.1 hereof, supersede the provisions of the Indenture to the
extent the Indenture is inconsistent herewith.
(b) The changes, modifications and supplements to the Indenture
effected by this Supplemental Indenture shall be applicable only with respect
to, and govern the terms of, the 1997A Notes, and shall not apply to any other
Securities which may be issued under the Indenture unless a supplemental
indenture with respect to such other Securities specifically incorporates such
changes, modifications and supplements.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the day and year first above written.
DIAMOND OFFSHORE DRILLING, INC.
By:_____________________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
as Trustee
By:_____________________________________
Name:
Title:
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<PAGE> 49
EXHIBIT A
Form of Face of 1997A Note
DIAMOND OFFSHORE DRILLING, INC.
_____% Convertible Subordinated Note Due 2007
No._____ $_______
Diamond Offshore Drilling, Inc., a Delaware corporation (herein called
the "Company", which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to ____________, or registered assigns, the principal sum of _____________
Dollars on February 15, 2007 and to pay interest thereon from _________ ___,
1997 or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, semi-annually on February 15 and August 15 in each
year, commencing August 15, 1997, at the rate of _____% per annum, until the
principal hereof is paid or made available for payment. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in such Indenture, be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which shall be the
February 1 or August 1 (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date. Any such interest not so punctually
paid or duly provided for will forthwith cease to be payable to the Holder on
such Regular Record Date and may either be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders
of Securities not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture. Payment of the principal of (and premium, if any)
and interest on this Security will be made at the office or agency of the
Company maintained for that purpose in the Borough of Manhattan, The City of
New York and at any other office or agency maintained by the Company for such
purpose, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of
A-1
<PAGE> 50
the Company payment of interest may be made by check mailed to the address of
the Person entitled thereto as such address shall appear in the Security
Register.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
DIAMOND OFFSHORE DRILLING, INC.
By:_____________________________________
Name:
Title:
Attest:
______________________________
A-2
<PAGE> 51
Form of Reverse of 1997A Note
This 1997A Note is one of a duly authorized issue of debentures,
notes, bonds or other evidences of indebtedness of the Company (herein called
the "Securities") issued and to be issued under an Indenture, dated as of
____________, 1997, as supplemented by the Supplemental Indenture dated as of
___________, 1997 (herein called the "Supplemental Indenture" and, together
with the Indenture, the "Indenture"), among the Company and The Chase Manhattan
Bank, as Trustee (herein called the "Trustee," which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee, the holders of Senior Indebtedness of the Company and the Holders
of the Securities and of the terms upon which the Securities are, and are to
be, authenticated and delivered. This 1997A Note is one of a series designated
as the Company's _____% Convertible Subordinated Notes Due 2007 (herein called
the "1997A Notes"), limited in aggregate principal amount to $350,000,000
(subject to increase as provided in the Indenture up to $400,000,000
aggregate principal amount).
Subject to and upon compliance with the provisions of the Indenture,
the Holder of this 1997A Note is entitled, at his option, at any time on or
before the close of business on the Business Day next preceding February 15,
2007, or in case this 1997A Note or a portion hereof is called for redemption,
then in respect of this 1997A Note or such portion hereof until and including,
but (unless the Company defaults in making the payment due upon redemption) not
after, the close of business on the Business Day next preceding the Redemption
Date, to convert this 1997A Note (or any portion of the principal amount hereof
which is $1,000 or an integral multiple thereof), at the principal amount
hereof, or of such portion, into fully paid and non-assessable shares
(calculated as to each conversion to the nearest 1/100 of a share) of Common
Stock of the Company at a conversion price equal to $_____ for each share of
Common Stock (or at the current adjusted conversion price if an adjustment
has been made as provided in the Indenture) by surrender of this 1997A Note,
duly endorsed or assigned to the Company or in blank, to the Company at its
office or agency in the Borough of Manhattan, The City of New York or at any
other office or agency maintained by the Company for such purpose, accompanied
by written notice to the Company that the Holder hereof elects to convert
this 1997A Note, or if less than the entire
A-3
<PAGE> 52
principal amount hereof is to be converted, the portion hereof to be converted,
and, in case such surrender shall be made during the period from the close of
business on any Regular Record Date next preceding any Interest Payment Date to
the opening of business on such Interest Payment Date (unless this 1997A Note
or the portion thereof being converted matures prior to such Interest Payment
Date or has been called for redemption on a Redemption Date within such
period), also accompanied by payment in New York Clearing House or other funds
acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of this 1997A Note then being
converted. Subject to the aforesaid requirement for payment and, in the case
of a conversion after the Regular Record Date next preceding any Interest
Payment Date and on or before such Interest Payment Date, to the right of the
Holder of this 1997A Note (or any Predecessor 1997A Note) of record at such
Regular Record Date to receive an installment of interest (with certain
exceptions provided in the Indenture), no payment or adjustment is to be made
on conversion for interest accrued hereon or for dividends on the Common Stock
issued on conversion. No fractions of shares or scrip representing fractions
of shares will be issued on conversion, but instead of any fractional interest
the Company shall pay a cash adjustment as provided in the Indenture. The
conversion price is subject to adjustment as provided in the Indenture. In
addition, the Indenture provides that in case of certain consolidations or
mergers to which the Company is a party or the transfer of substantially all of
the assets of the Company, the Indenture shall be amended, without the consent
of any Holders of Securities, so that this 1997A Note, if then outstanding,
will be convertible thereafter, during the period this 1997A Note shall be
convertible as specified above, only into the kind and amount of securities,
cash and other property receivable upon the consolidation, merger or transfer
by a holder of the number of shares of Common Stock into which this 1997A Note
might have been converted immediately prior to such consolidation, merger or
transfer (assuming such holder of Common Stock failed to exercise any rights of
election and received per share the kind and amount received per share by a
plurality of non-electing shares).
The 1997A Notes are redeemable, at the Company's option, as a whole or
in part, upon not less than 30 days' notice mailed to each Holder of 1997A
Notes to be redeemed at his address appearing in the Security Register, on any
date on or after February 15, 2001 and prior to maturity, at the following
Redemption Prices (expressed as percentages of principal amount) if redeemed
during the twelve-month period
A-4
<PAGE> 53
beginning on February 15 of the years set forth below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE YEAR PERCENTAGE
<S> <C <C> <C> <C>
2001 . . . . . . . . % 2004 . . . . . . . . . . . %
2002 . . . . . . . . % 2005 . . . . . . . . . . . %
2003 . . . . . . . . %
</TABLE>
and thereafter at 100% of the principal amount thereof; in each case together
with accrued and unpaid interest to (but not including) the Redemption Date
(subject to the rights of Holders of record on any Regular Record Date to
receive interest due on any Interest Payment Date that is on or prior to such
Redemption Date).
In the event of redemption or conversion of this 1997A Note in part
only, a new 1997A Note for the unredeemed or unconverted portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.
The indebtedness evidenced by this 1997A Note is, to the extent
provided in the Indenture, subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness of the Company, and this 1997A
Note is issued subject to the provisions of the Indenture with respect thereto.
Each Holder of this 1997A Note, by accepting the same, (1) agrees to and shall
be bound by such provisions, (2) authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination so provided and (3) appoints the Trustee his attorney-in-fact for
any and all such purposes.
In the event there shall occur any Change in Control, each Holder of
1997A Notes shall have the right, at such Holder's option but subject to the
conditions set forth in the Indenture, to require the Company to repurchase on
the Repurchase Date all or any part of such Holder's 1997A Notes at a
Repurchase Price equal to 100% of the principal amount thereof, together with
accrued and unpaid interest to the Repurchase Date and in the manner specified
in the Indenture.
If an Event of Default shall occur and be continuing, the principal of
all the 1997A Notes may be declared due and payable in the manner and with the
effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any
A-5
<PAGE> 54
time by the Company and the Trustee with the consent of the Holders of not less
than a majority in aggregate principal amount of the Securities at the time
Outstanding of each series affected by such amendment or modification. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities of such series, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this 1997A Note shall be conclusive and
binding upon such Holder and upon all future Holders of this 1997A Note and of
any 1997A Note issued upon the registration of transfer hereof or in exchange
hereto or in lieu hereof, whether or not notation of such consent or waiver is
made upon this 1997A Note.
No reference herein to the Indenture and no provision of this 1997A
Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of (and premium, if
any) and interest on this 1997A Note at the times, place and rate, and in the
coin or currency, herein prescribed or to convert this 1997A Note as provided
in the Indenture.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this 1997A Note is registrable in the
Security Register, upon surrender of this 1997A Note for registration of
transfer at the office or agency of the Company in the Borough of Manhattan,
The City of New York or at any other office or agency maintained by the Company
for such purpose, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the 1997A Note Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new 1997A Notes, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.
The 1997A Notes are issuable only in registered form without coupons
in denominations of $1,000 and any integral multiple thereof. As provided in
the Indenture and subject to certain limitations therein set forth, 1997A Notes
are exchangeable for a like aggregate principal amount of 1997A Notes of a
different authorized denomination, as requested by the Holder surrendering the
same.
A-6
<PAGE> 55
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this 1997A Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this 1997A Note is registered as the owner
hereof for all purposes, whether or not this 1997A Note be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this 1997A Note which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
A-7
<PAGE> 56
Form of Trustee's Certificate of Authentication
This is one of the Securities referred to in the within-mentioned
Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By:_____________________________________
Authorized Officer
Form of Election to Convert
To Diamond Offshore Drilling, Inc.:
The undersigned owner of this 1997A
Note hereby irrevocably exercises the option to convert this 1997A Note, or the
portion below designated, into shares of Common Stock of Diamond Offshore
Drilling, Inc. in accordance with the terms of the Indenture referred to in
this 1997A Note, and directs that the shares issuable and deliverable upon
conversion, together with any check in payment for fractional shares, be issued
in the name of and delivered to the undersigned registered Holder hereof,
unless a different name has been indicated in the assignment below. If shares
are to be issued in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto. Any
amount required to be paid by the undersigned on account of interest
accompanies this 1997A Note.
Dated:
Portion of 1997A Note to be
converted ($1,000 or an
integral multiple thereof):
$
________________________________________
Signature (for conversion only)
If shares of Common Stock are to be
issued and registered otherwise than to
the registered Holder named above,
please print or typewrite name and
address, including zip code, and social
security or other taxpayer
identification number.
________________________________________
A-8
<PAGE> 1
EXHIBIT 20.1
NEWS RELEASE
FOR IMMEDIATE RELEASE CONTACT: Laura Herzog
Thursday, January 23, 1997 (281) 492-5393
DIAMOND OFFSHORE DRILLING, INC.
ANNOUNCES EARNINGS AND
CONVERTIBLE SUBORDINATED NOTES OFFERING
Houston, Texas, January 23, 1997 -- Diamond Offshore Drilling, Inc. (NYSE:DO)
today reported net income of $56.2 million, or $.82 per share, on revenues of
$187.0 million for the quarter ended December 31, 1996. This compares to net
income of $5.9 million on revenues of $98.0 million for the quarter ended
December 31, 1995. On a pro forma basis, which restates the Company's actual
results as if the Company's public offering in October of 1995 had taken place
on January 1, 1995, net income per share for the quarter ended December 31,
1995 was $.13. Net income for the fourth quarter of 1996 included an after-tax
gain of $16.2 million, or $.24 per share, related to asset sales, offset by an
after-tax charge of $2.2 million, or $.03 per share, primarily related to
origination costs for a loan which was refinanced during the period.
For the year ended December 31, 1996, the Company reported net income of $146.4
million, or $2.35 per share, on revenues of $611.4 million. This compares to a
net loss of $7.0 million on revenues of $336.6 million, or $.20 per share on a
pro forma basis, for the year ended December 31, 1995. Net income for the full
year 1996 included an after-tax gain of $22.8 million, or $.37 per share,
related to asset sales, offset by an after-tax charge of $2.2 million, or $.03
per share, primarily related to loan origination costs.
Separately, Diamond Offshore announced that it plans to offer $300 million of
Convertible Subordinated Notes due 2007 in a public offering to be lead managed
by Credit Suisse First Boston. The Company filed a shelf registration
statement on Form S-3 on January 17, 1997 for a maximum amount of $600 million,
and will be issuing the Notes pursuant to a prospectus supplement to the shelf
registration statement.
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 is operating in the waters of six of the world's
seven continents.
<PAGE> 2
This announcement is neither an offer to sell, nor a solicitation of an offer
to buy, any of the Convertible Subordinated Notes. The offer is made only by a
prospectus supplement, copies of which may be obtained in any state in which
this announcement is circulated where Credit Suisse First Boston and the other
underwriters may legally offer such securities in compliance with the
securities laws of such state.
<PAGE> 3
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
----------------------- -----------------------
1996 1995
----------------------- -----------------------
<S> <C> <C> <C> <C>
ASSETS
------
Current assets:
Cash items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 28,180 15,347
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . 172,214 74,496
Rig inventory and supplies . . . . . . . . . . . . . . . . . . . . . 30,407 15,330
Prepaid expenses and other . . . . . . . . . . . . . . . . . . . . . 12,166 10,601
----------------------- -----------------------
Total current assets . . . . . . . . . . . . . . . . . . . . . . 242,967 115,774
Drilling and other property and equipment, less
accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . 1,198,160 502,278
Goodwill, net of amortization, and other assets . . . . . . . . . . . . . 133,373 --
----------------------- -----------------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,574,500 618,052
======================= =======================
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 128,000 52,251
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63,000 --
Deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . 176,296 72,907
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,472 --
Stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . 1,194,732 492,894
----------------------- -----------------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,574,500 618,052
======================= =======================
</TABLE>
<PAGE> 4
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
QUARTER ENDED
DECEMBER 31,
----------------------------------------
1996 1995
----------------------------------------
(in thousands)
<S> <C> <C>
REVENUES
Fourth-Generation Semisubmersibles . . . . . . . . . . . . . . . $35,400 $20,737
Other Semisubmersibles . . . . . . . . . . . . . . . . . . . . . 103,957 46,967
Jack-ups . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,268 18,890
Turnkey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,579 15,255
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,295 5,180
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 4
Eliminations . . . . . . . . . . . . . . . . . . . . . . . . . . (3,542) (9,031)
----------------------------------------
Total Revenues . . . . . . . . . . . . . . . . . . . . . . . $186,957 $98,002
========================================
CONTRACT DRILLING EXPENSE
Fourth-Generation Semisubmersibles . . . . . . . . . . . . . . . 11,652 8,927
Other Semisubmersibles . . . . . . . . . . . . . . . . . . . . . 54,626 35,036
Jack-ups . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,109 14,737
Turnkey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,811 17,963
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,883 5,022
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309 1,895
Eliminations . . . . . . . . . . . . . . . . . . . . . . . . . . (3,845) (9,280)
----------------------------------------
Total Contract Drilling Expense $99,545 $74,300
========================================
OPERATING INCOME
Fourth-Generation Semisubmersibles . . . . . . . . . . . . . . . $23,748 $11,810
Other Semisubmersibles . . . . . . . . . . . . . . . . . . . . . 49,331 11,931
Jack-ups . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,159 4,153
Turnkey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 768 (2,708)
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 412 158
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (309) (1,891)
Eliminations . . . . . . . . . . . . . . . . . . . . . . . . . . 303 249
General and Administrative Expense (4,979) (4,404)
Depreciation and Amortization Expense . . . . . . . . . . . . . . (23,705) (11,440)
Gain on Sale of Assets . . . . . . . . . . . . . . . . . . . . . 24,933 895
----------------------------------------
Total Operating Income . . . . . . . . . . . . . . . . . . . $83,661 $8,753
========================================
</TABLE>
<PAGE> 5
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31 DECEMBER 31
----------------------------- ---------------------------------
1996 1995 1996 1995
----------------------------- ---------------------------------
<S> <C> <C> <C> <C>
Revenues . . . . . . . . . . . . . . . . . . $ 186,957 $ 98,002 $ 611,430 $ 336,584
Operating expenses:
Contract Drilling . . . . . . . . . . . 99,545 74,300 341,654 259,560
General and administrative . . . . . . . 4,979 4,404 15,640 13,857
Depreciation and amortization . . . . . 23,705 11,440 75,767 52,865
Gain on sale of assets . . . . . . . . . (24,933) (895) (35,122) (1,349)
----------- ---------- ------------ -----------
Total operating expenses . . . . . 103,296 89,249 397,939 324,933
----------- ---------- ------------ -----------
Operating income . . . . . . . . . . . . . . 83,661 8,753 213,491 11,651
Other income (expense):
Interest expense . . . . . . . . . . . . (2,222) (913) (2,326) (27,052)
Currency transaction losses . . . . . . (70) (12) (28) (191)
Other . . . . . . . . . . . . . . . . . 493 526 1,568 1,789
----------- --------- ------------ -----------
Income (loss) before income tax (expense)
benefit . . . . . . . . . . . . . . . . . 81,862 8,354 212,705 (13,803)
Income tax (expense) benefit . . . . . . . . (25,708) (2,460) (66,317) 6,777
----------- --------- ------------ -----------
Net income (loss) . . . . . . . . . . . . . . $ 56,154 $ 5,894 $ 146,388 $ (7,026)
=========== ========= ============ ===========
Net income per share . . . . . . . . . . . . $ 0.82 $ 2.35
=========== ============
Weighted average shares outstanding . . . . . 68,343 62,231
=========== ============
Pro forma net income per share . . . . . . . $ 0.13 $ 0.20
========== ===========
</TABLE>
<PAGE> 1
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------------------------------
DIAMOND OFFSHORE DRILLING, INC.
(Exact name of obligor as specified in its charter)
DELAWARE 76-0321760
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
15415 KATY FREEWAY
HOUSTON, TEXAS (281) 492-5300 77094
(Address of principal executive offices) (Zip Code)
---------------------------------------------
DEBT SECURITIES
(Title of the indenture securities)
-------------------------------------------------------------------
<PAGE> 2
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York 12110.
Board of Governors of the Federal Reserve System, Washington, D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street,
New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
-2-
<PAGE> 3
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4
to Form T-1 filed in connection with Registration Statement No. 333-06249,
which is incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee,
published pursuant to law or the requirements of its supervising or
examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 28TH day of JANUARY, 1997.
THE CHASE MANHATTAN BANK
By /s/Ronald J. Halleran
-----------------------
Ronald J. Halleran
Second Vice President
- 3 -
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1996, in accordance
with a call made by the Federal Reserve Bank of this District
pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS
ASSETS IN MILLIONS
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ...........................................$ 11,095
Interest-bearing balances ................................... 4,998
Securities: .....................................................
Held to maturity securities....................................... 3,231
Available for sale securities..................................... 38,078
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold .......................................... 8,018
Securities purchased under agreements to resell ............. 731
Loans and lease financing receivables:
Loans and leases, net of unearned income..................... $130,513
Less: Allowance for loan and lease losses.................... 2,938
Less: Allocated transfer risk reserve ....................... 27
------------
Loans and leases, net of unearned income,
allowance, and reserve ...................................... 127,548
Trading Assets ................................................... 48,576
Premises and fixed assets (including capitalized
leases)........................................................... 2,850
Other real estate owned .......................................... 300
Investments in unconsolidated subsidiaries and
associated companies......................................... 92
Customer's liability to this bank on acceptances
outstanding ................................................. 2,777
Intangible assets ................................................ 1,361
Other assets ..................................................... 12,204
TOTAL ASSETS ..................................................... $261,859
===========
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<PAGE> 5
LIABILITIES
Deposits
In domestic offices ......................................... $80,163
Noninterest-bearing ......................................... $30,596
Interest-bearing ............................................ 49,567
In foreign offices, Edge and Agreement subsidiaries,
and IBF's ................................................... 65,173
Noninterest-bearing .................................... $ 3,616
Interest-bearing ............................................ 61,557
Federal funds purchased and securities sold under agreements to repurchase in
domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased ..................................... 14,594
Securities sold under agreements to repurchase .............. 14,110
Demand notes issued to the U.S. Treasury ......................... 2,200
Trading liabilities .............................................. 30,136
Other Borrowed money:
With a remaining maturity of one year or less ............... 16,895
With a remaining maturity of more than one year .................. 449
Mortgage indebtedness and obligations under capitalized
leases....................................................... 49
Bank's liability on acceptances executed and outstanding.......... 2,764
Subordinated notes and debentures ................................ 5,471
Other liabilities................................................. 13,997
TOTAL LIABILITIES ................................................ 246,001
Limited-Life Preferred stock and related surplus.................. 550
EQUITY CAPITAL
Common stock ..................................................... 1,209
Surplus........................................................... 10,176
Undivided profits and capital reserves ........................... 4,385
Net unrealized holding gains (Losses)
on available-for-sale securities ................................. (481)
Cumulative foreign currency translation adjustments .............. 19
TOTAL EQUITY CAPITAL ............................................. 15,308
------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL .................................... $261,859
==========
I, Joseph L. Sclafani, S.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER )DIRECTORS
THOMAS G. LABRECQUE )
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