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EXHIBIT 1.1
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OIL STATES INTERNATIONAL, INC.
(a Delaware corporation)
11,680,000 Shares of Common Stock
U.S. PURCHASE AGREEMENT
Dated , 2001
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TABLE OF CONTENTS
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U.S. PURCHASE AGREEMENT........................................................................1
SECTION 1. Representations and Warranties...........................................3
(a) Representations and Warranties by the Company............................3
(i) Compliance with Registration Requirements.......................3
(ii) Independent Accountants.........................................4
(iii) Financial Statements............................................4
(iv) No Material Adverse Change in Business..........................5
(v) Good Standing of the Company....................................5
(vi) Good Standing of Subsidiaries and Combining Companies...........6
(vii) Capitalization..................................................6
(viii) Authorization of Agreements.....................................6
(ix) Authorization and Description of Securities.....................6
(x) Absence of Defaults and Conflicts...............................7
(xi) Absence of Labor Dispute........................................8
(xii) Absence of Proceedings..........................................8
(xiii) Accuracy of Exhibits............................................8
(xiv) Possession of Intellectual Property.............................8
(xv) Absence of Further Requirements.................................9
(xvi) Possession of Licenses and Permits..............................9
(xvii) Title to Property...............................................9
(xviii) Compliance with Cuba Act.......................................10
(xix) Investment Company Act.........................................10
(xx) Environmental Laws.............................................10
(xxi) Registration Rights............................................11
(xxii) Related Party Transactions.....................................11
(xxiii) Insurance......................................................11
(xxiv) Tax Returns and Payment of Taxes...............................11
(xxv) Statistical and Market Data....................................12
(xxvi) Accounting and Other Controls..................................12
(xxvii) Consummation of Combination....................................12
(xxviii) Removal of Audit Opinion Qualification and Similar Financial
Statement Footnotes..........................................13
(xxix) Shares Not Subject to Lock-up Agreements.......................13
(b) Representations and Warranties by the Selling Stockholders..............13
(i) Accurate Disclosure............................................13
(ii) Authorization of Agreements....................................13
(iii) Good and Marketable Title......................................14
(iv) Due Execution of Stockholder Agreements........................14
(v) Absence of Manipulation........................................15
(vi) Absence of Further Requirements................................15
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(vii) Restrictions on Sale of Securities...........................15
(viii) Certificates Suitable for Transfer...........................15
(ix) No Association with NASD.....................................16
(c) Officer's Certificates................................................16
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing.......................16
(a) Initial Securities....................................................16
(b) Option Securities.....................................................16
(c) Payment17
(d) Denominations; Registration...........................................17
SECTION 3. Covenants of the Company..............................................18
(a) Compliance with Securities Regulations and Commission Requests........18
(b) Filing of Amendments..................................................18
(c) Delivery of Registration Statements...................................18
(d) Delivery of Prospectuses..............................................18
(e) Continued Compliance with Securities Laws.............................19
(f) Blue Sky Qualifications...............................................19
(g) Rule 158..............................................................19
(h) Use of Proceeds.......................................................20
(i) Listing20
(j) Restriction on Sale of Securities.....................................20
(k) Reporting Requirements................................................20
(l) Compliance with Rule 463..............................................20
(m) Covenants in Combination Transaction Agreements.......................20
SECTION 4. Payment of Expenses...................................................20
(a) Expenses..............................................................20
(b) Expenses of the Selling Stockholders..................................21
(c) Termination of Agreement..............................................21
(d) Allocation of Expenses................................................21
SECTION 5. Conditions of U.S. Underwriters' Obligations..........................21
(a) Effectiveness of Registration Statement...............................21
(b) Opinion of Counsel for Company........................................22
(c) Opinion of Counsel for the Selling Stockholders.......................22
(d) Opinion of Counsel for U.S. Underwriters..............................22
(e) Officers' Certificate.................................................22
(f) Certificate of Selling Stockholders...................................22
(g) Accountant's Comfort Letter...........................................23
(h) Bring-down Comfort Letter.............................................23
(i) Accountant's Tax Letter...............................................23
(j) Approval of Listing...................................................23
(k) No Objection..........................................................23
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(l) Lock-up Agreements....................................................23
(m) Consummation of Combination...........................................23
(n) Purchase of Initial International Securities..........................23
(o) Conditions to Purchase of U.S. Option Securities......................23
(i) Officers' Certificate of Company...............................24
(ii) Opinion of Counsel for Company.................................24
(iii) Opinion of Counsel for U.S. Underwriters.......................24
(iv) Bring-down Comfort Letters.....................................24
(p) Additional Documents..................................................24
(q) Termination of Agreement..............................................24
SECTION 6. Indemnification.......................................................25
(a) Indemnification of U.S. Underwriters..................................25
(b) Indemnification of Company............................................26
(c) Actions against Parties; Notification.................................26
(d) Settlement without Consent if Failure to Reimburse....................27
(e) Other Agreements with Respect to Indemnification......................27
SECTION 7. Contribution..........................................................27
SECTION 8. Representations, Warranties and Agreements to Survive Delivery........29
SECTION 9. Termination of Agreement..............................................29
(a) Termination; General..................................................29
(b) Liabilities...........................................................29
SECTION 10. Default by One or More of the U.S. Underwriters.......................29
SECTION 11. Default by One or More of the Selling Stockholders or the Company.....30
SECTION 12. Notices...............................................................31
SECTION 13. Parties...............................................................31
SECTION 14. GOVERNING LAW.........................................................31
SECTION 15. Appointment of Agent for Service......................................31
SECTION 16. Consent to Jurisdiction...............................................32
SECTION 17. Effect of Headings....................................................32
SCHEDULES
Schedule A List of Selling Stockholders..............................Sch A-1
Schedule B List of Underwriters......................................Sch B-1
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Schedule C List of Subsidiaries and Combining Companies..............Sch C-1
Schedule D Pricing Information.......................................Sch D-1
Schedule E List of Persons subject to Lock-up........................Sch E-1
EXHIBITS
Exhibit A-1 Form of Opinion of Company's Counsel..........................A-1
Exhibit A-2 Form of Opinion of Frasier Milner Casgrain....................A-2
Exhibit A-3 Form of Opinion of Selling Stockholders' Counsel..............A-3
Exhibit B Form of Lock-up Letter........................................B-1
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OIL STATES INTERNATIONAL, INC.
(a Delaware corporation)
11,680,000 Shares of Common Stock
(Par Value $.01 Per Share)
U.S. PURCHASE AGREEMENT
, 2001
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Credit Suisse First Boston Corporation
Simmons & Company International
as U.S. Representatives of the several U.S. Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Oil States International, Inc., a Delaware corporation (the "Company"),
and the persons listed in Schedule A hereto as selling stockholders (the
"Selling Stockholders") confirm their agreement with Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and each of
the other U.S. Underwriters named in Schedule B hereto (collectively, the "U.S.
Underwriters," which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom Merrill Lynch, Credit
Suisse First Boston Corporation and Simmons & Company International are acting
as representatives (in such capacity, the "U.S. Representatives"), with respect
to the issue and sale by the Company and the sale by the Selling Stockholders,
acting severally and not jointly, and the purchase by the U.S. Underwriters,
acting severally and not jointly, of the respective numbers of shares of Common
Stock, par value $.01 per share, of the Company ("Common Stock") set forth in
said Schedules A and B hereto, and with respect to the grant by the Company to
the U.S.
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Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of 1,752,000 additional shares
of Common Stock to cover over-allotments, if any. The aforesaid 11,680,000
shares of Common Stock (the "Initial U.S. Securities") to be purchased by the
U.S. Underwriters and all or any part of the 1,752,000 shares of Common Stock
subject to the option described in Section 2(b) hereof (the "U.S. Option
Securities") are hereinafter called, collectively, the "U.S. Securities."
It is understood that the Company and the Selling Stockholders are
concurrently entering into an agreement dated the date hereof (the
"International Purchase Agreement") providing for the offering by the Company
and the Selling Stockholders of an aggregate of 2,920,000 shares of Common Stock
(the "Initial International Securities") through arrangements with certain
underwriters outside the United States and Canada (the "International Managers")
for which Merrill Lynch International, Credit Suisse First Boston (Europe)
Limited and Simmons & Company International are acting as lead managers (the
"Lead Managers") and the grant by the Company to the International Managers,
acting severally and not jointly, of an option to purchase all or any part of
the International Managers' pro rata portion of up to 438,000 additional shares
of Common Stock solely to cover overallotments, if any (the "International
Option Securities" and, together with the U.S. Option Securities, the "Option
Securities"). The Initial International Securities and the International Option
Securities are hereinafter called the "International Securities." It is
understood that the Company and the Selling Stockholders are not obligated to
sell, and the U.S. Underwriters are not obligated to purchase, any Initial U.S.
Securities unless all of the Initial International Securities are
contemporaneously purchased by the International Managers.
The U.S. Underwriters and the International Managers are hereinafter
collectively called the "Underwriters," the Initial U.S. Securities and the
Initial International Securities are hereinafter collectively called the
"Initial Securities," and the U.S. Securities and the International Securities
are hereinafter collectively called the "Securities."
The Underwriters will concurrently enter into an Intersyndicate Agreement
of even date herewith (the "Intersyndicate Agreement") providing for the
coordination of certain transactions among the Underwriters under the direction
of Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (in
such capacity, the "Global Coordinator").
The Company and the Selling Stockholders understand that the U.S.
Underwriters propose to make a public offering of the U.S. Securities as soon as
the U.S. Representatives deem advisable after this Agreement has been executed
and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-43400) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the
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provisions of Rule 434 and Rule 424(b). Two forms of prospectus are to be used
in connection with the offering and sale of the Securities: one relating to the
U.S. Securities (the "Form of U.S. Prospectus") and one relating to the
International Securities (the "Form of International Prospectus"). The Form of
International Prospectus is identical to the Form of U.S. Prospectus, except for
the front cover and back cover pages and the information under the caption
"Underwriting." The information included in any such prospectus or in any such
Term Sheet, as the case may be, that was omitted from such registration
statement at the time it became effective but that is deemed to be part of such
registration statement at the time it became effective (a) pursuant to paragraph
(b) of Rule 430A is referred to as "Rule 430A Information" or (b) pursuant to
paragraph (d) of Rule 434 is referred to as "Rule 434 Information." Each Form of
U.S. Prospectus and Form of International Prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto and schedules thereto at the time it
became effective and including the Rule 430A Information and the Rule 434
Information, as applicable, is herein called the "Registration Statement." Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as the "Rule 462(b) Registration Statement," and after
such filing the term "Registration Statement" shall include the Rule 462(b)
Registration Statement. The final Form of U.S. Prospectus and the final Form of
International Prospectus in the forms first furnished to the Underwriters for
use in connection with the offering of the Securities are herein called the
"U.S. Prospectus" and the "International Prospectus," respectively, and
collectively, the "Prospectuses." If Rule 434 is relied on, the terms "U.S.
Prospectus" and "International Prospectus" shall refer to the preliminary U.S.
Prospectus dated January 19, 2001 and preliminary International Prospectus dated
January 19, 2001, respectively, each together with the applicable Term Sheet and
all references in this Agreement to the date of such Prospectuses shall mean the
date of the applicable Term Sheet. For purposes of this Agreement, all
references to the Registration Statement, any preliminary prospectus, the U.S.
Prospectus, the International Prospectus or any Term Sheet or any amendment or
supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("EDGAR").
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents
and warrants to each U.S. Underwriter as of the date hereof, as of the Closing
Time referred to in Section 2(c) hereof, and as of each Date of Delivery (if
any) referred to in Section 2(b) hereof, and agrees with each U.S. Underwriter,
as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and any
request on the part of the Commission for additional information has been
complied with.
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At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any U.S. Option Securities are
purchased, at the Date of Delivery), the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and did not and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading. Neither of the Prospectuses nor any amendments or
supplements thereto, at the time the Prospectuses or any amendments or
supplements thereto were issued and at the Closing Time (and, if any U.S.
Option Securities are purchased, at the Date of Delivery), included or
will include an untrue statement of a material fact or omitted or will
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. If Rule 434 is used, the Company will comply with the
requirements of Rule 434 and the Prospectuses shall not be "materially
different," as such term is used in Rule 434, from the prospectuses
included in the Registration Statement at the time it became effective.
The representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or the U.S.
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any U.S. Underwriter through the
U.S. Representatives expressly for use in the Registration Statement or
the U.S. Prospectus.
Each preliminary prospectus and the prospectuses filed as part of
the Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when
so filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectuses delivered to the Underwriters
for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(ii) Independent Accountants. Each firm of accountants who certified
financial statements and supporting schedules included in the Registration
Statement is an independent public accountant as required by the 1933 Act
and the 1933 Act Regulations.
(iii) Financial Statements. The financial statements of each of (1)
the Company and its consolidated subsidiaries, (2) PTI Group Inc. ("PTI")
and its consolidated subsidiaries, (3) HWC Energy Services, Inc. ("HWC")
and its consolidated subsidiaries and (4) Sooner Inc. (and its predecessor
Sooner Pipe & Supply Corporation) ("Sooner") and its consolidated
subsidiaries (the Company, PTI, HWC and Sooner are referred to herein
individually as a "Combining Company" and, from and after consummation of
the transactions contemplated by the Combination Agreement (as defined in
paragraph (viii) below), collectively as the "Combined Company") included
in the Registration Statement and the Prospectuses, together with the
related schedules and notes, present fairly the consolidated financial
position of the respective Combining Company, each at the dates indicated,
and the consolidated statements of operations,
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stockholders' equity and cash flows of the respective Combining Company
for the periods specified; said financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP") applied
on a consistent basis throughout the periods involved. The supporting
schedules, if any, included in the Registration Statement present fairly
in accordance with GAAP the information required to be stated therein. The
pro forma combined financial statements and the related notes thereto
included in the Registration Statement and the Prospectuses present fairly
the information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described therein,
and the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the
transactions and circumstances referred to therein. The selected
historical and pro forma financial information and the summary pro forma
combined financial information included in the Prospectuses present fairly
the information shown therein and have been compiled on a basis consistent
with that of the audited and pro forma financial statements included in
the Registration Statement.
(iv) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectuses, except as otherwise stated therein, (A) there has been
no material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Combining
Companies and their respective subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business (a "Material
Adverse Effect"), (B) there have been no transactions entered into by any
Combining Company or its subsidiaries, other than those in the ordinary
course of business, which are material with respect to the Combining
Companies and their respective subsidiaries considered as one enterprise,
and (C) except for cumulative dividends aggregating $600,000 as of
December 31, 2000 on (i) the Series A Convertible Cumulative Preferred
Shares of the Company, (ii) the Series A Cumulative Preferred Shares of
CECO Holdings, Inc., a wholly owned subsidiary of the Company, (iii) the
Series A and Series B Exchangeable Cumulative Preferred Shares of Oil
States Industries, Inc., a wholly owned subsidiary of the Company, and
(iv) the Series A and Series B Cumulative Convertible Preferred Shares of
HWC, there has been no dividend or distribution of any kind declared, paid
or made by any Combining Company on any class of its capital stock.
(v) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectuses and to enter into and perform its
obligations under this Agreement; and the Company is duly qualified as a
foreign corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
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(vi) Good Standing of Subsidiaries and Combining Companies. Each
Combining Company (other than the Company) and its and the Company's
respective subsidiaries has been duly organized and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the
Prospectuses and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing
of property or the conduct of business, except where the failure to so
qualify or to be in good standing would not result in a Material Adverse
Effect; except as otherwise disclosed in the Registration Statement, all
of the issued and outstanding capital stock of each Combining Company
(other than the Company) and its and the Company's respective subsidiaries
has been duly authorized and validly issued, is fully paid and
non-assessable and, as of the Closing Time and each Date of Delivery, is
owned by the Company, directly or through subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; none of the outstanding shares of capital stock of any Combining
Company (other than the Company) and its and the Company's respective
subsidiaries was issued in violation of the preemptive or similar rights
of any securityholder of such Combining Company or subsidiary. The only
subsidiaries of each Combining Company are those listed on Schedule C
hereto.
(vii) Capitalization. As of the Closing Time and each Date of
Delivery, the authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectuses in the column entitled "As
Adjusted" under the caption "Capitalization" (except for subsequent
issuances, if any, pursuant to this Agreement, pursuant to employee
benefit plans referred to in the Prospectuses or pursuant to the exercise
of convertible securities or options referred to in the Prospectuses). The
shares of issued and outstanding capital stock of the Company, including
the Securities to be purchased by the Underwriters from the Selling
Stockholders, have been duly authorized and validly issued and are fully
paid and non-assessable; none of the outstanding shares of capital stock
of the Company, including the Securities to be purchased from the Selling
Stockholders, was issued in violation of the preemptive or other similar
rights of any securityholder of the Company that have not been irrevocably
waived by valid, binding and enforceable waivers.
(viii) Authorization of Agreements. This Agreement and the
International Purchase Agreement have been duly authorized, executed and
delivered by the Company and the other Combining Companies. The
Combination Agreement among the Combining Companies and others, dated as
of July 31, 2000 (the "Combination Agreement"), and the other agreements
executed or to be executed by the Combining Companies and their
stockholders in connection with the transactions contemplated by the
Combination Agreement (such agreements, collectively with the Combination
Agreement, are referred to herein as the "Combination Transaction
Agreements") have been duly authorized, executed and delivered by the
parties thereto.
(ix) Authorization and Description of Securities. The Securities to
be purchased by the U.S. Underwriters and the International Managers from
the Company
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have been duly authorized for issuance and sale to the U.S. Underwriters
pursuant to this Agreement and the International Managers pursuant to the
International Purchase Agreement, respectively, and, when issued and
delivered by the Company pursuant to this Agreement and the International
Purchase Agreement, respectively, against payment of the consideration set
forth herein and the International Purchase Agreement, respectively, will
be validly issued, fully paid and non-assessable; the Common Stock
conforms to all statements relating thereto contained in the Prospectuses
and such description conforms to the rights set forth in the instruments
defining the same; no holder of the Securities will be subject to personal
liability by reason of being such a holder; and the issuance of the
Securities is not subject to the preemptive or other similar rights of any
securityholder of the Company.
(x) Absence of Defaults and Conflicts. None of the Combining
Companies nor any of their respective subsidiaries is (1) in violation of
its charter, by-laws or other organizational instrument or in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which any Combining Company or any of its subsidiaries is a party or by
which any of them may be bound, or to which any of the property or assets
of any Combining Company or any of its subsidiaries is subject
(collectively, "Agreements and Instruments") except for such defaults
that, individually or in the aggregate, would not result in a Material
Adverse Effect or (2) in violation of any law, ordinance, governmental
rule, regulation or court decree to which it or its property or assets may
be subject or has failed to obtain any material license, permit,
certificate, franchise or other governmental authorization or permit
necessary to the ownership of its property or assets or to the conduct of
its business, except for such violations or failures that, individually or
in the aggregate, would not result in a Material Adverse Effect; and the
execution, delivery and performance of this Agreement, the International
Purchase Agreement and the Combination Transaction Agreements and the
consummation of the transactions contemplated in this Agreement, the
International Purchase Agreement and the Combination Transaction
Agreements and in the Registration Statement (including the issuance and
sale of the Securities and the use of the proceeds from the sale of the
Securities as described in the Prospectuses under the caption "Use of
Proceeds") and compliance by each Combining Company with its obligations
under this Agreement, the International Purchase Agreement and the
Combination Transaction Agreements have been duly authorized by all
necessary corporate action and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of any Combining Company or any of
its subsidiaries pursuant to the Agreements and Instruments (except for
such conflicts, breaches, defaults, Repayment Events or liens, charges or
encumbrances that would not result in a Material Adverse Effect), nor will
such action result in any violation of (A) the provisions of the charter,
by-laws or other organizational instrument of any Combining Company or any
of its subsidiaries or (B) any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
any Combining Company or any of its subsidiaries or any of their assets,
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properties or operations, except, in the case of clause (B), for
violations that, individually or in the aggregate, would not result in a
Material Adverse Effect. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by any Combining Company or any of its
subsidiaries, except for such indebtedness that will be repaid with the
proceeds from the issuance of the Securities as set forth in the
Prospectuses.
(xi) Absence of Labor Dispute. No labor dispute with the employees
of any Combining Company or any of its subsidiaries exists or, to the
knowledge of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of the principal
suppliers, manufacturers, customers or contractors of any Combining
Company or any of its subsidiaries, which, in either case, may reasonably
be expected to result in a Material Adverse Effect.
(xii) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body now pending or, to the knowledge of the Company,
threatened, against or affecting any Combining Company or any of its
subsidiaries, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which might reasonably be
expected to result in a Material Adverse Effect, or which might reasonably
be expected to materially and adversely affect the properties or assets
thereof or the consummation of the transactions contemplated in this
Agreement, the International Purchase Agreement or the Combination
Transaction Agreements or the performance by any Combining Company of its
obligations hereunder or thereunder; the aggregate of all pending legal or
governmental proceedings to which any Combining Company or its
subsidiaries is a party or of which property or assets is the subject
which are not described in the Registration Statement, including ordinary
routine litigation incidental to the business, could not reasonably be
expected to result in a Material Adverse Effect.
(xiii) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement or the
Prospectuses or to be filed as exhibits thereto which have not been so
described and filed as required.
(xiv) Possession of Intellectual Property. Each Combining Company
and its subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, trademark registrations, service marks, service mark
registrations, trade names or other intellectual property (collectively,
"Intellectual Property") necessary to carry on the business now operated
by it, and none of the Combining Companies nor any of their respective
subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with respect to
any Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the
interest of any Combining Company and its subsidiaries therein, and which
infringement or conflict (if the subject
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<PAGE> 14
of any unfavorable decision, ruling or finding) or invalidity or
inadequacy, singly or in the aggregate, would result in a Material Adverse
Effect.
(xv) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority, agency or
body is necessary or required for the performance by any Combining Company
of its obligations hereunder, in connection with the offering, issuance or
sale of the Securities under this Agreement and the International Purchase
Agreement or the consummation of the transactions contemplated by this
Agreement, the International Purchase Agreement and the Combination
Transaction Agreements, except (i) such as have been already obtained or
as may be required under the 1933 Act or the 1933 Act Regulations and
foreign or state securities or blue sky laws, (ii) the filing of the
Certificate of Merger merging Merger Sub-Sooner, Inc. with and into
Sooner, as contemplated by the Combination Agreement, (iii) the filing of
the Articles of Merger merging Merger Sub-HWC, Inc. with and into HWC, as
contemplated by the Combination Agreement, (iv) the filing of the PTI
Articles of Arrangement (as defined in the Combination Agreement) with the
Registrar under the Business Corporations Act (Alberta) and (v) the
post-merger notice filing required under the Investment Canada Act.
(xvi) Possession of Licenses and Permits. Each Combining Company and
its subsidiaries possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them, and each Combining
Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure so
to possess or to comply would not, singly or in the aggregate, have a
Material Adverse Effect; all of the Governmental Licenses held by any
Combining Company or any subsidiary of any Combining Company are valid and
in full force and effect, except where the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full force
and effect would not have a Material Adverse Effect; and none of the
Combining Companies nor their respective subsidiaries has received any
notice of proceedings relating to the revocation or modification of any
such Governmental Licenses which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(xvii) Title to Property. Each Combining Company and its
subsidiaries have good and marketable title to all material real property
owned by them and good title to all other material properties owned by
them, in each case free and clear of all mortgages, pledges, liens,
security interests, claims, restrictions or encumbrances of any kind
except such as (a) are described in the Prospectuses or (b) do not, singly
or in the aggregate, materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property
by such Combining Company and its subsidiaries; and all of the leases and
subleases material to the business of the Combining Companies and their
subsidiaries, considered as one enterprise, and under which the Combining
Companies and their respective subsidiaries hold properties described in
the Prospectuses, are in full force and effect, and none of the Combining
Companies nor their respective subsidiaries has received any notice of any
material claim of any sort that has
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<PAGE> 15
been asserted by anyone adverse to the rights of any Combining Company or
its subsidiaries under any of the leases or subleases mentioned above, or
affecting or questioning the rights of any such Combining Company or
respective subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease.
(xviii) Compliance with Cuba Act. Each Combining Company and its
subsidiaries has complied with, and is and will be in compliance with, the
provisions of that certain Florida act relating to disclosure of doing
business with Cuba, codified as Section 517.075 of the Florida statutes,
and the rules and regulations thereunder (collectively, the "Cuba Act") or
is exempt therefrom.
(xix) Investment Company Act. None of the Combining Companies nor
any of their respective subsidiaries is, and upon the issuance and sale of
the Securities as herein contemplated and the application of the net
proceeds therefrom as described in the Prospectuses, none of them will be,
an "investment company" or an entity "controlled" by an "investment
company" as such terms are defined in the Investment Company Act of 1940,
as amended (the "1940 Act").
(xx) Environmental Laws. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) none of the Combining Companies nor any of
their respective subsidiaries is in violation of any federal, state, local
or foreign statute, law, rule, regulation, ordinance, code, policy or rule
of common law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) each
Combining Company and its subsidiaries have all permits, authorizations
and approvals required under any applicable Environmental Laws and are
each in compliance with their requirements, (C) there are no pending or,
to the knowledge of any Combining Company, threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against such Combining Company or its
subsidiaries, and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting any Combining Company or
its subsidiaries relating to Hazardous Materials or any Environmental
Laws.
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(xxi) Registration Rights. Except as disclosed in the Registration
Statement and the Prospectuses, there are no persons with registration
rights or other similar rights to have any securities registered pursuant
to the Registration Statement or otherwise registered by the Company under
the 1933 Act. With respect to the Registration Statement and offering of
Securities contemplated thereby, all such registration and similar rights
have been irrevocably waived by the holders thereof and any such waivers
are valid, binding and enforceable against such holders.
(xxii) Related Party Transactions. No relationship, direct or
indirect, exists between or among any Combining Company or any of its
subsidiaries, on the one hand, and the directors, officers, shareholders,
customers or suppliers of any Combining Company or any of its subsidiaries
on the other hand, which is required to be described in the Prospectuses
which is not so described.
(xxiii) Insurance. Each Combining Company and its subsidiaries are
insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in the
industries in which such Combining Company and its subsidiaries operate;
the Company has no reason to believe that any Combining Company or any of
its subsidiaries will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its operations, except
where the failure to renew or maintain such coverage could not,
individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect. The officers and directors of the Combined
Company are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as the Company believes
are prudent and customary for officers' and directors' liability insurance
of a public company and as the Company believes could cover any claims
which could reasonably be expected to be made in connection with the
issuance of the Securities; and the Company has no reason to believe that
it will not be able to renew its existing directors' and officers'
liability insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to cover
its officers and directors.
(xxiv) Tax Returns and Payment of Taxes. Each Combining Company and
each of its subsidiaries has timely filed all federal, state, local and
foreign tax returns that are required to be filed or has duly requested
extensions thereof and all such tax returns are true, correct and
complete, except to the extent that any failure to file or request an
extension or any failure to be correct and complete could not reasonably
be expected to result in a Material Adverse Effect. Each Combining Company
and each of its subsidiaries has timely paid all taxes shown as due on
such filed tax returns (including any related assessments, fines or
penalties), except to the extent that any such taxes are being contested
in good faith and by appropriate proceedings, or to the extent that any
failure to pay could not reasonably be expected to result in a Material
Adverse Effect; and adequate charges, accruals and reserves have been
provided for in the financial statements referred to in Section 1(a)(iii)
above in accordance with GAAP in respect of all federal, state, local and
foreign taxes for all periods as to which the tax liability of such
Combining Company or any such subsidiary has not been finally determined
or remains open to examination by applicable taxing authorities.
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<PAGE> 17
(xxv) Statistical and Market Data. The statistical and
market-related data included in the Prospectuses are derived from sources
which the Company reasonably and in good faith believes to be accurate,
reasonable and reliable, and the Company agrees, or has no reason to
disagree, with the sources from which such data were derived.
(xxvi) Accounting and Other Controls. Each Combining Company and
each of its subsidiaries has established a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions
were, are and will be executed in accordance with management's general or
specific authorization; (ii) transactions were, are and will be recorded
as necessary to permit preparation of financial statements in conformity
with GAAP and to maintain accountability for assets; (iii) access to
assets was, is and will be permitted only in accordance with management's
general or specific authorizations; and (iv) the recorded accountability
for assets was, is and will be compared with existing assets at reasonable
intervals and appropriate action was, is and will be taken with respect to
any differences.
(xxvii) Consummation of Combination. All conditions to consummation
of the transactions set forth in the Combination Agreement have been
satisfied, other than those conditions that by their terms are to be
satisfied after the date hereof and at or prior to the Closing Time, and
the Company has no reason to believe that any of the conditions that by
their terms are to be satisfied after the date hereof and at or prior to
the Closing Time will not be satisfied or, with respect to the conditions
set forth in Section 12.1(f) and (h) of the Combination Agreement, waived,
at or prior to the Closing Time. The Company has no reason to believe that
the transactions set forth in the Combination Agreement will not be
consummated in accordance with the Combination Agreement at or prior to
the Closing Time. There have been no amendments or supplements to the
Combination Agreement since the original execution thereof on July 31,
2000. At or prior to the Closing Time, the transactions contemplated by
the Combination Agreement will be consummated, with the result that each
Combining Company (other than the Company) will become a wholly-owned
direct or indirect subsidiary of the Company and, except as set forth in
the Registration Statement, all shares of capital stock of each Combining
Company (other than the Company) and all rights to acquire such shares
shall be converted, pursuant to the Combination Transaction Agreements,
into (a) shares of Common Stock or PTI Exchangeable Shares (as defined in
the Combination Agreement) or the right to receive shares of Common Stock
or PTI Exchangeable Shares, (b) an amount of cash not exceeding $[2.5]
million in the aggregate or (c) the right to seek payment for appraisal or
dissenters' rights or similar rights under applicable law for an amount
that, in the reasonable judgment of the Company, does not exceed
$[700,000] in the aggregate. None of the Combining Companies or any of
their respective subsidiaries nor any of their respective "affiliates" (as
defined in Rule 501(b) of Regulation D under the 1933 Act) has directly,
or through any agent, (a) sold, offered for sale, solicited offers to buy
or otherwise negotiated in respect of any "security" (as defined in the
1933 Act), including any shares of capital sock of the Company and its
wholly owned Canadian subsidiary issued to the stockholders of the
Combining Companies as contemplated by the Combination Transaction
Agreements, in a manner that would require the registration under the 1933
Act of any such security, or (b) engaged in any form of general
solicitation or general advertising (as those terms are used in Regulation
D under the
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1933 Act) in connection with the offering of any such security or in any
manner involving a public offering within the meaning of Section 4(2) of
the 1933 Act. It is not necessary in connection with the offer, sale and
delivery of the shares of capital sock of the Company and its wholly owned
Canadian subsidiary issued to the stockholders of the Combining Companies
as contemplated by the Combination Transaction Agreements to register such
offer or sale under the 1933 Act, any state law or any law of any province
of Canada.
(xxviii) Removal of Audit Opinion Qualification and Similar
Financial Statement Footnotes. After giving effect to the use of proceeds
received by the Company in the manner specified in the Prospectuses under
"Use of Proceeds," each of the items referred to (a) in the third
paragraph of Note 3 and in Note 4 of the unaudited financial statements of
the Company as of and for the nine months ended September 30, 2000 and
included in the Prospectuses, (b) the third paragraph of the report dated
July 31, 2000 of Arthur Andersen LLP relating to the audited financial
statements of the Company and included in the Prospectuses and (c) in the
first two paragraphs of Note 20 of the audited financial statements of the
Company and included in the Prospectuses will have been repaid, retired or
redeemed so that no obligations or other amounts disclosed in such notes
and such report remain payable or outstanding or represent a claim on the
assets of any Combining Company or any subsidiary of any Combining Company
in respect of any of such items. Based on discussions between the Company
and its independent accountants who will be involved in the audit of the
Company's consolidated financial statements for periods after the Closing
Time, the Company understands that, if such accountants were to render an
audit report on the consolidated financial statements of the Combined
Company and its subsidiaries immediately following the Closing Time, no
qualification or disclosure of the type referred to in clauses (a) and (b)
of the first sentence of this paragraph (xxviii) would be required.
(xxix) Shares Not Subject to Lock-up Agreements. The aggregate
number of shares of Common Stock that will be (a) outstanding immediately
following the Closing Time or issuable within 180 days from the date of
the Prospectuses under arrangements existing at the Closing Time and (b)
not subject to the lock-up agreements described in Section 1(b)(vii) or
Section 5(l) does not exceed 140,000 shares.
(b) Representations and Warranties by the Selling Stockholders. Each
Selling Stockholder represents and warrants, severally and not jointly, to each
U.S. Underwriter as of the date hereof and as of the Closing Time, and agrees
with each U.S. Underwriter, as follows:
(i) Accurate Disclosure. Such Selling Stockholder has reviewed and
is familiar with the Registration Statement and the Prospectuses and, with
respect to information furnished by such Selling Stockholder for use
therein, neither the Registration Statement nor the Prospectuses contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements therein not misleading.
(ii) Authorization of Agreements. Such Selling Stockholder has the
full legal right, power and authority to enter into this Agreement, a
Remaining Stockholder
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Election Agreement and a Selling Stockholder Agreement, which includes a
power of attorney and custody agreement (the "Selling Stockholder
Agreement" and, together with the Remaining Stockholder Election
Agreement, the "Stockholder Agreements") and to sell, transfer and deliver
the Securities to be sold by such Selling Stockholder hereunder. The
execution and delivery of this Agreement and the Stockholder Agreements,
the sale and delivery of the Securities to be sold by such Selling
Stockholder and the consummation of the transactions contemplated herein
and therein and compliance by such Selling Stockholder with its
obligations hereunder and thereunder have been duly authorized by such
Selling Stockholder and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default under, or result in the creation or imposition of
any tax, lien, charge or encumbrance upon the Securities to be sold by
such Selling Stockholder or any property or assets of such Selling
Stockholder pursuant to any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, license, lease or other agreement or
instrument to which such Selling Stockholder is a party or by which such
Selling Stockholder may be bound, or to which any of the property or
assets of such Selling Stockholder is subject (but only to the extent that
any such conflict, breach, default, tax, lien, charge or encumbrance
adversely affects the ability of such Selling Stockholder to deliver good
and marketable title to the Securities to be sold by the Selling
Stockholder hereunder), nor will such action result in any violation of
the provisions of the charter or by-laws or other organizational
instrument of such Selling Stockholder, if applicable, or any applicable
treaty, law, statute, rule, regulation, judgment, order, writ or decree of
any government, government instrumentality or court having jurisdiction
over such Selling Stockholder or any of its properties.
(iii) Good and Marketable Title. Such Selling Stockholder (together
with such Selling Stockholder's spouse, if applicable) will at the Closing
Time have good and marketable title to the Securities to be sold by such
Selling Stockholder hereunder, free and clear of any security interest,
mortgage, pledge, lien, charge, claim, equity or encumbrance of any kind,
other than pursuant to this Agreement; and upon delivery of such
Securities and payment of the purchase price therefor as herein
contemplated, assuming each such U.S. Underwriter has no notice of any
adverse claim, each of the U.S. Underwriters will receive good and
marketable title to the Securities purchased by it from such Selling
Stockholder, free and clear of any security interest, mortgage, pledge,
lien, charge, claim, equity or encumbrance of any kind.
(iv) Due Execution of Stockholder Agreements. Such Selling
Stockholder has duly executed and delivered, in the form heretofore
furnished to the U.S. Representatives, the Selling Stockholder Agreement
appointing Douglas E. Swanson and Cindy B. Taylor, or any of them, as
attorneys-in-fact (the "Attorneys-in-Fact") and ChaseMellon Shareholder
Services, L.L.C., as custodian (the "Custodian"); the Custodian is
authorized to deliver the Securities to be sold by such Selling
Stockholder hereunder and to accept payment therefor; and each
Attorney-in-Fact is authorized to execute and deliver this Agreement and
the certificate referred to in Section 5(f), to sell, assign and transfer
to the Underwriters the Securities to be sold by such Selling Stockholder
hereunder, to determine the purchase price to be paid by the Underwriters
to such Selling Stockholder, as provided in Section 2(a) hereof, to
authorize the delivery of the Securities to be sold by
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such Selling Stockholder hereunder, to accept payment therefor, and
otherwise to act on behalf of such Selling Stockholder in connection with
this Agreement.
(v) Absence of Manipulation. Such Selling Stockholder has not taken,
and will not take, directly or indirectly, any action which is designed to
or which has constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities.
(vi) Absence of Further Requirements. No filing with, or consent,
approval, authorization, license, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or
foreign, is necessary or required for the performance by such Selling
Stockholder of its obligations hereunder or in the Stockholder Agreements,
or in connection with the offer, sale and delivery of the Securities by
such Selling Stockholder hereunder or the consummation by such Selling
Stockholder of the transactions contemplated by this Agreement, except
such as may have previously been made or obtained or as may be required
under the 1933 Act or the 1933 Act Regulations or state securities laws.
(vii) Restrictions on Sale of Securities. During a period of 180
days from the date of the Prospectuses, such Selling Stockholder will not,
without the prior written consent of the Global Coordinator, (i) directly
or indirectly offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of,
any share of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, whether now owned or
hereafter acquired by the undersigned or with respect to which the
undersigned has or hereafter acquires the power of disposition, or file,
or request or demand that the Company file, any registration statement
under the 1933 Act with respect to any of the foregoing or (ii) enter into
any swap or any other agreement or any transaction that transfers, in
whole or in part, directly or indirectly, the economic consequences of
ownership of the Common Stock, whether any such swap or transaction
described in clause (i) or (ii) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise; provided,
however, that, without obtaining the prior written consent of the Global
Coordinator, such Selling Stockholder will be permitted to transfer shares
of Common Stock otherwise subject to this Section 1(b)(vii) to any
immediate family member of such Selling Stockholder, any trust established
for the benefit of any such immediate family member or any corporation
wholly owned by such Selling Stockholder or any combination of such
Selling Stockholder and any of the foregoing, provided that, prior to such
transfer and as a condition thereof, the transferee shall deliver to the
Global Coordinator a written agreement to be bound by the restrictions set
forth herein until the expiration of the aforementioned 180-day period.
The foregoing sentence shall not apply to the Securities to be sold
hereunder or under the International Purchase Agreement.
(viii) Certificates Suitable for Transfer. Such Selling Stockholder
has irrevocably placed in custody with the Custodian certificates, in
suitable form for transfer by delivery or accompanied by duly executed
instruments of transfer or assignment in
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blank with signatures guaranteed, for all of the Securities to be sold by
such Selling Stockholder pursuant to this Agreement or, pursuant to the
Selling Stockholder Agreement, has irrevocably committed to do so prior to
the Closing Time, in each case with irrevocable conditional instructions
to deliver such Securities to the U.S. Underwriter pursuant to this
Agreement.
(ix) No Association with NASD. Except as set forth in an annex to
the Selling Stockholder Agreement, neither such Selling Stockholder nor
any of its affiliates directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control
with, or has any other association with (within the meaning of Article I,
Section (ee) of the By-laws of the National Association of Securities
Dealers, Inc. (the "NASD")), any member firm of the NASD.
(c) Officer's Certificates. Any certificate signed by any officer of the
Company delivered to the Global Coordinator, the U.S. Representatives or to
counsel for the U.S. Underwriters shall be deemed a representation and warranty
by the Company to each U.S. Underwriter as to the matters covered thereby; and
any certificate signed by or on behalf of any Selling Stockholder as such and
delivered to the Global Coordinator, the U.S. Representatives or to counsel for
the U.S. Underwriters shall be deemed a representation and warranty by such
Selling Stockholder to each U.S. Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company and each Selling Stockholder agrees to sell to each U.S. Underwriter,
severally and not jointly, and each U.S. Underwriter, severally and not jointly,
agrees to purchase from the Company and each Selling Stockholder, at the price
per share set forth in Schedule D, that proportion of the number of Initial
Securities set forth in Schedule A opposite the name of the Company or such
Selling Stockholder, as the case may be, which the number of Initial Securities
set forth in Schedule B opposite the name of such U.S. Underwriter, plus any
additional number of Initial Securities which such U.S. Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof, bears to
the total number of Initial Securities, subject, in each case, to such
adjustments among the U.S. Underwriters as the U.S. Representatives in their
sole discretion shall make to eliminate any sales or purchases of fractional
securities.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the U.S. Underwriters,
severally and not jointly, to purchase up to an additional 1,752,000 shares of
Common Stock at the price per share set forth in Schedule D, less an amount per
share equal to any dividends or distributions declared by the Company and
payable on the Initial U.S. Securities but not payable on the U.S. Option
Securities. The option hereby granted will expire 30 days after the date hereof
and may be exercised in whole or in part from time to time only for the purpose
of covering over-allotments which may be made in connection with the offering
and distribution of the Initial U.S. Securities upon notice by the Global
Coordinator to the Company setting forth the number of U.S. Option Securities as
to which the several U.S. Underwriters are then exercising the option and the
time and date of
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payment and delivery for such U.S. Option Securities. Any such time and date of
delivery for the U.S. Option Securities (a "Date of Delivery") shall be
determined by the Global Coordinator, but shall not be later than seven full
business days after the exercise of said option, nor in any event prior to the
Closing Time, as hereinafter defined. If the option is exercised as to all or
any portion of the U.S. Option Securities, each of the U.S. Underwriters, acting
severally and not jointly, will purchase that proportion of the total number of
U.S. Option Securities then being purchased which the number of Initial U.S.
Securities set forth in Schedule B opposite the name of such U.S. Underwriter
bears to the total number of Initial U.S. Securities, subject in each case to
such adjustments as the Global Coordinator in its discretion shall make to
eliminate any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Baker
Botts L.L.P., 910 Louisiana, Houston, Texas 77002, or at such other place as
shall be agreed upon by the Global Coordinator, the Company and the Selling
Stockholders, at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing
occurs after 4:30 P.M. (Eastern time) on any given day) business day after the
date hereof (unless postponed in accordance with the provisions of Section 10),
or such other time not later than ten business days after such date as shall be
agreed upon by the Global Coordinator, the Company and the Selling Stockholders
(such time and date of payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the U.S. Option Securities
are purchased by the U.S. Underwriters, payment of the purchase price for, and
delivery of certificates for, such U.S. Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Global Coordinator and the Company, on each Date of Delivery as specified in the
notice from the Global Coordinator to the Company.
Payment shall be made to the Company and the Selling Stockholders by wire
transfer of immediately available funds to a bank account designated by the
Company and the Custodian, on behalf of the Selling Stockholders, against
delivery to the U.S. Representatives for the respective accounts of the U.S.
Underwriters of certificates for the U.S. Securities to be purchased by them. It
is understood that each U.S. Underwriter has authorized the U.S.
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Initial U.S. Securities and the U.S.
Option Securities, if any, which it has agreed to purchase. Merrill Lynch,
individually and not as representative of the U.S. Underwriters, may (but shall
not be obligated to) make payment of the purchase price for the Initial U.S.
Securities or the U.S. Option Securities, if any, to be purchased by any U.S.
Underwriter whose funds have not been received by the Closing Time or the
relevant Date of Delivery, as the case may be, but such payment shall not
relieve such U.S. Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial U.S.
Securities and the U.S. Option Securities, if any, shall be in such
denominations and registered in such names as the U.S. Representatives may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
U.S. Securities and the U.S. Option Securities, if any, will be made available
for examination and packaging by the U.S. Representatives in The City of New
York not later than 10:00 A.M.
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(Eastern time) on the business day prior to the Closing Time or the relevant
Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each U.S.
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
or Rule 434, as applicable, and will notify the Global Coordinator immediately,
and confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectuses or any amended Prospectuses shall have been filed, (ii) of the
receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectuses or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes. The Company will
promptly effect the filings necessary pursuant to Rule 424(b) and will take such
steps as it deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Global Coordinator
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectuses,
will furnish the Global Coordinator with copies of any such documents a
reasonable amount of time prior to such proposed filing or use, as the case may
be, and will not file or use any such document to which the Global Coordinator
or counsel for the U.S. Underwriters shall reasonably object.
(c) Delivery of Registration Statements. The Company has furnished or will
deliver to the U.S. Representatives and counsel for the U.S. Underwriters,
without charge, signed copies of the Registration Statement as originally filed
and of each amendment thereto (including exhibits filed therewith) and signed
copies of all consents, and will also deliver to the U.S. Representatives,
without charge, a conformed copy of the Registration Statement as originally
filed and of each amendment thereto (without exhibits) for each of the U.S.
Underwriters. The copies of the Registration Statement and each amendment
thereto furnished to the U.S. Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each U.S.
Underwriter, without charge, as many copies of each preliminary prospectus as
such U.S. Underwriter reasonably requested, and the Company hereby consents to
the use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each U.S. Underwriter, without charge,
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during the period when the U.S. Prospectus is required to be delivered under the
1933 Act or the Securities Exchange Act of 1934 (the "1934 Act"), such number of
copies of the U.S. Prospectus (as amended or supplemented) as such U.S.
Underwriter may reasonably request. The U.S. Prospectus and any amendments or
supplements thereto furnished to the U.S. Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the rules
and regulations promulgated thereunder (the "1934 Act Regulations") so as to
permit the completion of the distribution of the Securities as contemplated in
this Agreement and the International Purchase Agreement and in the Prospectuses.
If at any time when a prospectus is required by the 1933 Act or the 1934 Act to
be delivered in connection with sales of the Securities, any event shall occur
or condition shall exist as a result of which it is necessary, in the opinion of
counsel for the U.S. Underwriters or for the Company, to amend the Registration
Statement or amend or supplement any Prospectus in order that the Prospectuses
will not include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel, at any
such time to amend the Registration Statement or amend or supplement any
Prospectus in order to comply with the requirements of the 1933 Act, the 1933
Act Regulations, the 1934 Act or the 1934 Act Regulation, the Company will
promptly prepare and file with the Commission, subject to Section 3(b), such
amendment or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement or the Prospectuses comply with
such requirements, and the Company will furnish to the U.S. Underwriters such
number of copies of such amendment or supplement as the U.S. Underwriters may
reasonably request.
(f) Blue Sky Qualifications. The Company will use its reasonable best
efforts, in cooperation with the U.S. Underwriters, to qualify the Securities
for offering and sale under the applicable securities laws of such states and
other jurisdictions (domestic or foreign) as the Global Coordinator may
designate and to maintain such qualifications in effect for a period of not less
than one year from the later of the effective date of the Registration Statement
and any Rule 462(b) Registration Statement; provided, however, that the Company
shall not be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise so
subject. In each jurisdiction in which the Securities have been so qualified,
the Company will file such statements and reports as may be required by the laws
of such jurisdiction to continue such qualification in effect for a period of
not less than one year from the effective date of the Registration Statement and
any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
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(h) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Prospectuses
under "Use of Proceeds".
(i) Listing. The Company will use its reasonable best efforts to effect
the listing of the Common Stock (including the Securities) on the New York Stock
Exchange.
(j) Restriction on Sale of Securities. During a period of 180 days from
the date of the Prospectuses, the Company will not, without the prior written
consent of the Global Coordinator, (i) directly or indirectly offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of, any share of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or file any
registration statement under the 1933 Act with respect to any of the foregoing
or (ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic consequence
of ownership of the Common Stock, whether any such swap or transaction described
in clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the Securities to be sold hereunder or under the International Purchase
Agreement, (B) any shares of Common Stock issued or options to purchase Common
Stock or other Common Stock-based awards granted pursuant to the 2001 Equity
Participation Plan referred to in the Prospectuses or (C) any shares of Common
Stock or securities convertible into or exchangeable for shares of Common Stock
that are issued pursuant to the transactions contemplated by the Combination
Agreement.
(k) Reporting Requirements. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant to the
1934 Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(l) Compliance with Rule 463. The Company will file with the Commission
such reports on Form SR as may be required pursuant to Rule 463 of the 1933 Act
Regulations.
(m) Covenants in Combination Transaction Agreements. Each Combining
Company will use its best efforts to comply with and perform each of its
covenants and agreements contained in the Combination Transaction Agreements.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
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Agreement, any Agreement among Underwriters and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery
of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriters, including any stock or
other transfer taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Securities to the Underwriters and the transfer of
the Securities between the U.S. Underwriters and the International Managers,
(iv) the fees and disbursements of the Company's counsel, accountants and other
advisors, (v) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(f) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky
Survey and any supplement thereto, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus, any Term Sheets and of
the Prospectuses and any amendments or supplements thereto, (vii) the
preparation, printing and delivery to the Underwriters of copies of the Blue Sky
Survey and any supplement thereto, (viii) the fees and expenses of any transfer
agent or registrar for the Securities, (ix) the fees and expenses incurred in
connection with the listing of the Securities on the New York Stock Exchange,
and (x) the filing fees incident to, and the reasonable fees and disbursements
of counsel to the Underwriters in connection with the review by the NASD of the
terms of the sale of the Securities.
(b) Expenses of the Selling Stockholders. Each Selling Stockholder
will pay all expenses incident to the performance of its obligations under this
Agreement, including (i) any stock or other transfer taxes and any stamp or
other duties payable upon the sale of the Securities sold by such Selling
Stockholder to the Underwriters, and their transfer between the U.S.
Underwriters and the International Managers, and (ii) the fees and disbursements
of its counsel and advisors, if any.
(c) Termination of Agreement. If this Agreement is terminated by the U.S.
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the U.S. Underwriters for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the U.S. Underwriters.
(d) Allocation of Expenses. The provisions of this Section shall not
affect any agreement that the Company and the Selling Stockholders may make for
the sharing of costs and expenses incurred in connection with this Agreement and
the transactions contemplated hereby.
SECTION 5. Conditions of U.S. Underwriters' Obligations. The obligations
of the several U.S. Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Stockholders
contained in Section 1 hereof or in certificates of any officer of the Company
or on behalf of any Selling Stockholder delivered pursuant to the provisions
hereof, to the performance by the Company of its covenants and other obligations
hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and at
the Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
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reasonable satisfaction of counsel to the U.S. Underwriters. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company has elected to rely upon Rule 434,
a Term Sheet shall have been filed with the Commission in accordance with Rule
424(b).
(b) Opinion of Counsel for Company. At the Closing Time, the U.S.
Representatives shall have received the favorable opinion, dated as of the
Closing Time, of (i) Vinson & Elkins L.L.P., counsel for the Company, in form
and substance satisfactory to counsel for the U.S. Underwriters, together with
signed or reproduced copies of such letter for each of the other U.S.
Underwriters to the effect set forth in Exhibit A-1 hereto and to such further
effect as counsel to the U.S. Underwriters may reasonably request and (ii)
Fraser Milner Casgrain, counsel for PTI, in form and substance satisfactory to
counsel for the U.S. Underwriters, together with signed or reproduced copies of
such letter for each of the other U.S. Underwriters to the effect set forth in
Exhibit A-2 hereto, and to such further effect as counsel to the U.S.
Underwriters may reasonably request.
(c) Opinion of Counsel for the Selling Stockholders. At the Closing Time,
the U.S. Representatives shall have received the favorable opinion, dated as of
the Closing Time, of counsel for each Selling Stockholder, in form and substance
satisfactory to counsel for the U.S. Underwriters, together with signed or
reproduced copies of such letter for each of the other U.S. Underwriters to the
effect set forth in Exhibit A-3 hereto, and to such further effect as counsel to
the U.S. Underwriters may reasonably request.
(d) Opinion of Counsel for U.S. Underwriters. At the Closing Time, the
U.S. Representatives shall have received the favorable opinion, dated as of
Closing Time, of Baker Botts L.L.P., counsel for the U.S. Underwriters, together
with signed or reproduced copies of such letter for each of the other U.S.
Underwriters, in form and substance reasonably satisfactory to the U.S.
Underwriters.
(e) Officers' Certificate. At the Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectuses, any Material Adverse Effect, and the U.S.
Representatives shall have received a certificate of the President or a Vice
President of the Company and of the chief financial or chief accounting officer
of the Company, dated as of the Closing Time, to the effect that (i) there has
been no such Material Adverse Effect, (ii) the representations and warranties of
the Company in Section 1(a) hereof are true and correct with the same force and
effect as though expressly made at and as of the Closing Time, (iii) the Company
and each other Combining Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to the
Closing Time, and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are pending or are contemplated by the Commission.
(f) Certificate of Selling Stockholders. At the Closing Time, the U.S.
Representatives shall have received a certificate of an Attorney-in-Fact on
behalf of each Selling Stockholder, dated as of the Closing Time, to the effect
that (i) the representations and warranties
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of each Selling Stockholder contained in Section 1(b) hereof are true and
correct in all material respects with the same force and effect as though
expressly made at and as of the Closing Time and (ii) each Selling Stockholder
has complied with all agreements and all conditions on its part to be performed
under this Agreement at or prior to the Closing Time.
(g) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the U.S. Representatives shall have received from each of Ernst &
Young LLP, Arthur Andersen LLP and PricewaterhouseCoopers LLP a letter dated
such date, in form and substance satisfactory to the U.S. Representatives,
together with signed or reproduced copies of such letter for each of the other
U.S. Underwriters containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectuses.
(h) Bring-down Comfort Letter. At the Closing Time, the U.S.
Representatives shall have received from each of Ernst & Young LLP, Arthur
Andersen LLP and PricewaterhouseCoopers LLP a letter, dated as of the Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (g) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to the
Closing Time.
(i) Accountant's Tax Letter. At the Closing Time, the U.S. Representatives
shall have received from Ernst & Young LLP a letter dated as of the Closing
Time, to the effect that the U.S. Underwriters may rely on the opinion of such
firm delivered to the Company pursuant to Section 12.1(i) of the Combination
Agreement.
(j) Approval of Listing. At the Closing Time, the Securities shall have
been approved for listing on the New York Stock Exchange, subject only to
official notice of issuance.
(k) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(l) Lock-up Agreements. At the date of this Agreement, the U.S.
Representatives shall have received an agreement substantially in the form of
Exhibit B hereto signed by the persons listed on Schedule E hereto.
(m) Consummation of Combination. At the Closing Time, the transactions
contemplated by the Combination Agreement and as described in the Registration
Statement and the Prospectuses shall have been consummated without waiver or
modification, except such as have been approved by the Global Coordinator.
(n) Purchase of Initial International Securities. Contemporaneously with
the purchase by the U.S. Underwriters of the Initial U.S. Securities under this
Agreement, the International Managers shall have purchased the Initial
International Securities under the International Purchase Agreement.
(o) Conditions to Purchase of U.S. Option Securities. In the event that
the U.S. Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion
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of the U.S. Option Securities, the representations and warranties of the Company
contained herein and the statements in any certificates furnished by the Company
hereunder shall be true and correct as of each Date of Delivery and, at the
relevant Date of Delivery, the U.S. Representatives shall have received:
(i) Officers' Certificate of Company. A certificate, dated such Date
of Delivery, of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company confirming
that the certificate delivered at the Closing Time pursuant to Section
5(e) hereof remains true and correct as of such Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion (i) of
Vinson & Elkins L.L.P., counsel for the Company, in form and substance
satisfactory to counsel for the U.S. Underwriters, dated such Date of
Delivery, relating to the U.S. Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the opinion required
by Section 5(b)(i) hereof and (ii) of Fraser Milner Casgrain, counsel for
PTI, in form and substance satisfactory to counsel for the U.S.
Underwriters, dated such Date of Delivery, relating to the U.S. Option
Securities to be purchased on such date of delivery and otherwise to the
same effect as the opinion required by Section 5(b)(ii) hereof.
(iii) Opinion of Counsel for U.S. Underwriters. The favorable
opinion of Baker Botts L.L.P., counsel for the U.S. Underwriters, dated
such Date of Delivery, relating to the U.S. Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as the
opinion required by Section 5(d) hereof.
(iv) Bring-down Comfort Letters. A letter from each accounting firm
that delivers a comfort letter pursuant to Section 5(g) in form and
substance satisfactory to the U.S. Representatives and dated such Date of
Delivery, substantially in the same form and substance as the letter
provided by such firm and furnished to the U.S. Representatives pursuant
to Section 5(g) hereof, except that the "specified date" in each letter
furnished pursuant to this paragraph shall be a date not more than five
days prior to such Date of Delivery.
(p) Additional Documents. At the Closing Time and at each Date of
Delivery, counsel for the U.S. Underwriters shall have been furnished with such
documents, certificates and opinions as they may reasonably require for the
purpose of enabling them to pass upon the issuance and sale of the Securities as
herein contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company and the Selling
Stockholders in connection with the issuance and sale of the Securities as
herein contemplated shall be reasonably satisfactory in form and substance to
the U.S. Representatives and counsel for the U.S. Underwriters.
(q) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of U.S. Option
Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several U.S. Underwriters to purchase the relevant Option
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Securities, may be terminated by the U.S. Representatives by notice to the
Company at any time at or prior to Closing Time or such Date of Delivery, as the
case may be, and such termination shall be without liability of any party to any
other party except as provided in Section 4 and except that Sections 1, 6, 7 and
8 shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of U.S. Underwriters. Each Combining Company, jointly
and severally, and the Selling Stockholders severally agree to indemnify and
hold harmless each U.S. Underwriter and each person, if any, who controls any
U.S. Underwriter within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information
and the Rule 434 Information, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
included in any preliminary prospectus or the Prospectuses (or any
amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Merrill Lynch), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;
provided, however, that (x) this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any U.S. Underwriter through the U.S. Representatives expressly for
use in the Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the U.S. Prospectus (or any amendment or supplement thereto); (y)
the Company shall not be liable
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to any U.S. Underwriter with respect to any preliminary prospectus to the extent
that any such loss, liability, claim, damage or expense would not have been
incurred, but for the fact that such U.S. Underwriter, in contravention of a
requirement of applicable law, sold U.S. Securities to a person to whom such
U.S. Underwriter failed to send or give, at or prior to the written confirmation
of the sale of such U.S. Securities (the "Confirmation"), a copy of the U.S.
Prospectus, as then amended or supplemented if the Company has previously
furnished copies thereof (sufficiently in advance of the Confirmation and in
sufficient quantity to allow for distribution by the Confirmation) and the loss,
liability, claim, damage or expense of such U.S. Underwriter resulted from an
untrue statement or omission of a material fact contained in or omitted from the
preliminary prospectus that was corrected in the U.S. Prospectus as, if
applicable, amended or supplemented prior to the Confirmation and it is
judicially determined that such U.S. Prospectus was required by law to be
delivered at or prior to the Confirmation and (z) with respect to each Selling
Stockholder, the indemnity provisions of Section 6(a) shall be only with respect
to information furnished in writing by or on behalf of such Selling Stockholder
expressly for use in the Registration Statement (or any amendment thereto),
including Rule 430A Information and Rule 434 Information, if applicable, or any
preliminary prospectus or the U.S. Prospectus (or any amendment or supplement
thereto); and provided, further, that each Selling Stockholder's aggregate
liability under this Section 6 shall be limited to an amount equal to the net
proceeds (after deducting the underwriting discount, but before deducting
expenses) received by each Selling Stockholder from the sale of Securities
pursuant to this Agreement.
(b) Indemnification of Company, Directors and Officers and Selling
Stockholders. Each U.S. Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each
Selling Stockholder and each person, if any, who controls such Selling
Stockholder within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the U.S. Prospectus
(or any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such U.S. Underwriter through
the U.S. Representatives expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the U.S. Prospectus (or any
amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action;
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provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement. Notwithstanding the immediately preceding sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement of the nature contemplated by Section 6(a)(ii)
effected without its consent if such indemnifying party (i) reimburses such
indemnified party in accordance with such request to the extent the indemnifying
party considers such request to be reasonable and (ii) provides written notice
to the indemnified party substantiating the unpaid balance as unreasonable, in
each case prior to the date of such settlement.
(e) Other Agreements with Respect to Indemnification. The provisions of
this Section shall not affect any agreement among the Company and the Selling
Stockholders with respect to indemnification.
SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Stockholders on the one hand and the U.S. Underwriters on the other hand
from the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) 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 and the
Selling Stockholders on the one hand
27
<PAGE> 33
and of the U.S. Underwriters on the other hand in connection with the statements
or omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling Stockholders
on the one hand and the U.S. Underwriters on the other hand in connection with
the offering of the U.S. Securities pursuant to this Agreement shall be deemed
to be in the same respective proportions as the total net proceeds from the
offering of the U.S. Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the Selling Stockholders and the total
underwriting discount received by the U.S. Underwriters, in each case as set
forth on the cover of the U.S. Prospectus, or, if Rule 434 is used, the
corresponding location on the Term Sheet, bear to the aggregate initial public
offering price of the U.S. Securities as set forth on such cover.
The relative fault of the Company and the Selling Stockholders on the one
hand and the U.S. Underwriters on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Selling Stockholders
or by the U.S. Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholders and the U.S. Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 7
were determined by pro rata allocation (even if the U.S. Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this Section 7. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
7 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, (i) no U.S. Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the U.S. Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such U.S. Underwriter has otherwise been required to pay by reason of any such
untrue or alleged untrue statement or omission or alleged omission and (ii) no
Selling Stockholder shall be required to contribute any amount in excess of the
amount by which the total proceeds to such Selling Stockholder from the sale of
the Securities owned by such Selling Stockholder exceeds the amount of any
damages which such Selling Stockholder has otherwise been required to pay by
reason of any 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 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
28
<PAGE> 34
For purposes of this Section 7, each person, if any, who controls a U.S.
Underwriter or a Selling Stockholder within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as such U.S. Underwriter or such Selling Stockholder, as the case
may be, and each director of the Company, each officer of the Company who signed
the Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the Company. The U.S.
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Initial U.S. Securities set forth
opposite their respective names in Schedule B hereto and not joint.
The provisions of this Section shall not affect any agreement among the
Company and the Selling Stockholders with respect to contribution.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or the Selling Stockholders submitted
pursuant hereto shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any U.S. Underwriter or controlling
person, or by or on behalf of the Company or the Selling Stockholders, and shall
survive delivery of the Securities to the U.S. Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The U.S. Representatives may terminate this
Agreement, by notice to the Company and the Selling Stockholders, at any time at
or prior to Closing Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which information is given in
the U.S. Prospectus, any Material Adverse Effect, or (ii) if there has occurred
any material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the U.S. Representatives, impracticable to market the Securities or
to enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or the New York Stock Exchange, or if trading generally on the New
York Stock Exchange has been suspended or materially limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the NASD or any other governmental authority, or (iv) if a banking
moratorium has been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7 and 8 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the U.S. Underwriters. If one or
more of the U.S. Underwriters shall fail at Closing Time or a Date of Delivery
to purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the
29
<PAGE> 35
U.S. Representatives shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting U.S. Underwriters, or any
other underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, the U.S. Representatives shall not have completed such
arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of U.S. Securities to be purchased on such date, each of the
non-defaulting U.S. Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting U.S. Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number
of U.S. Securities to be purchased on such date, this Agreement or, with
respect to any Date of Delivery which occurs after the Closing Time, the
obligation of the U.S. Underwriters to purchase and of the Company to sell
the Option Securities to be purchased and sold on such Date of Delivery,
shall terminate without liability on the part of any non-defaulting U.S.
Underwriter.
No action taken pursuant to this Section shall relieve any defaulting U.S.
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the U.S.
Underwriters to purchase and the Company to sell the relevant U.S. Option
Securities, as the case may be, either (i) the U.S. Representatives or (ii) the
Company and any Selling Stockholder shall have the right to postpone Closing
Time or the relevant Date of Delivery, as the case may be, for a period not
exceeding seven days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements. As used
herein, the term "U.S. Underwriter" includes any person substituted for a U.S.
Underwriter under this Section 10.
SECTION 11. Default by One or More of the Selling Stockholders or the
Company.
(a) If a Selling Stockholder shall fail at the Closing Time to sell and
deliver the number of Securities which such Selling Stockholder is obligated to
sell hereunder, and the Company shall not exercise the right hereby granted to
increase the number of Securities to be issued by it hereunder by the total
number that would have been sold by such defaulting Selling Stockholder, then
the U.S. Underwriters may, at the option of the U.S. Representatives, by notice
from the U.S. Representatives to the Company and the non-defaulting Selling
Stockholders, either (1) terminate this Agreement without any liability on the
fault of any non-defaulting party except that the provisions of Sections 1, 4,
6, 7 and 8 shall remain in full force and effect or (2) elect to purchase the
Securities which the non-defaulting Selling Stockholders and the Company have
agreed to sell hereunder. No action taken pursuant to this Section 11 shall
relieve any Selling Stockholder so defaulting from liability, if any, in respect
of such default.
30
<PAGE> 36
In the event of a default by any Selling Stockholder as referred to in
this Section 11, each of the U.S. Representatives, the Company and the
non-defaulting Selling Stockholders shall have the right to postpone Closing
Time for a period not exceeding seven days in order to effect any required
change in the Registration Statement or Prospectus or in any other documents or
arrangements.
(b) If the Company shall fail at the Closing Time or at the Date of
Delivery to sell the number of Securities that it is obligated to sell
hereunder, then this Agreement shall terminate without any liability on the part
of any non-defaulting party; provided, however, that the provisions of Sections
1, 4, 6, 7 and 8 shall remain in full force and effect. No actions taken
pursuant to this Section shall relieve the Company from liability, if any, in
respect of such default.
SECTION 12. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the U.S.
Underwriters shall be directed to the U.S. Representatives at North Tower, World
Financial Center, New York, New York 10281-1201, attention of , with a copy to
Joe S. Poff at Baker Botts L.L.P., 910 Louisiana, Houston, Texas 77002; notices
to the Company shall be directed to it at Three Allen Center, 333 Clay Street,
Suite 3460, Houston, Texas 77002, attention of Cindy B. Taylor, with a copy to
Scott N. Wulfe at Vinson & Elkins L.L.P., 1001 Fannin, Suite 2300, Houston,
Texas 77002-6760; and notices to any Selling Stockholder shall be directed to it
c/o the Company at Three Allen Center, 333 Clay Street, Suite 3460, Houston,
Texas 77002 , with a copy to Scott N. Wulfe at Vinson & Elkins L.L.P., 1001
Fannin, Suite 2300, Houston, Texas 77002-6760.
SECTION 13. Parties. This Agreement shall inure to the benefit of and be
binding upon the U.S. Underwriters, each Combining Company and the Selling
Stockholders and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the U.S. Underwriters, each Combining Company and the
Selling Stockholders and their respective successors and the controlling persons
and officers and directors referred to in Sections 6 and 7 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the U.S. Underwriters, the Combining Companies and the
Selling Stockholders and their respective successors, and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Securities from any U.S. Underwriter shall be deemed to be a successor by reason
merely of such purchase.
SECTION 14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 15. Appointment of Agent for Service. PTI represents to each U.S.
Underwriter that it has appointed CT Corporation System, 111 Eighth Avenue, New
York, New York 10011, as its authorized agent (the "Authorized Agent") for
service of process in any action, suit or proceeding in any United States
federal court or any state court in the State of New
31
<PAGE> 37
York, County of New York, and expressly accepts the nonexclusive jurisdiction of
any such court in respect of any such action, suit or proceeding. PTI represents
to each U.S. Underwriter that it has notified CT Corporation System of such
designation and appointment and that CT Corporation System has accepted the same
in writing. PTI agrees to take any and all action, including the execution and
filing of all such instruments and documents as may be necessary to continue
such designation and appointment in full force and effect. Service of process
upon the Authorized Agent and written notice of such service to PTI shall be
deemed, in every respect, effective service of process upon such party.
SECTION 16. Consent to Jurisdiction. Each of the parties hereto
irrevocably agrees that any legal suit, action or proceeding arising out of or
based upon this Agreement or the transactions contemplated hereby may be
instituted in any New York state or United States federal court sitting in the
State of New York, County of New York, and irrevocably waives, to the fullest
extent it may effectively do so, any objection which it may now or hereafter
have to the laying of venue of any such proceeding and irrevocably submits to
the jurisdiction of such courts in any such suit, action or proceeding.
SECTION 17. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
32
<PAGE> 38
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Attorney-in-Fact for
the Selling Stockholders a counterpart hereof, whereupon this instrument, along
with all counterparts, will become a binding agreement between the U.S.
Underwriters, each Combining Company and the Selling Stockholders in accordance
with its terms.
Very truly yours,
OIL STATES INTERNATIONAL, INC.
By
---------------------------------
Name:
Title:
HWC ENERGY SERVICES, INC.
By
---------------------------------
Name:
Title:
PTI GROUP INC.
By
---------------------------------
Name:
Title:
SOONER INC.
By
---------------------------------
Name:
Title:
33
<PAGE> 39
SELLING STOCKHOLDERS
By
---------------------------------
Name:
As Attorney-in-Fact acting on
behalf of the Selling Stockholders
Named in Schedule A hereto
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
SIMMONS & COMPANY INTERNATIONAL
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By
---------------------------------------
Authorized Signatory
For themselves and as U.S. Representatives of the
other U.S. Underwriters named in Schedule B hereto.
34
<PAGE> 40
SCHEDULE A
<TABLE>
<CAPTION>
Number of
Initial
U.S.
Securities
----------
<S> <C>
Oil States International, Inc........................
Selling Stockholders:
[Name].........................................
[Name].........................................
------------
Total................................................ 11,680,000
============
</TABLE>
Sch A-1
<PAGE> 41
SCHEDULE B
<TABLE>
<CAPTION>
Number of
Initial U.S.
Name of U.S. Underwriter Securities
------------------------ ----------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.....................................
Credit Suisse First Boston Corporation......................
Simmons & Company International.............................
----------------
Total....................................................... 11,680,000
================
</TABLE>
Sch B-1
<PAGE> 42
SCHEDULE C
Subsidiaries
Oil States International, Inc.
PTI Group Inc.
HWC Energy Services, Inc.
Sooner Inc.
Sch C-1
<PAGE> 43
SCHEDULE D
OIL STATES INTERNATIONAL, INC.
11,680,000 Shares of Common Stock
(Par Value $.01 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $ .
2. The purchase price per share for the U.S. Securities to be paid by the
several U.S. Underwriters shall be $ , being an amount equal to the initial
public offering price set forth above less $ per share; provided that the
purchase price per share for any U.S. Option Securities purchased upon the
exercise of the over-allotment option described in Section 2(b) shall be reduced
by an amount per share equal to any dividends or distributions declared by the
Company and payable on the Initial U.S. Securities but not payable on the U.S.
Option Securities.
Sch D-1
<PAGE> 44
SCHEDULE E
List of Persons and Entities
Subject to Lock-up
SCF-III, L.P.
SCF-IV, L.P.
L.E. Simmons
Douglas E. Swanson
Cindy B. Taylor
Robert W. Hampton
Michael R. Chaddick
Christopher E. Cragg
Howard Hughes
Sandy Slator
Jay Trahan
Mark G. Papa
Gary L. Rosenthal
Andrew L. Waite
Stephen A. Wells
The existing stockholders of Oil States
The stockholders of HWC, PTI and Sooner receiving shares in Combination
Sch E-1
<PAGE> 45
EXHIBIT A-1
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)(i)
A-1-1
<PAGE> 46
EXHIBIT A-2
FORM OF OPINION OF FRAZIER MILNER CASGRAIN
TO BE DELIVERED PURSUANT TO
SECTION 5(b)(ii)
A-2-1
<PAGE> 47
EXHIBIT A-3
FORM OF OPINION OF COUNSEL
FOR THE SELLING STOCKHOLDERS
TO BE DELIVERED
PURSUANT TO SECTION 5(c)
(i) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency, domestic or foreign (other than as may be necessary under United States
state securities laws, as to which we need express no opinion) is necessary or
required to be obtained by the Selling Stockholder for the performance by the
Selling Stockholder of its obligations under the U.S. Purchase Agreement or the
International Purchase Agreement, or in the Stockholder Agreements, or in
connection with the offer, sale or delivery of the Securities.
(ii) Each of the Stockholder Agreements has been duly authorized, executed
and delivered by the Selling Stockholder named therein and constitutes the
legal, valid and binding agreement of such Selling Stockholder. The U.S.
Purchase Agreement and the International Purchase Agreement has been duly
authorized, executed and delivered by or on behalf of the Selling Stockholder.
(iii) Each Attorney-in-Fact has been duly and irrevocably authorized by
the Selling Stockholder to deliver the Securities on behalf of such Selling
Stockholder in accordance with the terms of the U.S. Purchase Agreement and the
International Purchase Agreement.
(iv) The execution, delivery and performance of the U.S. Purchase
Agreement, the International Purchase Agreement and the Stockholder Agreements
and the sale and delivery of the Securities and the consummation of the
transactions contemplated in the U.S. Purchase Agreement and the International
Purchase Agreement and in the Registration Statement and compliance by the
Selling Stockholder with its obligations under the U.S. Purchase Agreement, the
International Purchase Agreement and the Stockholder Agreements have been duly
authorized by all necessary action on the part of such Selling Stockholder and
do not and will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default under or
result in the creation or imposition of any tax, lien, charge or encumbrance
upon the Securities or any property or assets of such Selling Stockholder
pursuant to any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, license, lease or other instrument or agreement to which such
Selling Stockholder is a party or by which it may be bound, or to which any of
the property or assets of such Selling Stockholder may be subject, nor will such
action result in any violation of the provisions of the charter or by-laws of
the Selling Stockholder, if applicable, or any law, administrative regulation,
A-3-1
<PAGE> 48
judgment or order of any governmental agency or body or any administrative or
court decree having jurisdiction over such Selling Stockholder or any of its
properties.
(v) The Selling Stockholder (together with such Selling Stockholder's
spouse, if applicable) has good and marketable title to the Securities to be
sold by such Selling Stockholder pursuant to the U.S. Purchase Agreement and the
International Purchase Agreement, free and clear of any security interest,
mortgage, pledge, lien, charge, claim, equity or encumbrance of any kind, and
has full right, power and authority to sell, transfer and deliver such
Securities pursuant to the U.S. Purchase Agreement and the International
Purchase Agreement. By delivery of such Securities and payment of the purchase
price therefor as contemplated by the U.S. Purchase Agreement and the
International Purchase Agreement, such Selling Stockholder will transfer to the
Underwriters who have purchased such Securities pursuant to the U.S. Purchase
Agreement and the International Purchase Agreement (assuming each such
Underwriter has no notice of any adverse claim, as defined in Uniform Commercial
Code as adopted in the State of New York (the "NYUCC")), good and marketable
title to such Securities, free and clear of any adverse claim (as defined in the
NYUCC), security interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind.
Such opinion shall not state that it is to be governed or qualified by, or
that it is otherwise subject to, any treatise, written policy or other document
relating to legal opinions, including, without limitation, the Legal Opinion
Accord of the ABA Section of Business Law (1991).
A-3-2
<PAGE> 49
EXHIBIT B
[FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR
OTHER STOCKHOLDERS PURSUANT TO SECTION 5(K)]
, 2001
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
Credit Suisse First Boston Corporation
Simmons & Company International
as U.S. Representatives of the several
U.S. Underwriters to be named in the
within-mentioned U.S. Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Re: Proposed Public Offering by Oil States International, Inc.
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director] of Oil
States International, Inc., a Delaware corporation (the "Company"), understands
that Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch"), Credit Suisse First Boston Corporation and Simmons & Company
International propose to enter into a U.S. Purchase Agreement (the "U.S.
Purchase Agreement") with the Company providing for the public offering of
shares of the Company's common stock, par value $0.01 per share (the "Common
Stock"). In recognition of the benefit that such an offering will confer upon
the undersigned as a stockholder [and an officer and/or director] of the
Company, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees with each
underwriter to be named in the U.S. Purchase Agreement that, during a period of
180 days from the date of the U.S. Purchase Agreement, the undersigned will not,
without the prior written consent of Merrill Lynch, directly or indirectly, (i)
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant for
the sale of, or otherwise dispose of or transfer any shares of the Company's
Common Stock or any securities convertible into or exchangeable or exercisable
for Common Stock, whether now owned or hereafter acquired by the undersigned or
with respect to which the undersigned has or hereafter acquires the power of
disposition, or file any registration statement under the Securities Act of
1933, as amended, with respect to any of the foregoing, or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
B-1
<PAGE> 50
Common Stock, whether any such swap or transaction is to be settled by delivery
of Common Stock or other securities, in cash or otherwise.
Notwithstanding the foregoing, without obtaining the prior written consent
of Merrill Lynch, the undersigned will be permitted to transfer shares of Common
Stock otherwise subject to this letter agreement to any immediate family member
of the Stockholder, any trust established for the benefit of any such immediate
family member or any corporation wholly owned by the Stockholder or any
combination of the Stockholder and any of the foregoing, provided that, prior to
such transfer and as a condition thereof, the transferee shall deliver to
Merrill Lynch a written agreement to be bound by the restrictions set forth
herein until the expiration of the aforementioned 180-day period.
Very truly yours,
Signature:
---------------------------------
Print Name:
---------------------------------
B-2
