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EXHIBIT 1.1
3,699,788 Shares
CAL DIVE INTERNATIONAL, INC.
COMMON STOCK (NO PAR VALUE)
UNDERWRITING AGREEMENT
September 21, 2000
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September 21, 2000
Morgan Stanley & Co. Incorporated
Salomon Smith Barney Inc.
Raymond James & Associates, Inc.
Simmons & Company International
c/o Morgan Stanley & Co.
Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs and Mesdames:
COFLEXIP, a societe anonyme organized under the laws of the
French Republic (the "SELLING SHAREHOLDER"), proposes to sell to the several
Underwriters named in Schedule I hereto (the "UNDERWRITERS") 3,699,788 shares of
the common stock, no par value (the "FIRM SHARES"), of Cal Dive International,
Inc., a Minnesota corporation (the "COMPANY"). The Company proposes to issue and
sell to the several Underwriters not more than an additional 304,968 shares of
the common stock, no par value, of the Company (the "COMPANY ADDITIONAL SHARES")
and Owen Kratz ("KRATZ") proposes to issue and sell to the several Underwriters
not more than an additional 250,000 shares of the common stock, no par value, of
the Company (the "KRATZ ADDITIONAL SHARES" and, together with the Company
Additional Shares, the "ADDITIONAL SHARES") if and to the extent that you, as
Managers of the offering, shall have determined to exercise, on behalf of the
Underwriters, the right to purchase such shares of common stock granted to the
Underwriters in Section 3 hereof. The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the "SHARES." The shares of common
stock, no par value, of the Company to be outstanding after giving effect to the
sales contemplated hereby are hereinafter referred to as the "COMMON STOCK." The
Selling Shareholder, the Company and Kratz are hereinafter sometimes
individually referred to as the "SELLER" and collectively referred to as the
"SELLERS."
The Company has filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement, including a prospectus,
relating to the Shares. The registration statement as amended at the time it
became effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), is hereinafter
referred to as the "REGISTRATION STATEMENT"; the prospectus in the form first
used to confirm sales of Shares is hereinafter referred to as the "PROSPECTUS."
If the Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the Securities
Act (the "RULE 462 REGISTRATION STATEMENT"), then any reference herein to the
term "REGISTRATION STATEMENT" shall be deemed to include such Rule 462
Registration Statement (including, in the case of all references to the
Registration Statement and the Prospectus, documents incorporated therein by
reference).
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1. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in the Prospectus complied or will comply when so
filed in all material respects with the Exchange Act and the applicable
rules and regulations of the Commission thereunder, (ii) the Registration
Statement, when it became effective, did not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, (iii)
the Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder and (iv) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set
forth in this paragraph do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information relating to
any Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each of Louisiana
and Texas, the only jurisdictions in which the conduct of the Company's
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(d) Each subsidiary of the Company has been duly organized, is validly
existing in good standing under the laws of the jurisdiction of its
organization, has the power and authority (corporate or otherwise) to own
its property and to conduct its business as described in the Prospectus and
is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole; all of the issued shares of capital stock of each subsidiary of the
Company have been duly and validly authorized and issued, are fully paid
and non-assessable and are owned directly by the Company, free and clear of
all liens, encumbrances, equities or claims, except for liens granted in
connection with the
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Credit Agreement with Fleet Capital Corporation, a Rhode Island
corporation, as successor, dated as of May 23, 1995, as amended, the Change
of Control and Indemnity Agreement between the Company and Aker Marine
Contractors, Inc., a Texas corporation, et al., dated as of December 15,
1999 and the Security Agreement between Cal Dive I-Title XI, Inc., and the
United States of America, acting through the Secretary of Transportation,
dated as of August 16, 2000 (such agreements are collectively referred to
herein as the "CREDIT AGREEMENTS").
(e) This Agreement has been duly authorized, executed and delivered by
the Company.
(f) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(g) The shares of Common Stock (including the Firm Shares and the
Kratz Additional Shares) currently outstanding have been duly authorized
and are validly issued, fully paid and non-assessable.
(h) The Company Additional Shares have been duly authorized and, when
issued and delivered in accordance with the terms of this Agreement, will
be validly issued, fully paid and non-assessable, and the issuance of such
Company Additional Shares will not be subject to any preemptive or similar
rights.
(i) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement will not contravene
any provision of applicable law or the Amended and Restated Articles of
Incorporation (the "ARTICLES OF INCORPORATION") or the Bylaws (the
"BYLAWS"), in each case as amended to the date hereof, of the Company or
any agreement or other instrument binding upon the Company or any of its
subsidiaries that is material to the Company and its subsidiaries, taken as
a whole, or any judgment, order or decree of any governmental body, agency
or court having jurisdiction over the Company or any subsidiary, and no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company
of its obligations under this Agreement, except such as may be required by
the securities or Blue Sky laws of the various states in connection with
the offer and sale of the Shares.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from that
set forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is
subject that are required to be described in the Registration Statement or
the Prospectus and are not so described or any statutes, regulations,
contracts or other documents that are required to be described in the
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Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(l) Each preliminary prospectus 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 Securities Act, complied when so filed in
all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(m) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described
in the Prospectus, will not be required to register as an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended.
(n) The historical information underlying the estimates of the
reserves of the Company supplied by the Company to Miller and Lents, Ltd.
("MILLER AND LENTS"), independent petroleum engineers with respect to the
Company (as described in Annex A), for the purposes of preparing the
reserve reports of the Company referenced in the Prospectus (the "RESERVE
REPORTS"), including, without limitation, production volumes, sales prices
for production, contractual pricing provisions under oil or gas sales or
marketing contracts or under hedging arrangements, costs of operations and
development, and working interest and net revenue information relating to
the Company's ownership interests in properties, was true and correct in
all material respects on the date of each such Reserve Report; the
estimates of future capital expenditures and other future exploration and
development costs supplied to Miller and Lents were prepared in good faith
and with a reasonable basis; the information provided to Miller and Lents
for purposes of preparing the Reserve Reports was prepared in accordance
with customary industry practices; to the best of the Company's knowledge,
Miller and Lents was, as of the date of each of the Reserve Reports
prepared by it, and are, as of the date hereof, independent petroleum
engineers with respect to the Company; other than normal production of
reserves and intervening spot market product price fluctuations, and except
as disclosed in the Registration Statement and the Prospectus, the Company
is not aware of any facts or circumstances that would result in a
materially adverse change in the reserves in the aggregate, or the
aggregate present value of future net cash flows therefrom, as described in
the Prospectus and as reflected in the Reserve Reports; estimates of such
reserves and the present value of the future net cash flows therefrom as
described in the Prospectus and reflected in the Reserve Reports comply in
all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(o) The Company's estimates of oil and natural gas reserves in the
Registration Statement and Prospectus were prepared in good faith and with
a reasonable basis; the information used to arrive at such estimates was
prepared in accordance with customary industry practices; other than normal
production of reserves and intervening spot market product price
fluctuations, and except as disclosed in the Registration Statement and the
Prospectus, the Company is not aware of any facts or circumstances that
would result in a materially adverse change in such estimates in the
aggregate, or the aggregate present value of future net cash flows
therefrom, as described in the
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Prospectus; and estimates of such reserves and the present value of the
future net cash flows therefrom as described in the Prospectus comply in
all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(p) The Company and its subsidiaries (i) are in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("ENVIRONMENTAL LAWS"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct
their respective businesses as presently conducted and (iii) are in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure
to receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or approvals
would not, singly or in the aggregate, have a material adverse effect on
the Company and its subsidiaries, taken as a whole. There has been no
storage, disposal, generation, transportation, handling or treatment of
hazardous substances or solid wastes by the Company and its subsidiaries
(or to the knowledge of the Company, any of their predecessors in interest)
at, upon or from any of the property now or previously owned or leased by
the Company and its subsidiaries in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit or which
requires remedial action by the Company and its subsidiaries under any
applicable law, ordinance, rule, regulation, order, judgment, decree or
permit, except for any violation or remedial action which would not result
in, or which would not be reasonably likely to result in, singularly or in
the aggregate with all such violations and remedial actions, a material
adverse effect on the Company and its subsidiaries, taken as a whole, and
there has been no spill, discharge, leak, emission, injection, escape,
dumping or release of any kind onto such property or into the environment
surrounding such property of any solid wastes or hazardous substances due
to or caused by the Company and its subsidiaries, except for any such
spill, discharge, leak, emission, injection, escape, dumping or release
which would not result in or would not be reasonably likely to result in,
singularly or in the aggregate with all such spills, discharges, leaks,
emissions, injections, escapes, dumpings and releases, a material adverse
effect on the Company and its subsidiaries, taken as a whole. For purposes
of this provision, the terms "hazardous substances" and "solid wastes"
shall have the meanings specified in any applicable Environmental Laws.
(q) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties) which would, singly or in the aggregate, have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(r) The description of services to be performed by non-coastwise
qualified vessels set forth in the letter dated February 10, 1997 of
Robins, Kaplan, Miller & Ciresi, L.L.P., special counsel to the Company, to
the U.S. Commissioner of Customs, Office of Regulations and Rulings,
completely and correctly describes in all material respects the manner in
which the Company and its subsidiaries currently operate the marine vessels
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described in the Prospectus (the "VESSELS"). At no time during the Company
or any subsidiary's ownership of the Vessels have any of the Vessels been
sold, chartered or otherwise transferred to any person or entity in
violation of any applicable laws, rules or regulations. The Vessels and
classifications of such Vessels are appropriate for the Company's business,
except for Vessels or classifications which would not, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(s) Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of the
Company or to require the Company to include such securities with the
Shares registered pursuant to the Registration Statement. All such rights
to require the Company to include securities with the Shares registered
pursuant to the Registration Statement have been validly waived pursuant to
the terms of any such agreement or understanding.
(t) The Company and its subsidiaries own or possess adequate patent
rights or licenses or other rights to use patent rights, inventions,
trademarks, service marks, trade names, copyrights, technology and know-how
necessary to conduct the general business now or proposed to be operated by
them as described in the Prospectus, except where failure to do so would
not have a material adverse effect on the Company and its subsidiaries,
taken as a whole; neither the Company nor any of its subsidiaries has
received any notice of infringement of or conflict with asserted rights of
others with respect to any patent, patent rights, inventions, trademarks,
service marks, trade names, copyrights, technology or know-how which,
singularly or in the aggregate, would have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(u) The Company and each of 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 businesses in which they
are engaged; neither the Company nor any such subsidiary has been refused
any insurance coverage sought or applied for; and except as described in
the Prospectus neither the Company nor any such subsidiary has any reason
to believe that it 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 business at a
cost that would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
2. Representations and Warranties of the Selling Shareholder. The
Selling Shareholder represents and warrants to and agrees with each of the
Underwriters that:
(a) This Agreement has been duly authorized, executed and delivered by
or on behalf of the Selling Shareholder.
(b) The execution and delivery by the Selling Shareholder of, and the
performance by the Selling Shareholder of its obligations under, this
Agreement will not contravene any provision of the statuts or other
organizational documents of the Selling
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Shareholder, or applicable law, or any agreement or other instrument
binding upon the Selling Shareholder, except for such violations of
applicable law or agreements or other instruments as would not,
individually or in the aggregate, have a material adverse effect on the
performance by the Selling Shareholder of its obligations under this
Agreement or the consummation of the transactions herein described, or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Selling Shareholder, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Selling Shareholder of its
obligations under this Agreement, except such as may be required by the
securities or Blue Sky laws of the various states in connection with the
offer and sale of the Shares.
(c) The Selling Shareholder has, and on the Closing Date will have,
valid title to the Shares to be sold by the Selling Shareholder and the
legal right and power, and all authorization and approval required by law,
to enter into this Agreement, and to sell, transfer and deliver the Shares
to be sold by the Selling Shareholder.
(d) Upon payment and delivery of the Shares to be sold by the Selling
Shareholder pursuant to this Agreement, title to such Shares will pass free
and clear of any security interests, claims, liens, equities and other
encumbrances.
3. Representations and Warranties of Kratz. Kratz represents and
warrants to and agrees with each of the Underwriters that:
(a) Each of this Agreement, the Custody Agreement signed by Kratz and
the Company, as Custodian, relating to the deposit of the Shares to be sold
by Kratz (the "CUSTODY AGREEMENT") and the Power of Attorney appointing
certain individuals as Kratz's attorneys-in-fact to the extent set forth
therein and relating to the transactions contemplated hereby and by the
Registration Statement (the "POWER OF ATTORNEY") has been duly authorized,
executed and delivered by or on behalf of Kratz.
(b) The execution and delivery by Kratz of, and the performance by
Kratz of his obligations under, this Agreement, the Custody Agreement and
the Power of Attorney will not contravene any provision of applicable law,
or any agreement or other instrument binding upon Kratz, except for such
violations of applicable law or agreements or other instruments as would
not, individually or in the aggregate, have a material adverse effect on
the performance by Kratz of his obligations under this Agreement or the
consummation of the transactions herein described, or any judgment, order
or decree of any governmental body, agency or court having jurisdiction
over Kratz, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by Kratz of his obligations under this Agreement, the Custody
Agreement or the Power of Attorney, except such as may be required by the
securities or Blue Sky laws of the various states in connection with the
offer and sale of the Shares.
(c) Kratz has, and on the Option Closing Date will have, valid title
to the Shares to be sold by Kratz and the legal right and power, and all
authorization and
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approval required by law, to enter into this Agreement, the Custody
Agreement and the Power of Attorney, and to sell, transfer and deliver the
Shares to be sold by Kratz.
(d) Upon payment and delivery of the Shares to be sold by Kratz
pursuant to this Agreement, title to such Shares will pass free and clear
of any security interests, claims, liens, equities and other encumbrances.
4. Agreements to Sell and Purchase. The Selling Shareholder hereby
agrees to sell to the several Underwriters, and each Underwriter, upon the basis
of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees, severally and not jointly, to purchase
from the Selling Shareholder the Firm Shares at $50.39 a share (the "PURCHASE
PRICE").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company and Kratz agree
to sell to the Underwriters the Company Additional Shares and the Kratz
Additional Shares, respectively, and the Underwriters shall have a one-time
right to purchase, severally and not jointly, on a pro-rata basis from the
Company and Kratz up to 554,968 Additional Shares at the Purchase Price. If you,
on behalf of the Underwriters, elect to exercise such option, you shall so
notify the Company and Kratz in writing not later than 30 days after the date of
this Agreement, which notice shall specify the number of Additional Shares to be
purchased by the Underwriters and the date on which such shares are to be
purchased. Such date may be the same as the Closing Date (as defined below) but
not earlier than the Closing Date nor later than ten business days after the
date of such notice. Additional Shares may be purchased as provided in Section 6
hereof solely for the purpose of covering over-allotments made in connection
with the offering of the Firm Shares. If any Additional Shares are to be
purchased, each Underwriter agrees, severally and not jointly, to purchase the
number of Additional Shares (subject to such adjustments to eliminate fractional
shares as you may determine) that bears the same proportion to the total number
of Additional Shares to be purchased as the number of Firm Shares set forth in
Schedule I hereto opposite the name of such Underwriter bears to the total
number of Firm Shares.
Each Seller hereby agrees that, without the prior written consent of
Morgan Stanley & Co. Incorporated on behalf of the Underwriters, it will not,
during the period ending 90 days after the date of the Prospectus, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the Shares to be sold hereunder, (B) the issuance by the Company of
shares of Common Stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof of which the
Underwriters have been advised in writing or (C) transactions by any person
other than the Company in shares of Common Stock or other securities that in
either case were acquired in open market transactions after the completion of
the offering of the Shares.
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5. Terms of Public Offering. Each Seller is advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after this Agreement has become effective as in your judgment
is advisable. Each Seller is further advised by you that the Shares are to be
offered to the public initially at $52.625 a share (the "PUBLIC OFFERING PRICE")
and to certain dealers selected by you at a price that represents a concession
not in excess of $1.45 a share under the Public Offering Price, and that any
Underwriter may allow, and such dealers may reallow, a concession, not in excess
of $0.00 a share, to any Underwriter or to certain other dealers.
6. Payment and Delivery. Payment for the Firm Shares shall be made in
one sum by Morgan Stanley on behalf of the several Underwriters to the Selling
Shareholder in Federal or other funds immediately available in New York City
against delivery of such Firm Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on September 27, 2000, or at
such other time on the same or such other date, not later than October 4, 2000,
as shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "CLOSING DATE".
Payment for any Additional Shares shall be made to the Company and
Kratz in Federal or other funds immediately available in New York City against
delivery of such Additional Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on the date specified in the
notice described in Section 4 or at such other time on the same or on such other
date, in any event not later than November 4, 2000, as shall be designated in
writing by you. The time and date of such payment are hereinafter referred to as
the "OPTION CLOSING DATE".
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
7. Conditions to the Underwriters' Obligations. The obligations of the
Selling Shareholder to sell the Shares to the Underwriters and the several
obligations of the Underwriters to purchase and pay for the Shares on the
Closing Date are subject to the condition that the Registration Statement shall
remain effective on the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) if applicable, there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the
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possible change, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act; and
(ii) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company
and its subsidiaries, taken as a whole, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement) that, in your judgment, is
material and adverse and that makes it, in your judgment,
impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date, and on
the Option Closing Date, if any, a certificate, dated the Closing Date, or
the Option Closing Date, as the case may be, and signed by an executive
officer of the Company, to the effect set forth in Section 7(a)(i) above
and to the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date, or
as of the Option Closing Date, as the case may be, and that the Company has
complied with all of the agreements and satisfied all of the conditions on
its part to be performed or satisfied hereunder on or before the Closing
Date, or the Option Closing Date, as the case may be.
The officer signing and delivering such certificate may rely upon the
best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an
opinion of the General Counsel of the Company, dated the Closing Date, to
the effect that:
(i) the Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the State of
Minnesota, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole;
(ii) each subsidiary of the Company has been duly organized, is
validly existing in good standing under the laws of the jurisdiction
of its organization, has the power and authority (corporate or
otherwise) to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact business
and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole;
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(iii) the authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus;
(iv) the shares of Common Stock (including the Firm Shares and
the Kratz Additional Shares) currently outstanding have been duly
authorized and are validly issued, fully paid and non-assessable;
(v) all of the issued shares of capital stock of each subsidiary
of the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and are owned directly by the Company,
free and clear of all liens, encumbrances, equities or claims, except
for liens granted in connection with the Credit Agreements;
(vi) the Company Additional Shares have been duly authorized and,
when issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable, and
the issuance of such Shares will not be subject to any preemptive or
similar rights;
(vii) this Agreement has been duly authorized, executed and
delivered by the Company;
(viii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene any provision of applicable law, except for such
violations of applicable law as would not, individually or in the
aggregate, have a material adverse effect on the performance by the
Company of its obligations under this Agreement or the consummation of
the transactions herein described, or the Articles of Incorporation or
Bylaws, in each case as amended to the date hereof, of the Company or,
to the best of such counsel's knowledge, any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or, to
the best of such counsel's knowledge, any judgment, order or decree of
any governmental body, agency or court having jurisdiction over the
Company or any subsidiary, and no consent, approval, authorization or
order of, or qualification with, any governmental body or agency is
required for the performance by the Company of its obligations under
this Agreement, except such as may be required by the securities or
Blue Sky laws of the various states in connection with the offer and
sale of the Shares;
(ix) the statements (A) in the Prospectus under the caption
"Description of Capital Stock" and (B) in the Registration Statement
in Item 15, in each case insofar as such statements constitute
summaries of the legal matters, documents or proceedings referred to
therein, accurately present, in all material respects, the information
called for with respect to such legal matters, documents and
proceedings and accurately summarize, in all material respects, the
matters referred to therein;
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<PAGE> 13
(x) after due inquiry, such counsel does not know of any legal or
governmental proceedings pending or threatened to which the Company or
any of its subsidiaries is a party or to which any of the properties
of the Company or any of its subsidiaries is subject that are required
to be described in the Registration Statement or the Prospectus and
are not so described or of any statutes, regulations, contracts or
other documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required;
and
(xi) such counsel is of the opinion that the Registration
Statement and Prospectus (except for financial statements and
schedules and other financial and statistical data included therein as
to which such counsel need not express any opinion) comply as to form
in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder. In addition, such
opinion shall state that no facts have come to the attention of such
counsel that would cause such counsel to believe that the Registration
Statement and the prospectus included therein at the time the
Registration Statement became effective contained any untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein
not misleading (it being understood that such counsel expresses no
view with respect to the financial statements and schedules and other
financial and statistical data set forth or referred to in the
Registration Statement or any exhibits thereto), and no facts have
come to the attention of such counsel that would cause such counsel to
believe that the Prospectus contains any untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading (it being understood that such counsel
expresses no view with respect to the financial statements and
schedules and other financial and statistical data set forth or
referred to in the Registration Statement or any exhibits thereto).
(d) The Underwriters shall have received on the Closing Date an
opinion of Fulbright & Jaworski L.L.P., outside counsel for the Company,
dated the Closing Date, to the effect that:
(i) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene any provision of applicable law, except for such
violations of applicable law as would not, individually or in the
aggregate, have a material adverse effect on the performance by the
Company of its obligations under this Agreement or the consummation of
the transactions herein described, or, to the best of such counsel's
knowledge, any agreement or other instrument binding upon the Company
or any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or, to the best of such counsel's
knowledge, any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company or any
subsidiary, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for
the performance by the Company of its obligations under this
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<PAGE> 14
Agreement, except such as may be required by the securities or Blue
Sky laws of the various states in connection with the offer and sale
of the Shares;
(ii) the statements in the Prospectus under the caption
"Description of Capital Stock," insofar as such statements constitute
summaries of the documents referred to therein, accurately present, in
all material respects, the information called for with respect to such
documents and accurately summarize, in all material respects, such
documents;
(iii) after due inquiry, such counsel does not know of any
statutes, regulations, contracts or other documents that are required
to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement that are not
described or filed as required;
(iv) the Company is not an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended; and
(v) such counsel (A) is of the opinion that each document, if
any, filed pursuant to the Exchange Act and incorporated by reference
in the Registration Statement and the Prospectus (except for financial
statements and schedules and other financial and statistical data
included therein as to which such counsel need not express any
opinion) complied when so filed as to form in all material respects
with the Exchange Act, and the applicable rules and regulations of the
Commission thereunder, and (B) is of the opinion that the Registration
Statement and Prospectus (except for financial statements and
schedules and other financial and statistical data included therein as
to which such counsel need not express any opinion) comply as to form
in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder. In addition, such
opinion shall state that no facts have come to the attention of such
counsel that would cause such counsel to believe that the Registration
Statement and the prospectus included therein at the time the
Registration Statement became effective contained any untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein
not misleading (it being understood that such counsel expresses no
view with respect to the financial statements and schedules and other
financial and statistical data set forth or referred to in the
Registration Statement or any exhibits thereto), and no facts have
come to the attention of such counsel that would cause such counsel to
believe that the Prospectus contains any untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading (it being understood that such counsel
expresses no view with respect to the financial statements and
schedules and other financial and statistical data set forth or
referred to in the Registration Statement or any exhibits thereto).
(e) The Underwriters shall have received on the Closing Date an
opinion of Sullivan & Cromwell, counsel for the Selling Shareholder, dated
the Closing Date, substantially to the effect that:
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<PAGE> 15
(i) this Agreement has been duly delivered by or on behalf of the
Selling Shareholder;
(ii) assuming that the Underwriters (or the Depository Trust
Company on behalf of the Underwriters) have taken physical delivery
and possession of the Shares to be sold to the Underwriters by the
Selling Shareholder in good faith and without knowledge of any adverse
claims (within the meaning of Section 8-102 of the New York Uniform
Commercial Code (the "CODE")), upon delivery of such Shares in
registered form and payment for such Shares as contemplated in the
Underwriting Agreement, the Underwriters will be "protected
purchasers" of the Shares within the meaning of Section 8-302 of the
Code and will acquire such Shares free and clear of any adverse claims
(within the meaning of Section 8-102 of the Code); and
(iii) to the best of such counsel's knowledge, all regulatory
consents, authorizations, approvals and filings required to be
obtained or made by the Selling Shareholder under the Federal laws of
the United States or the laws of the State of New York for the sale
and delivery of the Shares to be sold by the Selling Shareholder have
been obtained or made.
(f) The Underwriters shall have received on the Closing Date an
opinion of Sullivan & Cromwell, special French counsel for the Selling
Shareholder, dated the Closing Date, substantially to the effect that:
(i) this Agreement has been duly authorized and executed by the
Selling Shareholder; and
(ii) the Selling Shareholder has all authorization and approval
required by French law to sell and transfer the Shares to be sold by
the Selling Shareholder.
(g) The Underwriters shall have received on the Closing Date an
opinion of the General Counsel for the Selling Shareholder, dated the
Closing Date, to the effect that the execution by the Selling Shareholder
of, and the performance by such Selling Shareholder of its obligations
under, this Agreement will not violate any provision of the statuts or
other organizational documents of such Selling Shareholder, or, to the best
of such counsel's knowledge, applicable French law, or, to the best of such
counsel's knowledge, any agreement or other instrument binding upon such
Selling Shareholder, except for such violations of applicable French law or
agreements or other instruments as would not, individually or in the
aggregate, have a material adverse effect on the performance by the Selling
Shareholder of its obligations under this Agreement or the consummation of
the transactions herein described, or, to the best of such counsel's
knowledge, any judgment, order or decree of any governmental body, agency
or court having jurisdiction over such Selling Shareholder, and, to the
best of such counsel's knowledge, no consent, approval, authorization or
order of, or qualification with, any governmental body or agency of the
French Republic is required for the performance by such Selling Shareholder
of its obligations under this Agreement.
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<PAGE> 16
(h) The Underwriters shall have received on the Option Closing Date an
opinion of Fulbright & Jaworski L.L.P., counsel for Kratz, dated the Option
Closing Date, to the effect that:
(i) each of this Agreement, the Custody Agreement and the Power
of Attorney has been duly authorized, executed and delivered by or on
behalf of Kratz;
(ii) the execution and delivery by Kratz of, and the performance
by Kratz of his obligations under, this Agreement, the Custody
Agreement and the Power of Attorney will not violate any provision of
applicable law, or any agreement or other instrument binding upon
Kratz and identified in a certificate delivered to such counsel by
Kratz or, to the best of such counsel's knowledge, any judgment, order
or decree of any governmental body, agency or court having
jurisdiction over Kratz, and, to the best of such counsel's knowledge,
no consent, approval, authorization or order of, or qualification
with, any governmental body or agency is required for the performance
by Kratz of his obligations under this Agreement, the Custody
Agreement or the Power of Attorney, except such as may be required by
the securities or Blue Sky laws of the various states in connection
with offer and sale of the Shares;
(iii) to the best of such counsel's knowledge, Kratz has the
legal right and power, and all authorization and approval required by
law, to enter into this Agreement, the Custody Agreement and the Power
of Attorney, and to sell, transfer and deliver the Shares to be sold
by Kratz.
(iv) assuming that the Underwriters (or the Depository Trust
Company on behalf of the Underwriters) have taken physical delivery
and possession of the Shares to be sold to the Underwriters by Kratz
in good faith and without knowledge of any adverse claims (within the
meaning of Section 8-102 of the Code), upon delivery of such Shares in
registered form and payment for such Shares as contemplated in the
Underwriting Agreement, the Underwriters will be "protected
purchasers" of the Shares within the meaning of Section 8-302 of the
Code and will acquire such Shares free and clear of any adverse claims
(within the meaning of Section 8-102 of the Code).
(i) The Underwriters shall have received on the Closing Date an
opinion of Baker Botts L.L.P., counsel for the Underwriters, dated the
Closing Date, (A) covering the matters referred to in Section 7(d)(ii)
above and the matters referred to in Section 7(d)(v)(B) and in the last
sentence of Section 7(d)(v) above and (B) to the effect that the statements
in the Prospectus under the captions "Underwriters" and "Plan of
Distribution," in each case insofar as such statements constitute summaries
of the legal matters, documents or proceedings referred to therein,
accurately present, in all material respects, the information called for
with respect to such legal matters, documents and proceedings and
accurately summarize, in all material respects, the matters referred to
therein.
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<PAGE> 17
With respect to Section 7(c)(xii) above, the General Counsel of the
Company, and with respect to Section 7(d)(v) above, Fulbright & Jaworski
L.L.P., may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and documents
incorporated by reference and review and discussion of the contents
thereof, but is without independent check or verification except as
specified. With respect to Section 7(c)(xii) above, Baker Botts L.L.P. may
state that their opinion and belief are based upon their participation in
the preparation of the Registration Statement and Prospectus and any
amendments or supplements thereto (other than the documents incorporated by
reference) and upon review and discussion of the contents thereof
(including documents incorporated by reference), but are without
independent check or verification except as specified. With respect to
Sections 7(e), 7(f) and 7(g) above, Sullivan & Cromwell and the General
Counsel of the Selling Shareholder may rely, with respect to factual
matters and to the extent such counsel deems appropriate, upon the
representations of the Selling Shareholder contained herein and in other
documents and instruments; provided that copies of any such other documents
and instruments shall be delivered to you and shall be in form and
substance satisfactory to your counsel. With respect to Section 7(h) above,
Fulbright & Jaworski L.L.P. may rely, with respect to factual matters and
to the extent such counsel deems appropriate, upon the representations of
Kratz contained herein and in other documents and instruments; provided
that copies of any such other documents and instruments shall be delivered
to you and shall be in form and substance satisfactory to your counsel.
The opinions of the General Counsel of the Company, Fulbright &
Jaworski L.L.P., Sullivan & Cromwell, the General Counsel of the Selling
Shareholder and Fulbright & Jaworski L.L.P. described in Sections 7(c),
7(d), 7(e), 7(f), 7(g) and 7(h) above shall be rendered to the Underwriters
at the request of the Company, the Selling Shareholder or Kratz, as the
case may be, and shall so state therein.
(j) Miller and Lents, Ltd., such firm constituting independent
petroleum engineering consultants (the "ENGINEERING CONSULTANTS"), shall
have delivered to you on the date of this Agreement a letter (the "RESERVE
LETTER") and also on the Closing Date a letter dated the Closing Date, in
each case in form and substance reasonably satisfactory to you and
substantially in the form attached hereto as Annex A, stating, as of the
date of such letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified information
with respect to the oil and gas reserves is given or incorporated in the
Prospectus as of the date not more than five days prior to the date of such
letter), the conclusions and findings of such firm with respect to the oil
and gas reserves of the Company.
(k) The Underwriters shall have received, on each of the date hereof
and the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to the Underwriters,
from Arthur Andersen LLP, independent public accountants, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
and certain financial information contained in the Registration
-16-
<PAGE> 18
Statement and the Prospectus; provided that the letter delivered on the
Closing Date shall use a "cut-off date" not earlier than the date hereof.
(l) The "lock-up" agreements, each substantially in the form of
Exhibit A hereto, between you and each executive officer and director of
the Company relating to sales and certain other dispositions of shares of
Common Stock or certain other securities, delivered to you on or before the
date hereof, shall be in full force and effect on the Closing Date.
(m) The Selling Shareholder shall have furnished or caused to be
furnished to the Underwriters on the Closing Date certificates of the
Selling Shareholder, satisfactory to the Underwriters to the effect that
the representations and warranties of such Selling Shareholder contained in
this Agreement are true and correct as of the Closing Date and that the
Selling Shareholder has complied with all of the agreements and satisfied
all of the conditions on its part to be performed or satisfied hereunder on
or before the Closing Date.
(n) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transaction herein
contemplated, the Selling Shareholder will deliver to the Underwriters
prior to the Closing Date a properly completed and executed United States
Treasury Department Form W-9 or Form W-8 (or other applicable form or
statements specified by Treasury Department regulations in lieu thereof).
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the delivery to you on the Option Closing
Date of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of the
Additional Shares and other matters related to the issuance of the
Additional Shares.
8. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish you, without charge, five signed copies of the
Registration Statement (including exhibits thereto and documents
incorporated by reference) and for delivery to each other Underwriter a
conformed copy of the Registration Statement (without exhibits thereto but
including documents incorporated by reference) and, during the period
mentioned in Section 8(c) below, as many copies of the Prospectus, any
documents incorporated by reference, and any supplements and amendments
thereto as you may reasonably request. The terms "supplement" and
"amendment" or "amend" as used in this Agreement shall include all
documents subsequently filed by the Company with the Commission pursuant to
the Exchange Act that are deemed to be incorporated by reference in the
Prospectus.
(b) Before amending or supplementing the Registration Statement or the
Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to
which you reasonably
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<PAGE> 19
object, and to file with the Commission within the applicable period
specified in Rule 424(b) under the Securities Act any prospectus required
to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public offering
of the Shares as in the opinion of counsel for the Underwriters the
Prospectus is required by law to be delivered in connection with sales by
an Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if, in
the opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses you will furnish
to the Company) to which Shares may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as
so amended or supplemented will not, in the light of the circumstances when
the Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(e) To make generally available to the Company's security holders and
to you as soon as practicable an earning statement covering the
twelve-month period ending September 30, 2001 that satisfies the provisions
of Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
9. Expenses. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company agrees to
pay or cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees and disbursements of
the Company's counsel, the Company's accountants and counsel for the Selling
Shareholder in connection with the registration and delivery of the Shares under
the Securities Act and all other fees or expenses in connection with the
preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the mailing
and delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable thereon, (iii) the cost of printing or producing any Blue
Sky or Legal Investment memorandum in connection with the offer and sale of the
Shares under state securities laws and all expenses in connection with the
qualification of the Shares for offer and sale under state securities laws as
provided in Section 8(d) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or Legal Investment
memorandum, (iv) all filing fees and the reasonable fees and disbursements of
counsel to the Underwriters incurred in connection with the review and
qualification of the offering of the Shares by the National Association of
Securities Dealers, Inc., (v) all fees and expenses in connection with the
preparation and filing of the registration
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<PAGE> 20
statement on Form 8-A relating to the Common Stock, if required, and all costs
and expenses incident to listing the Shares on the Nasdaq National Market, (vi)
the cost of printing certificates representing the Shares, (vii) the costs and
charges of any transfer agent, registrar or depositary, (viii) the costs and
expenses of the Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the Shares,
including, without limitation, expenses associated with the production of road
show slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of the
Company, travel and lodging expenses of the representatives and officers of the
Company and any such consultants, and the cost of any aircraft chartered in
connection with the road show as mutually agreed by the Company and the
Underwriters, and (ix) all other costs and expenses incident to the performance
of the obligations of the Company hereunder for which provision is not otherwise
made in this Section. It is understood, however, that except as provided in this
Section, Section 10 entitled "INDEMNITY AND CONTRIBUTION", and the last
paragraph of Section 12 below, the Underwriters will pay all of their costs and
expenses, including fees and disbursements of their counsel, stock transfer
taxes payable on resale of any of the Shares by them and any advertising
expenses connected with any offers they may make.
The provisions of this Section shall not supersede or otherwise affect
any agreement that the Sellers may otherwise have for the allocation of such
expenses among themselves.
10. Indemnity and Contribution.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably
incurred in connection with defending or investigating any such action or
claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses,
claims, damages or liabilities are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein; provided, however, that
the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
Shares, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person, if required by law so to
have been delivered, at or prior to the written confirmation of the sale of
the Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving use to such losses,
claims, damages or liabilities,
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<PAGE> 21
unless such failure is the result of noncompliance by the Company with
Section 8(a) hereof.
(b) The Selling Shareholder agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, to the same extent as the foregoing indemnity, from the
Company to the Underwriters, but only with reference to information
relating to the Selling Shareholder furnished to the Company in writing by
or on behalf the Selling Shareholder expressly for use in the Registration
Statement, any preliminary prospectus, the Prospectus or any amendments or
supplements thereto; provided, however, that the foregoing indemnity
agreement with respect to any preliminary prospectus shall not inure to the
benefit of any Underwriter from whom the person asserting any such losses,
claims, damages or liabilities purchased Shares, or any person controlling
such Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered,
at or prior to the written confirmation of the sale of the Shares to such
person, and if the Prospectus (as so amended or supplemented) would have
cured the defect giving use to such losses, claims, damages or liabilities.
(c) Kratz agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act,
to the same extent as the foregoing indemnity, from the Company to the
Underwriters, but only with reference to information relating to Kratz
furnished to the Company in writing by or on behalf of Kratz expressly for
use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto; provided, however,
that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
Shares, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person, if required by law so to
have been delivered, at or prior to the written confirmation of the sale of
the Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving use to such losses,
claims, damages or liabilities.
(d) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Selling Shareholder, Kratz, the Company, the
directors of the Company, the officers of the Company who sign the
Registration Statement and each person, if any, who controls the Company or
the Selling Shareholder within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity, from the Company to such Underwriter, but only with
reference to information relating to such Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
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<PAGE> 22
(e) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may
be sought pursuant to Section 10(a), 10(b), 10(c) or 10(d), such person
(the "INDEMNIFIED PARTY") shall promptly notify the person against whom
such indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in
such proceeding and shall pay the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party
shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless
(i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any
such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings
in the same jurisdiction, be liable for (i) the fees and expenses of more
than one separate firm (in addition to any local counsel) for all
Underwriters and all persons, if any, who control any Underwriter within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, (ii) the fees and expenses of more than one separate firm (in
addition to any local counsel) for the Company, its directors, its officers
who sign the Registration Statement and each person, if any, who controls
the Company within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act, (iii) the fees and expenses of more than
one separate firm (in addition to any local counsel) for the Selling
Shareholder and all persons, if any, who control the Selling Shareholder
within the meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act, and (iv) the fees and expenses of more than one
separate firm (in addition to any local counsel) for Kratz, and that all
such fees and expenses shall be reimbursed as they are incurred. Such firm
or firms shall be designated in writing by Morgan Stanley & Co.
Incorporated in the case of parties indemnified pursuant to Section 10(a),
10(b) or 10(c) and by the Company in the case of parties indemnified
pursuant to Section 10(d). The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing 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 as contemplated by
the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered into
more than 30 days after receipt by such indemnifying party of the aforesaid
request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could
have been
-21-
<PAGE> 23
a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter
of such proceeding.
(f) To the extent the indemnification provided for in Section 10(a)
is, other than pursuant to the terms of such Section, unavailable to an
indemnified party or insufficient in respect of any losses, claims, damages
or liabilities referred to therein, then the Company, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (it being understood that the
Company shall not have any liability for contribution hereunder other than
with reference to the matters covered by the indemnities in such Section)
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other
hand from the offering of the Shares or (ii) if the allocation provided by
clause 10(f)(i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause 10(f)(i) above but also the relative fault of the
Company on the one hand and of the indemnified party or parties on the
other hand in connection with the statements or omissions that resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company on
the one hand and the Underwriters on the other hand in connection with the
offering of the Shares shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Shares
(before deducting expenses) received by the Company, the Selling
Shareholder and Kratz on the one hand and the total underwriting discounts
and commissions received by the Underwriters on the other hand, in each
case as set forth in the table on the cover of the Prospectus, bear to the
aggregate Public Offering Price of the Shares. The relative fault of the
Company on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission.
(g) To the extent the indemnification provided for in Section 10(b)
is, other than pursuant to the terms of such Section, unavailable to an
indemnified party or insufficient in respect of any losses, claims, damages
or liabilities referred to therein, then the Selling Shareholder, in lieu
of indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (it being understood that the
Selling Shareholder shall not have any liability for contribution hereunder
other than with reference to the matters covered by the indemnities in such
Section) (i) in such proportion as is appropriate to reflect the relative
benefits received by the Selling Shareholder on the one hand and the
Underwriters on the other hand from the offering of the Shares or (ii) if
the allocation provided by clause 10(g)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause 10(g)(i) above but also the
relative fault of the Selling Shareholder on the one hand and of the
indemnified party or parties on the other hand in connection with the
statements or
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<PAGE> 24
omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Selling Shareholder on the one hand and the Underwriters on
the other hand in connection with the offering of the Shares shall be
deemed to be in the same respective proportions as the net proceeds from
the offering of the Shares (before deducting expenses) received by the
Selling Shareholder and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus, bear to the aggregate Public Offering Price of the
Shares. The relative fault of the Selling Shareholder on the one hand and
the Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Selling Shareholder or by the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
(h) To the extent the indemnification provided for in Section 10(c)
is, other than pursuant to the terms of such Section, unavailable to an
indemnified party or insufficient in respect of any losses, claims, damages
or liabilities referred to therein, then Kratz, in lieu of indemnifying
such indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities (it being understood that Kratz shall not have any
liability for contribution hereunder other than with reference to the
matters covered by the indemnities in such Section) (i) in such proportion
as is appropriate to reflect the relative benefits received by Kratz on the
one hand and the Underwriters on the other hand from the offering of the
Shares or (ii) if the allocation provided by clause 10(h)(i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause 10(h)(i) above
but also the relative fault of Kratz on the one hand and of the indemnified
party or parties on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by Kratz on the one hand and the Underwriters on the other hand in
connection with the offering of the Shares shall be deemed to be in the
same respective proportions as the net proceeds from the offering of the
Shares (before deducting expenses) received by Kratz and the total
underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover of the Prospectus, bear to
the aggregate Public Offering Price of the Shares. The relative fault of
Kratz on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by Kratz
or by the Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission.
(i) To the extent the indemnification provided for in Section 10(d)
is, other than pursuant to the terms of such Section, unavailable to an
indemnified party or insufficient in respect of any losses, claims, damages
or liabilities referred to therein, then such Underwriter or Underwriters
referred to in Section 10(d), in lieu of indemnifying such indemnified
party thereunder, shall contribute to the amount paid or payable by such
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<PAGE> 25
indemnified party as a result of such losses, claims, damages or
liabilities (it being understood that any Underwriter shall not have any
liability for contribution hereunder other than with reference to the
matters covered by the indemnities in such Section) (i) in such proportion
as is appropriate to reflect the relative benefits received by the Sellers
on the one hand and the Underwriters on the other hand from the offering of
the Shares or (ii) if the allocation provided by clause 10(i)(i) above is
not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause 10(i)(i) above
but also the relative fault of such Underwriter or Underwriters on the one
hand and of the indemnified party or parties on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Sellers on the one
hand and the Underwriters on the other hand in connection with the offering
of the Shares shall be deemed to be in the same respective proportions as
the net proceeds from the offering of the Shares (before deducting
expenses) received by the Sellers and the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the
table on the cover of the Prospectus, bear to the aggregate Public Offering
Price of the Shares. The relative fault of the Sellers on the one hand and
such Underwriter or Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Sellers or by the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Underwriters' respective obligations to contribute pursuant
to this Section 10 are several in proportion to the respective number of
Shares they have purchased hereunder, and not joint.
(j) Each Seller and the Underwriters agree that it would not be just
or equitable if contribution pursuant to Sections 10(f), 10(g), 10(h) and
10(i) were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations
referred to in Sections 10(f), 10(g), 10(h) and 10(i). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages
and liabilities referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding
the provisions of this Section 10, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The remedies provided for
in this Section 10 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law
or in equity.
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<PAGE> 26
(k) The indemnity and contribution provisions contained in this
Section 10 and the representations, warranties and other statements of the
Company, the Selling Shareholder and Kratz contained in this Agreement
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf
of any Underwriter or any person controlling any Underwriter, the Selling
Shareholder or any person controlling the Selling Shareholder, the Company,
its officers or directors or any person controlling the Company, or Kratz
and (iii) acceptance of and payment for any of the Shares.
(l) The provisions of this Section 10 shall not supersede or otherwise
affect any agreement that the Company, the Selling Shareholder and Kratz
may otherwise have with respect to indemnification and contribution
obligations among themselves.
11. Termination. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the National Association
of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses 11(a)(i) through 11(a)(iv), such event, singly
or together with any other such event, makes it, in your judgment, impracticable
to market the Shares on the terms and in the manner contemplated in the
Prospectus.
12. Effectiveness; Defaulting Underwriters. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Shares
that it has or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Firm Shares set forth opposite their respective names in Schedule I bears to the
aggregate number of Firm Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as you may specify, to
purchase the Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided that in no event shall the
number of Shares that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 12 by an amount in excess of
one-ninth of such number of Shares without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail
or refuse to purchase Firm Shares and the aggregate number of Firm Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Firm Shares to be purchased, and arrangements satisfactory to you, the
Company and the Selling
-25-
<PAGE> 27
Shareholder for the purchase of such Firm Shares are not made within 36 hours
after such default, this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter, the Company, the Selling Shareholder or
Kratz. In any such case either you or the relevant Seller shall have the right
to postpone the Closing Date, but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement and in
the Prospectus or in any other documents or arrangements may be effected. If, on
the Option Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Additional Shares and the aggregate number of Additional Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Additional Shares to be purchased, the non-defaulting Underwriters
shall have the option to (i) terminate their obligation hereunder to purchase
Additional Shares or (ii) purchase not less than the number of Additional Shares
that such non-defaulting Underwriters would have been obligated to purchase in
the absence of such default. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Selling Shareholder
to comply with the terms or to fulfill any of the conditions of this Agreement,
or if for any reason the Selling Shareholder shall be unable to perform its
obligations under this Agreement, the Company will reimburse the Underwriters or
such Underwriters as have so terminated this Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the fees and
disbursements of their counsel) reasonably incurred by such Underwriters in
connection with this Agreement or the offering contemplated hereunder.
13. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
14. Applicable Law.
(a) This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York, without giving effect to
any conflicts of laws provisions thereof that would require the application
of different law.
(b) Each of the parties hereto hereby irrevocably submits itself to
the jurisdiction of the Federal District Court for the Southern District of
New York or any state court located in New York County, New York with
respect to any claim, dispute or other disagreement (each, a "Dispute") and
each party hereby irrevocably agrees that all claims in respect of such
Dispute or any action, suit or proceeding related thereto may be heard and
determined in such courts. The parties hereby irrevocably waive, to the
fullest extent permitted by applicable law, any objection which they may
now or hereafter have to the laying of venue of any Dispute brought in such
court or any defense of inconvenient forum for the maintenance of such
Dispute. Each of the parties hereto agrees that an award or judgment in any
such dispute may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law.
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<PAGE> 28
(c) Each of the parties hereto hereby consents to process being served
by any party to this Agreement in any suit, action or proceeding by the
delivery or mailing of a copy thereof in accordance with the provisions of
Section 15.
(d) Nothing in this Section 14 shall affect the rights of the parties
to commence any action, suit or proceeding in any other forum or to serve
process in any such action, suit or proceeding in any other manner
permitted by law.
15. Notices. All notices, demands or other communications to be given
or delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally to the
recipient, sent to the recipient by reputable express courier service (charges
prepaid) or mailed to the recipient by certified or registered mail, return
receipt requested and postage prepaid. Such notices, demands and other
communications shall be sent to the parties at the respective addressed
indicated below:
If to the Underwriters:
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Attn: James C. Murphy
Facsimile: (212) 761-0358
with a copy to:
Baker Botts L.L.P.
3000 Shell Plaza
910 Louisiana
Houston, Texas 77002
Attn: J. David Kirkland, Jr.
Facsimile: (713) 229-7701
If to the Company or to Kratz:
Cal Dive International, Inc.
400 N. Sam Houston Parkway E., Suite 400
Houston, Texas 77060
Attn: Owen Kratz
Facsimile: (281) 618-0505
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<PAGE> 29
with a copy to:
Fulbright & Jaworski L.L.P.
1301 McKinney, Suite 5100
Houston, Texas 77010
Attn: Arthur H. Rogers
Facsimile: (713) 651-5246
If to the Selling Shareholder:
COFLEXIP
23 Avenue de Neuilly
75116 Paris, France
Attn: Aline Montel
Facsimile: 33-1-40-67-60-07
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attn: Garth W. Bray
Facsimile: (212) 558-3588
16. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
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<PAGE> 30
Very truly yours,
CAL DIVE INTERNATIONAL, INC.
By: /s/ Owen Kratz
-------------------------------------
Owen Kratz
Chairman and Chief Executive Officer
COFLEXIP
By: /s/ Pierre Marie Valentin
-------------------------------------
Pierre Marie Valentin
Chairman and Chief Executive Officer
/s/ Owen Kratz
-------------------------------------
Owen Kratz
Accepted as of the date hereof:
MORGAN STANLEY & CO. INCORPORATED
SALOMON SMITH BARNEY INC.
RAYMOND JAMES & ASSOCIATES, INC.
SIMMONS & COMPANY INTERNATIONAL
Acting severally on behalf
of themselves and the
several Underwriters named
in Schedule I hereto.
By: Morgan Stanley & Co. Incorporated
By: /s/ James C. Murphy
-----------------------------
James C. Murphy
Vice President
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<PAGE> 31
SCHEDULE I
<TABLE>
<CAPTION>
NUMBER OF FIRM
SHARES TO BE
UNDERWRITER PURCHASED
------------------------------------------------------------- ---------------
<S> <C>
Morgan Stanley & Co. Incorporated 1,154,926
Salomon Smith Barney Inc. 1,154,926
Raymond James & Associates Inc. 494,968
Simmons & Company International 494,968
Dain Rauscher Wessels 50,000
A Division of Dain Rauscher
First Union Securities, Inc. 50,000
Frost Securities, Inc. 50,000
Howard Weil, A Div of Legg Mason Wood Walker Incorporated 50,000
ING Barings LLC 50,000
Edward D. Jones & Co., L.P. 50,000
Paine Webber Incorporated 50,000
Ryan, Beck & Co., Inc. 50,000
---------
Total 3,699,788
=========
</TABLE>
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<PAGE> 32
EXHIBIT A
FORM OF LOCK-UP LETTER
September 21, 2000
Morgan Stanley & Co. Incorporated
Salomon Smith Barney Inc.
Raymond James & Associates, Inc.
Simmons & Company International
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036
Dear Sirs and Mesdames:
The undersigned understands that Morgan Stanley & Co. Incorporated
("MORGAN STANLEY"), Salomon Smith Barney Inc., Raymond James & Associates, Inc.,
and Simmons & Company International propose to enter into an Underwriting
Agreement (the "UNDERWRITING AGREEMENT") with Cal Dive International, Inc., a
Minnesota corporation (the "Company"), COFLEXIP, a French corporation, and Owen
Kratz providing for the public offering (the "PUBLIC OFFERING") by the several
Underwriters, including Morgan Stanley (the "UNDERWRITERS"), of 3,699,788 shares
(the "SHARES") of the common stock, no par value, of the Company (the "COMMON
STOCK").
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Morgan
Stanley on behalf of the Underwriters, it will not, during the period commencing
on the date hereof and ending 90 days after the date of the final prospectus
relating to the Public Offering (the "PROSPECTUS"), (1) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (2) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (1) or (2)
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 sale of any
Shares to the Underwriters pursuant to the Underwriting Agreement, (b)
transactions relating to shares of Common Stock or other securities acquired in
open market transactions after the completion of the Public Offering or (c)
transfers for estate planning purposes, provided that, in the case of clause
(c), any such transferee agrees to be subject to the terms hereof. In addition,
the undersigned agrees that, without the prior written consent of Morgan Stanley
on behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending 90 days after the date of the Prospectus, make any demand
for or exercise any right with respect to, the registration of any shares of
Common Stock or any security convertible into or exercisable or exchangeable for
Common Stock.
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<PAGE> 33
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
------------------------------------
(Name)
------------------------------------
(Address)
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<PAGE> 34
ANNEX A
FORM OF RESERVE LETTER OF MILLER AND LENTS, LTD.
[MILLER AND LENTS LETTERHEAD]
September 21, 2000
Cal Dive International, Inc.
400 N. Sam Houston Parkway E., Suite 400
Houston, Texas 77060
Morgan Stanley & Co. Incorporated
Salomon Smith Barney Inc.
Raymond James & Associates, Inc.
Simmons & Company International
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036
Re: Cal Dive International, Inc.
Public Offering of 3,699,788 Shares of Common Stock
Ladies and Gentlemen:
Miller and Lents, Ltd. was retained by Cal Dive International, Inc. (the
"Company") to estimate the proved oil and gas reserves and the future net
revenues to be derived therefrom as of December 31 in each of the years 1999,
1998, 1997 and 1996, attributable to the Energy Resource Technology, Inc.
interests in properties located offshore Texas and offshore Louisiana. The
results of our studies are documented in our reports entitled "Energy Resource
Technology, Inc., Reserves and Future Net Revenue as of December 31, 1999, SEC
Price Case," dated February 23, 2000, "Energy Resource Technology, Inc., Reserve
and Future Net Revenue Forecast as of December 31, 1998, SEC Price Case," dated
February 1, 1999, "Energy Resource Technology, Inc., Reserve and Future Net
Revenue Forecast as of December 31, 1997, SEC Price Case," dated February 23,
1998 and "Energy Resource Technology, Inc., Reserve and Future Net Revenue
Forecast as of December 31, 1996, SEC Price Case," dated April 25, 1997.
Information regarding the classification and definitions of the reserves shown
is included in the reports.
Since the date of the reports, we have not been provided any additional
information by the Company that would cause the results set forth in the reports
to be misleading as of the effective date of the reserve information therein,
December 31 in each of the years 1999, 1998, 1997 and 1996, respectively. As of
the date hereof, nothing has come to our attention which would cause us to
revise by any material amount any statement made or opinion expressed by us in
the reports with respect to our estimates of the oil and gas reserves and future
net revenues attributable to the interests of the Company in such properties.
-1-
<PAGE> 35
Miller and Lents, Ltd. is not employed on a contingent basis. At the time
of preparation of the reports we did not have, and at the date hereof we do not
have, any financial interest ifn the Company, nor are we connected with the
Company as a promoter, underwriter, director, officer or employee.
Very truly yours,
MILLER AND LENTS, LTD.
By
------------------------------------
Name:
Title:
-2-
