EXHIBIT 1.1
OEI International, Inc.
4,300,000 Shares 1
Common Stock
($0.001 par value)
Underwriting Agreement
New York, New York
, 1998
Xxxxx Xxxxxx Inc.
CIBC Xxxxxxxxxxx Corp.
Xxxxxxx Xxxxxx Xxxxx Inc.
As Representatives of the several Underwriters,
c/o Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
OEI International, Inc., a Delaware corporation ("OEI"), proposes to sell
to the several underwriters named in Schedule I hereto (the "Underwriters"), for
whom you (the "Representatives") are acting as representatives, 4,300,000 shares
of Common Stock, $0.001 par value ("Common Stock") of OEI (said shares to be
issued and sold by OEI being hereinafter called the "Underwritten Securities").
OEI also proposes to grant to the Underwriters an option to purchase up to
645,000 additional shares of Common Stock to cover over-allotments (the "Option
Securities"; the Option Securities, together with the Underwritten Securities,
being hereinafter called the "Securities"). To the extent there are no
additional Underwriters listed on Schedule I other than you, the term
Representatives as used herein shall mean you, as Underwriters, and the terms
Representatives and Underwriters shall mean either the singular or plural as the
context requires. Certain terms used herein are defined in Section 17 hereof.
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1 Plus an option to purchase from OEI, up to 645,000 additional shares to
cover over-allotments.
1. REPRESENTATIONS AND WARRANTIES. OEI represents and warrants to, and
agrees with, each Underwriter as set forth below in this Section 1.
(a) OEI has prepared and filed with the Commission a registration
statement (Reg. No. 333-50323) on Form S-1, including a related preliminary
prospectus, for the registration under the Act of the offering and sale of the
Securities. OEI may have filed one or more amendments thereto, including a
related preliminary prospectus, each of which has previously been furnished to
you. OEI will next file with the Commission either (1) prior to the Effective
Date of such registration statement, a further amendment to such registration
statement (including the form of final prospectus) or (2) after the Effective
Date of such registration statement, a final prospectus in accordance with Rules
430A and 424(b). In the case of clause (2), OEI has included in such
registration statement, as amended at the Effective Date, all information (other
than Rule 430A Information) required by the Act and the rules thereunder to be
included in such registration statement and the Prospectus. As filed, such
amendment and form of final prospectus, or such final prospectus, shall contain
all Rule 430A Information, together with all other such required information,
and, except to the extent the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the form furnished to you
prior to the Execution Time or, to the extent not completed at the Execution
Time, shall contain only such specific additional information and other changes
(beyond that contained in the latest Preliminary Prospectus) as OEI has advised
you, prior to the Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or will, and
when the Prospectus is first filed (if required) in accordance with Rule 424(b)
and on the Closing Date (as defined herein) and on any date on which Option
Securities are purchased, if such date is not the Closing Date (a "settlement
date"), the Prospectus (and any supplements thereto) will, comply in all
material respects with the applicable requirements of the Act and the rules
thereunder; on the Effective Date and at the Execution Time, the Registration
Statement did not or will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and, on the Effective Date,
the Prospectus, if not filed pursuant to Rule 424(b), will not, and on the date
of any filing pursuant to Rule 424(b) and on the Closing Date and any settlement
date, the Prospectus (together with any supplement thereto) will not, include
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED, HOWEVER,
that OEI makes no representations or warranties as to the information contained
in or omitted from the Registration Statement or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished herein or in writing to OEI by or on behalf of any Underwriter through
the Representatives specifically for inclusion in the Registration Statement or
the Prospectus (or any supplement thereto).
(c) Each of OEI and its subsidiaries and each of Petrocon Engineering,
Inc., a Texas corporation, and its subsidiaries ("Petrocon"), W-Industries,
Inc., a Texas corporation ("W-I"),
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Xxxxxx, Xxxxxxxxxx and Xxxxxx, Inc., a New Jersey corporation ("PS&S"), Xxxxxx
Engineering, Inc., a Texas corporation and its subsidiary ("GEI") and Chemical &
Industrial Engineering, Inc., a Kentucky corporation ("C&I"), (each of W-I,
PS&S, GEI and C&I, individually a "Company" and, collectively, the "Companies")
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction in which it is chartered or
organized with full corporate power and authority to own or lease, as the case
may be, and to operate its properties and conduct its business as described in
the Prospectus, and is duly qualified to do business as a foreign corporation
and is in good standing under the laws of each jurisdiction which requires such
qualification, except for such jurisdictions where the failure to so qualify or
to be in good standing would not, individually or in the aggregate, have a
material adverse effect on the condition (financial or otherwise), prospects,
results of operations, business or properties of OEI and its subsidiaries,
Petrocon and its subsidiaries and the Companies and their respective
subsidiaries, taken as a whole (a "Material Adverse Effect").
(d) All the outstanding shares of capital stock of each of OEI and its
subsidiaries, Petrocon and its subsidiaries and the Companies and their
subsidiaries have been duly and validly authorized and issued and are fully paid
and nonassessable, and, except as otherwise set forth in the Prospectus, all
outstanding shares of capital stock of each of OEI and its subsidiaries,
Petrocon and its subsidiaries and the Companies and their subsidiaries are owned
by OEI, Petrocon or such Company, as the case may be, either directly or through
wholly owned subsidiaries, free and clear of any perfected security interest or
any other security interests, claims, liens or encumbrances of any kind.
(e) OEI's authorized capitalization is as set forth in the Prospectus;
the capital stock of OEI conforms in all material respects to the description
thereof contained in the Prospectus; the outstanding shares of Common Stock have
been duly and validly authorized and issued and are fully paid and
nonassessable; the Securities have been duly and validly authorized, and, when
issued and delivered to and paid for by the Underwriters pursuant to this
Agreement, will be duly issued free of preemptive and other rights and
encumbrances, fully paid and nonassessable; the Securities are duly listed, and
admitted and authorized for trading, subject to official notice of issuance and
evidence of satisfactory distribution, on the New York Stock Exchange; the
certificates for the Securities are in valid and sufficient form; the holders of
outstanding shares of capital stock of OEI are not entitled to preemptive or
other rights to subscribe for the Securities; and, except as set forth in the
Prospectus, no options, warrants or other rights to purchase, agreements or
other obligations to issue, or rights to convert any obligations into or
exchange any securities for, shares of capital stock of or ownership interests
in OEI are outstanding.
(f) There is no franchise, contract or other document, or any
transaction that has occurred between or among OEI and its subsidiaries,
Petrocon and its subsidiaries or any Company and its subsidiaries, or any of the
officers or directors or any affiliate or affiliates of OEI and its
subsidiaries, Petrocon and its subsidiaries or any Company and its subsidiaries
of a character required to be described in the Registration Statement or
Prospectus, or, in case of a
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franchise, contract or other document, to be filed as an exhibit thereto, which
is not described or filed as required.
(g) This Agreement has been duly authorized, executed and delivered by
OEI and constitutes a valid and binding obligation of OEI enforceable in
accordance with its terms, except as rights to indemnity and contribution
hereunder may be limited by federal and state securities laws or principles of
public policy and subject to qualification that the enforceability of OEI's
obligations hereunder may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium and other laws relating to or affecting
creditors' rights generally and by general equitable principles.
(h) OEI will not, after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described in the
Prospectus, be an "investment company" as defined in the Investment Company Act
of 1940, as amended.
(i) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained under the
Act and such as may be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities by the
Underwriters in the manner contemplated herein and in the Prospectus.
(j) Neither the issue and sale of the Securities nor the consummation
of any other of the transactions herein contemplated nor the fulfillment of the
terms hereof will conflict with, result in a breach, violation or default (or an
event which with notice or lapse of time or both could become a default) or
imposition of any lien, charge or encumbrance upon any property or assets of OEI
and its subsidiaries, Petrocon and its subsidiaries or any Company and its
subsidiaries pursuant to, (i) the charter or by-laws of OEI and its
subsidiaries, Petrocon and its subsidiaries or any Company and its subsidiaries,
(ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition, covenant or
instrument or give rise to any right of termination, amendment acceleration or
cancellation of any such indenture, contract, lease, agreement or other
obligation to which OEI and its subsidiaries, Petrocon and its subsidiaries or
any Company and its subsidiaries is a party or bound or to which its or their
property is subject, or (iii) any statute, law, rule, regulation, judgment,
order or decree applicable to OEI and its subsidiaries, Petrocon and its
subsidiaries or any Company and its subsidiaries, of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority having
jurisdiction over OEI and its subsidiaries, Petrocon and its subsidiaries or any
Company and subsidiaries, or any of its or their properties.
(k) No holders of securities of OEI have rights to the registration of
such securities under the Registration Statement, OEI has obtained from all
officers and directors of OEI and the stockholders of Petrocon and the Companies
(collectively, the "Stockholders"), their enforceable written agreement that for
a period of at least [two years] from the date of this Agreement they
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will not, sell, offer to sell, solicit an offer to buy, contract to sell, grant
any option to purchase or otherwise transfer or dispose of any shares of Common
Stock or any security convertible or exchangeable for Common Stock (other than
shares acquired on exercise of employee stock options by stockholders who are
not directors or executive officers of OEI or beneficial owners of 5% or more of
the Common Stock), without the prior written consent of Xxxxx Xxxxxx Inc.
(l) The respective historical financial statements and schedules of OEI
and its subsidiaries, Petrocon and its subsidiaries and each Company and its
subsidiaries, included in the Prospectus and the Registration Statement present
fairly in all material respects the respective financial condition, results of
operations and cash flows of OEI and its subsidiaries, Petrocon and its
subsidiaries and each Company and its subsidiaries, as of the dates and for the
periods indicated, comply as to form with the applicable accounting requirements
of the Act and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved (except as otherwise noted therein). The selected financial data set
forth under the captions "Summary Historical and Pro Forma Combined Financial
Data" and "Selected Historical and Pro Forma Combined Financial Data" in the
Prospectus and Registration Statement fairly present, on the basis stated in the
Prospectus and the Registration Statement, the information included therein. The
pro forma combined financial statements included in the Prospectus and the
Registration Statement include assumptions that provide a reasonable basis for
presenting the significant effects directly attributable to the transactions and
events described therein, the related pro forma adjustments give appropriate
effect to those assumptions, and the pro forma adjustments reflect the proper
application of those adjustments to the historical financial statement amounts
in the pro forma combined financial statements included in the Prospectus and
the Registration Statement. The pro forma combined financial statements included
in the Prospectus and the Registration Statement comply as to form in all
material respects with the applicable accounting requirements of Regulation S-X
under the Act and the pro forma adjustments have been properly applied to the
historical amounts in the compilation of those statements.
(m) Except as set forth in or contemplated in the Prospectus (exclusive
of any supplement thereto), no action, suit or proceeding by or before any court
or governmental agency, authority or body or any arbitrator involving OEI or any
of its subsidiaries, Petrocon or any of its subsidiaries or any Company or any
of its subsidiaries, or its or their property is pending or, to the best
knowledge of OEI and its subsidiaries, Petrocon and its subsidiaries and each
Company and its subsidiaries, threatened, that (i) could reasonably be expected
to have a material adverse effect on the performance of this Agreement or the
consummation of any of the transactions contemplated hereby or (ii) could
reasonably be expected to result in a Material Adverse Effect, whether or not
arising from transactions in the ordinary course of business.
(n) Each of OEI and its subsidiaries, Petrocon and its subsidiaries and
the Companies and their subsidiaries owns or leases all such properties as are
necessary to the conduct of its operations as presently conducted.
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(o) None of OEI or its subsidiaries, Petrocon or its subsidiaries or
any Company or its subsidiaries is in violation or default of (i) any provision
of its charter or bylaws, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which it is a party or bound or
to which its property is subject, except for such violations or defaults as
would not, individually or in the aggregate, result in a Material Adverse
Effect, or (iii) any statute, law, rule, regulation, judgment, order or decree
of any court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over OEI and its subsidiaries,
Petrocon and its subsidiaries or any Company and its subsidiaries or any of
their respective properties, as applicable except for such violations or
defaults as would not, individually or in the aggregate, result in a Material
Adverse Effect.
(p) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as described therein,
there has not been any material adverse change or development or event involving
a prospective material adverse change in the condition (financial or otherwise),
prospects, earnings, business or properties of any of OEI and its subsidiaries,
Petrocon and its subsidiaries or any Company and its subsidiaries, respectively,
taken as a whole, whether or not arising from transactions in the ordinary
course of business or from events beyond their control; neither OEI and its
subsidiaries, Petrocon and its subsidiaries nor any Company and its subsidiaries
has entered into any transaction, other than in the ordinary course of business,
that is material to OEI and its subsidiaries, Petrocon and its subsidiaries or
any Company and its subsidiaries, respectively; neither OEI and its
subsidiaries, Petrocon and its subsidiaries nor any Company and its subsidiaries
has sustained any material loss or interference with its assets, businesses or
properties from fire, explosion, earthquake, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or any court or legislative
or other governmental action, order or decree. Since the date of the latest
respective consolidated balance sheets included in the Registration Statement
and the Prospectus, except as reflected in the Registration Statement and the
Prospectus, neither OEI and its subsidiaries, nor Petrocon and its subsidiaries
nor any Company and its subsidiaries has incurred any liability or obligation,
direct or contingent, except for liabilities or obligations undertaken in the
ordinary course of business, including purchases or leases of equipment.
(q) Xxxxxx Xxxxxxxx LLP, which has certified the annual historical
financial statements of OEI and its subsidiaries for the year ended December 31,
1997, Petrocon and its subsidiaries for the years ended December 31, 1996 and
1997 and for each Company and its subsidiaries, if any, for the years ended
December 31, 1996 and 1997, and delivered their report with respect to the
audited financial statements and schedules included in the Prospectus, are
independent public accountants with respect to OEI within the meaning of the Act
and the applicable published rules and regulations thereunder.
(r) There are no transfer taxes or other similar fees or charges under
Federal law or the laws of any state, or any political subdivision thereof,
required to be paid in connection with
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the execution and delivery of this Agreement or the issuance by OEI or sale by
OEI of the Securities.
(s) Except as set forth in or contemplated in the Prospectus (exclusive
of any supplement thereto), each of OEI and its subsidiaries, Petrocon and its
subsidiaries and each Company and its subsidiaries have filed all foreign,
federal, state and local tax returns that are required to be filed or has
requested extensions thereof (except in any case in which the failure so to file
would not have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of OEI and its
subsidiaries, Petrocon and its subsidiaries and each Company and its
subsidiaries, taken as a whole), whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto) and has paid all taxes required
to be paid by it and any other assessment, fine or penalty levied against it, to
the extent that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good faith or
as would not result in a Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business.
(t) Except as set forth in or contemplated in the Prospectus (exclusive
of any supplement thereto), no labor problem or dispute with the employees of
OEI or its subsidiaries, Petrocon or its subsidiaries or any Company or its
subsidiaries exists or, to the best knowledge of OEI and its subsidiaries,
Petrocon and its subsidiaries and each Company and its subsidiaries, is
threatened or imminent, and neither OEI, Petrocon nor any Company is aware of
any existing or imminent labor disturbance by the employees of any of its or its
subsidiaries' principal suppliers, contractors or customers, that could result
in a Material Adverse Effect, whether or not arising from transactions in the
ordinary course of business.
(u) Each of OEI and its subsidiaries, Petrocon and its subsidiaries and
the Companies and their 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; all
policies of insurance insuring OEI and its subsidiaries, Petrocon and its
subsidiaries and each Company and its subsidiaries or their respective
businesses, assets, employees, officers and directors are in full force and
effect; OEI and its subsidiaries, Petrocon and its subsidiaries and each Company
and its subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and there are no material claims by OEI or
its subsidiaries, Petrocon or its subsidiaries or any Company or its
subsidiaries under any such policy or instrument as to which any insurance
company is denying liability or defending under a reservation of rights clause;
neither OEI or its subsidiaries, Petrocon or its subsidiaries nor any Company or
its subsidiaries has been refused any insurance coverage sought or applied for;
and neither OEI or its subsidiaries, Petrocon or its subsidiaries nor any
Company or its subsidiaries 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,
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whether or not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
(v) Except as set forth in or contemplated by the Prospectus (exclusive
of any supplements thereto), no subsidiary of OEI, Petrocon or any Company is
currently prohibited, directly or indirectly, from paying any dividends to any
of OEI, Petrocon or any Company or its parent Company, respectively, from making
any other distribution on such subsidiary's capital stock, from repaying to any
of OEI, Petrocon or any Company or its parent Company, respectively, any loans
or advances to such subsidiary from OEI, Petrocon or any Company, respectively,
or from transferring any of such subsidiary's property or assets to any of OEI,
Petrocon or any Company or its parent Company, respectively, or any other
subsidiary of OEI, Petrocon or any Company.
(w) Except as set forth in or contemplated in the Prospectus (exclusive
of any supplement thereto), each of OEI and its subsidiaries, Petrocon and its
subsidiaries and the Companies and their subsidiaries possesses all licenses,
certificates, permits and other authorizations (collectively, "Permits") issued
by the appropriate federal, state or foreign regulatory authorities necessary to
conduct its respective business, except any Permits as to which the failure to
possess the same would not, individually or in the aggregate, result in a
Material Adverse Effect, and neither OEI and its subsidiaries, Petrocon and its
subsidiaries nor any Company and its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Effect, whether or not arising from transactions in the ordinary course of
business.
(x) OEI, Petrocon and each Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(y) Neither OEI nor Petrocon or any Company has taken, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or otherwise,
in stabilization or manipulation of the price of any security of OEI to
facilitate the sale or resale of the Securities.
(z) Except as set forth in or contemplated in the Prospectus (exclusive
of any supplement thereto), each of OEI and its subsidiaries, Petrocon and its
subsidiaries and the Companies and their subsidiaries are (i) in compliance with
any and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety,
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the environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received and are in compliance
with all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) have not
received notice of any actual or potential liability for the investigation or
remediation of any disposal or release of hazardous or toxic substances or
wastes, pollutants or contaminants, except where such non-compliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals, or liability would not, individually or in the aggregate, result in a
Material Adverse Effect, whether or not arising from transactions in the
ordinary course of business. Except as set forth in the Prospectus, neither OEI
and its subsidiaries, Petrocon and its subsidiaries nor any Company and its
subsidiaries has been named as a "potentially responsible party" under the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended.
(aa) In the ordinary course of business, each of Petrocon and the
Companies periodically reviews the effect of Environmental Laws on their
respective business, operations and properties, in the course of which it
identifies and evaluates associated costs and liabilities (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). On the basis of such review, Petrocon and each
Company has reasonably concluded that such associated costs and liabilities
would not, singly or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or properties
of OEI and its subsidiaries, Petrocon and its subsidiaries and each Company and
its subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).
(bb) Each of OEI and its subsidiaries, Petrocon and its subsidiaries
and each Company and its subsidiaries has fulfilled its obligations, if any,
under the minimum funding standards of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Employee
Retirement Income Security Act of 1974 ("ERISA") and the regulations and
published interpretations thereunder with respect to each "plan" (as defined in
Section 3(3) of ERISA and such regulations and published interpretations) in
which employees of OEI and its subsidiaries, Petrocon and its subsidiaries and
each Company and its subsidiaries are eligible to participate, and each such
plan is in compliance in all material respects with the presently applicable
provisions of ERISA and such regulations and published interpretations, except
for failures to fulfill its obligations or be in compliance which would not,
individually or in the aggregate, result in a Material Adverse Effect. None of
OEI and its subsidiaries, Petrocon and its subsidiaries or any Company and its
subsidiaries has incurred any unpaid liability to the Pension Benefit Guaranty
Corporation (other than for the payment of premiums in the ordinary course) or
to any such plan under Title IV of ERISA.
(cc) OEI has no significant subsidiaries as defined by Rule 1-02 of
Regulation S-X other than Petrocon or the Companies.
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(dd) Each of OEI and its subsidiaries, Petrocon and its subsidiaries
and the Companies and their subsidiaries own, possess, license or have other
rights to use, on reasonable terms, all patents, patent applications, trade and
service marks, trade and service xxxx registrations, trade names, copyrights,
licenses, inventions, trade secrets, technology, know-how and other intellectual
property (collectively, the "Intellectual Property") described in the Prospectus
or material to the conduct of OEI's business as now conducted or as proposed in
the Prospectus to be conducted.
(ee) OEI (i) does not have any material lending or other relationship
with any bank or lending affiliate of Xxxxxxx Xxxxx Xxxxxx Holding Inc. and (ii)
does not intend to use any of the proceeds from the sale of the Securities
hereunder to repay any outstanding debt owed to any affiliate of Xxxxxxx Xxxxx
Barney Holding Inc.
(ff) OEI is in compliance in all material respects with the
Commission's staff legal bulletin No. 5 dated October 8, 1997 related to Year
2000 compliance.
Any certificate signed by any officer of OEI and delivered to the
Representatives or counsel for the Underwriters in connection with the offering
of the Securities shall be deemed a representation and warranty by OEI as to
matters covered thereby to each Underwriter.
2. PURCHASE AND SALE. (a) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, OEI agrees to
sell to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from OEI, at a purchase price of $_________ per share, the
amount of the Underwritten Securities set forth opposite such Underwriter's name
in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, OEI hereby grants an option to
the several Underwriters to purchase, severally and not jointly, up to 645,000
Option Securities at the same purchase price per share as the Underwriters shall
pay for the Underwritten Securities. Said option may be exercised only to cover
over-allotments in the sale of the Underwritten Securities by the Underwriters.
Said option may be exercised in whole or in part at any time (but not more than
once) on or before the 30th day after the date of the Prospectus upon written or
telegraphic notice by the Representatives to OEI setting forth the number of
shares of the Option Securities as to which the several Underwriters are
exercising the option and the settlement date. Delivery of certificates for the
shares of Option Securities by OEI, and payment therefor to OEI, shall be made
as provided in Section 3 hereof. The number of Option Securities to be purchased
by each Underwriter shall be the same percentage of the total number of shares
of the Option Securities to be purchased by the several Underwriters as such
Underwriter is purchasing of the Underwritten Securities, subject to such
adjustments as you in your absolute discretion shall make to eliminate any
fractional shares.
3. DELIVERY AND PAYMENT. Delivery of and payment for the Underwritten
Securities and the Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised
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on or before the third Business Day prior to the Closing Date) shall be made at
10:00 AM, New York City time, on ________ , 1998, or at such time on such later
date not more than three Business Days after the foregoing date as the
Representatives shall designate, which date and time may be postponed by
agreement between the Representatives and OEI or as provided in Section 9 hereof
(such date and time of delivery and payment for the Securities being herein
called the "Closing Date"). Delivery of the Securities shall be made to the
Representatives for the respective accounts of the several Underwriters against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of OEI by wire transfer payable in same-day
funds to an account specified by OEI. Delivery of the Underwritten Securities
and the Option Securities shall be made through the facilities of The Depository
Trust Company unless the Representatives shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised after the
third Business Day prior to the Closing Date, OEI will deliver the Option
Securities (at the expense of OEI) to the Representatives on the date specified
by the Representatives (which shall be within three Business Days after exercise
of said option) for the respective accounts of the several Underwriters, against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of OEI by wire transfer payable in same-day
funds to an account specified by OEI. If settlement for the Option Securities
occurs after the Closing Date, OEI will deliver to the Representatives on the
settlement date for the Option Securities, and the obligation of the
Underwriters to purchase the Option Securities shall be conditioned upon receipt
of, supplemental opinions, certificates and letters confirming as of such date
the opinions, certificates and letters delivered on the Closing Date pursuant to
Section 6 hereof.
4. OFFERING BY UNDERWRITERS. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. AGREEMENTS. OEI agrees with the several Underwriters that:
(a) OEI will use its best efforts to cause the Registration Statement,
if not effective at the Execution Time, and any amendment thereof, to become
effective. Prior to the termination of the offering of the Securities, OEI will
not file any amendment of the Registration Statement or supplement to the
Prospectus or any Rule 462(b) Registration Statement unless OEI has furnished
you a copy for your review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object. Subject to the foregoing
sentence, if the Registration Statement has become or becomes effective pursuant
to Rule 430A, or filing of the Prospectus is otherwise required under Rule
424(b), OEI will cause the Prospectus, properly completed, and any supplement
thereto to be filed with the Commission pursuant to the applicable paragraph of
Rule 424(b) within the time period prescribed and will provide evidence
satisfactory to the Representatives of such timely filing. OEI will promptly
advise the Representatives (1) when the Registration Statement, if not effective
at the Execution Time, shall have become effective, (2) when the Prospectus, and
any supplement thereto, shall have been filed (if required) with the Commission
pursuant to Rule 424(b) or when any Rule 462(b)
-11-
Registration Statement shall have been filed with the Commission, (3) when,
prior to termination of the offering of the Securities, any amendment to the
Registration Statement shall have been filed or become effective, (4) of any
request by the Commission or its staff for any amendment of the Registration
Statement, or any Rule 462(b) Registration Statement, or for any supplement to
the Prospectus or for any additional information, (5) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for that purpose
and (6) of the receipt by OEI of any notification with respect to the suspension
of the qualification of the Securities for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose. OEI will use its
best efforts to prevent the issuance of any such stop order or the suspension of
any such qualification and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of which
the Prospectus as then supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it shall be necessary to amend the Registration
Statement or supplement the Prospectus to comply with the Act or the rules
thereunder, OEI promptly will (1) notify the Representatives of any such event;
(2) prepare and file with the Commission, subject to the second sentence of
paragraph (a) of this Section 5, an amendment or supplement which will correct
such statement or omission or effect such compliance; and (3) supply any
supplemented Prospectus to you in such quantities as you may reasonably request.
(c) As soon as practicable, OEI will make generally available to its
security holders and to each Representative an earnings statement or statements
of OEI and its Subsidiaries which will satisfy the provisions of Section 11(a)
of the Act and Rule 158 under the Act.
(d) OEI will furnish to each Representative and counsel for the
Underwriters signed copies of the Registration Statement (including exhibits
thereto) and to each other Underwriter a copy of the Registration Statement
(without exhibits thereto) and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Act, as many copies of each
Preliminary Prospectus and the Prospectus and any supplement thereto as the
Representatives may reasonably request.
(e) OEI will arrange, if necessary, for the qualification of the
Securities for sale under the laws of such jurisdictions as the Representatives
may designate and will maintain such qualifications in effect so long as
required for the distribution of the Securities; PROVIDED that in no event shall
OEI be obligated to qualify to do business in any jurisdiction where it is not
now so qualified or to take any action that would subject it to service of
process in suits, other than those arising out of the offering or sale of the
Securities, in any jurisdiction where it is not now so subject.
-12-
(f) OEI will not, and will cause its directors, officers and the
Stockholders not to, without the prior written consent of Xxxxx Xxxxxx Inc. for
a period of [two years] following the Execution Time (the "Lockup"), sell, offer
to sell, solicit an offer to buy, contract to sell, grant an option to purchase,
or otherwise transfer or dispose of (or enter into any transaction which is
designed to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to cash
settlement or otherwise) by OEI or any affiliate of OEI or any person in privity
with OEI or any affiliate of OEI) directly or indirectly, or announce the
offering of, any other shares of Common Stock or any securities convertible
into, or exchangeable for, shares of Common Stock; PROVIDED, HOWEVER, that OEI
may issue Common Stock (i) in connection with acquisitions; (ii) pursuant to
awards under OEI's 1998 Incentive Plan and Employee Stock Purchase Plan; and
(iii) pursuant to the exercise of warrants outstanding as of the Closing, and
its stockholders (other than directors and officers of OEI and those of its
stockholders who are beneficial owners of 5% or more of the Common Stock) may
sell shares of Common Stock to the extent such share were acquired on the
exercise of employee stock options.
(g) OEI will not take, directly or indirectly, any action designed to
or which has constituted or which might reasonably be expected to cause or
result, under the Exchange Act or otherwise, in stabilization or manipulation of
the price of any security of OEI to facilitate the sale or resale of the
Securities.
(h) OEI agrees to pay the costs and expenses relating to the following
matters: (i) the preparation, printing or reproduction and filing with the
Commission of the Registration Statement (including financial statements and
exhibits thereto), each Preliminary Prospectus, the Prospectus, and each
amendment or supplement to any of them; (ii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting and
packaging) of such copies of the Registration Statement, each Preliminary
Prospectus, the Prospectus, and all amendments or supplements to any of them, as
may, in each case, be reasonably requested for use in connection with the
offering and sale of the Securities; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Securities,
including any stamp or transfer taxes in connection with the original issuance
and sale of the Securities; (iv) the printing (or reproduction) and delivery of
this Agreement, any blue sky memorandum and all other agreements or documents
printed (or reproduced) and delivered in connection with the offering of the
Securities; (v) the registration of the Securities under the Exchange Act and
the listing of the Securities on the New York Stock Exchange; (vi) any
registration or qualification of the Securities for offer and sale under the
securities or blue sky laws of the several states (including filing fees and the
reasonable fees and expenses of counsel for the Underwriters relating to such
registration and qualification); (vii) any filings required to be made with the
National Association of Securities Dealers, Inc. (including filing fees and the
reasonable fees and expenses of counsel for the Underwriters relating to such
filings); (viii) the transportation and other expenses incurred by or on behalf
of OEI representatives in connection with presentations to prospective
purchasers of the Securities; (ix) the fees and expenses of OEI's, Petrocon's
and each Company's accountants and the fees and expenses of their respective
counsel (including local and special
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counsel); and (x) all other costs and expenses incident to the performance by
OEI, Petrocon and each Company of its respective obligations hereunder.
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of
the Underwriters to purchase the Underwritten Securities and the Option
Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of OEI contained herein as of the
Execution Time, the Closing Date and any settlement date pursuant to Section 3
hereof, to the accuracy of the statements of OEI made in any certificates
pursuant to the provisions hereof, to the performance by OEI of its obligations
hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior to the
Execution Time, unless the Representatives agree in writing to a later time, the
Registration Statement will become effective not later than (i) 6:00 PM New York
City time on the date of determination of the public offering price, if such
determination occurred at or prior to 3:00 PM New York City time on such date or
(ii) 9:30 AM on the Business Day following the day on which the public offering
price was determined, if such determination occurred after 3:00 PM New York City
time on such date; if filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Prospectus, and any such supplement, will
be filed in the manner and within the time period required by Rule 424(b); and
no stop order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been instituted
or threatened.
(b) The mergers of Petrocon and the Companies with the subsidiaries of
OEI (the "Mergers") have been completed substantially in accordance with the
terms of those certain Agreements and Plans of Reorganization, each dated April
10, 1998, by and among OEI and Petrocon and the Companies and certain other
parties (collectively, the "Reorganization Agreements"), without the waiver or
modification of any material term or condition thereof.
(c) OEI shall have furnished to the Representatives the opinion of
Xxxxxx & Xxxxxx, L.L.P., counsel for OEI, dated the Closing Date and addressed
to the Representatives, to the effect that:
(i) each of OEI and its subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full corporate
power and authority to own or lease, as the case may be, and to operate
its properties and conduct its business as described in the Registration
Statement and the Prospectus (and any amendment or supplement thereto),
and is duly qualified to conduct its business and is in good standing in
each jurisdiction or
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place where the nature of its properties or the conduct of its business
requires such qualification, except where the failure to be so qualified
would not, individually or in the aggregate, result in a Material Adverse
Effect, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus;
(ii) the outstanding shares of capital stock of each of OEI and its
subsidiaries have been duly and validly authorized and issued, are fully
paid and nonassessable, and, except as otherwise set forth in the
Prospectus, all outstanding shares of capital stock of such subsidiaries
are owned by OEI either directly, or indirectly through one of the other
subsidiaries, free and clear of any perfected security interest and, to
the best knowledge of such counsel after due inquiry, any other security
interest, claim, lien or encumbrance of any kind;
(iii) each of the Reorganization Agreements (which have been filed with
the Commission as exhibits to the Registration Statement) has been duly
authorized, executed and delivered by OEI and constitutes the valid and
binding obligation of OEI; the Mergers as described in the Prospectus have
been completed and to the best knowledge of such counsel do not constitute
any violation, breach or default (or an event which with notice or lapse
of time or both could become a default) under any material contract,
agreement or other obligation or give rise to any right of termination,
amendment, acceleration or cancellation of any such contract, agreement or
other obligation of OEI and its subsidiaries, or to their knowledge,
Petrocon and its subsidiaries and each Company and its subsidiaries, and
to the best knowledge of such counsel, all the necessary consents or
waivers have been obtained for the Mergers;
(iv) the authorized, issued and outstanding capital stock of OEI
conforms in all material respects to the description thereto set forth
under the caption "Capitalization" in the Prospectus as of the date of the
Prospectus and as adjusted, as of the date hereof, giving effect to the
Mergers; the capital stock of OEI conforms in all material respects to the
description thereof contained in the Prospectus; the outstanding shares of
Common Stock have been duly and validly authorized and issued and are
fully paid and nonassessable; the Securities have been duly and validly
authorized, and, when issued and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be duly issued free of any
statutory, preemptive or other rights, fully paid and nonassessable; the
Securities are duly listed, and admitted and authorized for trading,
subject to official notice of issuance and evidence of satisfactory
distribution, on the New York Stock Exchange; the certificates for the
Securities are in valid and sufficient form; the holders of outstanding
shares of capital stock of OEI are not entitled to preemptive or other
rights to subscribe for the Securities; and, except as set forth in the
Prospectus, to the best knowledge of such counsel, no options, warrants or
other rights to purchase, agreements or other obligations to issue, or
rights to convert any obligations into or exchange any securities for,
shares of capital stock of or ownership interests in OEI are outstanding;
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(v) there is no pending, or to the best knowledge of such counsel,
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving OEI or
its subsidiaries, Petrocon or its subsidiaries or any Company or its
subsidiaries or its or their property of a character required to be
disclosed in the Registration Statement, which is not adequately disclosed
in the Prospectus, and to the best knowledge of such counsel there is no
franchise, contract or other document of a character required to be
described in the Registration Statement or Prospectus, or to be filed as
an exhibit thereto, which is not described or filed as required; and the
statements in the Prospectus under the heading "Risk Factors -- Government
Regulation"; "Business -- Government Regulation"; "The Company -- Summary
of the Terms of the Pending Acquisitions," "Management" and "Description
of Capital Stock," insofar as such statements constitute summaries of the
legal matters, documents or proceedings referred to therein, fairly
present, in all material respects, the information called for with respect
to such legal matters, documents and proceedings and fairly summarize, in
all material respects, the matters referred to therein;
(vi) the Registration Statement has become effective under the Act; any
required filing of the Prospectus and any supplements thereto, pursuant to
Rule 424(b), have been made in the manner and within the time period
required by Rule 424(b); to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued, no proceedings for that purpose have been instituted or threatened
and the Registration Statement and the Prospectus (other than the
financial statements and other financial information contained therein, as
to which such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act and the
rules thereunder; and, such counsel has no reason to believe that on the
Effective Date or at the Execution Time, the Registration Statement
contains or contained any untrue statement of a material fact or omitted
or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus as of its date and on the Closing Date includes any untrue
statement of a material fact or omitted 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 (in each case,
other than the financial statements and other financial information
contained therein, as to which such counsel need express no opinion);
(vii) this Agreement has been duly authorized, executed and delivered
by OEI;
(viii) OEI is not and, after giving effect to the offering and sale of
the Securities and the application of the proceeds thereof as described in
the Prospectus, will not be, an "investment company" as defined in the
Investment Company Act of 1940, as amended;
(ix) no consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained under
the Act, such as may be
-16-
required under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the Underwriters in the
manner contemplated in this Agreement and in the Prospectus and such other
approvals (specified in such opinion) as have been obtained;
(x) neither the issue and sale of the Securities, nor the consummation
of any other of the transactions herein contemplated nor the fulfillment
of the terms hereof will conflict with, result in a breach or violation of
or imposition of any lien, charge or encumbrance upon any property or
assets of OEI and its subsidiaries pursuant to, (i) the charter or by-laws
of OEI and its subsidiaries, (ii) to the best knowledge of counsel, the
terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which OEI and its subsidiaries is a party or
bound or to which its or their property is subject, or (iii) to the best
knowledge of counsel, any statute, law, rule, regulation, judgment, order
or decree applicable to OEI and its subsidiaries of any court, regulatory
body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over OEI and its subsidiaries or any of its
or their properties; and
(xi) Except as set forth in the Prospectus (exclusive of any supplement
thereto) and the Registration Statement, no holders of securities of OEI
have rights to the registration of such securities under the Registration
Statement.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
Texas, the General Corporation Law of the State of Delaware, or the Federal laws
of the United States, to the extent they deem proper and specified in such
opinion, upon the opinion of other counsel of good standing whom they believe to
be reliable (and shall so state in their opinion to the Underwriters) and who
are satisfactory to counsel for the Underwriters, (B) as to matters involving
Petrocon and its subsidiaries and the Companies and their respective
subsidiaries, as applicable, upon the opinions of , and (C) as to matters of
fact, to the extent they deem proper, on certificates of responsible officers of
OEI and public officials; PROVIDED that the Underwriters and their counsel may
rely on such opinions and that such counsel shall state that the opinion of any
other counsel is in form and scope satisfactory to such counsel and it believes
that they are justified in relying on such opinions. Copies of all such opinions
and certificates shall be furnished to counsel to the Underwriters on the
Closing Date. References to the Prospectus in this paragraph (c) include any
supplements thereto at the Closing Date. The opinion of such counsel shall be
rendered to the Underwriters at the request of OEI and shall so state therein.
(d) The Representatives shall have received the opinions of counsel of
Petrocon and of each of the Companies addressed to the Underwriters in the
respective form attached hereto as Exhibit A.
(e) The Representatives shall have received from Xxxxxx, Xxxxx & Xxxxxxx
LLP,
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counsel for the Underwriters, such opinion or opinions, dated the Closing Date
and addressed to the Representatives, with respect to the issuance and sale of
the Securities, the Registration Statement, the Prospectus (together with any
supplement thereto) and other related matters as the Representatives may
reasonably require, and OEI shall have furnished to such counsel such documents
as they request for the purpose of enabling them to pass upon such matters. The
opinion or opinions of such counsel shall be rendered to the Underwriters at the
request of OEI and shall so state therein.
(f) OEI shall have furnished to the Representatives a certificate of OEI,
signed by the Chairman of the Board or the President and the principal financial
or accounting officer of OEI, dated the Closing Date, to the effect that the
signers of such certificates have carefully examined the Registration Statement,
the Prospectus, any supplements to the Prospectus and this Agreement and that:
(i) the representations and warranties of OEI contained in this
Agreement are true and correct in all material respects on and as of the
Closing Date with the same effect as if made on the Closing Date and OEI
has complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to OEI's knowledge, threatened;
(iii) Except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto), since the date of the most recent
financial statements included in the Prospectus (exclusive of any
supplement thereto), there has been no Material Adverse Effect, whether or
not arising from transactions in the ordinary course of business; and
(iv) the Mergers have been completed substantially in accordance with
the terms of the Reorganization Agreements, without the waiver or
modification of any material term or condition thereof.
(g) At the Execution Time and at the Closing Date, Xxxxxx Xxxxxxxx LLP
shall have furnished to the Representatives letters, dated respectively as of
the Execution Time and as of the Closing Date, in form and substance
satisfactory to the Representatives, confirming that they are independent
accountants within the meaning of the Act and the applicable published rules and
regulations thereunder and that they have performed a review of the unaudited
interim financial information of OEI for the three-month periods ended March 31,
1998 and 1997, and as at March 31, 1998, in accordance with Statement on
Auditing Standards No. 71 and stating in effect that:
(i) in their opinion, the audited financial statements and financial
statement schedules and pro forma financial statements included in the
Registration Statement and the Prospectus and reported on by them comply
as to form in all material respects with the
-18-
applicable accounting requirements of the Act and the related published
rules and regulations;
(ii)on the basis of a reading of the amounts included in the
Registration Statement and the Prospectus under the headings "Summary
Historical and Pro Forma Combined Financial Data" and "Selected Historical
and Pro Forma Combined Financial Data"; reading the latest unaudited
financial statements made available by OEI and its subsidiaries; their
limited review , in accordance with standards established under Statement
on Auditing Standards No. 71, of the unaudited interim financial
information for the three-month period ended, March 31, 1998, and as at
March 31, 1998; carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing standards)
which would not necessarily reveal matters of significance with respect to
the comments set forth in such letter; a reading of the minutes of the
meetings of the stockholders and directors of OEI and its subsidiaries,
Petrocon and its subsidiaries and the Companies and their respective
subsidiaries; and inquiries of certain officials of each of OEI, Petrocon
and the Companies who have responsibility for financial and accounting
matters of OEI, Petrocon and the Companies as to transactions and events
subsequent to December 31, 1997, nothing came to their attention which
caused them to believe that:
(1) any unaudited financial statements included in the Registration
Statement and the Prospectus do not comply as to form in all material
respects with applicable accounting requirements of the Act and with
the published rules and regulations of the Commission with respect to
Registration Statements on Form S-1; and said unaudited financial
statements are not in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of the
audited financial statements included in the Registration Statement and
the Prospectus;
(2) with respect to the period subsequent to December 31, 1997,
there were any changes, at a specified date not more than five days
prior to the date of the letter, in the long-term debt, capital stock
or any decrease in the stockholders' equity or working capital of OEI
and its subsidiaries, Petrocon and its subsidiaries and the Companies
and their respective subsidiaries as compared with the amounts shown on
the December 31, 1997 balance sheets included in the Registration
Statement and the Prospectus, or for the period from December 31, 1997
to such specified date there were any decreases, as compared with the
fiscal quarter ended December 31, 1997 in net revenues or income before
income taxes or in total or per share amounts of net income of OEI and
its subsidiaries', Petrocon and its subsidiaries' or the Companies and
their respective subsidiaries' operating income, net interest income,
or net interest income after provision for loan losses, except in all
instances for changes or decreases set forth in such letter, in which
case the letter shall be accompanied by an explanation by OEI, Petrocon
and the Companies, as applicable, as to the significance
-19-
thereof unless said explanation is not deemed necessary by the
Representatives;
(3) the information included in the Registration Statement and
Prospectus in response to Regulation S-K, Item 301 (Selected Financial
Data), Item 302 (Supplementary Financial Information), Item 402
(Executive Compensation) and Item 503(d) (Ratio of Earnings to Fixed
Charges) is not in conformity with the applicable disclosure
requirements of Regulation S-K, or does not agree with the
corresponding amounts in the audited financial statements from which
such amounts were derived;
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial
or statistical information derived from the general accounting records of
OEI and its subsidiaries, Petrocon and its subsidiaries and each of the
Companies and their respective subsidiaries, if any) set forth in the
Registration Statement and the Prospectus, including the information set
forth under the caption "Summary Historical and Pro Forma Combined
Financial Data" and "Selected Historical and Pro Forma Combined Financial
Data" in the Prospectus, agrees with the accounting records of OEI and its
subsidiaries, Petrocon and its subsidiaries and the Companies and their
respective subsidiaries, if any, excluding any questions of legal
interpretation; [Discuss with Xxxxxx Xxxxxxxx how to describe the
procedures they have agreed to apply to the annual historical financial
statements of Petrocon and its subsidiaries for the years ended December
31, 1994 and 1995 that appear in the selected financial table.] and that
they are not aware of any material modifications that should be made to
those statements for them to be in conformity with generally accepted
accounting principles; and
(iv) on the basis of a reading of the unaudited pro forma combined
financial statements included in the Registration Statement and the
Prospectus (the "pro forma combined financial statements"); carrying out
certain specified procedures; making inquiries of certain officials of
OEI, Petrocon and the Companies who have responsibility for financial and
accounting matters about the basis for their determination of the pro
forma adjustments and whether the pro forma combined financial statements
comply as to form in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X; comparing the historical
financial information for OEI, Petrocon and the Companies included in the
pro forma combined financial statements with the historical financial
statements contained in the Prospectus and finding them to be in
agreement; and proving the arithmetic accuracy of the application of the
pro forma adjustments to the historical amounts in the pro forma financial
statements, nothing came to their attention which caused them to believe
that the pro forma financial statements do not comply as to form in all
material respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X or that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of such
statements.
References to the Prospectus in this paragraph (g) include any supplement
thereto at the
-20-
date of the letter.
OEI shall have received from Xxxxxx Xxxxxxxx LLP (and furnished to the
Representatives) a report with respect to a review of unaudited interim
financial information of OEI for the quarters ending March 31, 1997 and 1998, in
accordance with Statement on Auditing Standards No. 71.
(h) The Representatives shall have received on each Closing Date a
certificate, including exhibits thereto, addressed to the Representatives and
dated such Closing Date, of the Secretary or an Assistant Secretary of OEI,
signed in such officer's capacity as such officer, as to the (i) certificate of
incorporation and bylaws of OEI, (ii) resolutions authorizing the execution and
delivery of the Registration Statement, the Prospectus and the offering of the
Shares, this Agreement and the performance of the transactions contemplated by
this Agreement, (iii) the form of Common Stock certificate and the number of
shares of Common Stock outstanding and (iv) incumbency of the person or persons
authorized to execute and deliver the Registration Statement, this Agreement and
any other documents contemplated by the offering of the Securities.
(i) The Representatives shall have received on each Closing Date (i)
certificates of the Secretaries of State of each State where OEI and its
subsidiaries, Petrocon and its subsidiaries and each of the Companies and their
respective subsidiaries, as applicable, is incorporated and doing business as to
the good standing of OEI and its subsidiaries, Petrocon and its subsidiaries and
each of the Companies and their respective subsidiaries, qualification of OEI
and its subsidiaries, Petrocon and its subsidiaries and each of the Companies
and their respective subsidiaries to do business as a foreign corporation, if
applicable, and filing of annual reports and (ii) copies of all charter
documents of OEI and its subsidiaries, Petrocon and its subsidiaries and each of
the Companies and their respective subsidiaries certified by the Secretary of
State of the state of such corporation's incorporation.
(j) Subsequent to the Execution Time or, if earlier, the dates as of which
information is given in the Registration Statement (exclusive of any amendment
thereof) and the Prospectus (exclusive of any supplement thereto), there shall
not have been (i) any change or decrease specified in the letter or letters
referred to in paragraph (e) of this Section 6 or (ii) any change, or any
development involving a prospective change, in or affecting the condition
(financial or otherwise), earnings, business or properties of OEI and its
subsidiaries, Petrocon and its subsidiaries or the Companies and their
subsidiaries, taken as a whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto) the effect of which, in any
case referred to in clause (i) or (ii) above, is, in the sole judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Registration Statement (exclusive of any amendment thereof)
and the Prospectus (exclusive of any supplement thereto).
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(k) OEI, Petrocon and the Companies shall deliver to the Representatives
on each Closing Date such other documents as the Representatives shall
reasonably request.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of such
cancellation shall be given to OEI in writing or by telephone or facsimile
confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office Xxxxxx & Xxxxxx, L.L.P., counsel for OEI, at 000
Xxxxxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxx, xx the Closing Date.
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Underwriters set forth in Section 6 hereof is not satisfied, because of
any termination pursuant to Section 10 hereof or because of any refusal,
inability or failure on the part of OEI to perform any agreement herein or
comply with any provision hereof other than by reason of a default by any of the
Underwriters, OEI will reimburse the Underwriters severally through Xxxxxxx
Xxxxx Barney on demand for all out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities.
8. INDEMNIFICATION AND CONTRIBUTION. (a) OEI agrees to indemnify and hold
harmless each Underwriter, the directors, officers, employees and agents of each
Underwriter and each person who controls any Underwriter within the meaning of
either the Act or the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or other Federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the registration statement for the registration of the Securities
as originally filed or in any amendment thereof, or in any Preliminary
Prospectus or the Prospectus, or in any amendment thereof or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and agrees to reimburse each such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that OEI will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to OEI by or on behalf of any Underwriter
through the Representatives specifically for inclusion therein. This indemnity
agreement will be
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in addition to any liability which OEI may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify and
hold harmless OEI, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls OEI within the meaning of
either the Act or the Exchange Act, to the same extent as the foregoing
indemnity to each Underwriter, but only with reference to written information
relating to such Underwriter furnished to OEI by or on behalf of such
Underwriter through the Representatives specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any Underwriter may otherwise have. OEI
acknowledges that the statements set forth in the last paragraph of the cover
page regarding delivery of the Securities, the legend in block capital letters
on page 2 related to stabilization, syndicate covering transactions and penalty
bids and, under the heading "Underwriting," (i) the sentences related to
concessions and reallowances and (ii) the paragraph related to stabilization,
syndicate covering transactions and penalty bids in any Preliminary Prospectus
and the Prospectus constitute the only information furnished in writing by or on
behalf of the several Underwriters for inclusion in any Preliminary Prospectus
or the Prospectus.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); PROVIDED, HOWEVER, that such counsel shall be
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to
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employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 8 is unavailable or insufficient to hold harmless an indemnified
party for any reason, OEI and the Underwriters severally agree to contribute to
the aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which OEI and one or more of the Underwriters may be
subject in such proportion as is appropriate to reflect the relative benefits
received by OEI on the one hand and by the Underwriters on the other from the
offering of the Securities; PROVIDED, HOWEVER, that in no case shall any
Underwriter (except as may be provided in any agreement among underwriters
relating to the offering of the Securities) be responsible for any amount in
excess of the underwriting discount or commission applicable to the Securities
purchased by such Underwriter hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, OEI and the
Underwriters severally shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of OEI on
the one hand and of the Underwriters on the other in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by OEI shall be deemed to
be equal to the total net proceeds from the offering (before deducting expenses)
received by it, and benefits received by the Underwriters shall be deemed to be
equal to the total underwriting discounts and commissions, in each case as set
forth on the cover page of the Prospectus. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by OEI on the one hand or the
Underwriters on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. OEI and the Underwriters agree that it would not
be just and equitable if contribution were determined by pro rata allocation or
any other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls OEI within the meaning of either the
Act or the Exchange Act, each officer of OEI who shall have signed the
Registration Statement and each director of OEI shall have the same rights to
contribution as OEI, subject in each case to the applicable terms and conditions
of this paragraph (d).
-24-
9. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters shall fail
to purchase and pay for any of the Securities agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; PROVIDED, HOWEVER, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter or
OEI. In the event of a default by any Underwriter as set forth in this Section
9, the Closing Date shall be postponed for such period, not exceeding five
Business Days, as the Representatives shall determine in order that the required
changes in the Registration Statement and the Prospectus or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Underwriter of its liability, if any, to OEI and
any nondefaulting Underwriter for damages occasioned by its default hereunder.
10. TERMINATION. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to OEI prior to
delivery of and payment for the Securities, if at any time prior to such time
(i) trading in OEI's Common Stock shall have been suspended by the Commission or
the New York Stock Exchange or trading in securities generally on the New York
Stock Exchange shall have been suspended or limited or minimum prices shall have
been established on such Exchange, (ii) a banking moratorium shall have been
declared either by Federal or New York State authorities or (iii) there shall
have occurred any outbreak or escalation of hostilities, declaration by the
United States of a national emergency or war or other calamity or crisis the
effect of which on financial markets is such as to make it, in the sole judgment
of the Representatives, impractical or inadvisable to proceed with the offering
or delivery of the Securities as contemplated by the Prospectus (exclusive of
any supplement thereto).
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective agreements,
representations, warranties, indemnities and other statements of OEI or its
officers and of the Underwriters set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation made by or
on behalf of any Underwriter or OEI or any of the officers, directors or
controlling persons referred to in Section 8 hereof, and will survive delivery
of and payment for the Securities. The provisions of Sections 7 and 8 hereof
shall survive the termination or cancellation of this Agreement.
12. NOTICES. All communications hereunder will be in writing and effective
only on receipt, and, if sent to the Representatives, will be mailed, delivered
or telefaxed to the Salomon
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Xxxxx Xxxxxx General Counsel (fax no.: (000) 000-0000) and confirmed to the
General Counsel, Xxxxxxx Xxxxx Barney, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, 00000, Attention: General Counsel, with a copy mailed, delivered or
telefaxed to Xxxxxx, Xxxxx & Xxxxxxx, LLP, at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, 00000-0000, (fax no. (000) 000-0000), Attention: Xxxxxxx X. Xxxxxxx; or,
if sent to OEI, will be mailed, delivered or telefaxed to 0000 Xxxxx Xxxx Xxxx,
Xxxxx 000, Xxxxxxx, Xxxxx, 00000, (fax no. (000) 000-0000) and confirmed to it
at 0000 Xxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000, Attention: Chief
Financial Officer, with a copy mailed, delivered or telefaxed to Xxxxxx &
Xxxxxx, L.L.P., 000 Xxxxxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxx, 00000, (fax no. (713)
000-0000), Attention: Xxxxx X. Xxxxxxxx, Xx.
13. SUCCESSORS. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 8 hereof, and no other
person will have any right or obligation hereunder.
14. APPLICABLE LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
15. COUNTERPARTS. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. HEADINGS. The section headings used herein are for convenience only
and shall not affect the construction hereof.
17. DEFINITIONS. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies
are authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the
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rules and regulations of the Commission promulgated thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus referred to
in paragraph 1(a) above and any preliminary prospectus included in the
Registration Statement at the Effective Date that omits Rule 430A
Information.
"Prospectus" shall mean the prospectus relating to the Securities that is
first filed pursuant to Rule 424(b) after the Execution Time or, if no
filing pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Securities included in the Registration
Statement at the Effective Date.
"Registration Statement" shall mean the registration statement referred to
in paragraph 1(a) above, including exhibits and financial statements, as
amended at the Execution Time (or, if not effective at the Execution Time,
in the form in which it shall become effective) and, in the event any
post-effective amendment thereto or any Rule 462(b) Registration Statement
becomes effective prior to the Closing Date, shall also mean such
registration statement as so amended or such Rule 462(b) Registration
Statement, as the case may be. Such term shall include any Rule 430A
Information deemed to be included therein at the Effective Date as
provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under the Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration statement
and any amendments thereto filed pursuant to Rule 462(b) relating to the
offering covered by the initial registration statement.
"Xxxxxxx Xxxxx Xxxxxx" shall mean Xxxxx Xxxxxx Inc.
[Signature page follows.]
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among OEI
and the several Underwriters.
Very truly yours,
OEI INTERNATIONAL, INC.
By:________________________________
Name: X.X. Xxxxxx
Title: Chairman and Chief Executive
Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
XXXXX XXXXXX INC.
CIBC XXXXXXXXXXX CORP.
XXXXXXX XXXXXX XXXXX INC.
By: XXXXX XXXXXX INC.
By:___________________
Name:
Title:
For themselves and the other
several Underwriters named
in Schedule I to the
foregoing Agreement.
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SCHEDULE I
UNDERWRITERS
Number of Firm
Shares to be
NAME Purchased
Xxxxx Xxxxxx, Inc.
CIBC Xxxxxxxxxxx Corp.
Xxxxxxx Xxxxxx Xxxxx Inc.
Total _____________
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SCHEDULE II
FORM OF LOCK-UP AGREEMENT
OEI International, Inc.
Public Offering of 4,300,000 Shares
of Common Stock
, 1998
Xxxxx Xxxxxx Inc.
CIBC Xxxxxxxxxxx Corp.
Xxxxxxx Xxxxxx Xxxxx Inc.
As Representatives of the several Underwriters,
c/o Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned understands that you and certain other firms propose to
enter into an Underwriting Agreement (the "Underwriting Agreement") providing
for the purchase by you and such other firms (the "Underwriters") of shares (the
"Shares") of Common Stock, par value $0.001 per share (the "Common Stock"), of
OEI International, Inc. ("OEI") and that the Underwriters propose to reoffer the
Shares to the public.
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that without the prior written consent of Xxxxx Xxxxxx
Inc. the undersigned will not directly or indirectly (and, except as may be
disclosed in the Prospectus, will not announce or disclose any intention to)
sell, offer to sell, solicit an offer to buy, contract to sell, grant any option
to purchase, or otherwise transfer or dispose of, any shares of Common Stock, or
any securities convertible into or exercisable or exchangeable for Common Stock,
for a period of [two years] after the date of the final Prospectus relating to
the offering of the Shares to the public by the Underwriters. Prior to the
expiration of such period, the undersigned will not announce or disclose any
intention to do anything after the expiration of such period which the
undersigned is
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prohibited, as provided in the preceding sentence, from doing during such
period.
The undersigned agrees that the provisions of this agreement shall be
binding also upon the successors, assigns, heirs and personal representatives of
the undersigned.
In furtherance of the foregoing, OEI and , its Transfer Agent, are hereby
authorized to decline to make any transfer of securities if such transfer would
constitute a violation or breach of this letter agreement.
It is understood that, if the Underwriting Agreement does not become
effective, or if the Underwriting Agreement (other than the provisions thereof
which survive termination) shall terminate or be terminated prior to payment for
and delivery of the Shares, you will release [me/us] from [my/our] obligations
under this letter agreement.
Very truly yours,
[SIGNATURE OF OFFICER, DIRECTOR OR MAJOR STOCKHOLDER]
[NAME AND ADDRESS]
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EXHIBIT A
Form of Opinion of Counsel to the Founding Companies
[Letterhead of Counsel to Founding Company]
_____________, 1998
OEI International, Inc.
0000 Xxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Xxxxx Xxxxxx Inc.
CIBC Xxxxxxxxxxx Corp.
Xxxxxxx Xxxxxx Xxxxx Inc.
as Representatives of the several Underwriters
c/o Xxxxxxx Xxxxx Barney
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
We have acted as counsel to ____________________, a _________________
corporation (the "COMPANY"), and ________________, _______________ and
_______________ (collectively, the "STOCKHOLDERS"), in connection with the
Agreement and Plan of Reorganization dated as of _______________, 1998 (the
"ACQUISITION AGREEMENT"), by and among OEI International, Inc., a Delaware
corporation ("OEI"), _________ Acquisition, Inc., a ______________ corporation
("NEWCO"), the Company and the Stockholders. This opinion is delivered to you
pursuant to Section 7.04(a)(ii)(B)(2) of the Acquisition Agreement and Sections
_____ and ____ of the Underwriting Agreement dated _______________, 1998 (the
"UNDERWRITING AGREEMENT"), by and between OEI and Xxxxx Xxxxxx Inc., CIBC
Xxxxxxxxxxx Corp. and Xxxxxxx Xxxxxx Xxxxx Inc., individually and as
representatives of the several underwriters named in Schedule A thereto.
Capitalized terms used and not otherwise defined herein have the meanings given
to them in the Acquisition Agreement.
We have examined the originals, or copies certified or otherwise
identified to our satisfaction, of (i) the Acquisition Agreement, (ii) the
[Articles] [Certificate] of Merger dated
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_____________ __, 1998, with respect to the Merger between Newco and the
Company, (iii) the Lock-Up Agreements dated as of ___________, 1998, executed by
the respective Stockholders in favor of the Underwriters (the "Lock-Up
Agreements"), (iv) the Employment Agreement[s] dated as of __________ ___, 1998,
between the Company and [each of]
(the "Employment Agreement[s]"), (v) the Charter Documents, each as amended to
date, of the Company, (vi) corporate records of the Company including minute
books as furnished to us by the Company, (vii) certificates of public officials
and of representatives of the Company, and (viii) such statutes and other
instruments and documents as we have deemed appropriate as a basis for the
opinions hereinafter expressed.
In rendering the following opinions, we have relied on the respective
representations and warranties of the Stockholders and the Company contained in
the Acquisition Agreement and in certificates of the Stockholders and of
officers of the Company with respect to the accuracy of the factual matters that
form the basis for any of the opinions contained herein. In making our
examination, we have assumed, without independent investigation, that all
signatures on documents examined by us are genuine, all documents submitted to
us as originals are authentic and all documents submitted to us as certified or
photostatic copies of original documents conform to those original documents and
all those original documents are authentic. In addition, we have assumed the due
authorization, execution and delivery of all documents referred to herein by the
parties thereto other than the Stockholders and the Company and the due
authority of all persons executing such documents except the Stockholders and
the persons executing those documents on behalf of the Company.
On the basis of the foregoing, and subject to the assumptions, limitations
and qualifications hereinafter set forth, we are of the opinion that:
1. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State [Commonwealth] of _____________ and
has all requisite corporate power and authority to own and operate its
properties, to lease the properties it operates under lease and to conduct its
business as currently conducted. [The Company is duly qualified as a foreign
corporation to do business and is in good standing in every jurisdiction outside
the State [Commonwealth] of _______________ in which the failure to so qualify
would have a material adverse effect on its business.][The Company is not
required to be qualified as a foreign corporation to do business in any
jurisdiction in which the failure to so qualify would have a material adverse
effect on its business.] To our knowledge, the Company is not in violation of
any provision of its Charter Documents.
2. The Company has all requisite corporate power and authority to execute,
deliver and perform its obligations under the Acquisition Agreement and to
effectuate the Merger and the other transactions contemplated thereby to be
effected at or prior to the Closing. The execution and delivery of the
Acquisition Agreement by the Company, and the performance by the Company of its
obligations under the Acquisition Agreement, have been duly authorized by all
necessary corporate action and proceedings required under its Charter Documents
and
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applicable Governmental Requirements, including all actions required to be taken
by the Stockholders [stockholders of the Company, IF LESS THAN ALL ARE SIGNING
THE ACQUISITION AGREEMENT] to approve the Merger. Each Stockholder has the legal
capacity to execute, deliver and perform such Stockholder's obligations under
the Acquisition Agreement, the Lock-Up Agreement to which such Stockholder is a
party, and the Employment Agreement to which such Stockholder is a party, if
any.
3. [Each subsidiary of the Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of
_____________ and has all requisite corporate power and authority to own and
operate its properties, to lease the properties it operates under lease and to
conduct its business as currently conducted. [Each subsidiary of the Company is
duly qualified as a foreign corporation to do business and is in good standing
in every jurisdiction outside the State of _______________ in which the failure
to so qualify would have a material adverse effect on its business.] [No such
subsidiary is required to be qualified as a foreign corporation to do business
in any jurisdiction in which the failure to so qualify would have a material
adverse effect on its business.] To our knowledge, no such subsidiary is in
violation of any provision of its Charter Documents.] [THIS PARAGRAPH 3 TO BE
INCLUDED FOR GEI AND PETROCON ONLY.]
[4. The issued and outstanding capital stock of each subsidiary of the
Company is as represented by the Company and the Stockholders in Section 4.06 of
the Disclosure Statement, and each share of such stock has been duly authorized
and validly issued, is fully paid and nonassessable and is owned by the Company
directly or indirectly through wholly owned subsidiaries, free and clear of any
Lien or, to our knowledge, any pending or threatened claim.] [THIS PARAGRAPH 4
TO BE INCLUDED FOR GEI AND PETROCON ONLY.]
5. The Acquisition Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
enforceability may be subject to the effect of (a) any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally, (b) general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at law) and
(c) any implied covenant of good faith and fair dealing. The Acquisition
Agreement has been duly executed and delivered by the Stockholders and
constitutes the legal, valid and binding obligation of the Stockholders,
enforceable against the Stockholders in accordance with its terms, except as
enforceability may be subject to the effect of (a) any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally, (b) general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at law) and
(c) any implied covenant of good faith and fair dealing. The Lock-Up Agreements
to which the respective Stockholders are parties, have been duly executed and
delivered by the Stockholder party thereto and constitute the legal, valid and
binding obligation of that Stockholder, enforceable against that Stockholder in
accordance with its terms, except as enforceability may be subject to the effect
of (a) any applicable
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bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally, (b) general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law and (c) any implied covenant of good faith and fair dealing. The
Employment Agreement[s] to which [ is a party][ , , and , respectively, are
parties] [has][have each] been duly executed and delivered by the Stockholder
party thereto and constitutes the legal, valid and binding obligation of that
Stockholder, enforceable against that Stockholder in accordance with its terms,
except as enforceability may be subject to the effect of (a) any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally, (b) general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law) and (c) any implied covenant of good faith and fair dealing.
6. Neither the execution, delivery and performance of the Acquisition
Agreement nor the consummation of the transactions contemplated thereby do or
will (a) violate, breach or constitute a default (or an event which with notice
or lapse of time or both could become a default) under (i) any Charter Document
of the Company [or any of its Subsidiaries], (ii) any Governmental Requirement
applicable to the Company [or any of its Subsidiaries] or by which [its property
is] [their respective properties are] bound, or (iii) any Material Agreement of
the Company [or any of its Subsidiaries] known to us or (b) cause or result in
the loss by the Company [or any Subsidiary] of a material benefit under, or give
rise to the imposition of, or afford any Person the right to obtain, any Lien
upon any property or assets of the Company [or any of its Subsidiaries] (or upon
any revenues, income or profits of the Company [or any of its Subsidiaries]
therefrom) pursuant to any such Material Agreement or any right of termination,
amendment, acceleration or cancellation of any Material Agreement. The
execution, delivery and performance in accordance with its terms by any
Stockholder of the Acquisition Agreement, the Lock-Up Agreement to which that
Stockholder is a party and the Employment Agreement to which that Stockholder is
a party, and the consummation of the transactions contemplated thereby do not
and will not, (a) violate or conflict with any Governmental Requirement
applicable to any of the Stockholders, (b) breach or constitute a default under
any material agreement or instrument known to us to which any Stockholder is a
party or by which any Stockholder or any of the shares of Company Capital Stock
owned by any Stockholder are bound or subject or (c) result in the creation or
imposition of, or afford any Person the right to obtain, any Lien upon any
property or assets of any Stockholder (or upon any revenues, income or profits
of any Stockholder therefrom) or the Company [or any of its Subsidiaries]
pursuant to any such agreement or instrument.
7. Except for the filing of the [Articles] [Certificate] of Merger with
the [Secretary of State] of the State [Commonwealth] of , no Governmental
Approvals are required to be obtained, and no reports or notices or filings with
any Governmental Authority are required to be made, by the Company or any
Stockholder for the execution, delivery or performance by the Company of the
Acquisition Agreement, the enforcement against the Company and the Stockholders
of their respective obligations thereunder or the effectuation of
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the Merger or the other transactions contemplated thereby to be effected at or
prior to the Closing.
8. To our knowledge, except pursuant to the Acquisition Agreement, there
are no existing options, warrants, subscriptions or other rights to purchase or
securities convertible into or exchangeable for, the capital stock of the
Company [or any of its Subsidiaries]. To our knowledge, except as disclosed
pursuant to the Acquisition Agreement, neither the Company nor any Stockholder
is a party to or bound by any agreement, instrument, contract, obligation,
commitment or understanding of any character, except for the Acquisition
Agreement, relating to the sale, assignment, conveyance, encumbrance, transfer
or delivery of any capital stock of the Company [or any of its subsidiaries] or
all or substantially all the assets of the Company.
9. To our knowledge, there is no pending or threatened Litigation that (a)
questions the validity of the Acquisition Agreement, any Lock-Up Agreement or
any Employment Agreement or any action taken or to be taken by the Company or
any Stockholder in connection with the Acquisition Agreement, any Lock-Up
Agreement or any Employment Agreement, at law or in equity, before or by any
Governmental Authority or before any arbitrator or (b) if adversely determined,
would have a material adverse effect (i) on the condition (financial or other),
earnings, business, operations or prospects of the Company [and its
Subsidiaries, taken as a whole], (ii) on the ability of the Company to perform
its obligations under the Acquisition Agreement or (iii) on the ability of any
Stockholder to perform his [or her] obligations under the Acquisition Agreement,
the Lock-Up Agreement to which that Stockholder is a party or that Stockholders'
Employment Agreement.
10. Immediately prior to the Effective Time: (a) the authorized Capital
Stock of the Company consisted of __________ shares of common stock, par value
$_____ per share, of which _____ shares were issued and outstanding; (b) all
such outstanding shares of Capital Stock of the Company were (i) duly authorized
and validly issued in accordance with the applicable Governmental Requirements
of the State of _______________ and the Charter Documents of the Company, (ii)
fully paid and nonassessable, (iii) not issued in violation of any preemptive
rights, rights of first refusal or other similar rights, and (iv) to our
knowledge, were issued in compliance with the applicable provisions of federal
and state securities laws; (c) except as disclosed pursuant to the Acquisition
Agreement, no shares of Capital Stock of the Company were held in the treasury
of the Company; and (d) the Stockholders owned all the issued and outstanding
shares of Capital Stock of the Company free and clear, to our knowledge, of any
Lien or adverse claim.
11. The [Articles] [Certificate] of Merger complies with the applicable
law of the State [Commonwealth] of _______________ and, following the filing
thereof by the Surviving Corporation with the [Secretary of State] of the State
[Commonwealth] of _______________ and the payment of all applicable filing fees
with respect thereto, the Merger will be effective at the Effective Time. [Upon
the Effective Time, no former stockholder of the Company will be entitled to
exercise any rights as a dissenting stockholder with respect to the Merger.]
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[IMMEDIATELY PRECEDING SENTENCE FOR GEI, PS&S AND W-I ONLY.]
In the opinions set forth above, phrases such as "to our knowledge,"
"known to us" and those with equivalent wording refer to the conscious awareness
of information by the lawyers of this Firm who have prepared this opinion,
signed this letter or been actively involved in assisting and advising the
Company and the Stockholders in connection with the negotiation, execution and
delivery of the Acquisition Agreement and related matters, without any
independent investigation by any lawyer of this Firm.
The opinions expressed in paragraph 1 [and paragraph 3] as to the
qualification and good standing of [each of] the Company [and its Subsidiaries]
as a foreign corporation are based solely on our review of certificates of
public officials of the relevant jurisdiction.] The Acquisition Agreement
provides, except where otherwise specifically provided, that it is to be
governed by and construed and enforced in accordance with the substantive laws
of the State [Commonwealth] of _______________. For purposes of our opinions
expressed in paragraph 5 above, we have assumed, with your approval, that the
laws of the State of Texas are identical to the laws of the State [Commonwealth]
of _______________, and no opinion is expressed herein as to any matter governed
by any law other than the laws of the State [Commonwealth] of _______________
and the federal laws of the United States of America, each as in effect on the
date hereof.
The opinions expressed in paragraph 5 above are subject to the
additional qualification that we express no opinion as to the enforceability of
(a) any severability or reformation provisions contained in the Acquisition
Agreement, any Lock-Up Agreement or any Employment Agreement, (b) any provisions
in the Acquisition Agreement, any Lock-Up Agreement or the Employment Agreement
which purport to entitle a party to indemnification in respect of any matter
arising under any securities laws or to the extent indemnification in respect of
any matter would otherwise be against public policy, (c) any provisions of the
Acquisition Agreement, any Lock-Up Agreement or any Employment Agreement
purporting to establish a right to enforce a covenant or restriction by
injunctions or restraining orders or (d) any provisions of the Acquisition
Agreement, any Lock-Up Agreement or any Employment Agreement that have the
effect of prohibiting oral amendments or waivers of any provisions of those
documents.
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This opinion and the matters addressed herein are as of the date hereof,
and we undertake no, and hereby disclaim any, obligation to advise you of any
change in any matter set forth herein occurring after the date hereof. This
opinion is being furnished to you for use solely in connection with the
transactions being consummated pursuant to the Acquisition Agreement and the
Underwriting Agreement. No other use or distribution of this opinion may be made
without our prior written consent, except that this opinion may be provided to
and relied upon by _____________, as Agent, and the other [Lenders] parties to
the [Credit Agreement] dated
, 1998 with OEI.
Very truly yours,
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