PIONEER COMPANIES, INC. 1,000,000 shares of Common Stock Underwriting Agreement

PIONEER COMPANIES, INC.

1,000,000 shares of Common Stock

Underwriting Agreement

December 1, 2004

PIONEER COMPANIES, INC.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000

December 1, 2004

CRT CAPITAL GROUP LLC
000 Xxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000

Ladies and Gentlemen:

Pioneer Companies, Inc., a Delaware corporation (the “Company”), proposes to issue and sell to CRT Capital Group LLC (the “Underwriter”), an aggregate of 1,000,000 shares (the “Underwritten Shares”) and, at the election of the Underwriter, up to 100,000 additional shares (the “Option Shares”) of common stock, par value $0.01 per share (the “Common Stock”), of the Company pursuant to this agreement dated as of December 1, 2004 (this “Agreement”). The Underwritten Shares and the Option Shares are herein referred to as the “Shares”.

The Company has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3 (No. 333-118891) which relates to the offering from time to time in accordance with Rule 415 under the Securities Act of 1933, as amended, including the rules and regulations promulgated thereunder (the “Securities Act”), of the Common Stock and certain other equity and debt securities, and has filed amendments thereto on or prior to the date of this Agreement. Such registration statement, as amended on or prior to the date of this Agreement, has been declared effective by the Commission. As provided in Section 5(a), a prospectus supplement reflecting the terms of the offering of the Shares and the other matters set forth therein has been or will be filed pursuant to Rule 424(b) promulgated under the Securities Act. Such prospectus supplement is herein referred to as the “Prospectus Supplement.” Such registration statement, as amended on or prior to the date of this Agreement, including the exhibits thereto, the schedules thereto and the documents incorporated by reference therein, is herein called the “Registration Statement,” and the base prospectus included therein relating to all offerings of securities under the Registration Statement, as supplemented by the Prospectus Supplement, including all material incorporated by reference therein as of the date of the prospectus supplement dated the date hereof (the “Prospectus Supplement”), is herein called the “Prospectus.” Any registration statement filed pursuant to Rule 462(b) of the Securities Act Regulations is herein referred to as the “Rule 462(b) Registration Statement,” and after such filing the term “Registration Statement” shall include the Rule 462(b) Registration Statement. No document has been or will be prepared or distributed in reliance on Rule 434 under the Securities Act. For purposes of this Agreement, all references to the Registration Statement, the Prospectus

or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system.

All references in this Agreement to financial statements and schedules and other information which is “contained,” “included” or “stated” in the Registration Statement or the Prospectus (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is so incorporated by reference in the Registration Statement or the Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement or the Prospectus shall be deemed to mean and include the filing, of any document under the Securities Exchange Act of 1934, as amended, including the rules and regulations promulgated thereunder (the “Exchange Act”), which is incorporated by reference in the Registration Statement after the date of the Prospectus Supplement or the Prospectus, as the case may be.

The Company hereby agrees with the Underwriter as follows:

1. Purchase and Sale of the Shares. The Company agrees to sell the Underwritten Shares to the Underwriter as hereinafter provided, and the Underwriter, upon the basis of the representations and warranties herein contained, but subject to the conditions hereinafter stated, agrees to purchase, from the Company at a purchase price per share of $20.62 (the “Purchase Price”), 1,000,000 Underwritten Shares.

In addition, the Company agrees to sell the Option Shares to the Underwriter and the Underwriter shall have the option to purchase, on the basis of the representations and warranties herein contained, but subject to the conditions hereinafter stated, at its election up to 100,000 Option Shares for the sole purpose of covering over-allotments in the sale of the Underwritten Shares.

The Underwriter may exercise the option to purchase the Option Shares at any time on or before the thirtieth day following the date of this Agreement, by written notice to the Company from the Underwriter; provided that the Underwriter may not exercise the option to purchase the Option Shares more than once. Such notice shall set forth the aggregate number of Option Shares as to which the option is being exercised and the date and time when the Option Shares are to be delivered and paid for. Any such notice shall be given at least two Business Days prior to the date and time of delivery specified therein.

2. Offering by the Underwriter. The Company understands that the Underwriter intends (i) to make a public offering of the Shares as soon after the parties hereto have executed and delivered this Agreement, as in the judgment of the Underwriter is advisable and (ii) initially to offer the Shares upon the terms set forth in the Prospectus.

3. Payment for the Shares. Payment for the Shares shall be made by wire transfer in immediately available funds to the account specified to the Underwriter by the Company: (a) in the case of the Underwritten Shares, on December 6, 2004, or at such other time on the same or such other date, not later than the fifth Business Day thereafter, as the Underwriter and the Company may agree upon in writing or (b) in the case of the Option Shares, on any Business

Day from the Closing Date to the fifth Business Day after the date of the written notice from the Underwriter to the Company notifying the Company of its exercise of the over-allotment option granted to it. The time and date of such payment for the Underwritten Shares is referred to herein as the “Closing Date” and the time and date for such payment for the Option Shares, if other than the Closing Date, is herein referred to as an “Additional Closing Date”. As used herein, the term “Business Day” means any day other than a day on which banks are permitted or required to be closed in New York, New York or Houston, Texas.

Payment for the Shares to be purchased on the Closing Date or any Additional Closing Date, as the case may be, shall be made against delivery to the Underwriter of the Shares to be purchased on such date registered in such names and in such denominations as the Underwriter shall request in writing not later than two full Business Days prior to the Closing Date or any Additional Closing Date, as the case may be, with any transfer taxes payable in connection with the transfer to the Underwriter of the Shares duly paid by the Company. Unless the Underwriter elects to take delivery of the Shares through the book-entry facilities of the Depository Trust Company, the certificates for the Shares will be made available for inspection and packaging by the Underwriter at the office of the Underwriter set forth above not later than 1:00 P.M., New York City time, on the Business Day prior to the Closing Date or any Additional Closing Date, as the case may be.

4. Representations and Warranties of the Company. The Company represents and warrants to the Underwriter that as of the date hereof and as of the Closing Date:

(a) no order preventing or suspending the use of the Prospectus has been issued by the Commission, and the Prospectus complied when so filed in all material respects with the Securities Act, and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information relating to the Underwriter furnished to the Company in writing by the Underwriter expressly for use therein, it being understood and agreed that the only such information is that described as such in the second paragraph of Section 7 hereof;

(b) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose has been instituted or, to the knowledge of the Company, threatened by the Commission; and the Registration Statement and Prospectus comply, or will comply, as the case may be, in all material respects with the Securities Act and the Registration Statement and any amendments thereto do not and will not, as of the applicable effective date as to the Registration Statement and any amendment thereto, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and the Prospectus, at the Closing Date or any Additional Closing Date, as the case may be, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except that the foregoing representations and warranties shall not apply to statements or omissions in the

Registration Statement or the Prospectus made in reliance upon and in conformity with information relating to the Underwriter furnished to the Company in writing by the Underwriter expressly for use therein, it being understood and agreed that the only such information is that described as such in the second paragraph of Section 7 hereof;

(c) the documents incorporated by reference in the Registration Statement or the Prospectus, when each was filed with the Commission conformed in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated by reference in the Registration Statement or the Prospectus, when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act, and will not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

(d) the financial statements, and the related notes thereto, included or incorporated by reference in the Registration Statement or the Prospectus (i) present fairly the consolidated financial position of the Company and its consolidated subsidiaries as of the dates indicated and the results of their operations and changes in their consolidated cash flows for the periods specified and (ii) comply as to form in all material respects with the requirements applicable to registration statements on Form S-3 under the Securities Act; and said financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis, and the supporting schedules, if any, included or incorporated by reference in the Registration Statement or the Prospectus present fairly the information required to be stated therein; the other financial and statistical information and data included or incorporated by reference in the Registration Statement or the Prospectus are, in all material respects, accurately presented and prepared on a basis consistent with such financial statements and the books and records of the Company and its consolidated subsidiaries;

(e) since the respective dates as of which information is given in the Registration Statement or the Prospectus, there has not been any material change in the capital stock or long-term debt of the Company or any of its subsidiaries, or any material adverse change in or affecting the business, prospects, condition (financial or other), stockholders’ equity or results of operations of the Company and its subsidiaries, taken as a whole (a “Material Adverse Change”); and except as set forth or contemplated in the Registration Statement or the Prospectus (as it stood at the time of execution and delivery of this Agreement) the Company has not declared, paid or made any dividend or distribution of any kind on any class of its capital stock and neither the Company nor its subsidiaries has entered into any transaction or agreement (whether or not in the ordinary course of business) material to the Company and its subsidiaries taken as a whole or incurred any material liability, direct or contingent;

(f) the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, other than where the failure to be so qualified or in good standing would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, prospects, condition (financial or other), stockholders’ equity or results of operations of the Company and its subsidiaries, taken as a whole (a “Material Adverse Effect”);

(g) the list of subsidiaries on Schedule I includes the only subsidiaries, direct or indirect, of the Company (the subsidiaries on such Schedule herein referred to as the “subsidiaries”), and each of the Company’s subsidiaries has been duly incorporated or organized and is validly existing under the laws of its jurisdiction of organization or incorporation with power and authority (corporate and otherwise) under such laws to own its properties and conduct its business as described in the Prospectus, and has been duly qualified to do business and is in good standing under the laws of each jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, other than where the failure to be so qualified or in good standing would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; and all the outstanding shares of capital stock or other ownership interests of each subsidiary of the Company have been duly authorized and validly issued, are fully-paid and non-assessable, and, except as otherwise disclosed in the Prospectus, are owned by the Company, directly or indirectly, free and clear of all liens, encumbrances, security interests and similar claims;

(h) this Agreement has been duly authorized, executed and delivered by the Company;

(i) the Company has an authorized capitalization as set forth in the Prospectus and such authorized capital stock conforms as to legal matters in all material respects to the description thereof set forth in the Prospectus, and all of the outstanding shares of capital stock of the Company have been duly authorized and validly issued, are fully-paid and non-assessable and are not subject to any pre-emptive or similar rights; and, except as described in or expressly contemplated by the Prospectus, there are no outstanding rights (including, without limitation, preemptive rights), warrants or options to acquire, or instruments convertible into or exchangeable for, any shares of capital stock or other equity interest in the Company or any of its subsidiaries, or any contract, commitment, agreement, understanding or arrangement of any kind relating to the issuance of any capital stock or other equity interest of the Company or any such subsidiary, any such convertible or exchangeable securities or any such rights, warrants or options;

(j) the Shares have been duly authorized, and, when issued and delivered to and paid for by the Underwriter in accordance with the terms of this Agreement, will be duly issued, fully paid and non-assessable and will conform to the descriptions thereof in

the Prospectus; and the issuance of the Shares is not subject to any preemptive or similar rights;

(k) neither the Company nor any of its subsidiaries is, or with the giving of notice or lapse of time or both would be, (A) in violation of its Certificate of Incorporation or By-Laws or other constitutive documents or (B) or in default under any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which it or any of them or any of their respective properties or assets is bound, except, in the case of clause (B) above, for defaults which individually and in the aggregate would not reasonably be expected to have a Material Adverse Effect; the issue and sale of the Shares to be sold by the Company hereunder and the performance by the Company of its obligations under this Agreement and the consummation of the transactions contemplated herein will not, or with the giving of notice or lapse of time or both would not, (X) conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, any material indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, or (Y) result in any violation of (i) the provisions of the Certificate of Incorporation or the By-Laws of the Company or any of its subsidiaries or (ii) any applicable law or statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or its subsidiaries or any of their respective properties except, in the case of clauses (X) or (Y)(ii) above, for such conflicts or breaches as would not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect; and no consent, approval, authorization, order, license, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Shares to be sold by the Company hereunder or the consummation by the Company of the transactions contemplated by this Agreement, except such consents, approvals, authorizations, orders, licenses, registrations or qualifications as have been obtained under the Securities Act and as may be required under state securities or “blue sky” laws in connection with the purchase and distribution of the Shares by the Underwriter;

(l) other than as set forth or contemplated in the Prospectus, there are no legal or governmental investigations, actions, suits, inquiries or proceedings pending or threatened against or affecting the Company or any of its subsidiaries or any of their respective properties or to which the Company or any of its subsidiaries is or may be a party or to which any property of the Company or any of its subsidiaries is or may be the subject which, if determined adversely to the Company or any of its subsidiaries, could individually or in the aggregate reasonably be expected to result in a Material Adverse Effect, and, to the best of the Company’s knowledge, no such legal or governmental investigations, actions, suits, inquiries or proceedings are threatened or contemplated by any court, governmental agency or body or threatened by others; and there are no statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or Prospectus or to be filed as exhibits to the Registration Statement that are not so described or filed;

(m) no relationship, direct or indirect, exists between or among the Company or any of its subsidiaries on the one hand, and the directors, officers, stockholders, customers or suppliers of the Company or any of its subsidiaries on the other hand, which is required by the Securities Act to be described in the Registration Statement or the Prospectus which is not so described;

(n) except as otherwise described in the Registration Statement or the Prospectus, no person has the right, pursuant to any contract, agreement, understanding or otherwise, to require the Company to (i) file a registration statement under the Securities Act with respect to any securities of the Company owned or to be owned by such person or (ii) to register any securities for offering and sale under the Securities Act by reason of the filing of the Registration Statement with the Commission or the issue and sale of the Shares to be sold by the Company hereunder or the filing of any other registration statement filed by the Company under the Securities Act

(o) the Company is not and, after giving effect to the offering and sale of the Shares, will not be an “investment company”, as such term is defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”);

(p) Deloitte & Touche LLP, who have certified certain financial statements of the Company and its subsidiaries, is an independent registered public accounting firm as required by the Securities Act;

(q) the Company and its subsidiaries have filed all federal, state, local and foreign tax returns which have been required to be filed and have paid all taxes shown thereon and all assessments received by them or any of them to the extent that such taxes have become due except for (i) such taxes and assessments as are being contested in good faith and (ii) such returns, taxes and assessments for which the failure to file or pay, as applicable, would not, individually or in the aggregate, result in a Material Adverse Effect;

(r) the Company has not taken, directly or indirectly, any action designed to, or that might be reasonably expected to, cause or result in stabilization or manipulation of the price of the Common Stock of the Company;

(s) each of the Company and its subsidiaries owns, possesses or has obtained all licenses, permits, certificates, consents, orders, approvals and other authorizations from, and has made all declarations and filings with, all federal, state, local and other governmental authorities (including foreign regulatory agencies), all self-regulatory organizations and all courts and other tribunals, domestic or foreign, necessary to own or lease, as the case may be, and to operate its properties and to carry on its business as conducted as of the date hereof, except such as would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, and neither the Company nor any such subsidiary has received any notice of any proceeding relating to revocation or modification of any such license, permit, certificate, consent, order, approval or other authorization which, if determined adversely to the Company or any of its subsidiaries would reasonably be expected, individually or in the aggregate, to result

in a Material Adverse Effect; and each of the Company and its subsidiaries is in compliance with all laws and regulations relating to the conduct of its business as conducted as of the date hereof, except where the failure to so comply would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect;

(t) there are no existing or, to the best knowledge of the Company, threatened labor disputes with the employees of the Company or any of its subsidiaries which would reasonably be expected to have a Material Adverse Effect;

(u) the Company and its subsidiaries (i) are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and except as disclosed in the Registration Statement or the Prospectus;

(v) in the ordinary course of its business, the Company conducts a periodic review of the effect of Environmental Laws on the business, operations and properties of the Company and its subsidiaries, 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, the Company has reasonably concluded that such associated costs and liabilities would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, except as disclosed in the Registration Statement or the Prospectus;

(w) Except as disclosed in the Prospectus, there are no contracts, agreements or understandings between the Company and any person that would give rise to a valid claim against the Company or the Underwriter for a brokerage commission, finder’s fee or other like payment in connection with this offering;

(x) The Company and its subsidiaries own, possess or can acquire on reasonable terms, adequate trademarks, trade names and other rights to inventions, know-how, patents, copyrights, confidential information and other intellectual property (collectively, “intellectual property rights”) necessary to conduct the business now operated by them, or presently employed by them, and have not received any notice of infringement of or conflict with asserted rights of others with respect to any intellectual property rights that, if determined adversely to the Company or any of its subsidiaries, would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

(y) The information contained in the Prospectus regarding the Company’s expectations, plans and intentions, and any other “forward-looking” information within the meaning of the Securities Act and the Exchange Act, were made by the Company on a reasonable basis and reflect the Company’s good faith belief and/or estimate of the matters described therein;

(z) The Company and each of its subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as is customary for companies engaged in similar industries. All material policies of insurance insuring the Company or any of it subsidiaries or any of their respective businesses, assets, employees, officers and directors are in full force and effect, and the Company and its subsidiaries are in compliance with the terms of such policies in all material respects. There are no material claims by the Company or any of its subsidiaries under any such policy or instrument as to which an insurance company is denying liability or defending under a reservation of rights clause;

(aa) No payments or inducements have been offered, made or given, directly or indirectly, to any federal, state or local official or candidate for, any federal, state or local office in the United States or foreign offices by the Company or any of its subsidiaries, by any of their officers, directors, employees or agents or, to the best knowledge of the Company, by any other person in connection with any opportunity, contract, agreement, permit, certificate, consent, order, approval, waiver or other authorization relating to the business of the Company or any of its subsidiaries, except for such payments or inducements as were lawful under applicable laws, rules and regulations. Neither the Company nor any of its subsidiaries, nor, to the best knowledge of the Company, any of their directors, officers, agents or employees, (i) has used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any government official or employee from corporate funds; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, unlawful rebate, payoff, influence payment, kickback or other unlawful payment in connection with the business of any of the Company or any of its subsidiaries;

(bb) (i) The Company maintains a system of internal accounting controls sufficient to provide reasonable assurances that (A) transactions are executed in accordance with management’s general or specific authorization; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles; and (C) the recorded assets are compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences; (ii) Based on the evaluation of its disclosure controls and procedures, the Company is not aware of (A) any significant deficiency in the design or operation of internal controls which could adversely affect its ability to record, process, summarize and report financial data or any material weaknesses in internal controls; or (B) any fraud, whether or not material, that involves management or other employees who have a significant role in its internal controls; and (iii) since the date of the most recent evaluation of such disclosure controls and procedures, there have been no significant changes in the Company’s internal controls or in other factors that could significantly

affect internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses; and

(cc) There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit of any of the officers or directors of Company or its subsidiaries or any of their respective family members, except as disclosed in the Prospectus. Neither the Company nor any of its subsidiaries has, in violation of the Xxxxxxxx-Xxxxx Act of 2002 (the “Xxxxxxxx-Xxxxx Act”), directly or indirectly, extended or maintained credit, arranged for the extension of credit, or renewed an extension of credit, in the form of a personal loan to or for any director or executive officer of the Company or any of its subsidiaries. The Company is otherwise in compliance with all of the requirements of the Xxxxxxxx-Xxxxx Act applicable to it.

5. Certain Covenants and Agreements of the Company. The Company covenants and agrees with the Underwriter as follows:

(a) to use its best efforts (i) to cause the Registration Statement to become effective at the earliest possible time and, if required, to file the final Prospectus with the Commission within the time periods specified by Rule 424(b) under the Securities Act, and to furnish copies of the Prospectus to the Underwriter as promptly as practicable in such quantities as the Underwriter may reasonably request and (ii) keep the Registration Statement effective from the date hereof through the date which is 90 days after the date hereof;

(b) to deliver, at the expense of the Company, to the Underwriter two signed copies of the Registration Statement (as originally filed) and each amendment thereto, in each case including exhibits and documents incorporated by reference therein, and, during the period mentioned in Section 5(e) below, to the Underwriter as many copies of the Prospectus as the Underwriter may reasonably request;

(c) before filing any amendment or supplement to the Registration Statement or the Prospectus to furnish to the Underwriter a copy of the proposed amendment or supplement for review and not to file any such proposed amendment or supplement to which the Underwriter reasonably objects;

(d) to advise the Underwriter promptly (i) when any amendment to the Registration Statement has been filed or becomes effective, (ii) when any supplement to the Prospectus or any amended Prospectus has been filed and to furnish the Underwriter with copies thereof, (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for any additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of the Prospectus or the initiation or threatening of any proceeding for that purpose, (v) of the occurrence of any event, within the period referenced in Section 5(e) below, as a result of which the Prospectus would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements

therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, and (vi) of the receipt by the Company of any notification with respect to any suspension of the qualification of the Shares for offer and sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and to use its best efforts to prevent the issuance of any such stop order, or of any order preventing or suspending the use of the Prospectus, or of any order suspending any such qualification of the Shares, or notification of any such order thereof and, if issued, to obtain as soon as possible the withdrawal thereof;

(e) if at any time when a prospectus is required by the Securities Act to be delivered in connection with sales of the Shares, any event shall occur or condition shall exist as a result of which it is necessary, in the judgment of the Underwriter or the Company, to amend the Registration Statement or amend or supplement the Prospectus in order that the Prospectus will not include any untrue statements of material fact or omit to state a material fact necessary in order to make the statements therein not misleading in light of the circumstances existing at the time it is delivered to a purchaser, or if it shall be necessary, in the judgment of the Underwriter or the Company, at any such time to amend the Registration Statement or amend or supplement the Prospectus in order to comply with the requirements of the Securities Act, the Company will promptly prepare and file with the Commission such amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement or the Prospectus comply with such requirements, and the Company will furnish to the Underwriter such number of copies of such amendment or supplement as the Underwriter may reasonable request;

(f) to endeavor to qualify the Shares for offer and sale under the securities or “blue sky” laws of such jurisdictions as the Underwriter shall reasonably request and to continue such qualification in effect so long as reasonably required for distribution of the Shares; provided that the Company shall not be required to (x) file a general consent to service of process, (y) subject itself to taxation or (z) qualify as a foreign corporation in any jurisdiction in which it is not otherwise required to do so;

(g) to make generally available to its security holders and to the Underwriter as soon as practicable an earnings statement covering a period of at least twelve months beginning with the first fiscal quarter of the Company occurring after the effective date of the Registration Statement, which shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission promulgated thereunder;

(h) for a period of two years, to furnish to the Underwriter copies of all reports or other communications not otherwise publicly available (financial or other) furnished to holders of the Shares (in the same manner as such documents are furnished to holders of the Shares), and copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange;

(i) for a period of 90 days after the date hereof, not to offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or file with the Commission a registration statement under the Act relating to, any additional shares of its Common

Stock or securities convertible into or exchangeable or exercisable for any shares of its Common Stock, or publicly disclose the intention to make any such offer, sale, pledge, disposition or filing, without the prior written consent of the Underwriter, except grants of employee or director stock options, restricted stock or phantom units pursuant to the terms of a plan in effect on the date hereof or the exercise of any employee or director stock options, restricted stock or phantom units outstanding on the date hereof;

(j) to use the net proceeds received by the Company from the sale of the Shares pursuant to this Agreement in the manner specified in the Prospectus under caption “Use of Proceeds”;

(k) whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, to pay or cause to be paid all costs and expenses incident to the performance of its obligations hereunder, including without limiting the generality of the foregoing, all costs and expenses (i) incident to the preparation, registration, transfer, execution and delivery of the Shares to the Underwriter, including any transfer or other taxes payable thereon, (ii) incident to the preparation, printing and filing under the Securities Act of the Registration Statement and the Prospectus, (iii) incurred in connection with the registration or qualification of the Shares under the laws of such jurisdictions as the Underwriter may designate (including fees of counsel for the Underwriter and their disbursements), (iv) related to any required filing with, and clearance of the offering by, the NASD (including fees of counsel for the Underwriter and their disbursements), (v) in connection with the printing (including word processing and duplication costs) and delivery of this Agreement and the furnishing to the Underwriter and dealers of copies of the Registration Statement and the Prospectus, including mailing and shipping, as herein provided, (vi) the cost of preparing stock certificates, and (vii) the cost and charges of any transfer agent and any registrar; and

(l) not to take, directly or indirectly, any action designed to, or that might be reasonably expected to, cause or result in stabilization or manipulation of the price of the Common Stock.

6. Conditions of the Obligations of the Underwriter. The obligations of the Underwriter hereunder to purchase the Shares on the Closing Date or the Additional Closing Date, as the case may be, are subject to the performance by the Company of its obligations hereunder and to the following additional conditions:

(a) the Registration Statement shall have become effective (or if a post-effective amendment is required to be filed under the Securities Act, such post-effective amendment shall have become effective) not later than 5:00 P.M., New York City time, on the date hereof and shall remain effective; and no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment shall be in effect, and no proceedings for such purpose shall be pending before or threatened by the Commission; the Prospectus shall have been filed with the Commission pursuant to Rule 424(b) within the applicable time period prescribed for such filing by the Securities Act and in accordance with Section 5(a) hereof; and all requests of the Underwriter for

additional information shall have been complied with to the reasonable satisfaction of the Underwriter;

(b) the representations and warranties of the Company contained herein are true and correct on and as of the Closing Date or the Additional Closing Date, as the case may be, as if made on and as of the Closing Date or the Additional Closing Date, as the case may be, and the Company shall have complied with all covenants and agreements hereunder at or prior to the Closing Date or the Additional Closing Date, as the case may be;

(c) subsequent to the execution and delivery of this Agreement, there shall not have occurred (i) any Material Adverse Change which, in the judgment of the Underwriter, makes it impractical or inadvisable to proceed with completion of the public offering or the sale of and payment for the Shares; (ii) any change in U.S. or international financial, political or economic conditions or currency exchange rates or exchange controls as would, in the judgment of the Underwriter, be likely to prejudice materially the success of the proposed issue, sale or distribution of the Shares, whether in the primary market or in respect of dealings in the secondary market; (iii) any material suspension or material limitation of trading in securities generally on the New York Stock Exchange, the Nasdaq Stock Market or the American Stock Exchange or any setting of minimum prices for trading on such exchanges; (iv) any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market; (v) any banking moratorium declared by U.S. federal or New York authorities; (vi) any major disruption of settlements of securities or clearance services in the United States or Canada or (vii) any attack on, outbreak or escalation of hostilities or act of terrorism involving the United States, any declaration of war by Congress or any other national or international calamity or emergency if, in the judgment of the Underwriter, the effect of any such attack, outbreak, escalation, act, declaration, calamity or emergency makes it impractical or inadvisable to proceed with completion of the public offering or the sale of and payment for the Shares;

(d) the Underwriter shall have received on and as of the Closing Date or the Additional Closing Date, as the case may be, a certificate of the Chief Financial Officer of the Company, with specific knowledge about the Company’s financial matters, satisfactory to the Underwriter to the effect set forth in Sections 6(a) and 6(b) and to the further effect that there has not occurred any Material Adverse Change from that set forth or contemplated in the Prospectus;

(e) Xxxxx Xxxxx L.L.P., outside counsel for the Company, shall have furnished to the Underwriter its written opinion, dated the Closing Date or the Additional Closing Date, as the case may be, in form and substance reasonably satisfactory to the Underwriter, to the effect that:

(i) the Company is a corporation duly incorporated and validly existing in good standing under the laws of the State of Delaware, with corporate power and authority under such laws to own its properties and conduct its business as described in the Prospectus;

(ii) the Company has been duly qualified to do business and is in good standing as a foreign corporation under the laws of the State of Delaware and the State of Texas other than where the failure to be so qualified or in good standing would not reasonably be expected to have a Material Adverse Effect;

(iii) this Agreement has been duly authorized, executed and delivered by the Company;

(iv) the authorized capital stock of the Company conforms as to legal matters in all material respects to the description thereof contained in the Prospectus under the caption “Description of Capital Stock”;

(v) the Shares to be issued and sold hereunder have been duly authorized by the Company, and when delivered to and paid for by the Underwriter in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable and the issuance of the Shares is not subject to any preemptive rights contained in the charter or bylaws of the Company or, to such counsel’s knowledge, to any preemptive rights of any stockholder of the Company or of any other person;

(vi) such counsel does not know of any statutes, regulations, agreements, contracts or other documents that are required to be described (including by way of incorporation of reference) in the Registration Statement or Prospectus or to be filed as exhibits to the Registration Statement that are not described or filed as required;

(vii) the Registration Statement and the Prospectus, excluding the documents incorporated by reference therein (other than the financial statements, the notes thereto and the auditor’s reports thereon and the other financial, statistical and accounting data contained therein, as to which such counsel need express no opinion) as of the dates they became effective or were filed with the Commission, as the case may be, appear on their face to be appropriately responsive in all material respects to the requirements of the Securities Act;

(viii) the documents incorporated by reference in the Prospectus (other than the financial statements, the notes thereto and the auditor’s reports thereon and the other financial, statistical and accounting data contained therein, as to which such counsel need express no opinion), when they were filed under the Exchange Act with the Commission appear on their face to be appropriately responsive in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable;

(ix) the issue and sale of the Shares being delivered on the Closing Date or the Additional Closing Date, as the case may be, and the performance by the Company of its obligations under this Agreement and the consummation of the transactions contemplated herein will not (either with or without the giving of notice or the lapse of time, or both) (1) result in any violation of the provisions of

(a) the Certificate of Incorporation or the By-Laws of the Company or (b) any law or statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or its subsidiaries or any of their respective properties or assets or (2) conflict with or result (whether with or without the lapse of time or the giving of notice, or both) in a breach of any of the terms or provisions of any material obligation, agreement, covenant or condition contained in any agreement or instrument filed as an exhibit to any filing made by the Company under the Exchange Act (an “Agreement or Instrument”) except, in the case of clauses 1(b) and (2) above, as would not reasonably be expected to have a Material Adverse Effect;

(x) no consent, approval, authorization, order, license, registration or qualification of or with any court or governmental agency or body is required for the issuance by the Company of the Shares to be sold by it hereunder or the consummation by the Company of the other transactions contemplated by this Agreement, except such consents, approvals, authorizations, orders, licenses, registrations or qualifications as have been obtained under the Securities Act and as may be required under state securities or “blue sky” laws in connection with the purchase and distribution of the Shares by the Underwriter; and

(xi) the Company is not and, after giving effect to the offering and sale of the Shares, will not be an “investment company”, as such term is defined in the Investment Company Act.

Such counsel shall also state that they have participated in conferences with officers and other representatives of the Company, representatives of the independent accountants of the Company and representatives of the Underwriter and their counsel at which the contents of the Registration Statement and the Prospectus and related matters were discussed; and, although such counsel did not independently verify such information and is not passing upon, and does not assume any responsibility for, the accuracy, completeness or fairness of the statements contained in the Registration Statement and the Prospectus, on the basis of the foregoing, no facts have come to the attention of such counsel to lead such counsel to believe that (a) the Registration Statement (other than the financial statements, the notes thereto and the auditor’s reports thereon and the other financial, statistical and accounting data contained therein, as to which such counsel need express no opinion), at its effective date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or (b) the Prospectus (other than the financial statements, the notes thereto and the auditor’s reports thereon and the other financial, statistical and accounting data contained therein, as to which such counsel need express no opinion), at the time the Prospectus was issued, or at the Closing Date, contained or contains an untrue statement of a material fact or omitted or omits 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.

The opinion of Xxxxx Xxxxx L.L.P. described above shall be rendered to the Underwriter at the request of the Company and shall so state therein.

(f) Xxxx X. Xxxxxxxxxx, corporate counsel for the Company, shall have furnished to the Underwriter his written opinion, dated the Closing Date or the Additional Closing Date, as the case may be, in form and substance reasonably satisfactory to the Underwriter, to the effect that:

(i) each of the Company’s subsidiaries has been duly organized and is validly existing under the laws of its jurisdiction of organization with corporate or other organizational power and authority under such laws to own its properties and conduct its business as described in the Prospectus and has been duly qualified to do business and is in good standing under the laws of each jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, other than where the failure to be so qualified and in good standing would not reasonably be likely to have a Material Adverse Effect; and, except as otherwise disclosed in the Prospectus, all of the outstanding shares of capital stock or other ownership interests of each subsidiary are owned by the Company, directly or indirectly, free and clear of all liens, encumbrances, security interests and similar claims;

(ii) the shares of capital stock of the Company outstanding prior to the issuance of the Shares to be sold hereunder have been duly authorized and are validly issued, fully paid and non-assessable; and

(iii) other than as set forth or contemplated in the Prospectus, to the best of such counsel’s knowledge, there are no (and none of the Company or any of its subsidiaries has received any actual notice of any) legal or governmental investigations, inquiries, actions, suits or proceedings pending or threatened or contemplated against the Company or any of its subsidiaries or any of their respective properties or assets or to which the Company or any of its subsidiaries is or may be a party or to which any property of the Company or its subsidiaries is or may be the subject that, if determined adversely to the Company or its subsidiaries would individually or in the aggregate reasonably be expected to have a Material Adverse Effect.

Such counsel shall also state that he has participated in conferences with officers and other representatives of the Company, representatives of the independent accountants of the Company and representatives of the Underwriter and their counsel at which the contents of the Registration Statement and the Prospectus and related matters were discussed; and, although such counsel did not independently verify such information and is not passing upon, and does not assume any responsibility for, the accuracy, completeness or fairness of the statements contained in the Registration Statement and the Prospectus, on the basis of the foregoing, no facts have come to the attention of such counsel to lead such counsel to believe that (a) the Registration Statement (other than the financial statements, the notes thereto and the auditor’s reports thereon and the

other financial, statistical and accounting data contained therein, as to which such counsel need express no opinion), at its effective date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or (b) the Prospectus (other than the financial statements, the notes thereto and the auditor’s reports thereon and the other financial, statistical and accounting data contained therein, as to which such counsel need express no opinion), at the time the Prospectus was issued, or at the Closing Date, contained or contains an untrue statement of a material fact or omitted or omits 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.

The opinion of Xx. Xxxxxxxxxx described above shall be rendered to the Underwriter at the request of the Company and shall so state therein.

(g) the Underwriter shall have received, at the time this Agreement is executed and at the Closing Date or Additional Closing Date, as the case may be, letters dated the date hereof or the Closing Date, as the case may be, in form and substance satisfactory to the Underwriter from Deloitte & Touche LLP, independent public accountants, containing statements and information of the type customarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement and the Prospectus;

(h) the Underwriter shall have received on and as of the Closing Date or Additional Closing Date, as the case may be, an opinion of Xxxxx Xxxxxxx LLP, counsel to the Underwriter, with respect to the due authorization and valid issuance of the Shares, the Registration Statement, the Prospectus and other related matters as the Underwriter may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters;

(i) on or prior to the Closing Date or Additional Closing Date, as the case may be, the Company shall have furnished to the Underwriter such further certificates and documents as the Underwriter shall reasonably request;

(j) the “lock-up” agreements, each substantially in the form of Exhibit A hereto, between the Underwriter and the directors and executive officers of the Company listed on Schedule II attached hereto relating to sales and certain other dispositions of shares of Common Stock or certain other securities shall be in full force and effect on the Closing Date or Additional Closing Date, as the case may be; and

7. Indemnification and Contribution. The Company agrees to indemnify and hold harmless the Underwriter and each person, if any, who controls the Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, the reasonable legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such expenses are incurred) caused by any untrue statement or alleged untrue statement of a material fact contained in the (i) Registration Statement (as

amended if the Company shall have furnished any amendments), or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) the Prospectus, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances in which they were made, except insofar as such losses, claims, damages or liabilities are caused by any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with information relating to the Underwriter furnished to the Company in writing by the Underwriter expressly for use therein; it being understood and agreed that the only such information is that described as such in the next paragraph.

The Underwriter agrees to indemnify and hold harmless the Company, its directors, its officers who sign the Registration Statement and each person who controls the Company within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to each Underwriter, but only with reference to information relating to the Underwriter furnished to the Company in writing by the Underwriter expressly for use in the Registration Statement or the Prospectus; it being understood and agreed that the only such information in the Prospectus furnished by the Underwriter consists of the information appearing in the third, eighth and ninth paragraphs under the caption “Underwriting”.

If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any person in respect of which indemnity may be sought pursuant to the preceding paragraphs of this Section 7, such person (the “Indemnified Person”) shall promptly notify the person or persons against whom such indemnity may be sought (each an “Indemnifying Person”) in writing, and such Indemnifying Persons, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others the Indemnifying Persons may designate in such proceeding and shall pay the reasonable fees and expenses of such counsel related to such proceeding. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person and not the Indemnifying Persons unless (i) the Indemnifying Persons and the Indemnified Person shall have mutually agreed to the contrary, (ii) the Indemnifying Persons has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person or (iii) the named parties in any such proceeding (including any impleaded parties) include both an Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that no Indemnifying Person shall, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be reimbursed as they are incurred. Any such separate firm for the Underwriter and such control persons of the Underwriter shall be designated in writing by the Underwriter and any such separate firm for the Company, its directors, its officers who sign the Registration Statement and such control persons of the Company shall be designated in writing by the Company. No Indemnifying Person shall be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, each Indemnifying Person agrees to indemnify any Indemnified

Person from and against any loss or liability by reason of such settlement or judgment. No Indemnifying Person shall, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement (i) includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding and (ii) does not include a statement as to or an admission of fault, culpability or failure to act by or on behalf of the Indemnified Person.

If the indemnification provided for in this Section 7 is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person, in lieu of indemnifying such Indemnified Person, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriter on the other hand from the offering of the Shares or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Underwriter on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriter on the other hand shall be deemed to be in the same respective proportions as the net proceeds from the offering (before deducting expenses) received by the Company and the total underwriting discounts and the commissions received by the Underwriter in connection with the public offering of the Shares bear to the aggregate public offering price of the Shares. The relative fault of the Company on the one hand and the Underwriter on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriter, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

The Company and the Underwriter agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any reasonable legal or other expenses incurred by such Indemnified Person in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 7, in no event shall the Underwriter be required to contribute any amount in excess of the amount by which the total the total discount and commissions applicable to the Shares pursuant to this Agreement exceeds the amount of any damages that the Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

The remedies provided for in this Section 7 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity.

The indemnity and contribution agreements contained in this Section 7 and the representations and warranties of the Company set forth in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of the Underwriter or any person controlling the Underwriter or by or on behalf of the Company, its officers or directors or any other person controlling the Company and (iii) acceptance of and payment for any of the Shares.

8. Effectiveness of Agreement. This Agreement shall become effective upon execution and delivery hereof by the parties hereto.

9. Termination; Survival of Certain Representations and Obligations. If this Agreement shall be terminated by the Underwriter, because of any failure or refusal on the part of the Company to comply with the terms or to fulfill the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement or any condition of the Underwriter’s obligations cannot be fulfilled or is not waived, the Company agrees to reimburse the Underwriter for all out-of-pocket expenses (including the fees and expenses of its counsel) reasonably incurred by the Underwriter in connection with this Agreement and the offering contemplated hereunder. If the Agreement is terminated by the Company by reason of the default of the Underwriter or if the Agreement is terminated as a result of the application of Section 6(c)(ii), (iii), (v), (vi) or (vii), the Company shall not be obligated to reimburse the Underwriter on account of such expenses. The respective indemnities, agreements, representations, warranties and other statements of the Company or its officers and of the Underwriter set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of the Underwriter, the Company or any of their respective representatives, officers or directors or any controlling person, and will survive delivery of and payment for the Shares.

10. Successors. This Agreement shall inure to the benefit of and be binding upon the Company, the Underwriter, any controlling persons referred to herein and their respective successors and assigns. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any other person, firm or corporation any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. No purchaser of Shares from the Underwriter shall be deemed to be a successor merely by reason of such purchase.

11. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriter at CRT Capital Group, 000 Xxxxxx Xxxxx, 0xx Xxxxx, Xxxxxxxx, XX 00000, Attention: Sheffield Merchant Banking Group (Facsimile: (000) 000-0000). Notices to the Company shall be given to it at Pioneer Companies, Inc., 000 Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000 (Facsimile: (000) 000-0000); Attention: General Counsel.

12. Counterparts. This Agreement may be signed in counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument.

13. Applicable Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to principles of conflicts of laws. The Company hereby submits to the non-exclusive jurisdiction of the federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

14. Amendments. No amendment or waiver of any provision of this Agreement, nor consent or approval to any departure therefrom, shall be effective unless given in writing and signed by the parties hereto.

If the foregoing is in accordance with your understanding, please sign and return four counterparts hereof.


PIONEER COMPANIES, INC.
By:	/s/ XXXX X. XXXXXXXXXX
	Name:	Xxxx X. Xxxxxxxxxx
	Title:	Vice President, General Counsel and Secretary


Accepted: December 1, 2004

CRT CAPITAL GROUP LLC

By:	/s/ XXXX XXXX

	Name:	Xxxx Xxxx
	Title:	Vice President

SCHEDULE I

SUBSIDIARIES

PCI Chemicals Canada Company (Nova Scotia, Canada)
Pioneer Americas LLC (Delaware)
Imperial West Chemical Co. (Nevada)
KNA California, Inc. (Delaware)
Pioneer (East), Inc. (Delaware)
Pioneer Licensing, Inc. (Delaware)
Pioneer Water Technologies, Inc. (Delaware)
KWT, Inc. (Delaware)

SCHEDULE II

EXECUTIVE OFFICERS AND DIRECTORS

Xxxxxxx X. XxXxxxxx
Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxxx
Xxxxxx X. Xxxxx
Xxxx Xxxxxxxxx
Xxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxx

EXHIBIT A

[FORM OF LOCK-UP AGREEMENT]

Pioneer Companies, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000

CRT Capital Group
000 Xxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000

Dear Sirs:

As an inducement to the Underwriter to execute the Underwriting Agreement, pursuant to which an offering will be made that is intended to result in an orderly market for the Common Stock, $0.01 par value (the “Securities”), of Pioneer Companies, Inc., and any successor (by merger or otherwise) thereto, (the “Company”), the undersigned hereby agrees pursuant to this letter agreement dated as of December 1, 2004 (this “Agreement”) that from the date hereof and until 90 days after the public offering date set forth on the final prospectus used to sell the Securities (the “Public Offering Date”) pursuant to the Underwriting Agreement, to which you are or expect to become parties, the undersigned will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any shares of Securities or securities convertible into or exchangeable or exercisable for any shares of Securities, enter into a transaction which would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of the Securities, whether any such aforementioned transaction is to be settled by delivery of the Securities or such other securities, in cash or otherwise, or publicly disclose the intention to make any such offer, sale, pledge or disposition, or to enter into any such transaction, swap, hedge or other arrangement, without, in each case, the prior written consent of CRT Capital Group (the “Underwriter”).

Any Securities received upon exercise of options granted to the undersigned will also be subject to this Agreement. Any Securities acquired by the undersigned in the open market will not be subject to this Agreement. A transfer of Securities to (i) to members of the immediate family of the undersigned or a trust, partnership, limited liability company or other entity, all of the beneficial interests of which are held by the undersigned and/or members of the immediate family of the undersigned, (ii) to a spouse, former spouse, child, or other dependent pursuant to a domestic relations order, as defined in Section 414(p) of the Internal Revenue Code or Section 206(d)(3) of Title I of the Employee Retirement Income Security Act, or (iii) charitable organizations and other health and welfare organizations, including schools may be made; provided, in each case, that (x) the transferee agrees, prior to the transfer, to be bound in writing by the terms of this Agreement and (y) the undersigned is not required to, and does not voluntarily, file a report under Section 16(a) of the Securities Exchange Act of 1934, as amended, reporting a reduction in beneficial ownership of shares of Common Stock during such 90-day period. As used herein, “members of the immediate family” of a person include such

person’s spouse, lineal descendants (including adopted and step-children), father, mother, brother, sister, father-in-law, mother-in-law, brother-in-law and sister-in-law.

In furtherance of the foregoing, the Company and its transfer agent and registrar are hereby authorized to decline to make any transfer of shares of Securities if such transfer would constitute a violation or breach of this Agreement.

This Agreement shall be binding on the undersigned and the successors, heirs, personal representatives and assigns of the undersigned. This Agreement shall lapse and become null and void if the Public Offering Date shall not have occurred on or before December 1, 2004.


		Very truly yours,


		Name:

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PIONEER COMPANIES, INC. 1,000,000 shares of Common Stock Underwriting Agreement

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