3,000,000 Shares JAMES RIVER COAL COMPANY COMMON STOCK, PAR VALUE $0.01 PER SHARE UNDERWRITING AGREEMENT
Exhibit 1.1
EXECUTION COPY
3,000,000 Shares
▇▇▇▇▇
RIVER COAL COMPANY
COMMON
STOCK, PAR VALUE $0.01 PER SHARE
March 19,
2008
March 19,
2008
UBS
Securities LLC
As
representative of the several Underwriters
Named in
Schedule I hereto
c/o UBS
Securities LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇
Dear Sirs
and Mesdames:
▇▇▇▇▇
River Coal Company, a Virginia corporation (the “Company”), proposes to issue
and sell to the several Underwriters named in Schedule I hereto (the “Underwriters”), an aggregate
of 3,000,000 shares of the common stock, par value $0.01 per share, of the
Company (the “Firm
Shares”). The Company also proposes to issue and sell to the
several Underwriters not more than an additional 450,000 shares of its common
stock, par value $0.01 per share, of the Company (the “Additional Shares”), if and to
the extent that you, as Representatives, shall have determined to exercise, on
behalf of the Underwriters, the right to purchase such shares of common stock
granted to the Underwriters in Section 3 hereof. The Firm Shares and
the Additional Shares are hereinafter collectively referred to as the “Shares.” The shares of common
stock, par value $0.01 per share, of the Company to be outstanding after giving
effect to the issuance and sale contemplated hereby are hereinafter referred to
as the “Common
Stock.”
The
Company has filed with the Securities and Exchange Commission (the “Commission”) a registration
statement on Form S-3 (No. 333-143563), including a prospectus,
relating to the registration of certain shares of Common Stock (the “Shelf Securities”), to be sold
from time to time by the Company. The registration statement, as it
relates to the Shares being sold in this offering, as amended to the date of
this Agreement, including the information (if any) deemed to be part of such
registration statement at the time of effectiveness pursuant to Rule 430A
or Rule 430B under the Securities Act of 1933, as amended (the “Securities Act”), is
hereinafter referred to as the “Registration Statement”; and
the related prospectus covering the Shelf Securities dated June 25, 2007 and in
the form first used to confirm sales of the Shelf Securities (or in the form
first made available to the Underwriters by the Company to meet requests of
purchasers pursuant to Rule 173 under the Securities Act) is hereinafter
referred to as the “Basic
Prospectus.” If the Company has filed an abbreviated
registration
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statement
to register additional shares of Common Stock pursuant to Rule 462(b) under
the Securities Act (the “Rule 462 Registration
Statement”), then any reference herein to the term “Registration Statement” shall
be deemed to include such Rule 462 Registration Statement. The
Basic Prospectus, as supplemented by the prospectus supplement specifically
relating to the Shares in the form first used to confirm sales of the Shares (or
in the form first made available to the Underwriters by the Company to meet
requests of purchasers pursuant to Rule 173 under the Securities Act) is
hereinafter referred to as the “Prospectus,” and the term
“preliminary prospectus” means any preliminary form of the
Prospectus.
For
purposes of this Agreement, “free writing prospectus” has
the meaning set forth in Rule 405 under the Securities Act, “Time of Sale Prospectus” means
the preliminary prospectus identified on Schedule II hereto, together with
the free writing prospectuses, if any, identified on Schedule II hereto,
and “broadly available road
show” means a “bona fide
electronic road show” as defined in Rule 433(h)(5) under the
Securities Act that has been made available without restriction to any
person. As used herein, the terms “Registration Statement,” “Basic
Prospectus,” “preliminary prospectus,” “Time of Sale Prospectus” and
“Prospectus” shall include the documents, if any, incorporated by reference
therein. The terms “supplement,” “amendment,” and “amend” as used herein with
respect to the Registration Statement, the Basic Prospectus, the Time of Sale
Prospectus, any preliminary prospectus or any free writing prospectus shall
include all documents subsequently filed by the Company with the Commission
pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are
incorporated by reference therein.
1.
Representations and Warranties of
the Company. The Company represents and warrants to and agrees with each
of the Underwriters that:
(a) The
Company meets the requirements for use of Form S-3 under the Securities Act ;
the Registration Statement has become effective; no stop order suspending the
effectiveness of the Registration Statement is in effect, and no proceedings for
such purpose are pending before or threatened by the Commission.
(b) (i) Each
document, if any, filed or to be filed pursuant to the Exchange Act and
incorporated by reference in the Time of Sale Prospectus or the Prospectus
complied or will comply when so filed in all material respects with the Exchange
Act and the applicable rules and regulations of the Commission thereunder, (ii)
each part of the Registration Statement, when such part became effective, did
not contain and, each such part, as amended or supplemented, if applicable, will
not
3
contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (iii) the Registration Statement as of the date hereof does not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (iv) the Registration Statement complies, and the Prospectus, as of
its date, will comply and the Registration Statement and the Prospectus, as
amended or supplemented, if applicable, as of the Closing Date (as defined in
Section 4), will comply, in all material respects with the Securities Act and
the applicable rules and regulations of the Commission thereunder, (v) the
Time of Sale Prospectus, at the time of the sale of the Shares and at the
Closing Date (as defined in Section 4), will not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, (vi) each broadly available road show, if any, and
any issuer free writing prospectus as defined in Rule 433(h) under the
Securities Act, when considered together as a whole with the Time of Sale
Prospectus, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading and (vii) the
Prospectus does not contain and, as amended or supplemented, if applicable, will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or omissions
in the Registration Statement, the Time of Sale Prospectus, any issuer free
writing prospectus as defined in Rule 433(h) under the Securities Act (and
to which the Underwriters have not objected in accordance with the provisions of
Section 6(d) of this Agreement), or the Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein.
(c) The
Company is not an “ineligible issuer” in connection with the offering pursuant
to Rules 164, 405 and 433 under the Securities Act. Any free writing
prospectus that the Company is required to file pursuant to Rule 433(d) under
the Securities Act has been, or will be, filed with the Commission in accordance
with the requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder. Each free writing
prospectus that the Company has filed, or is required to file, pursuant to Rule
433(d) under the Securities Act or that was prepared by or on behalf of or used
or referred to by the Company complies or will
4
comply in
all material respects with the requirements of the Securities Act and the
applicable rules and regulations of the Commission thereunder. Except
for the free writing prospectuses, if any, identified in Schedule II
hereto
forming part of the Time of Sale Prospectus, and electronic road shows, if any,
each furnished to you before first use, the Company has not prepared, used or
referred to, and will not, without your prior consent, prepare, use or refer to,
any free writing prospectus.
(d) The
Company has been duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its business as
described in the Time of Sale Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries or their prospects, taken as a whole.
(e) Each
subsidiary of the Company has been duly incorporated or organized, is validly
existing as a corporation or other entity in good standing under the laws of the
jurisdiction of its organization, has the power and authority to own its
property and to conduct its business as described in the Time of Sale Prospectus
and is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material adverse effect
on the Company and its subsidiaries or their prospects, taken as a whole; except
as set forth in the Time of Sale Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement), all of the issued
shares of capital stock or other ownership interests of each subsidiary of the
Company have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned directly by the Company free and clear of all
liens, encumbrances, equities or claims.
(f) This
Agreement has been duly authorized, executed and delivered by the
Company.
(g) The
authorized capital stock of the Company conforms as to legal matters to the
description thereof contained in each of the Time of Sale Prospectus and the
Prospectus and the Company has an outstanding
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capitalization
as set forth or incorporated by reference in the Time of Sale Prospectus and the
Prospectus.
(h) The
shares of Common Stock outstanding prior to the issuance of the Shares to be
sold by the Company have been duly authorized and are validly issued, fully paid
and non-assessable.
(i) The
Shares to be issued and sold by the Company to the Underwriters hereunder have
been duly authorized and, when issued and delivered in accordance with the terms
of this Agreement, will be validly issued, fully paid and non-assessable, and
the issuance of such Shares will not be subject to any preemptive or similar
rights.
(j) The
execution and delivery by the Company of this Agreement and the performance by
the Company of its obligations under this Agreement, will not, contravene any
provision of applicable law or the certificate of incorporation or by-laws of
the Company or any agreement or other instrument binding upon the Company or any
of its subsidiaries that is material to the Company and its subsidiaries, taken
as a whole, or any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company and its subsidiaries and no consent,
approval, authorization or order of, or qualification with, any governmental
body or agency is required for the performance by the Company of its obligations
under this Agreement, except such as may be required by the securities or Blue
Sky laws of the various states in connection with the offer and sale of the
Shares.
(k) There has
not occurred any material adverse change, or any development involving a
prospective material adverse change, in the condition, financial or otherwise,
or in the earnings, business, operations or prospects of the Company and its
subsidiaries, taken as a whole, from that set forth in the Time of Sale
Prospectus (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement).
(l) There are
no legal or governmental proceedings, including, without limitation, any
proceedings pursuant to Environmental Laws (as defined below), pending or
threatened to which the Company or any of its subsidiaries or to which any of
the properties of the Company or any of its subsidiaries is subject that are
required to be described in the Registration Statement or the Time of Sale
Prospectus and are not so described or any statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement
or the Time of Sale Prospectus or
6
to be
filed as exhibits to the Registration Statement that are not described or filed
as required.
(m) Each
preliminary prospectus filed as part of the registration statement as originally
filed or as part of any amendment thereto, or filed pursuant to Rule 424 under
the Securities Act, complied when so filed in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder.
(n) The
Company is not, and after giving effect to the offering and sale of the Shares
and the application of the proceeds thereof as described in the Time of Sale
Prospectus will not be, required to register as an “investment company” as such
term is defined in the Investment Company Act of 1940, as amended.
(o) The
Company and its subsidiaries (i) are in compliance with any and all applicable
foreign, federal, state and local laws, regulations, orders, decrees and
judgments 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 or obtained 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, singly or in the aggregate, have a material adverse effect on the
Company and its subsidiaries or their prospects, taken as a whole.
(p) Except as
disclosed in the financial statements incorporated by reference in the
Registration Statement, there are not, with respect to the Company and its
subsidiaries any costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures, any
clean-up requirements or obligations, any costs or liabilities relating to
closure of properties or mines or compliance with Environmental Laws or any
permit, license or approval, any related constraints on operating activities and
any potential liabilities for off-site disposal or contamination, exposure to
hazardous substances or other potential liabilities to third parties) which
would, singly or in the aggregate, have a material adverse effect on the Company
and its subsidiaries or their prospects, taken as a whole.
7
(q) There are
no contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of the
Company.
(r) The
Company and its subsidiaries own or possess, or can acquire on reasonable terms,
all material patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks and
trade names currently employed by them in connection with the business now
operated by them, and neither the Company nor any of its subsidiaries has
received any notice of infringement of or conflict with asserted rights of
others with respect to any of the foregoing which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would have a
material adverse affect on the Company and its subsidiaries or their prospects,
taken as a whole.
(s) The
Company and its subsidiaries have good and marketable title in fee simple to all
real property and good and marketable title to all personal property owned by
them which is material to the business of the Company and its subsidiaries free
and clear of all liens, encumbrances and defects except such as are described in
the Time of Sale Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement) or such as do not materially affect
the value of such property and do not interfere with the use made and proposed
to be made of such property by the Company and its subsidiaries; and any real
property (including, without limitation, any subsurface rights) and buildings
held under lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not materially interfere with the use made and proposed to be
made of such property and buildings by the Company and its subsidiaries, in each
case except as described in the Time of Sale Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement).
(t) No
material labor dispute with the employees of the Company or any of its
subsidiaries exists, except as described in the Time of Sale Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), or, to the knowledge of the Company, is imminent; and the
Company is not aware of any existing, threatened or imminent labor disturbance
by the employees of any of its principal suppliers, manufacturers or contractors
that could have a
8
material
adverse effect on the Company and its subsidiaries or their prospects, taken as
a whole.
(u) The
Company and its subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which they are engaged; neither the Company
nor any of its subsidiaries has been refused
any insurance coverage sought or applied for; and neither the Company nor any of
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 on the Company
and its subsidiaries or their prospects, taken as a whole, except as described
in the Time of Sale Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement).
(v) The
Company and each of its subsidiaries maintain 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 U.S. 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. Except as described in the Time of Sale Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), since December 31, 2007, there has been (i) no material
weakness in the Company’s internal control over financial reporting (whether or
not remediated) and (ii) no change in the Company’s internal control over
financial reporting that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial
reporting.
(w) The
consolidated historical financial statements of the Company and its consolidated
subsidiaries incorporated by reference in the Time of Sale Prospectus and the
Registration Statement present fairly in all material respects the financial
condition, results of operations and cash flows of the Company, as of the dates
and for the periods indicated, comply as to form with the applicable accounting
requirements of the Securities Act and the Exchange Act and have been prepared
in
9
conformity
with U.S. generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except as otherwise noted
therein). The selected financial data incorporated by reference in
the Time of Sale Prospectus and the Registration Statement and set forth under
the caption “Part II—Item 6—Selected Financial
Data” from the Company’s Annual Report on Form 10-K filed on March 6, 2008
fairly present, on the basis stated therein, the information included
therein.
(x) The
Company and each of its subsidiaries possess all licenses, certificates, permits
and other authorizations issued by the appropriate federal, national, state or
foreign regulatory authorities, including, without limitation, any permits or
approvals required by the United States Office of Surface Mining Reclamation and
Enforcement and corresponding state agencies, as are necessary to conduct their
respective businesses, and neither the Company nor 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 have a material
adverse effect on the Company and its subsidiaries or their prospects, 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 Time of Sale Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement).
(y) There is
and has been no material failure on the part of the Company and any of the
Company’s directors or officers, in their capacities as such, to comply with any
provision of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations
promulgated in connection therewith, including Section 402 related to loans and
Sections 302 and 906 related to certifications.
(z) All
information related to the Company’s coal reserves (including, without
limitation, the Company’s estimated reserves of recoverable coal in the
aggregate and by mining complex location) included in the Registration Statement
and the Time of Sale Prospectus (collectively, the “Reserve Information”) (i) is
accurate in all material respects, (ii) complies in all material respects with
the applicable requirements of the Securities Act and the rules
thereunder, and (iii) when read together with the other information in the Time
of Sale Prospectus, does not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading. The Reserve Information has
been calculated in accordance with standard mining engineering
procedures
10
used in
the coal industry and applicable government reporting requirements and
applicable law. All assumptions used in the calculation of the
Reserve Information were and are reasonable.
(aa) All
statistical or market-related data included in the Registration Statement or the
Time of Sale Prospectus are based on or derived from sources that the Company
believes to be reliable and accurate, and the Company has obtained the written
consent to the use of such data from such sources to the extent
required.
In
addition, any certificate signed by any officer of the Company or any of the
subsidiaries of the Company and delivered to the Underwriters or counsel for the
Underwriters in connection with this offering of the Shares and that
specifically identifies this Agreement shall be deemed to be a representation
and warranty by the Company, as to matters covered thereby, to each
Underwriter.
2.
Agreements to Sell and
Purchase. The Company hereby agrees to sell to the several Underwriters,
and each Underwriter, upon the basis of the representations and warranties
herein contained, but subject to the conditions hereinafter stated, agrees,
severally and not jointly, to purchase from the Company at $14.72 a share (the
“Purchase Price”) the
number of Firm Shares (subject to such adjustments to eliminate fractional
shares as you may determine) that bears the same proportion to the number of
Firm Shares to be issued and sold by the Company as the number of Firm Shares
set forth in Schedule I hereto opposite the name of such Underwriter bears to
the total number of Firm Shares.
On the
basis of the representations and warranties contained in this Agreement, and
subject to its terms and conditions, the Company agrees to issue and sell to the
Underwriters, and the Underwriters shall have the right to purchase, severally
and not jointly, up to 450,000 Additional Shares at the Purchase
Price. You may exercise this right on behalf of the Underwriters in
whole or from time to time in part by giving written notice of each election to
exercise the option not later than 30 days after the date of this
Agreement. Any exercise notice shall specify the number of Additional
Shares to be purchased by the Underwriters and the date on which such shares are
to be purchased. Each purchase date must be at least one business day
after the written notice is given and may not be earlier than the closing date
for the Firm Shares nor later than ten business days after the date of such
notice. Additional Shares may be purchased as provided in Section 4
hereof solely for the purpose of covering over-allotments made in connection
with the offering of the Firm Shares. On each day, if any, that
Additional Shares are to be purchased (an “Option Closing Date”), each
Underwriter agrees, severally and not jointly, to purchase the number of
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Additional
Shares (subject to such adjustments to eliminate fractional shares as you may
determine) that bears the same proportion to the total number of Additional
Shares to be purchased on such Option Closing Date as the number of Firm Shares
set forth in Schedule I hereto opposite the name of such Underwriter bears to
the total number of Firm Shares.
The
Company hereby agrees that, without the prior written consent of UBS Securities
LLC on behalf of the Underwriters, it will not, during the period ending
60 days after the date of the Prospectus, (1) offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell,
grant any option, right or warrant to purchase, lend, or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or (2) enter
into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of the Common Stock, whether
any such transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise or (3)
file any registration statement with the Commission relating to the offering of
any shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock. The restrictions contained in the
preceding sentence shall not apply to:
(A) the
Shares to be sold hereunder;
(B) the
issuance by the Company of:
(i) shares of
Common Stock upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof of which the Underwriters have been
advised in writing;
(ii) shares of
Common Stock or securities convertible into, or exercisable, or exchangeable
for, shares of Common Stock in exchange for equity or assets of another entity
in connection with a merger, acquisition or strategic investment, provided that prior to any
such issuance the recipient of such securities shall have agreed with UBS
Securities LLC to be bound the terms of this Section 2 for the remainder of such
60-day period;
(iii) restricted
Common Stock and options to purchase Common Stock pursuant to the Company’s 2004
Equity Incentive Plan (the “2004 Plan”) as in effect on
the date hereof, provided that (1) the
aggregate amount of restricted Common Stock and options issued by the Company
pursuant to this clause (iii) shall not exceed the aggregate amount of
securities reserved for issuance under the
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2004 Plan
as of the date hereof and (2) any restricted Common Stock or options issued by
the Company pursuant to this clause (iii) shall neither vest nor become
unrestricted, as applicable, for the remainder of such 60-day period;
and
(iv) shares
of Common Stock issued solely in an exchange for any of the Company’s
outstanding bonds in an amount up to $25,000,000 at a nominal valuation per
share not less than $1.00 per share above the last publicly traded price as
quoted on the Nasdaq Global Market on March 18, 2008.
3.
Terms of Public Offering. The
Company is advised by you that the Underwriters propose to make a public
offering of their respective portions of the Shares as soon after the
Registration Statement and this Agreement have become effective as in your
judgment is advisable. The Company is further advised by you that the
Shares are to be offered to the public initially at $14.95 a share (the “Public Offering
Price”).
4.
Payment and Delivery. Payment
for the Firm Shares to be issued and sold by the Company shall be made to the
Company in Federal or other funds immediately available in New York City against
delivery of such Firm Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on March 25, 2008, or at
such other time on the same or such other date, not later than April 1, 2008, as
shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the “Closing Date.”
Payment
for any Additional Shares shall be made to the Company in Federal or other funds
immediately available in New York City against delivery of such Additional
Shares for the respective accounts of the several Underwriters at
10:00 a.m., New York City time, on the date specified in the corresponding
notice described in Section 2 or at such other time on the same or on such other
date, in any event not later than May 2, 2008, as shall be designated in writing
by you.
The Firm
Shares and Additional Shares shall be registered in such names and in such
denominations as you shall request in writing not later than one full business
day prior to the Closing Date or the applicable Option Closing Date, as the case
may be. The Firm Shares and Additional Shares shall be delivered to
you on the Closing Date or an Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
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5.
Conditions to the Underwriters’
Obligations. The obligations of the Company to issue and sell the Shares
to the Underwriters and the several obligations of the Underwriters to purchase
and pay for the Shares on the Closing Date are subject to the condition that the
Prospectus, as amended or supplemented, in relation to the Shares, shall have
been filed with the Commission pursuant to Rule 424(b) within the applicable
time period prescribed for such filing by the rules and regulations under the
Securities Act; as of the Closing Date, no stop order suspending the
effectiveness of the Registration
Statement shall be in effect or shall be pending or threatened by the
Commission.
The
several obligations of the Underwriters are subject to the following further
conditions:
(a) Subsequent
to the execution and delivery of this Agreement and prior to the Closing
Date:
(i) there
shall not have occurred any downgrading, nor shall any notice have been given of
any intended or potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change, in the rating
accorded any of the Company’s securities by any “nationally recognized
statistical rating organization,” as such term is defined for purposes of Rule
436(g)(2) under the Securities Act; and
(ii) there
shall not have occurred any change, or any development involving a prospective
change, in the condition, financial or otherwise, or in the earnings, business
or operations of the Company and its subsidiaries, taken as a whole, from that
set forth in the Time of Sale Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement) that, in your
judgment, is material and adverse and that makes it, in your judgment,
impracticable to market the Shares on the terms and in the manner contemplated
in the Time of Sale Prospectus.
(b) The
Underwriters shall have received on the Closing Date a certificate, dated the
Closing Date and signed by an executive officer of the Company, to the effect
set forth in Section 5(a)(i) above and to the effect that the representations
and warranties of the Company contained in this Agreement are true and correct
as of the Closing Date and that the Company has complied with all of the
agreements and satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before the Closing Date.
14
The
officer signing and delivering such certificate may rely upon the best of his or
her knowledge as to proceedings threatened.
(c) The
Underwriters shall have received on the Closing Date an opinion of ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP, outside counsel for the Company, dated the Closing Date, to the
effect that:
(i) the
Company has been duly incorporated, is validly existing as a corporation in good
standing under the laws of the Commonwealth of Virginia, has the corporate power
and authority to own its property and to conduct its business as described in
the Time of Sale Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company and its subsidiaries, taken as a
whole;
(ii) each
subsidiary of the Company is validly existing as a corporation or other entity
in good standing under the laws of the jurisdiction of its organization, has the
power and authority to own its property and to conduct its business as described
in the Time of Sale Prospectus and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company and its subsidiaries, taken as a
whole;
(iii) the
authorized capital stock of the Company conforms as to legal matters to the
description thereof contained in the Time of Sale Prospectus and the
Prospectus;
(iv) the
shares of Common Stock outstanding prior to the issuance of the Shares to be
sold by the Company have been duly authorized and are validly issued, fully paid
and non-assessable;
(v) except as
set forth in the Time of Sale Prospectus or the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement) and
based solely on a review of the stock certificates set forth in Schedule III
hereto and an officers’ certificate from the Company, the Company (or a
wholly-owned subsidiary of the Company) owns the number of shares of stock and
membership interest of each subsidiary, as
15
applicable,
as set forth on Schedule III hereto, free and clear of all liens, encumbrances,
equities or claims, except for those held by (a) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding,
Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and the Lenders from time to time
parties to that certain $100,000,000 Term Credit Agreement by and among the
Company, certain of its subsidiaries, such lenders, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior
Funding, Inc., and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, dated as of February
26, 2007, as amended, and (b) General Electric Capital Corporation, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Senior Funding, Inc. and the Lenders
from time to time parties to that certain $35,000,000 Revolving Credit Agreement
by and among the Company, certain of its subsidiaries, such lenders, General
Electric Capital Corporation, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc., dated as
of February 26, 2007, as amended, pursuant to each such
agreement;
(vi) the
Shares have been duly authorized and, when issued, delivered and paid for in
accordance with the terms of this Agreement, will be validly issued, fully paid
and non-assessable, and the issuance of such Shares will not be subject to any
preemptive or similar rights;
(vii) this
Agreement has been duly authorized, executed and delivered by the
Company;
(vii) the
execution and delivery by the Company of this Agreement did not, and, if the
Company were now to perform its obligations under this Agreement, such
performance would not, result in any: (a) violation of the articles of
incorporation or by-laws of the Company; (b) violation of any existing
federal or state constitution, statute, regulation, rule, order or law to which
the Company is subject; (c) breach of or default under any agreement filed
as an exhibit to the Registration Statement; (d) violation of any judicial
or administrative decree, writ, judgment or order to which, to such counsel’s
knowledge, the Company or any subsidiary of the Company is subject; or (e)
violation of the Nasdaq Marketplace Rules;
(ix) no
consent, approval, authorization or order of, or filing with any governmental
authority of the United States or the Commonwealth of Virginia is required for
the performance by the Company of its obligations under this Agreement, except
such as may be required by the securities or Blue Sky laws of the various states
in connection with the offer and sale of the Shares;
16
(x) the
statements relating to legal matters, documents or proceedings included or
incorporated by reference in (A) the Time of Sale Prospectus and the
Prospectus under the captions “Part I— Item 1— Business— Customers and
Coal Contracts,” “Part I—Item 2—Properties,” “Part
I—Item 3—Legal Proceedings”
incorporated by reference from the Company’s Annual Report on Form 10-K filed on
March 6, 2008 and “Description of Capital Stock” included in the
Time of Sale Prospectus and the Prospectus and (B) the Registration
Statement in Item 15, in each case fairly summarize in all material
respects such matters, documents or proceedings;
(xi) to such
counsel’s knowledge, (a) there are no legal or governmental proceedings
pending or threatened to which the Company or any of its subsidiaries is a party
or to which any of the properties of the Company or any of its subsidiaries is
subject that are required to be described in the Registration Statement, the
Time of Sale Prospectus or the Prospectus and are not so described; and
(b) there are no statutes, regulations or contracts that are required to be
described in the Registration Statement, the Time of Sale Prospectus or the
Prospectus or to be filed as exhibits to the Registration Statement that are not
described or filed as required;
(xii) the
Company is not, and after giving effect to the offering and sale of the Shares
and the application of the proceeds thereof as described in the Time of Sale
Prospectus and the Prospectus will not be, required to register as an
“investment company” as such term is defined in the Investment Company Act of
1940, as amended; and
(xiii) (A) in
the opinion of such counsel, the Registration Statement, the Time of Sale
Prospectus and the Prospectus (except for the financial statements and financial
schedules, other financial information and statistical information derived
therefrom, and coal reserve information included or incorporated
17
by
reference therein, as to which such counsel need not express any belief) appear
on their face to be appropriately responsive in all material respects to the
requirements of the Securities Act and the applicable rules and regulations of
the Commission thereunder, and (B) nothing has come to the attention of
such counsel that causes such counsel to believe that (i) the Registration
Statement or the Prospectus included therein (except for the financial
statements and financial schedules, other financial information and statistical
information derived therefrom, and coal reserve information included or
incorporated by reference therein, as to which such counsel need not express any
belief) at the time the Registration Statement became effective contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or (ii) the Prospectus (except for the financial statements and financial
schedules, other financial information
and statistical information derived therefrom, and coal reserve information
included or incorporated by reference therein, as to which such counsel need not
express any belief) as of its date or as of the Closing Date contained or
contains any 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 or (iii) the Time
of Sale Prospectus (except for the financial statements and financial schedules,
other financial information and statistical information derived therefrom, and
coal reserve information included or incorporated by reference therein, as to
which such counsel need not express any belief), considered together, with the
price per Share and number of Shares, as of the date hereof, included an untrue
statement of a material fact or omitted 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.
(d) The
Underwriters shall have received on the Closing Date an opinion of ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, the Company's General Counsel, dated the Closing Date, to the effect
that the statements made in the section entitled “Part I¾Item 1¾Business¾Government Regulation”
incorporated by reference from the Company’s Annual Report on Form 10-K filed on
March 6, 2008 in the Time of Sale Prospectus that purport to describe the
provisions of the laws referred to therein fairly summarize in all material
respects such matters.
(e) The
Underwriters shall have received on the Closing Date an opinion of Cravath,
Swaine & ▇▇▇▇▇ LLP, counsel for the Underwriters, dated the Closing Date,
covering the matters referred to in Sections 5(c)(vi),5(c)(vii), 5(c)(x)
(but only as to the statements in the Time of Sale Prospectus and the Prospectus
under “Description of Capital Stock” and “Underwriters”) and
Section 5(c)(xiii) above.
With
respect to Section 5(c)(xiii) above, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP may state that
their beliefs are based upon their participation in the preparation of the
Registration Statement the Time of Sale Prospectus and the Prospectus and any
amendments or supplements thereto and review and discussion of the contents
thereof, but are without independent check or verification, except as
specified. With respect to Section 5(c)(xiii), Cravath, Swaine
& ▇▇▇▇▇ LLP may state that their beliefs are based upon their participation
in the preparation of the Registration Statement the
18
Time of
Sale Prospectus and the Prospectus and any amendments or supplements thereto and
upon review and discussion of the contents thereof, but are without independent
check or verification except as specified.
The
opinions of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ described in Sections
5(c) and 5(d) above shall be rendered to the Underwriters at the request of the
Company and shall so state therein.
(f) The
Underwriters shall have received, on each of the date hereof and the Closing
Date, a letter dated the date hereof or the Closing Date, as the case may be, in
form and substance satisfactory to the Underwriters, from KPMG LLP, the
Company’s independent public accountants, containing statements and information
of the type ordinarily included in accountants’ “comfort letters” to
underwriters with respect to the consolidated financial statements and certain
financial information of the Company and its subsidiaries, contained in the
Registration Statement, the Time of Sale Prospectus and the Prospectus; provided that the letter
delivered on the Closing Date shall use a “cut-off date” not earlier than the
date hereof.
(g) The
“lock-up” agreements, each substantially in the form of Exhibit A hereto,
between you and certain officers and directors of the Company listed on Schedule
IV hereto, relating to sales and certain other dispositions of shares of Common
Stock or certain other securities, delivered to you on or before the date
hereof, shall be in full force and effect on the Closing Date.
If
settlement for the Additional Shares occurs after the Closing Date, the Company
will deliver to the Underwriters on the settlement date for the Additional
Shares, and the obligation of the Underwriters to purchase the Additional Shares
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 5 hereof as well as the
satisfaction of the conditions pursuant to Section 5(a) hereof.
19
6.
Covenants of the Company. In
further consideration of the agreements of the Underwriters herein contained,
the Company covenants with each Underwriter as follows:
(a) To
furnish to you, without charge, a conformed copy of the Registration Statement
(including exhibits thereto and documents incorporated by reference) and for
delivery to each other Underwriter a conformed
copy of the Registration Statement (without exhibits thereto but including
documents incorporated by reference) and to furnish to you in New York City,
without charge, prior to 10:00 a.m. New York City time on the business day
next succeeding the date of this Agreement and during the period mentioned in
Section 6(e) below, as many copies of the Time of Sale Prospectus, the
Prospectus, any documents incorporated by reference therein, and any supplements
and amendments thereto or to the Registration Statement as you may reasonably
request.
(b) Before
amending or supplementing the Registration Statement, the Time of Sale
Prospectus or the Prospectus, to furnish to you a copy of each such proposed
amendment or supplement and not to file any such proposed amendment or
supplement to which you reasonably object, and to file with the Commission
within the applicable period specified in Rule 424(b) under the Securities Act
any prospectus required to be filed pursuant to such Rule.
(c) To
furnish to you a copy of each proposed free writing prospectus to be prepared by
or on behalf of, used by, or referred to by the Company in connection with this
offering of Shares and not to use or refer to any proposed free writing
prospectus to which you reasonably object.
(d) Without
the consent of the Representatives, not to take any action that would result in
an Underwriter or the Company being required to file with the Commission
pursuant to Rule 433(d) under the Securities Act a free writing prospectus
prepared by or on behalf of the Underwriter that the Underwriter otherwise would
not have been required to file thereunder.
(e) If the
Time of Sale Prospectus is being used to solicit offers to buy the Shares at a
time when the Prospectus is not yet available to prospective purchasers and any
event shall occur or condition exist as a result of which it is necessary to
amend or supplement the Time of Sale Prospectus in order to make the statements
therein, in the light of the circumstances, not misleading, or if any event
shall occur or condition exist as a result of which the Time of Sale Prospectus
conflicts with the information contained in the Registration Statement then on
file, or if, in
20
the
reasonable opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Time of Sale Prospectus to comply with applicable law, forthwith
to prepare, file with the Commission and furnish, at its own expense, to the
Underwriters and to any dealer upon request, either amendments or supplements to
the Time of Sale Prospectus so that the statements in the Time of Sale
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Time of Sale
Prospectus is delivered to a prospective purchaser, be misleading or so that the
Time of Sale Prospectus, as amended or supplemented, will no longer conflict
with the Registration Statement, or so that the Time of Sale Prospectus, as
amended or supplemented, will comply with applicable law.
(f) If, at
any time during the period when a Prospectus is required by the Act to be
delivered (whether physically or through compliance with Rule 172 under the Act
or any similar rule), any event shall occur or condition exist as a result of
which it is necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances, not misleading, or if any
event shall occur or condition exist as a result of which the Prospectus
conflicts with the information contained in the Registration Statement then on
file, or if, in the reasonable opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Prospectus to comply with applicable law,
forthwith to prepare, file with the Commission and furnish, at its own expense,
to the Underwriters and to any dealer upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a prospective purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will no longer conflict with the
Registration Statement, or so that the Prospectus, as amended or supplemented,
will comply with applicable law.
(g) To
endeavor to qualify the Shares for offer and sale under the securities or Blue
Sky laws of such jurisdictions as you shall reasonably request.
(h) To make
generally available to the Company’s security holders and to you as soon as
practicable an earning statement covering the twelve-month period ending
March 31, 2009 that satisfies the provisions of Section 11(a) of the
Securities Act and the rules and regulations of the Commission
thereunder.
21
7.
Expenses. Whether or not the
transactions contemplated in this Agreement are consummated or this Agreement is
terminated, the Company agrees to pay or cause to be paid all expenses incident
to the performance of its obligations under this Agreement, including: (i) the
fees, disbursements and expenses of the Company’s counsel and the Company’s
accountants in connection with the registration and delivery of the Shares under
the Securities Act and all other fees or expenses in connection with the
preparation and filing of the Registration Statement, any preliminary
prospectus, the Time of Sale Prospectus, the Prospectus and amendments and
supplements to any of the foregoing,
including all printing costs associated therewith, and the mailing and
delivering of copies thereof to the Underwriters and dealers, in the quantities
hereinabove specified, (ii) all costs and expenses related to the transfer and
delivery of the Shares to the Underwriters, including any transfer or other
taxes payable thereon, (iii) the cost of printing or producing any Blue Sky or
Legal Investment memorandum in connection with the offer and sale of the Shares
under state securities laws and all expenses in connection with the
qualification of the Shares for offer and sale under state securities laws as
provided in Section 6(f) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or Legal Investment
memorandum, (iv) all filing fees and the reasonable fees and disbursements of
counsel to the Underwriters incurred in connection with the review and
qualification of the offering of the Shares by the Financial Industry Regulatory
Authority, (v) all fees and expenses incident to listing the Shares on the
Nasdaq Global Market, (vi) the cost of printing certificates representing the
Shares, (vii) the costs and charges of any transfer agent, registrar or
depositary, (viii) the costs and expenses of the Company relating to investor
presentations on any “road show” undertaken in connection with the marketing of
the offering of the Shares, including, without limitation, expenses associated
with the production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the
cost of any aircraft chartered in connection with the road show, (ix) the
document production charges and expenses associated with printing this Agreement
and (x) all other costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not otherwise made
in this Section. It is understood, however, that except as provided
in this Section, Section 9 entitled “Indemnity and Contribution”, and the last
paragraph of Section 11 below, the Underwriters will pay all of their costs and
expenses, including fees and disbursements of their counsel, stock transfer
taxes payable on resale of any of the Shares by them and any advertising
expenses connected with any offers they may make.
22
8.
Covenants of the
Underwriters. Each Underwriter severally covenants with the
Company not to take any action that would result in the Company being required
to file with the Commission under Rule 433(d) a free writing prospectus prepared
by or on behalf of such Underwriter that otherwise would not be required to be
filed by the Company thereunder, but for the action of the
Underwriter.
9.
Indemnity and
Contribution. (a) The Company agrees to indemnify and hold
harmless each Underwriter, each person, if any, who controls any Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, and each affiliate of any Underwriter within the meaning of
Rule 405 under the Securities Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus, the Time of Sale Prospectus, any issuer
free writing prospectus as defined in Rule 433(h) under the Securities Act,
any Company information that the Company has filed, or is required to file,
pursuant to Rule 433(d) of the Securities Act or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein.
(b) Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless
the Company, the directors of the Company, the officers of the Company who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus, the Time of Sale Prospectus, any issuer free writing
prospectus or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the
23
statements
therein not misleading, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus, the
Time of Sale Prospectus, any issuer free writing prospectus or the Prospectus or
any amendments or supplements thereto.
(c) In
case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to Section 9(a) or 9(b), such person (the “indemnified party”) shall
promptly notify the person against whom such indemnity may be sought (the “indemnifying party”) in
writing and the indemnifying party, upon request of the indemnified party, shall
retain counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in
respect of the legal expenses of any indemnified party in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for (i)
the fees and expenses of more than one separate firm (in addition to any local
counsel) for all Underwriters and all persons, if any, who control any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act or who are affiliates of any Underwriter within
the meaning of Rule 405 under the Securities Act and (ii) the fees and expenses
of more than one separate firm (in addition to any local counsel) for the
Company, its directors, its officers who sign the Registration Statement and
each person, if any, who controls the Company within the meaning of either such
Section, and that all such fees and expenses shall be reimbursed as they are
incurred. In the case of any such separate firm for the Underwriters
and such control persons and affiliates of any Underwriters, such firm shall be
designated in writing by UBS Securities LLC. In the case of any such
separate firm for the Company, and such directors, officers and control persons
of the Company, such firm shall be designated in writing by the
Company. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason
24
of such
settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) To the
extent the indemnification provided for in Section 9(a) or 9(b) is unavailable
to an indemnified party or insufficient in respect of any losses, claims,
damages or liabilities referred to therein, then each indemnifying party under
such paragraph, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
or parties on the one hand and the indemnified party or parties on the other
hand from the offering of the Shares or (ii) if the allocation provided by
clause 9(d)(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 9(d)(i) above but also the relative fault of the indemnifying party
or parties on the one hand and of the indemnified party or parties on the other
hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other hand in connection with the offering
of the Shares shall be deemed to be in the same respective proportions as the
net proceeds from the offering of the Shares (before deducting expenses)
received by the Company and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus, bear to the aggregate Public Offering Price of the
Shares. The relative fault of the Company on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company
25
or
by the Underwriters and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Underwriters’ respective obligations to contribute
pursuant to this Section 9 are several in proportion to the respective number of
Shares they have purchased hereunder, and not joint.
(e) The
Company and the Underwriters agree that it would not be just or equitable if
contribution pursuant to this Section 9 were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose)
or by any other method of allocation that does not take account of the equitable
considerations referred to in Section 9(d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding
the provisions of this Section 9, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 9 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.
(f) The
indemnity and contribution provisions contained in this Section 9 and the
representations, warranties and other statements of the Company contained in
this Agreement shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter, any person controlling any Underwriter or any
affiliate of any Underwriter, or the Company, its officers or directors or any
person controlling the Company and (iii) acceptance of and payment for any of
the Shares.
10.
Termination. The Underwriters
may terminate this Agreement by notice given by you to the Company if, after the
execution and delivery of this Agreement and prior to the Closing Date (in the
case of the Firm Shares) or any Option Closing Date (in the case of any
Additional Shares), (i) trading generally shall have been suspended or
materially limited on, or by, as the case may be, any of The New York Stock
Exchange, the American Stock Exchange, or the
26
Nasdaq
Global Market, (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a material
disruption in securities settlement, payment or clearance services in the United
States shall have occurred, (iv) any moratorium on commercial banking activities
shall have been declared by Federal or New York State authorities or (v) there
shall have occurred any outbreak or escalation of hostilities, or any change in
financial markets or any calamity or crisis that, in your judgment, is material
and adverse and which, singly or together with any other event specified in this
clause (v), makes it, in your judgment, impracticable or inadvisable to proceed
with the offer, sale or delivery of the Shares on the terms and in
the manner contemplated in the Time of Sale Prospectus or the
Prospectus.
11.
Effectiveness; Defaulting
Underwriters. This Agreement shall become effective upon the execution
and delivery hereof by the parties hereto.
If, on
the Closing Date or an Option Closing Date, as the case may be, any one or more
of the Underwriters shall fail or refuse to purchase Shares that it has or they
have agreed to purchase hereunder on such date, and the aggregate number of
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase is not more than one-tenth of the aggregate number of the
Shares to be purchased on such date, the other Underwriters shall be obligated
severally in the proportions that the number of Firm Shares set forth opposite
their respective names in Schedule I bears to the aggregate number of Firm
Shares set forth opposite the names of all such non-defaulting Underwriters, or
in such other proportions as you may specify, to purchase the Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
on such date; provided
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 11 by
an amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter
or Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Shares to be purchased on such date,
and arrangements satisfactory to you and the Company for the purchase of such
Firm Shares are not made within 36 hours after such default, this Agreement
shall terminate without liability on the part of any non-defaulting Underwriter
or the Company. In any such case either you or the Company shall have
the right to postpone the Closing Date, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement,
in the Time of Sale Prospectus and in the Prospectus or in any other documents
or arrangements may be effected. If, on an Option Closing
Date,
27
any
Underwriter or Underwriters shall fail or refuse to purchase Additional Shares
and the aggregate number of Additional Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Additional Shares to be
purchased on such Option Closing Date, the non-defaulting Underwriters shall
have the option to (i) terminate their obligation hereunder to purchase the
Additional Shares to be sold on such Option Closing Date or (ii) purchase not
less than the number of Additional Shares that such non-defaulting Underwriters
would have been obligated to purchase in the absence of such
default. Any action taken under this paragraph shall not relieve
any defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
If this
Agreement shall be terminated by the Underwriters, or any of them, because of
any failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, or if for any reason the
Company shall be unable to perform its obligations under this Agreement, the
Company will reimburse the Underwriters or such Underwriters as have so
terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
12.
No Fiduciary Duty. The
Company hereby acknowledges that the Underwriters are acting solely as
underwriters in connection with the purchase and sale of the
Shares. The Company further acknowledges that the Underwriters are
acting pursuant to a contractual relationship created solely by this Agreement
entered into on an arm’s length basis, and in no event do the parties intend
that the Underwriters act or be responsible as a fiduciary to the Company, its
management, stockholders or creditors or any other person in connection with any
activity that the Underwriters may undertake or have undertaken in furtherance
of the purchase and sale of the Shares, either before or after the date
hereof. The Underwriters hereby expressly disclaim any fiduciary or
similar obligations to the Company, either in connection with the transactions
contemplated by this Agreement or any matters leading up to such transactions,
and the Company hereby confirms its understanding and agreement to that
effect. The Company and the Underwriters agree that they are each
responsible for making their own independent judgments with respect to any such
transactions and that any opinions or views expressed by the Underwriters to the
Company regarding such transactions, including, but not limited to, any opinions
or views with respect to the price or market for the Company’s securities, do
not constitute advice or recommendations to the Company. The Company
hereby waives and releases, to the fullest extent permitted by law, any
28
claims
that the Company may have against the Underwriters with respect to any breach or
alleged breach of any fiduciary or similar duty to the Company in connection
with the transactions contemplated by this Agreement or any matters leading up
to such transactions.
13.
Counterparts. This Agreement
may be signed in two or more counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument.
14.
Applicable Law. This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of New York.
15.
Submission to
Jurisdiction. Except as set forth below, no claim arising out
of or in any way relating to this Agreement may be commenced, prosecuted or
continued in any court other than the courts of the State of New York located in
the City and County of New York or in the United States District Court for the
Southern District of New York, which courts shall have jurisdiction over the
adjudication of such matters, and the Company consents to the jurisdiction of
such courts and personal service with respect thereto. The Company
hereby consents to personal jurisdiction, service and venue in any court in
which any claim arising out of or in any way relating to this Agreement is
brought by any third party against any Underwriter or any indemnified
party. Each Underwriter and the Company (on its behalf and, to the
extent permitted by applicable law, on behalf of its stockholders and
affiliates) waive all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise) in any way arising
out of or relating to this Agreement. The Company agrees that a final
judgment in any such action, proceeding or counterclaim brought in any such
court shall be conclusive and binding upon the Company and may be enforced in
any other courts to the jurisdiction of which the Company is or may be subject,
by suit upon such judgment.
16.
Headings. The headings of the
sections of this Agreement have been inserted for convenience of reference only
and shall not be deemed a part of this Agreement.
29
17.
Notices. All
communications hereunder shall be in writing and effective only upon receipt and
if to the Underwriters shall be delivered, mailed or sent to you at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Syndicate Department and if to the Company shall be
delivered, mailed or sent to ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇.
30
|
Very
truly yours,
▇▇▇▇▇
RIVER COAL COMPANY
By: /s/ ▇▇▇▇▇ ▇.
▇▇▇▇▇
Name:
Title:
|
31
Accepted
as of the date hereof
UBS
Securities LLC
Acting
severally on behalf of themselves
and the
several Underwriters named in
Schedule
I hereto.
By:
UBS Securities LLC
By: /s/ ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
Director
SCHEDULE
I
|
Underwriter
|
Number
of Firm Shares
To Be Purchased
|
|
UBS
Securities
LLC
|
3,000,000
|
|
Total
|
3,000,000
|
SCHEDULE
II
Time
of Sale Prospectus
1. Preliminary
Prospectus dated March 18, 2008, including the Basic Prospectus dated June 25,
2007.
SCHEDULE
III
LIST
OF SUBSIDIARY STOCK CERTIFICATES
|
Subsidiary
|
Certificate
Number
|
Number of Shares /
Membership Interest Held by
the Company or its Wholly-
Owned
Subsidiary
|
|
BDCC
Holding Company, Inc.
|
1
|
100
|
|
▇▇▇▇
County Coal Corporation
|
5
|
1,000
|
|
▇▇▇▇▇▇▇
Coal Corporation
|
9
|
100
|
|
▇▇▇▇▇▇▇
Coal Leasing Company
|
2
|
100
|
|
▇▇▇▇▇▇▇
Processing Company
|
1
|
100
|
|
Blue
Diamond Coal Company
|
1
|
100
|
|
Eolia
Resources, Inc.
|
1
|
2,500
|
|
▇▇▇▇▇
River Coal Sales, Inc.
|
5
|
100
|
|
▇▇▇▇▇
River Coal Service Company
|
5
|
200
|
|
▇▇▇▇▇
Creek Coal Company
|
4
|
1,000
|
|
▇▇▇▇▇
Creek Elkhorn Coal Corporation
|
4
|
600
|
|
▇▇▇▇▇
Creek Processing Company
|
1
|
100
|
|
Leeco,
Inc.
|
4
|
300
|
|
▇▇▇▇▇
Elkhorn Coal Corporation
|
1
|
29,609
|
|
Shamrock
Coal Company, Incorporated
|
4
|
1,000
|
|
Triad
Mining Inc.
|
24
|
411.31
|
|
Triad
Underground Mining, LLC
|
N/A
|
100%
|
SCHEDULE
IV
Lock-up
Agreements
1. ▇▇▇▇
▇. Crown
2. ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇
3. ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, ▇▇
4. ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
5. ▇▇▇
▇. ▇▇▇▇, ▇▇.
6. ▇▇▇▇▇
▇. ▇▇▇▇▇
7. ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇
8. ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇
EXHIBIT
A
[FORM
OF LOCK-UP LETTER]
[●],
2008
UBS
Securities LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇
Dear Sirs
and Mesdames:
The
undersigned understands that UBS Securities LLC (“UBS”) and certain other
underwriters severally propose to enter into an Underwriting Agreement (the
“Underwriting
Agreement”) with ▇▇▇▇▇ River Coal Company, a Virginia corporation (the
“Company”), providing
for the public offering (the “Public Offering”) by the
several Underwriters, including UBS (the “Underwriters”), of shares (the
“Shares”) of the common
stock, par value $0.01 per share, of the Company (the “Common Stock”).
To induce
the Underwriters that may participate in the Public Offering to continue their
efforts in connection with the Public Offering, the undersigned hereby agrees
that, without the prior written consent of UBS on behalf of the Underwriters, it
will not, during the period commencing on the date hereof and ending
60 days after the date of the final prospectus relating to the Public
Offering (the “Prospectus”), (1) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, or (2) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise.
The
foregoing paragraph shall not apply to:
(a) transactions
relating to shares of Common Stock or other securities acquired in open market
transactions after the completion of the Public Offering, provided that no filing
under Section 16(a) of the Securities Exchange Act of 1934, as amended (a
“Section 16(a)
Filing”), shall be required or shall be
voluntarily
made in connection with subsequent sales of Common Stock or other securities
acquired in such open market transactions;
(b) the
transfer of any Shares as a bona fide gift or gifts, provided that (i) the
donee or donees thereof agree to be bound in writing with the Underwriters by
the restriction set forth herein and (ii) any Section 16(a) Filing
made in connection therewith shall specify that such transfer is being made as a
bona fide gift or gifts;
(c) the
transfer of any Shares to any trust for the direct or indirect benefit of the
undersigned or the immediate family of the undersigned, provided that (i) the
trustee of the trust agrees to be bound in writing with the Underwriters by the
restrictions set forth herein, (ii) any such transfer shall not involve a
disposition for value and (iii) any Section 16(a) Filing made in
connection therewith shall specify that such transfer is being made to a trust
for the direct or indirect benefit of the undersigned or the immediate family of
the undersigned and does not involve a disposition for value;
(d) the
transfer of any Shares as a result of testate or intestate succession, provided that (i) the
transferee agrees to be bound in writing with the Underwriters by the
restrictions set forth herein and (ii) any Section 16(a) Filing made in
connection therewith shall specify that such transfer is being made as a result
of testate or intestate succession and does not involve a disposition for value;
and
(e) the
transfer of any Shares to a partnership, limited liability company or other
entity, provided that
(i) all the beneficial ownership interests of such partnership, limited
liability company or other entity are held by the transferor or the immediate
family of the transferor, (ii) the transferor and any other owner of
beneficial ownership interests agrees on behalf of such partnership, limited
liability company or other entity to be bound in writing by the restrictions set
forth herein, (iii) any such transfer shall not involve a disposition for
value and (iv) no Section 16(a) Filing shall be required or shall be
voluntarily made in connection with such transfer;
(f) the
transfer of any Shares to the Company solely to satisfy tax withholding
obligations incurred as a result of the vesting of restricted stock acquired by
the undersigned pursuant to an incentive plan in effect as of the date of this
agreement and disclosed in the Prospectus used to sell the Shares.
In
addition, the undersigned agrees that, without the prior written consent of UBS
on behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending 60 days after the date of the Prospectus, make any
demand for or exercise any right with respect to, the registration of any shares
of Common Stock or any security convertible into or exercisable or
exchangeable
for
Common Stock. The undersigned also agrees and consents to the entry
of stop transfer instructions with the Company’s transfer agent and registrar
against the transfer of the undersigned’s shares of Common Stock except in
compliance with the foregoing restrictions.
The
undersigned understands that the Company and the Underwriters are relying upon
this Lock-Up Agreement in proceeding toward consummation of the Public
Offering. The undersigned further understands that this Lock-Up
Agreement is irrevocable and shall be binding upon the undersigned’s heirs,
legal representatives, successors and assigns.
Whether
or not the Public Offering actually occurs depends on a number of factors,
including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
If for
any reason the Underwriting Agreement shall be terminated prior to the Closing
Date (as defined in the Underwriting Agreement) or if either party delivers
written notice to the other that it does not intend to enter into the
Underwriting Agreement, the agreement set forth above shall likewise be
terminated.
|
Very
truly yours,
(Name) (Address) |