Exhibit 1.1
International Coal Group, Inc.
[ ] Shares
Common Stock
($0.01 Par Value)
UNDERWRITING AGREEMENT
[__________], 2005
UNDERWRITING AGREEMENT
[___________], 2005
UBS Securities LLC
▇▇▇▇▇▇ Brothers Inc.
as Managing Underwriters
c/o UBS Securities LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
International Coal Group, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to the underwriters named in Schedule A
annexed hereto (the "Underwriters"), for whom you are acting as representatives,
an aggregate of [___________] shares (the "Firm Shares") of Common Stock, $0.01
par value (the "Common Stock"), of the Company, all of which are to be issued
and sold by the Company. In addition, solely for the purpose of covering
over-allotments, the Company proposes to grant to the Underwriters the option to
purchase from the Company up to an additional [____________] shares of Common
Stock (the "Additional Shares") in the respective amounts set forth under the
caption "Additional Shares" in Schedule B hereto. The Firm Shares and the
Additional Shares are hereinafter collectively sometimes referred to as the
"Shares." The Shares are described in the Prospectus which is referred to below.
The Company hereby acknowledges that, in connection with the proposed
offering of the Shares, it has requested UBS Financial Services Inc.
("UBS-FinSvc") to administer a directed share program (the "Directed Share
Program") under which up to 800,000 Firm Shares, or 4% of the Firm Shares to be
purchased by the Underwriters (the "Reserved Shares"), shall be reserved for
sale by UBS-FinSvc at the initial public offering price to the Company's
officers, directors, employees and consultants and other persons having a
relationship with the Company, designated by the Company (the "Directed Share
Participants") as part of the distribution of the Shares by the Underwriters,
subject to the terms of this Agreement, the applicable rules, regulations and
interpretations of the National Association of Securities Dealers, Inc. (the
"NASD") and all other applicable laws, rules and regulations. The number of
Shares available for sale to the general public will be reduced to the extent
that Directed Share Participants purchase Reserved Shares. The Underwriters may
offer any Reserved Shares not purchased by Directed Share Participants to the
general public on the same basis as the other Shares being issued and sold
hereunder. The Company has supplied UBS-FinSvc with names, addresses and
telephone numbers of the individuals or other entities which the Company has
designated to be participants in the Directed Share Program. It is understood
that any number of those designated to participate in the Directed Share Program
may decline to do so.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (File No.
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333-124393) including a prospectus, relating to the Shares. The Company has
furnished to you, for use by the Underwriters and by dealers, copies of one or
more preliminary prospectuses (each such preliminary prospectus, being herein
called a "Preliminary Prospectus") relating to the Shares. Except where the
context otherwise requires, the registration statement, as amended when it
became or becomes effective, including all documents filed as a part thereof,
and including any information contained in a prospectus subsequently filed with
the Commission pursuant to Rule 424(b) under the Act and deemed to be part of
the registration statement at the time of effectiveness pursuant to Rule 430(A)
under the Act and also including any registration statement filed pursuant to
Rule 462(b) under the Act, is herein called the "Registration Statement," and
the prospectus, in the form filed by the Company with the Commission pursuant to
Rule 424(b) under the Act on or before the second business day after the date
hereof (or such earlier time as may be required under the Act) or, if no such
filing is required, the form of final prospectus included in the Registration
Statement at the time it became effective, is herein called the "Prospectus." As
used herein, "business day" shall mean a day on which The New York Stock
Exchange is open for trading.
The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the representations and
warranties and subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company the
respective number of Firm Shares (subject to such adjustment as you may
determine to avoid fractional shares) which bears the same proportion to the
number of Firm Shares to be sold by the Company, as the number of Firm Shares
set forth opposite the name of such Underwriter in Schedule A attached hereto,
subject to adjustment in accordance with Section 8 hereof, in each case at a
purchase price of $[______] per Share. The Company is advised by you that the
Underwriters intend (i) to make a public offering of their respective portions
of the Firm Shares as soon after the effective date of the Registration
Statement as in your judgment is advisable and (ii) initially to offer the Firm
Shares upon the terms set forth in the Prospectus. You may from time to time
increase or decrease the public offering price after the initial public offering
to such extent as you may determine.
In addition, the Company hereby grants to the several Underwriters the
option to purchase, and upon the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the Underwriters shall
have the right to purchase, severally and not jointly, from the Company, in
accordance with the number of Firm Shares to be purchased by each of them, all
or a portion of the Additional Shares as may be necessary to cover
over-allotments made in connection with the offering of the Firm Shares, at the
same purchase price per share to be paid by the Underwriters to the Company for
the Firm Shares. This option may be exercised by UBS Securities LLC ("UBS") on
behalf of the several Underwriters at any time and from time to time on or
before the thirtieth day following the date hereof, by written notice to the
Company; provided that the Underwriters may only make such election no more than
three times. Such notice shall set forth the aggregate number of Additional
Shares as to which the option is being exercised, and the date and time when the
Additional Shares are to be delivered (such date and time being herein referred
to as the "additional time of purchase"); provided, however, that the additional
time of purchase shall not be earlier than the time of purchase (as defined
below) nor earlier than the second business day after the date on which the
op-
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tion shall have been exercised nor later than the tenth business day after the
date on which the option shall have been exercised. The number of Additional
Shares to be sold to each Underwriter shall be the number which bears the same
proportion to the aggregate number of Additional Shares being purchased as the
number of Firm Shares set forth opposite the name of such Underwriter on
Schedule A hereto bears to the total number of Firm Shares (subject, in each
case, to such adjustment as you may determine to eliminate fractional shares),
subject to adjustment in accordance with Section 8 hereof.
2. Payment and Delivery. Payment of the purchase price for the Firm
Shares shall be made to the Company by Federal Funds wire transfer, against
delivery of the certificates for the Firm Shares to you through the facilities
of The Depository Trust Company ("DTC") for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00 A.M., New York
City time, on [_______________], 2005 (unless another time shall be agreed to by
you and the Company or unless postponed in accordance with the provisions of
Section 8 hereof). The time at which such payment and delivery are to be made is
hereinafter sometimes called "the time of purchase." Electronic transfer of the
Firm Shares shall be made to you at the time of purchase in such names and in
such denominations as you shall specify.
Payment of the purchase price for the Additional Shares shall be made
at the additional time of purchase in the same manner and at the same office as
the payment for the Firm Shares. Electronic transfer of the Additional Shares
shall be made to you at the additional time of purchase in such names and in
such denominations as you shall specify.
Deliveries of the documents described in Section 6 hereof with respect
to the purchase of the Shares shall be made at the offices of Underwriters'
Counsel and the address of its New York office, at 9:00 A.M., New York City
time, on the date of the closing of the purchase of the Firm Shares or the
Additional Shares, as the case may be.
3. Representations and Warranties of the Company. The Company represents
and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has been declared effective under the
Act; no stop order of the Commission preventing or suspending the use of
any Preliminary Prospectus or the effectiveness of the Registration
Statement is in effect and no proceedings for such purpose have been
instituted or, to the Company's knowledge after due inquiry, are
contemplated by the Commission; each Preliminary Prospectus, at the time of
filing thereof, complied in all material respects to the requirements of
the Act and the last Preliminary Prospectus distributed in connection with
the offering of the Shares did not, as of its date, and 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,
in light of the circumstances under which they were made, not misleading;
the Registration Statement complied when it became effective, complies and
will comply as amended or supplemented, if applicable, at the time of
purchase and any additional time of purchase, in all material respects with
the requirements of the Act and the Prospectus will comply, as of its date
and as amended or supplemented, if applicable, at the time of purchase and
any additional times of purchase, in all material respects with the
requirements of the Act and any statutes, regulations, contracts
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or other documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement have been and will be so described or filed; the Registration
Statement did not when it became effective, does not and will not, as
amended or supplemented, if applicable, at the time of purchase and any
additional time of purchase, 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 and the Prospectus will not,
as of its date and as amended or supplemented, if applicable, at the time
of purchase and any additional time of purchase, 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,
however, that the Company makes no warranty or representation with respect
to any statement contained in the Preliminary Prospectus, the Registration
Statement or the Prospectus in reliance upon and in conformity with
information concerning an Underwriter and furnished in writing by or on
behalf of such Underwriter through you to the Company expressly for use in
the Preliminary Prospectus, the Registration Statement or the Prospectus;
and the Company has not distributed and will not distribute any offering
material in connection with the offering or sale of the Shares other than
the Registration Statement, the Preliminary Prospectus and the Prospectus;
(b) as of the date of this Agreement, the Company has an authorized
and outstanding capitalization as set forth under the heading "Actual" in
the section of the Registration Statement and the Prospectus entitled
"Capitalization" and, as of the time of purchase, the Company shall have an
authorized and outstanding capitalization as set forth under the heading
"Pro Forma, As Adjusted for this Offering" in the section of the
Registration Statement and the Prospectus entitled "Capitalization"; all of
the issued and outstanding shares of capital stock, including the issued
and outstanding shares of Common Stock, of the Company have been duly
authorized and validly issued and are fully paid and non-assessable, have
been issued in compliance with all federal and state securities laws and
were not issued in violation of any preemptive right, resale right, right
of first refusal or similar right;
(c) the Company has been duly incorporated and is existing as a
corporation in good standing under the laws of the State of Delaware, with
full corporate power and authority to own, lease and operate its properties
and conduct its business as described in the Registration Statement and the
Prospectus, to execute and deliver this Agreement and to issue, sell and
deliver the Shares as contemplated herein;
(d) the Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so qualified
and in good standing would not, individually or in the aggregate, have a
material adverse effect on the business, properties, financial condition,
results of operation or prospects of the Company and the Subsidiaries (as
hereinafter defined) taken as a whole (a "Material Adverse Effect");
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(e) the Company has no subsidiaries (as defined in the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder
(collectively, the "Exchange Act")) other than the entities listed on
Schedules B and C annexed hereto (collectively, the "ICG Subsidiaries" and
the "Anker Subsidiaries," respectively, and, together, the "Subsidiaries");
other than the equity interests of the Subsidiaries and other than as
described in the Registration Statement, the Company does not own, directly
or indirectly, any shares of stock or any other equity or long-term debt
securities of any corporation or have any equity interest in any firm,
partnership, joint venture, association or other entity; complete and
correct copies of the respective certificates of incorporation and the
by-laws (or other constituent documents) of the Company and the
Subsidiaries and all amendments thereto have been delivered to you, and
except as set forth in the exhibits to the Registration Statement, no
changes therein will be made subsequent to the date hereof and prior to the
time of purchase or, if later, the additional time of purchase; each
Subsidiary has been duly incorporated or, in the case of a limited
liability company, formed and is existing as a corporation or limited
liability company, as the case may be, in good standing under the laws of
the jurisdiction of its incorporation or formation, as the case may be,
with full corporate or limited liability company power and authority to
own, lease and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus; each Subsidiary
is duly qualified to do business as a foreign corporation or limited
liability company and is in good standing in each jurisdiction where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so qualified
and in good standing would not, individually or in the aggregate, have a
Material Adverse Effect; all of the outstanding equity interests of each of
the Subsidiaries have been duly authorized and validly issued, are fully
paid and non-assessable and other than as described in the Registration
Statement are owned by the Company subject to no security interest, other
encumbrance or adverse claims; and except as otherwise shown in Schedules B
and C no options, warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligation into shares
of capital stock or ownership interests in the Subsidiaries are
outstanding;
(f) the Shares have been duly authorized and, when issued and
delivered against payment therefor as provided herein, will be validly
issued, fully paid and non-assessable and free of statutory and contractual
preemptive rights, resale rights, rights of first refusal and similar
rights;
(g) the capital stock of the Company, including the Shares, shall
conform in all material respects as of the time of purchase and as of the
additional time of purchase, if applicable, to the description thereof
contained in the Registration Statement and the Prospectus and the
certificates for the Shares as of the time of purchase and as of the
additional time of purchase, if applicable, will be in due and proper form
and the holders of the Shares will not be subject to personal liability for
the obligations of the Company by reason of being such holders;
(h) this Agreement has been duly authorized, executed and delivered by
the Company;
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(i) neither the Company nor any of the Subsidiaries is in breach or
violation of or in default under (nor has any event occurred which with
notice, lapse of time or both would result in any breach of, constitute a
default under or give the holder of any indebtedness (or a person acting on
such holder's behalf) the right to require the repurchase, redemption or
repayment of all or a part of such indebtedness under) its respective
charter or by-laws (or other constituent documents), as the case may be,
or, except as would not have a Material Adverse Effect, any indenture,
mortgage, deed of trust, bank loan or credit agreement or other evidence of
indebtedness, or any license, lease, contract or other agreement or
instrument to which the Company or any of the Subsidiaries is a party or by
which any of them or any of their respective properties may be bound or
affected, and the execution, delivery and performance of this Agreement,
the issuance and sale of the Shares and the consummation of the
transactions contemplated hereby by the Company will not conflict with,
result in any breach or violation of or constitute a default under (nor
constitute any event which with notice, lapse of time or both would result
in any breach of or constitute a default under) the charter or by-laws (or
other constituent documents) of the Company or any of the Subsidiaries, or,
except as would not have a Material Adverse Effect, any indenture,
mortgage, deed of trust, bank loan or credit agreement or other evidence of
indebtedness, or any license, lease, contract or other agreement or
instrument to which the Company or any of the Subsidiaries is a party or by
which any of them or any of their respective properties may be bound or
affected, or any federal, state, local or foreign law, regulation or rule
or any decree, judgment or order applicable to the Company or any of the
Subsidiaries;
(j) no approval, authorization, consent or order of or filing with any
federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency is required in connection with the
issuance and sale of the Shares or the consummation by the Company of the
transactions contemplated hereby other than registration of the Shares
under the Act, which has been or will be effected, and any necessary
qualification under the securities or blue sky laws of the various
jurisdictions in which the Shares are being offered by the Underwriters or
under the rules and regulations of the NASD;
(k) except as set forth in the Registration Statement and the
Prospectus or otherwise waived in writing or terminated prior to the date
hereof, (i) no person has the right, contractual or otherwise, to cause the
Company to issue or sell to it any shares of Common Stock or shares of any
other capital stock or other equity interests of the Company, (ii) no
person has any preemptive rights, resale rights, rights of first refusal or
other rights to purchase any shares of Common Stock or shares of any other
capital stock or other equity interests of the Company, and (iii) no person
has the right to act as an underwriter or as a financial advisor to the
Company in connection with the offer and sale of the Shares, in the case of
each of the foregoing clauses (i), (ii) and (iii), whether as a result of
the filing or effectiveness of the Registration Statement or the sale of
the Shares as contemplated thereby or otherwise; except as set forth in the
Registration Statement and the Prospectus, no person has the right,
contractual or otherwise, to cause the Company to register under the Act
any shares of Common Stock or shares of any other capital stock or other
equity interests of the Company, or to include any such shares or interests
in the Registration Statement or the
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offering contemplated thereby, whether as a result of the filing or
effectiveness of the Registration Statement or the sale of the Shares as
contemplated thereby or otherwise;
(l) each of the Company and the Subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all necessary
filings required under any federal, state, local or foreign law, regulation
or rule, and has obtained all necessary authorizations, consents and
approvals from other persons, in order to conduct its respective business,
except where the absence of any such license, authorization, consent,
approval or filing could not, individually or in the aggregate, have a
Material Adverse Effect; neither the Company nor any of the Subsidiaries is
in violation of, or in default under, or has received notice of any
proceedings relating to revocation or modification of, any such license,
authorization, consent or approval or any federal, state, local or foreign
law, regulation or rule or any decree, order or judgment applicable to the
Company or any of the Subsidiaries, except where such violation, default,
revocation or modification would not, individually or in the aggregate,
have a Material Adverse Effect;
(m) all legal or governmental proceedings, affiliate transactions,
off-balance sheet transactions, contracts, licenses, agreements, leases or
documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement have been so described or filed as required;
(n) except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits, claims, investigations or
proceedings pending or, to the Company's knowledge, threatened or
contemplated to which the Company or any of the Subsidiaries or any of
their respective directors or officers is a party (in such person's
capacity as a director or officer) or of which any of their respective
properties is subject at law or in equity, before or by any federal, state,
local or foreign governmental or regulatory commission, board, body,
authority or agency, except any such action, suit, claim, investigation or
proceeding which would not result in a judgment, decree or order having,
individually or in the aggregate, a Material Adverse Effect or preventing
consummation of the transactions contemplated hereby;
(o) Deloitte & Touche LLP, whose reports on the audited consolidated
financial statements of ICG, Inc. and its consolidated subsidiaries, Anker
Coal Group, Inc. and its consolidated subsidiaries and CoalQuest
Development, LLC are filed with the Commission as part of the Registration
Statement and the Prospectus, are independent public accountants within the
meaning of Regulation S-X under the Act and the rules and regulations of
the Commission thereunder;
(p) the audited consolidated financial statements of ICG, Inc. and its
consolidated subsidiaries, Anker Coal Group, Inc. and its consolidated
subsidiaries and CoalQuest Development, LLC included in the Registration
Statement and the Prospectus, together with the related notes and
schedules, present fairly in all material respects the consolidated
financial position of the Company and the Subsidiaries as of the dates
indicated and the consolidated results of operations and cash flows of the
Company and the Subsidiaries for the periods specified and have been
prepared in compliance with the requirements of the Act and
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in conformity with generally accepted accounting principles applied on a
consistent basis during the periods involved; any pro forma financial data
included in the Registration Statement and the Prospectus have been
prepared in accordance with the requirements of Regulation S-X of the Act
and the assumptions used by management in the preparation of such pro forma
financial information and data are reasonable under the circumstances, the
pro forma adjustments used therein are appropriate to give effect to the
transactions or circumstances described therein and the pro forma
adjustments have been properly applied to the historical amounts in the
compilation of those statements and data; the other financial and
statistical data set forth in the Registration Statement and the Prospectus
are accurately presented and prepared on a basis consistent with the
financial statements and books and records of the Company; there are no
financial statements (historical or pro forma) that are required to be
included in the Registration Statement and the Prospectus that are not
included as required; and the Company and the Subsidiaries do not have any
material liabilities or obligations, direct or contingent (including any
off-balance sheet obligations), not disclosed in the Registration Statement
and the Prospectus;
(q) except as set forth or contemplated in the Registration Statement
and the Prospectus, subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
there has not been (i) any material adverse change, or any development
involving a prospective material adverse change, in the business,
properties, management, financial condition or results of operations of the
Company and the Subsidiaries taken as a whole, (ii) any transaction which
is material to the Company and the Subsidiaries taken as a whole, (iii) any
obligation, direct or contingent (including any off-balance sheet
obligations), incurred by the Company or the Subsidiaries, which is
material to the Company and the Subsidiaries taken as a whole, (iv) any
change in the capital stock or any material change in the outstanding
indebtedness, in each case, of the Company or the Subsidiaries or (v) any
dividend or distribution of any kind declared, paid or made on the capital
stock of the Company;
(r) the Company has obtained for the benefit of the Underwriters the
agreement (a "Lock-Up Agreement"), in the form set forth as Exhibit A
hereto, of each of its directors and officers and each stockholder named in
Exhibit A-1 hereto;
(s) the Company is not and, after giving effect to the offering and
sale of the Shares by the Company and the application of the net proceeds
thereof as described in the Registration Statement and Prospectus, will not
be an "investment company" or an entity "controlled" by an "investment
company," as such terms are defined in the Investment Company Act of 1940,
as amended (the "Investment Company Act");
(t) the Company, each of the ICG Subsidiaries and, to the Company's
knowledge, each of the Anker Subsidiaries has good and marketable title to
all property (real and personal) owned by each of them, in each case free
and clear of all liens, claims, security interests or other encumbrances,
except as such are permitted under the Company's existing senior secured
credit facility and are described in the Registration Statement and the
Prospectus or such as do not, individually or in the aggregate, materially
affect the value of the
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property and do not interfere with the use made or proposed to be made of
such property by the Company and the Subsidiaries; all the property
described in the Registration Statement and the Prospectus as being held
under lease by the Company or a Subsidiary is held thereby under valid,
subsisting and enforceable leases; as of the Closing Date, each of the
Company and the Subsidiaries will own or lease all such properties as are
necessary to conduct its operations as presently conducted except as would
not reasonably be expected to have a Material Adverse Effect;
(u) the Company and the Subsidiaries own, or have obtained valid and
enforceable licenses for, or other rights to use, the inventions, patent
applications, patents, trademarks (both registered and unregistered),
tradenames, copyrights, trade secrets and other proprietary information
described in the Registration Statement and the Prospectus as being owned
or licensed by them or which are necessary for the conduct of their
respective businesses in the manner described in the Registration Statement
and Prospectus, except where the failure to own, license or have such
rights would not, individually or in the aggregate, have a Material Adverse
Effect (collectively, "Intellectual Property"); (i) except as would not
have a Material Adverse Effect, there are no third parties who have or,
will be able to establish rights to any Intellectual Property, except for
the ownership rights of the owners of the Intellectual Property which is
licensed to the Company; (ii) except as would not have a Material Adverse
Effect, to the Company's knowledge there is no infringement by third
parties of any Intellectual Property; (iii) except as would not have a
Material Adverse Effect, there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others
challenging the Company's rights in or to any Intellectual Property, and
the Company is unaware of any facts which could form a reasonable basis for
any such claim; (iv) except as would not have a Material Adverse Effect,
there is no pending or, to the Company's knowledge, threatened action,
suit, proceeding or claim by others challenging the validity or scope of
any Intellectual Property, and the Company is unaware of any facts which
could form a reasonable basis for any such claim; (v) there is no pending
or, to the Company's knowledge, threatened action, suit, proceeding or
claim by others that the Company infringes or otherwise violates any
patent, trademark, copyright, trade secret or other proprietary rights of
others, and the Company is unaware of any facts which could form a
reasonable basis for any such claim; (vi) except as would not have a
Material Adverse Effect, there is no patent or patent application that
contains claims that interfere with the issued or pending claims of any of
the Intellectual Property; and (vii) except as would not have a Material
Adverse Effect, there is no prior art that may render any patent
application owned by the Company of the Intellectual Property unpatentable
that has not been disclosed to the U.S. Patent and Trademark Office;
(v) neither the Company nor any of the Subsidiaries is engaged in any
unfair labor practice; except for matters which would not, individually or
in the aggregate, have a Material Adverse Effect, (i) there is (A) no
unfair labor practice complaint pending or, to the Company's knowledge
after due inquiry, threatened against the Company or any of the
Subsidiaries before the National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under collective bargaining
agreements is pending or threatened, (B) no strike, labor dispute, slowdown
or stoppage pending or, to the Company's knowledge
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after due inquiry, threatened against the Company or any of the
Subsidiaries and (C) no union representation dispute currently existing
concerning the employees of the Company or any of the Subsidiaries, and
(ii) to the Company's knowledge after due inquiry, (A) no union organizing
activities are currently taking place concerning the employees of the
Company or any of the Subsidiaries and (B) there has been no violation of
any federal, state, local or foreign law relating to discrimination in the
hiring, promotion or pay of employees, any applicable wage or hour laws or
any provision of the Employee Retirement Income Security Act of 1974
("ERISA") or the rules and regulations promulgated thereunder concerning
the employees of the Company or any of the Subsidiaries;
(w) Except as set forth in the Registration Statement and the
Prospectus, and except for such matters as would not, individually or in
the aggregate, have a Material Adverse Effect, the Company and each of
Subsidiaries (or, to the knowledge of the Company, any other entity for
whose acts or omissions the Company is or may be liable) (1) are conducting
their businesses and operations in compliance with Environmental and Mining
Laws (as defined below); (2) possess, maintain in full force and effect,
and are in compliance with all permits, licenses or registrations required
under Environmental and Mining Law for the conduct of their businesses and
operations; (3) have not received any notice from a governmental authority
or any other third party alleging any violation of Environmental and Mining
Law or liability thereunder (including, without limitation, liability as a
"potentially responsible party" and/or for costs of investigating or
remediating sites containing Hazardous Substances (as defined below) and/or
reclamation or damages to natural resources); (4) do not have knowledge of
any release of Hazardous Substances that, individually or in the aggregate,
can reasonably be expected to require any material capital expenditures by
the Company or its Subsidiaries regarding the investigation, remediation or
cleanup thereof; and (5) are not subject to any pending or, to the
knowledge of the Company, threatened claim or other legal proceeding under
any Environmental and Mining Laws against the Company or its subsidiaries.
As used in this paragraph, "Environmental and Mining Laws" means any and
all applicable federal, state, local, and foreign laws, ordinances,
regulations and common law, or any enforceable administrative or judicial
order, consent, decree or judgment, relating to pollution or the protection
of human health or the environment, including, without limitation, those
relating to, regulating, or imposing liability or standards of conduct
concerning (i) the emission, discharge, release, generation, processing,
use, treatment, storage, disposal, transport or handling of, or exposure
to, Hazardous Substances, (ii) the investigation, remediation or cleanup of
any Hazardous Substances, or (iii) surface or underground coal mining,
including any related reclamation. As used in this paragraph, "Hazardous
Substances" means pollutants, contaminants or hazardous, dangerous or toxic
substances, materials or wastes, or petroleum, petroleum products, or any
other chemical substance regulated under Environmental and Mining Laws;
(x) in the ordinary course of its business, the Company and each of
the Subsidiaries conducts a periodic review of the effect of the
Environmental and Mining Laws on its business, operations and properties,
in the course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for reclamation, cleanup, closure of properties or
compliance with the
-11-
Environmental and Mining Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities
to third parties);
(y) all tax returns required to be filed by the Company and each of
the Subsidiaries have been filed, except as would not reasonably be
expected to have a Material Adverse Effect and all taxes and other
assessments of a similar nature (whether imposed directly or through
withholding) including any interest, additions to tax or penalties
applicable thereto due or claimed to be due from such entities have been
paid, other than those being contested in good faith and for which adequate
reserves have been provided;
(z) the Company and each of the Subsidiaries maintains insurance
covering its properties, operations, personnel and businesses as the
Company deems adequate and as previously disclosed to the Underwriters;
such insurance insures against such losses and risks to an extent which is
adequate in accordance with customary industry practice to protect the
Company and the Subsidiaries and their businesses; all such insurance is
fully in force on the date hereof except as would not reasonably be
expected to have a Material Adverse Effect and will be fully in force at
the time of purchase and any additional time of purchase;
(aa) except as set forth in the Registration Statement and Prospectus,
neither the Company nor any of the Subsidiaries has sustained since the
date of the last audited financial statements included in the Registration
Statement and the Prospectus any loss or interference with its respective
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree;
(bb) the Company has not sent or received any communication regarding
termination of, or intent not to renew, any of the contracts or agreements
filed as an exhibit to the Registration Statement, and no such termination
or non-renewal has been threatened by the Company or, to the Company's
knowledge after due inquiry, any other party to any such contract or
agreement;
(cc) the Company and each of the Subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(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 existing assets at reasonable intervals and
appropriate action is taken with respect to any differences;
(dd) the Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15 and 15d-15 under the
Exchange Act); such disclosure controls and procedures are designed to
ensure that material information relating to the Company, including its
consolidated subsidiaries, is made known to the Company's Chief Executive
Officer and its Chief Financial Officer by others within those entities,
and such
-12-
disclosure controls and procedures are effective to perform the functions
for which they were established; the Company's auditors and the Audit
Committee of the Board of Directors have been advised of: (i) any
significant deficiencies in the design or operation of internal controls
which could adversely affect the Company's ability to record, process,
summarize, and report financial data; and (ii) any fraud, whether or not
material, that involves management or other employees who have a role in
the Company's internal controls; any material weaknesses in internal
controls have been identified for the Company's auditors; and since the
date of the most recent evaluation of such disclosure controls and
procedures, there have been no significant changes in internal controls or
in other factors that could significantly affect internal controls,
including any corrective actions with regard to significant deficiencies
and material weaknesses;
(ee) the Company has provided you true, correct, and complete copies
of all documentation pertaining to any extension of credit in the form of a
personal loan made, directly or indirectly, by the Company to any director
or executive officer of the Company, or to any family member or affiliate
of any director or executive officer of the Company; and since July 30,
2002, the Company has not, directly or indirectly, including through any
subsidiary: (i) extended credit, arranged to extend credit, or renewed any
extension of credit, in the form of a personal loan, to or for any director
or executive officer of the Company, or to or for any family member or
affiliate of any director or executive officer of the Company; or (ii) made
any material modification, including any renewal thereof, to any term of
any personal loan to any director or executive officer of the Company, or
any family member or affiliate of any director or executive officer, which
loan was outstanding on July 30, 2002;
(ff) any statistical and market-related data included in the
Registration Statement and the 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;
(gg) neither the Company nor any of the Subsidiaries nor any of their
respective directors, officers, controlling persons or to their knowledge,
affiliates, has taken, directly or indirectly, any action designed, or
which has constituted or might reasonably be expected to cause or result
in, under the Exchange Act or otherwise, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or
resale of the Shares;
(hh) to the Company's knowledge after due inquiry, there are no
affiliations or associations between any member of the NASD and any of the
Company's officers, directors or 5% or greater securityholders, except as
set forth in the Registration Statement and the Prospectus;
(ii) the Registration Statement, the Prospectus and any Preliminary
Prospectus comply, and any further amendments or supplements thereto will
comply, with any applicable laws or regulations of any foreign jurisdiction
in which the Prospectus or any Preliminary Prospectus is distributed in
connection with the Directed Share Program; and no approval, authorization,
consent or order of or filing with any governmental or regulatory
commission,
-13-
board, body, authority or agency, other than those obtained, is required in
connection with the offering of the Reserved Shares in any jurisdiction
where the Reserved Shares are being offered;
(jj) the Company has not offered, or caused the Underwriters to offer,
Shares to any person pursuant to the Directed Share Program with the intent
to influence unlawfully (i) a customer or supplier of the Company or any of
the Subsidiaries to alter the customer's or supplier's level or type of
business with the Company or any of the Subsidiaries, or (ii) a trade
journalist or publication to write or publish favorable information about
the Company or any of the Subsidiaries or any of their respective products
or services;
(kk) there is no failure of the Company or the Subsidiaries, or any of
the officers and directors of the Company or any of the Subsidiaries, in
their capacities as such, to comply in all material respects with the
provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as amended, and the rules and
regulations promulgated in connection therewith which are currently
applicable to the Company or the Subsidiaries;
(ll) the Company has taken all necessary actions to ensure that, upon
and at all times after the effectiveness of the Registration Statement, the
Company and the Subsidiaries and any of the officers and directors of the
Company and any of the Subsidiaries, in their capacities as such, will be
in compliance in all material respects with the provisions of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as amended, and the rules and regulations
promulgated thereunder;
(mm) the Company has not paid or agreed to pay to any person any
compensation for soliciting another to purchase any securities of the
Company (except as contemplated in this Agreement);
(nn) no Subsidiary is currently prohibited, directly or indirectly,
from paying any dividends to the Company or any other Subsidiary, from
making any other distribution on such Subsidiary's capital stock, from
repaying to the Company or any other Subsidiary any loans or advances to
such Subsidiary from the Company or any other Subsidiary or from
transferring any of such Subsidiary's property or assets to the Company or
any other Subsidiary of the Company, except prohibitions imposed under the
Company's existing senior secured credit agreement described in the
Prospectus or as otherwise described in or contemplated in the Prospectus
(exclusive of any amendment or supplement thereto); and
(oo) the Company has consummated the merger with Anker Coal Group,
Inc. and CoalQuest Development, LLC upon the terms and conditions set forth
in the Business Combination Agreements, each dated as of March 31, 2005, by
and between the Company and each of, Anker Coal Group, Inc. and CoalQuest
Development, LLC, as amended and in effect on the date hereof.
In addition, any certificate signed by any officer of the Company or
any of the Subsidiaries and delivered to the Underwriters or counsel for the
Underwriters in connection with the of-
-14-
fering of the Shares shall be deemed to be a representation and warranty by the
Company or Subsidiary, as the case may be, as to matters covered thereby, to
each Underwriter.
4. Certain Covenants of the Company. The Company hereby agrees:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the
securities or blue sky laws of such states or other jurisdictions as you
may reasonably designate and to maintain such qualifications in effect so
long as you may reasonably request for the distribution of the Shares;
provided that the Company shall not be required to qualify as a foreign
corporation or to consent to the service of process under the laws of any
such jurisdiction (except service of process with respect to the offering
and sale of the Shares) or to subject itself to taxation for doing business
in any jurisdiction; and provided, further that the Company shall not be
obligated to maintain any such qualification for more than one year from
the date of this Agreement; and to promptly advise you of the receipt by
the Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose;
(b) to make available to the Underwriters in New York City, as soon as
practicable after the Registration Statement becomes effective, and
thereafter from time to time to furnish to the Underwriters, as many copies
of the Prospectus (or of the Prospectus as amended or supplemented if the
Company shall have made any amendments or supplements thereto after the
effective date of the Registration Statement) as the Underwriters may
reasonably request for the purposes contemplated by the Act; in case any
Underwriter is required to deliver a prospectus after the nine-month period
referred to in Section 10(a)(3) of the Act in connection with the sale of
the Shares, the Company will prepare, at its expense, promptly upon request
such amendment or amendments to the Registration Statement and the
Prospectus as may be necessary to permit compliance with the requirements
of Section 10(a)(3) of the Act;
(c) if, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or any post-effective amendment
thereto to be declared effective before the offering of the Shares may
commence, the Company will use its reasonable best efforts to cause the
Registration Statement or such post-effective amendment to become effective
as soon as possible and the Company will advise you promptly and, if
requested by you, will confirm such advice in writing, (i) when the
Registration Statement and any such post-effective amendment thereto has
become effective, and (ii) if Rule 430A under the Act is used, when the
Prospectus is filed with the Commission pursuant to Rule 424(b) under the
Act (which the Company agrees to file in a timely manner under such Rule);
(d) to advise you promptly, confirming such advice in writing, of any
request by the Commission for amendments or supplements to the Registration
Statement or the Prospectus or for additional information with respect
thereto, or of notice of institution of proceedings for, or the entry of a
stop order, suspending the effectiveness of the Registration Statement and,
if the Commission should enter a stop order suspending the effectiveness of
the Registration Statement, to use its reasonable best efforts to obtain
the lifting or removal of such order
-15-
as soon as possible; to advise you promptly of any proposal to amend or
supplement the Registration Statement or the Prospectus and to provide you
and Underwriters' counsel copies of any such documents for review and
comment a reasonable amount of time prior to any proposed filing and to
file no such amendment or supplement to which you shall object in writing;
(e) subject to Section 4(d) hereof, to file promptly all reports and
any definitive proxy or information statement required to be filed by the
Company with the Commission in order to comply with the Exchange Act
subsequent to the date of the Prospectus and for so long as the delivery of
a prospectus is required in connection with the offering or sale of the
Shares; to provide you with a copy of such reports and statements and other
documents to be filed by the Company pursuant to Section 13, 14 or 15(d) of
the Exchange Act during such period a reasonable amount of time prior to
any proposed filing, and to promptly notify you of such filing and for so
long as the delivery of a prospectus is required in connection with the
offering or sale of the Shares;
(f) if necessary or appropriate, to file a registration statement
pursuant to Rule 462(b) under the Act;
(g) to advise the Underwriters promptly of the happening of any event
within the time during which a prospectus relating to the Shares is
required to be delivered under the Act which could require the making of
any change in the Prospectus then being used so that the Prospectus would
not include an untrue statement of material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading, and, during such
time, subject to Section 4(d) hereof, to prepare and furnish, at the
Company's expense, to the Underwriters as soon as practicable such
amendments or supplements to such Prospectus as may be necessary to reflect
any such change;
(h) to make generally available to its security holders, and to
deliver to you, a consolidated earnings statement of the Company and its
subsidiaries (which will satisfy the provisions of Section 11(a) of the
Act) covering a period of twelve months beginning with the first fiscal
quarter of the Company after the effective date of the Registration
Statement (as defined in Rule 158(c) of the Act) as soon as is reasonably
practicable after the termination of such twelve-month period but in any
case not later than fifteen months after the effective date of the
Registration Statement;
(i) to the extent required by the Exchange Act, for at least five (5)
years after the effective date of the Registration Statement, make
available to its shareholders as soon as practicable after the end of each
fiscal year an annual report (including a consolidated balance sheet and
statements of income, shareholders' equity and cash flow of the Company and
the Subsidiaries for such fiscal year, accompanied by a copy of the
certificate or report thereon of nationally recognized independent
certified public accountants);
-16-
(j) to furnish to you five (5) conformed copies of the Registration
Statement, as initially filed with the Commission, and of all amendments
thereto (including all exhibits thereto) and sufficient conformed copies of
the foregoing (other than exhibits) for distribution of a copy to each of
the other Underwriters;
(k) to the extent not otherwise available on ▇▇▇▇▇, to furnish
promptly and, upon written request, to each of the other Underwriters for a
period of two years from the date of this Agreement (i) copies of any
reports or other communications which the Company shall send to its
stockholders or shall from time to time publish or publicly disseminate,
(ii) copies of all annual, quarterly and current reports filed with the
Commission on Forms 10-K, 10-Q and 8-K, or such other similar forms as may
be designated by the Commission, and (iii) copies of documents or reports
filed with any national securities exchange on which any class of
securities of the Company is listed;
(l) to furnish to you as early as practicable prior to the time of
purchase and any additional time of purchase, as the case may be, but not
later than two business days prior thereto, a copy of the latest available
unaudited interim and monthly consolidated financial statements, if any, of
the Company and the Subsidiaries which have been read by the Company's
independent certified public accountants, as stated in their letter to be
furnished pursuant to Section 6(b) hereof;
(m) to apply the net proceeds from the sale of the Shares in the
manner set forth under the caption "Use of Proceeds" in the Prospectus;
(n) to pay all costs, expenses, fees and taxes in connection with (i)
the preparation and filing of the Registration Statement, each Preliminary
Prospectus, the Prospectus, and any amendments or supplements thereto, and
the printing and furnishing of a reasonable number of copies of each
thereof to the Underwriters and to dealers (including costs of mailing and
shipment), (ii) the registration, issue, sale and delivery of the Shares
including any stock or transfer taxes and stamp or similar duties payable
upon the sale, issuance or delivery of the Shares to the Underwriters,
(iii) the producing, word processing and/or printing of this Agreement, any
Agreement Among Underwriters, any dealer agreements, any Powers of Attorney
and any closing documents (including compilations thereof) and the
reproduction and/or printing and furnishing of a reasonable number of
copies of each thereof to the Underwriters and (except closing documents)
to dealers (including costs of mailing and shipment), (iv) the
qualification of the Shares for offering and sale under state or foreign
laws and the determination of their eligibility for investment under state
or foreign law as aforesaid (including the reasonable legal fees and filing
fees and other disbursements of counsel for the Underwriters incurred in
connection with such qualification and determination which, together with
any such fees described in Section 4(n)(vi) shall not exceed $10,000) and
the printing and furnishing of a reasonable number of copies of any blue
sky surveys or legal investment surveys to the Underwriters and to dealers,
(v) any listing of the Shares on any securities exchange or qualification
of the Shares for listing on NYSE and any registration thereof under the
Exchange Act, (vi) any filing for review of the public offering of the
Shares by the NASD, including the reasonable legal fees and filing fees and
other disbursements of counsel to the Un-
-17-
derwriters incurred in connection with such filing for review by the NASD
which together with any such fees described in Section 4(n)(iv) shall not
exceed $20,000, (vii) the fees and disbursements of any transfer agent or
registrar for the Shares, (viii) the costs and expenses of the Company
relating to presentations or meetings undertaken in connection with the
marketing of the offering and sale of the Shares to prospective investors
and the Underwriters' sales forces, 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, travel, lodging and other expenses incurred by the officers
of the Company and any such consultants, and the cost of any aircraft
chartered in connection with the road show, (ix) the offer and sale of the
Reserved Shares, including all costs and expenses of UBS-FinSvc and the
Underwriters, including the reasonable fees and disbursement of counsel for
the Underwriters, and (x) the performance of the Company's other
obligations hereunder;
(o) not to (i) sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase or otherwise dispose of
or agree to dispose of, directly or indirectly, any Common Stock or
securities convertible into or exchangeable or exercisable for Common Stock
or warrants or other rights to purchase Common Stock or any other
securities of the Company that are substantially similar to Common Stock,
or (ii) file or cause to be declared effective a registration statement
under the Act relating to the offer and sale of any shares of Common Stock
or securities convertible into or exercisable or exchangeable for Common
Stock or other rights to purchase Common Stock or any other securities of
the Company that are substantially similar to Common Stock, or (iii) enter
into any swap or other arrangement that transfers to another, in whole or
in part, any of the economic consequences of ownership of Common Stock or
any securities convertible into or exercisable or exchangeable for Common
Stock, or warrants or other rights to purchase Common Stock, whether any
such transaction is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise for a period of 180 days after the date of
the final Prospectus (the "Lock-Up Period"), without the prior written
consent of UBS, except for (A) the registration of the Shares and the sales
to the Underwriters pursuant to this Agreement, (B) issuances of Common
Stock upon the exercise of options or warrants disclosed as outstanding in
the Registration Statement and the Prospectus, (C) the issuance of employee
stock options not exercisable during the Lock-Up Period pursuant to stock
option plans described in the Registration Statement and the Prospectus,
(D) the issuance of Common Stock in connection with the acquisitions of
Anker Coal Group, Inc. and CoalQuest Development, LLC and the
reorganization of the Company as described in the Prospectus and (E) the
issuance of shares of Common Stock in connection with acquisitions of
businesses or portions thereof or in connection with any strategic
investment in the Company by any third party on terms approved by the
Company's board of directors, provided that the parties in any such
acquisition or investment transaction agree to be bound by the restrictions
contained in this paragraph or will not receive any of such shares of
Common Stock until after the expiration of such 180-day period;
(p) to use its best efforts to cause the Common Stock to be listed on
the New York Stock Exchange;
-18-
(q) to maintain a transfer agent and, if necessary under the
jurisdiction of incorporation of the Company, a registrar for the Common
Stock; and
(r) to ensure that the Directed Shares will be restricted to the
extent required by the NASD and its rules from sale, transfer, assignment,
pledge or hypothecation for a period of three months following the date of
the effectiveness of the Registration Statement; and to comply with all
applicable securities and other applicable laws, rules and regulations in
each jurisdiction in which the Reserved Shares are offered in connection
with the Directed Share Program.
5. Reimbursement of Underwriters' Expenses. If the Shares are not
delivered for any reason other than the termination of this Agreement pursuant
to the fifth paragraph of Section 8 hereof or the default by one or more of the
Underwriters in its or their respective obligations hereunder, the Company
shall, in addition to paying the amounts described in Section 4(n) hereof,
reimburse the Underwriters for all of their out-of-pocket expenses, including
the reasonable fees and disbursements of their counsel.
6. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company on the date hereof, at the time of
purchase and, if applicable, at the additional time of purchase, the performance
by the Company of its obligations hereunder and to the following additional
conditions precedent:
(a) The Company shall furnish to you at the time of purchase and, if
applicable, at the additional time of purchase, an opinion of ▇▇▇▇▇ Day,
counsel for the Company, in the form of Exhibit C hereto addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced copies for each of the other
Underwriters and in form and substance satisfactory to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
LLP, counsel for the Underwriters.
(b) You shall have received from Deloitte & Touche LLP letters dated,
respectively, the date of this Agreement, the time of purchase and, if
applicable, the additional time of purchase, and addressed to the
Underwriters (with reproduced copies for each of the Underwriters) in the
forms heretofore approved by UBS.
(c) You shall have received at the time of purchase and, if
applicable, at the additional time of purchase, the favorable opinion of
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, dated the time of
purchase or the additional time of purchase, as the case may be, and in
form and substance satisfactory to the Underwriters.
(d) No Prospectus or amendment or supplement to the Registration
Statement or the Prospectus shall have been filed to which you object in
writing.
(e) The Registration Statement shall become effective not later than
5:30 P.M. New York City time on the date of this Agreement and, if Rule
430A under the Act is used,
-19-
the Prospectus shall have been filed with the Commission pursuant to Rule
424(b) under the Act at or before 5:30 P.M., New York City time, on the
second full business day after the date of this Agreement.
(f) Prior to the time of purchase, and, if applicable, the additional
time of purchase, (i) no stop order with respect to the effectiveness of
the Registration Statement shall have been issued under the Act or
proceedings initiated under Section 8(d) or 8(e) of the Act; (ii) the
Registration Statement and all amendments thereto shall 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; and (iii) the Prospectus and all amendments or supplements
thereto shall 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 the light of the circumstances under which they
are made, not misleading.
(g) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, no
material adverse change or any development involving a prospective material
adverse change in the business, properties, management, financial condition
or results of operations of the Company and the Subsidiaries taken as a
whole shall occur or become known.
(h) The Company will, at the time of purchase and, if applicable, at
the additional time of purchase, deliver to you a certificate of its Chief
Executive Officer and its Chief Financial Officer to the form attached as
Exhibit B hereto.
(i) You shall have received signed Lock-up Agreements referred to in
Section 3(r) hereof.
(j) The Company shall have furnished to you such other documents and
certificates as to the accuracy and completeness of any statement in the
Registration Statement and the Prospectus as of the time of purchase and,
if applicable, the additional time of purchase, as you may reasonably
request.
(k) The Shares shall have been approved for listing on the New York
Exchange, subject only to notice of issuance at or prior to the time of
purchase or the additional time of purchase, as the case may be.
7. Effective Date of Agreement; Termination. This Agreement shall become
effective (i) if Rule 430A under the Act is not used, when you shall have
received notification of the effectiveness of the Registration Statement, or
(ii) if Rule 430A under the Act is used, when the parties hereto have executed
and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject
to termination in the absolute discretion of UBS or any group of Underwriters
(which may include UBS) which has agreed to purchase in the aggregate at least
50% of the Firm Shares, if (x) since the time of execution of this Agreement or
the earlier respective dates as of which information is given in the
Registration Statement and the Prospectus, there has been any material adverse
change or any development involv-
-20-
ing a prospective material adverse change in the business, properties,
management, financial condition or results of operation of the Company and the
Subsidiaries taken as a whole, which would, in UBS' judgment or in the judgment
of such group of Underwriters, make it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares on the terms and in the
manner contemplated in the Registration Statement and the Prospectus, or (y)
there shall have occurred: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange, the American Stock Exchange
or the NASDAQ; (ii) a suspension or material limitation in trading in the
Company's securities on the New York Stock Exchange; (iii) a general moratorium
on commercial banking activities declared by either federal or New York State
authorities or a material disruption in commercial banking or securities
settlement or clearance services in the United States; (iv) an outbreak or
escalation of hostilities or acts of terrorism involving the United States or a
declaration by the United States of a state of national emergency or war; or (v)
any other calamity or crisis or any change in financial, political or economic
conditions in the United States or elsewhere, if the effect of any such event
specified in clause (iv) or (v) in UBS' judgment or in the judgment of such
group of Underwriters makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares on the terms and in the manner
contemplated in the Registration Statement and the Prospectus.
If UBS or any group of Underwriters which has agreed to purchase in
the aggregate at least 50% of the Firm Shares, elects to terminate this
Agreement as provided in this Section 7, the Company and each other Underwriter
shall be notified promptly in writing.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply with any of the terms of this Agreement, the Company shall not
be under any obligation or liability under this Agreement (except to the extent
provided in Sections 4(n), 5 and 9 hereof), and the Underwriters shall be under
no obligation or liability to the Company under this Agreement (except to the
extent provided in Sections 7 and 9 hereof) or to one another hereunder.
8. Increase in Underwriters' Commitments. Subject to Sections 6 and 7
hereof, if any Underwriter shall default in its obligation to take up and pay
for the Firm Shares to be purchased by it hereunder (otherwise than for a
failure of a condition set forth in Section 6 hereof or a reason sufficient to
justify the termination of this Agreement under the provisions of Section 7
hereof) and if the number of Firm Shares which all Underwriters so defaulting
shall have agreed but failed to take up and pay for does not exceed 10% of the
total number of Firm Shares, the non-defaulting Underwriters shall take up and
pay for (in addition to the aggregate number of Firm Shares they are obligated
to purchase pursuant to Section 1 hereof) the number of Firm Shares agreed to be
purchased by all such defaulting Underwriters, as hereinafter provided. Such
Shares shall be taken up and paid for by such non-defaulting Underwriters in
such amount or amounts as you may designate with the consent of each Underwriter
so designated or, in the event no such designation is made, such Shares shall be
taken up and paid for by all non-defaulting Underwriters pro rata in proportion
to the aggregate number of Firm Shares set opposite the names of such
non-defaulting Underwriters in Schedule A.
-21-
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it will
not sell any Firm Shares hereunder unless all of the Firm Shares are purchased
by the Underwriters (or by substituted Underwriters selected by you with the
approval of the Company or selected by the Company with your approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and the
Prospectus and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 8 with like effect as if
such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Firm Shares which the defaulting
Underwriter or Underwriters agreed to purchase exceeds 10% of the total number
of Firm Shares which all Underwriters agreed to purchase hereunder, and if
neither the non-defaulting Underwriters nor the Company shall make arrangements
within the five business day period stated above for the purchase of all the
Firm Shares which the defaulting Underwriter or Underwriters agreed to purchase
hereunder, this Agreement shall terminate without further act or deed and
without any liability on the part of the Company to any non-defaulting
Underwriter and without any liability on the part of any non-defaulting
Underwriter to the Company. Nothing in this paragraph, and no action taken
hereunder, shall relieve any defaulting Underwriter from liability in respect of
any default of such Underwriter under this Agreement.
9. Indemnity and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter, its partners, directors and officers, and any person who
controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and the successors and assigns of all of
the foregoing persons, from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation) which,
jointly or severally, any such Underwriter or any such person may incur
under the Act, the Exchange Act, the common law or otherwise, insofar as
such loss, damage, expense, liability or claim arises out of or is based
upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus (the term Prospectus for the purpose of this
Section 9 being deemed to include any Preliminary Prospectus, the
Prospectus and the Prospectus as amended or supplemented by the Company),
or arises out of or is based upon any omission or alleged omission to state
a material fact required to be stated in either such Registration Statement
or such Prospectus or necessary to make the statements made therein not
misleading, except insofar as any such loss, damage, expense, liability or
claim arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in and in conformity with
information concerning such Underwriter furnished in writ-
-22-
ing by or on behalf of such Underwriter through you to the Company
expressly for use in such Registration Statement or such Prospectus or
arises out of or is based upon any omission or alleged omission to state a
material fact in connection with such information required to be stated in
such Registration Statement or such Prospectus or necessary to make such
information not misleading, (ii) any untrue statement or alleged untrue
statement of any material fact contained in any audio or visual materials
provided by the Company or based upon written information furnished by or
on behalf of the Company including, without limitation, slides, videos,
films or tape recordings used in connection with the marketing of the
Shares, or (iii) the Directed Share Program, provided that the Company
shall not be responsible under this clause (iii) for any loss, damage,
expense, liability or claim that is finally judicially determined to have
resulted from the gross negligence or willful misconduct of the
Underwriters in conducting the Directed Share Program; provided, however,
that the indemnity agreement contained in this Section 9(a) with respect to
any Preliminary Prospectus or amended Preliminary Prospectus shall not
inure to the benefit of any Underwriter (or to the benefit of any person
controlling such Underwriter) from whom the person asserting any such loss,
damage, expense, liability or claim purchased the Shares which are the
subject thereof if, and only to the extent that, a court of competent
jurisdiction finds, in a final, non-appealable judgment binding upon the
parties hereto, that (A) the sale to such person was an initial resale by
such Underwriter directly to such person, (B) the Prospectus corrected, and
the Company has satisfied and sustained the burden of proof that the
Prospectus corrected, any such alleged untrue statement or omission, (C)
such Underwriter failed to send or give a copy of the Prospectus to such
person at or prior to the written confirmation of the sale of such Shares
to such person, (D) the Company furnished to such Underwriter, in
compliance with Section 4(b) hereof, sufficient copies of the Prospectus in
a timely manner as to reasonably permit such Underwriter to send or give a
copy of the Prospectus to such person at or prior to the written
confirmation of such sale, (E) such Prospectus was required by law to be
delivered to such person at or prior to the written confirmation of such
sale, and (F) such loss, damage, expense, liability or claim resulted from
such failure to send or give a copy of the Prospectus to such person at or
prior to the written confirmation of the sale of such Shares to such
person.
If any action, suit or proceeding (each, a "Proceeding") is
brought against an Underwriter or any such person in respect of which
indemnity may be sought against the Company pursuant to the foregoing
paragraph, such Underwriter or such person shall promptly notify the
Company in writing of the institution of such Proceeding and the Company
shall assume the defense of such Proceeding, including the employment of
counsel reasonably satisfactory to such indemnified party and payment of
all reasonably incurred fees and expenses; provided, however, that the
omission to so notify the Company shall not relieve the Company from any
liability which the Company may have to any Underwriter or any such person
or otherwise, except where such omission results in material prejudice to
the Company that affects the substantive rights of the Company. Such
Underwriter or such person shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall
be at the expense of such Underwriter or of such person unless the
employment of such counsel shall have been authorized in writing by the
Company in connection with the defense of such Proceeding or the Company
shall not have, within a reasonable period of time in light of the
circumstances, employed counsel to have charge of the defense of
-23-
such Proceeding or such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are
different from, additional to or in conflict with those available to the
Company (in which case the Company shall not have the right to direct the
defense of such Proceeding on behalf of the indemnified party or parties),
in any of which events such fees and expenses shall be borne by the Company
and paid as incurred (it being understood, however, that the Company shall
not be liable for the expenses of more than one separate counsel (in
addition to any local counsel) in any one Proceeding or series of related
Proceedings in the same jurisdiction representing the indemnified parties
who are parties to such Proceeding). The Company shall not be liable for
any settlement of any Proceeding effected without its written consent
(which consent will not be unreasonably withheld) but if settled with the
written consent of the Company, the Company agrees to indemnify and hold
harmless any Underwriter and any such person from and against any loss or
liability by reason of such settlement to the extent otherwise required by
this Section 9. 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 sentence of this paragraph, then 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 60 business days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall not have fully
reimbursed the indemnified party in accordance with such request prior to
the date of such settlement and (iii) such indemnified party shall have
given the indemnifying party at least 30 days' prior notice of its
intention to settle. No indemnifying party shall, without the prior written
consent of the indemnified party (which consent will not be unreasonably
withheld), 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 and does not include an admission of fault, culpability
or a failure to act, by or on behalf of such indemnified party.
The Company agrees to indemnify, defend and hold harmless
UBS-FinSvc and its partners, directors and officers, and any person who
controls UBS-FinSvc within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, and the successors and assigns of all of the
foregoing persons, from and against any loss, damage, expense, liability or
claim (including the reasonable cost of investigation) which, jointly or
severally, UBS-FinSvc or any such person may incur under the Act, the
Exchange Act, the common law or otherwise, insofar as such loss, damage,
expense, liability or claim (i) arises out of or is based upon (a) any of
the matters referred to in clauses (i) through (iii) of the first paragraph
in this Section 9(a), or (b) any untrue statement or alleged untrue
statement of a material fact contained in any material prepared by or with
the consent of the Company for distribution to Directed Share Participants
in connection with the Directed Share Program 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; (ii)
caused by the failure of any Directed Share Participant to pay for and
accept delivery of Reserved Shares that the Directed Share Participant has
agreed to purchase; or (iii) otherwise arises out of or is based upon the
Directed Share Program, provided that the Company shall not be responsible
under this clause (iii) for any loss,
-24-
damage, expense, liability or claim that is finally judicially determined
to have resulted from the gross negligence or willful misconduct of
UBS-FinSvc in conducting the Directed Share Program. The second paragraph
of this Section 9(a) shall apply equally to any Proceeding brought against
UBS-FinSvc or any such person in respect of which indemnity may be sought
against the Company pursuant to the foregoing sentence; except that the
Company shall be liable for the expenses of one separate counsel (in
addition to any local counsel) for UBS-FinSvc and any such person, separate
and in addition to counsel for the Underwriters, in any such Proceeding.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Company, its directors and officers and any person who
controls the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, and the successors and assigns of all of the
foregoing persons, from and against any loss, damage, expense, liability or
claim (including the reasonable cost of investigation) which, jointly or
severally, the Company or any such person may incur under the Act, the
Exchange Act, the common law or otherwise, insofar as such loss, damage,
expense, liability or claim arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in and
in conformity with information concerning such Underwriter furnished in
writing by or on behalf of such Underwriter through you to the Company
expressly for use in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus, or arises out of or is based upon any omission
or alleged omission to state a material fact in connection with such
information required to be stated in such Registration Statement or such
Prospectus or necessary to make such information not misleading.
If any Proceeding is brought against the Company or any such
person in respect of which indemnity may be sought against any Underwriter
pursuant to the foregoing paragraph, the Company or such person shall
promptly notify such Underwriter in writing of the institution of such
Proceeding and such Underwriter shall assume the defense of such
Proceeding, including the employment of counsel reasonably satisfactory to
such indemnified party and payment of all fees and expenses; provided,
however, that the omission to so notify such Underwriter shall not relieve
such Underwriter from any liability which such Underwriter may have to the
Company or any such person or otherwise, except where such omission results
in material prejudice to such Underwriter that affects the substantive
rights of such Underwriter. The Company or such person shall have the right
to employ its own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of the Company or such person unless
the employment of such counsel shall have been authorized in writing by
such Underwriter in connection with the defense of such Proceeding or such
Underwriter shall not have, within a reasonable period of time in light of
the circumstances, employed counsel to defend such Proceeding or such
indemnified party or parties shall have reasonably concluded that there may
be defenses available to it or them which are different from or additional
to or in conflict with those available to such Underwriter (in which case
such Underwriter shall not have the right to direct the defense of such
Proceeding on behalf of the indemnified party or parties, but such
Underwriter may employ counsel and participate in the defense thereof but
the fees and expenses of such counsel shall be at the expense of such
Underwriter), in any of
-25-
which events such fees and expenses shall be borne by such Underwriter and
paid as incurred (it being understood, however, that such Underwriter shall
not be liable for the expenses of more than one separate counsel (in
addition to any local counsel) in any one Proceeding or series of related
Proceedings in the same jurisdiction representing the indemnified parties
who are parties to such Proceeding). No Underwriter shall be liable for any
settlement of any such Proceeding effected without the written consent of
such Underwriter (which consent will not be unreasonably withheld) but if
settled with the written consent of such Underwriter, such Underwriter
agrees to indemnify and hold harmless the Company and any such person from
and against any loss or liability by reason of such settlement.
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
sentence of this paragraph, then 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 60
business days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent of
the indemnified party (which consent will not be unreasonably withheld),
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 and
does not include an admission of fault, culpability or failure to act, by
or on behalf of such indemnified party.
(c) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 9 or insufficient to hold an indemnified party harmless in respect
of any losses, damages, expenses, liabilities or claims referred to
therein, then each applicable indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, damages, expenses, liabilities or claims (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other hand from the offering of
the Shares or (ii) if the allocation provided by clause (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 of the
Underwriters on the other in connection with the statements or omissions
which resulted in such losses, damages, expenses, liabilities or claims, 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
shall be deemed to be in the same respective proportions as the total
proceeds from the offering (net of underwriting discounts and commissions
but before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, bear
to the aggregate public offering price of the Shares. The relative fault of
the Company on the one hand and of the Underwriters on the other shall be
determined by reference to, among other things, whether the untrue
statement or alleged untrue statement of a material fact or omission or
alleged omission relates to information sup-
-26-
plied by the Company or by the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party
as a result of the losses, damages, expenses, liabilities and claims
referred to in this subsection shall be deemed to include any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating, preparing to defend or defending any Proceeding.
(d) The Company and the Underwriters agree that it would not be just
and 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 subsection (c)
above. 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 such Underwriter and
distributed to the public were offered to the public exceeds the amount of
any damage which such Underwriter has otherwise been required to pay by
reason of such untrue statement or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
The Underwriters' obligations to contribute pursuant to this Section 9 are
several in proportion to their respective underwriting commitments and not
joint.
(e) The indemnity and contribution agreements contained in this
Section 9 and the covenants, warranties and representations of the Company
contained in this Agreement shall remain in full force and effect
regardless of any investigation made by or on behalf of any Underwriter,
its partners, directors or officers or any person (including each partner,
officer or director of such person) who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, or by
or on behalf of the Company, its directors or officers, or any person who
controls the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, and shall survive any termination of this Agreement
or the issuance and delivery of the Shares. The Company and each
Underwriter agree promptly to notify each other of the commencement of any
Proceeding against it and, in the case of the Company, against any of the
Company's officers or directors, as the case may be, in connection with the
issuance and sale of the Shares, or in connection with the Registration
Statement or the Prospectus.
10. Information Furnished by the Underwriters. The statements set forth
in the last paragraph on the cover page of the Prospectus and the statements set
forth in the [_____________] paragraphs under the caption "Underwriting" in the
Prospectus constitute the only information furnished by or on behalf of the
Underwriters as such information is referred to in Sections 3 and 9 hereof.
11. Notices. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or
-27-
sent to UBS Securities LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇,
Attention: Syndicate Department; if to the Company, shall be sufficient in all
respects if delivered or sent to the Company at the offices of the Company at
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.
12. Governing Law; Construction. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
13. Submission to Jurisdiction. Except as set forth below, no Claim 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 UBS or any indemnified party.
Each of UBS and the Company (on its behalf and, to the extent permitted by
applicable law, on behalf of its stockholders and affiliates) waives 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.
14. Parties at Interest. The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters and the Company and to the
extent provided in Section 9 hereof the controlling persons, directors and
officers referred to in such section, and their respective successors, assigns,
heirs, personal representatives and executors and administrators. No other
person, partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
15. Counterparts. This Agreement may be signed by the parties in one or
more counterparts which together shall constitute one and the same agreement
among the parties.
16. Successors and Assigns. This Agreement shall be binding upon the
Underwriters and the Company and their successors and assigns and any successor
or assign of any substantial portion of the Company's and any of the
Underwriters' respective businesses and/or assets.
17. Miscellaneous. UBS, an indirect, wholly owned subsidiary of UBS AG,
is not a bank and is separate from any affiliated bank, including any U.S.
branch or agency of UBS AG. Because UBS is a separately incorporated entity, it
is solely responsible for its own contractual obligations and commitments,
including obligations with respect to sales and purchases of securities.
Securities sold, offered or recommended by UBS are not deposits, are not insured
by the Federal Deposit Insurance Corporation, are not guaranteed by a branch or
agency, and are not otherwise an obligation or responsibility of a branch or
agency.
-28-
18. Contractual Relationship. The Company hereby acknowledges that the
Underwriters are acting solely as an underwriter in connection with the purchase
and sale of the Company's securities. The Company further acknowledges that the
Underwriters are acting pursuant to a contractual relationship created solely by
this Underwriting 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, creditors or any other
person in connection with any activity that the Underwriters may undertake or
has undertaken in furtherance of the purchase and sale of the Company's
securities, 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 Underwriting 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 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 Underwriting
Agreement or any matters leading up to such transactions.
-29-
If the foregoing correctly sets forth the understanding among
the Company and the Underwriters, please so indicate in the space provided below
for the purpose, whereupon this agreement and your acceptance shall constitute a
binding agreement among the Company and the Underwriters, severally.
Very truly yours,
INTERNATIONAL COAL GROUP, INC.
By:
-----------------------------------
Title:
Accepted and agreed to as of the date first above written, on behalf of itself
and the other several Underwriters named in Schedule A
UBS SECURITIES LLC
▇▇▇▇▇▇ BROTHERS INC.
By: UBS SECURITIES LLC
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
By: ▇▇▇▇▇▇ BROTHERS INC.
By:
-----------------------------------
Name:
Title:
-1-
SCHEDULE A
Number of
Underwriter Firm Shares
----------- -----------
UBS SECURITIES LLC
▇▇▇▇▇▇ BROTHERS INC.
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇▇, SACHS & CO.
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
-----------
Total........................
===========
-1-
SCHEDULE B
ICG Subsidiaries
Subsidiaries Ownership Percentage
------------ --------------------
-1-
SCHEDULE C
Anker Subsidiaries
Subsidiaries Ownership Percentage
------------ --------------------
-1-
EXHIBIT A
International Coal Group, Inc.
Common Stock
($0.01 Par Value)
May , 2005
UBS Securities LLC
▇▇▇▇▇▇ Brothers Inc.
As Representatives of the several Underwriters
c/o UBS Securities LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in connection
with the proposed Underwriting Agreement (the "Underwriting Agreement") to be
entered into by International Coal Group, Inc. (the "Company") and you, as
Representatives of the several Underwriters named therein, with respect to the
public offering (the "Offering") of common stock, par value $0.01 per share (the
"Common Stock"), of the Company pursuant to a Registration Statement on Form S-1
filed with the Securities and Exchange Commission (the "Commission").
In order to induce you to enter into the Underwriting Agreement, the
undersigned agrees that for a period of 180 days after the date of the final
prospectus relating to the Offering (the "Lock-Up Period") the undersigned will
not, without the prior written consent of UBS Securities LLC ("UBS"), (i) sell,
offer to sell, contract or agree to sell, hypothecate, pledge, grant any option
to purchase or otherwise dispose of or agree to dispose of, directly or
indirectly, or file (or participate in the filing of) a registration statement
with the Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the meaning
of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Commission promulgated thereunder with respect to, any
Common Stock of the Company or any securities convertible into or exercisable or
exchangeable for Common Stock, or warrants or other rights to purchase Common
Stock, (ii) enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, or warrants or other rights to purchase Common Stock, whether any
such transaction is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, or (iii) publicly announce an intention to
effect any transaction specified in clause (i) or (ii). The foregoing sentence
shall not apply to (a) the registration of or sale to the Underwriters of any
Common Stock pursuant to the Offering and the Underwriting
Agreement, (b) bona fide gifts, provided the recipient thereof agrees in writing
with the Underwriters to be bound by the terms of this Lock-Up Letter Agreement,
(c) dispositions to any trust for the direct or indirect benefit of the
undersigned and/or the immediate family of the undersigned, provided that such
trust agrees in writing with the Underwriters to be bound by the terms of this
Lock-Up Letter Agreement, (d) transfers occurring by operation of law, such as
rules of descent and distribution, or statutes governing the effects of merger
or a qualified domestic order, provided that the transferee agrees to be bound
by the terms of this Lock-Up Letter Agreement and (e) transfers by the
undersigned, if a limited partnership, limited liability company or corporation,
to any limited or general partner, member or corporate subsidiary, as the case
may be, of the undersigned, provided the recipient thereof agrees in writing
with the Underwriters to be bound by the terms of this Lock-Up Letter Agreement.
In addition, the undersigned hereby waives any rights the undersigned
may have to require registration of Common Stock in connection with the filing
of a registration statement relating to the Offering. The undersigned further
agrees that, for a period of 180 days after the date of the final prospectus
relating to the Offering, the undersigned will not, without the prior written
consent of UBS, make any demand for, or exercise any right with respect to, the
registration of Common Stock of the Company or any securities convertible into
or exercisable or exchangeable for Common Stock, or warrants or other rights to
purchase Common Stock.
If (i) the Company notifies you in writing that it does not intend to
proceed with the Offering, (ii) the registration statement filed with the
Securities and Exchange Commission with respect to the Offering is withdrawn or
(iii) for any reason the Underwriting Agreement shall be terminated prior to the
time of purchase (as defined in the Underwriting Agreement), this Lock-Up Letter
Agreement shall be terminated and the undersigned shall be released from its
obligations hereunder. Notwithstanding anything to the contrary herein, if the
first time of purchase for the Firm Shares (as defined in the Underwriting
Agreement) shall not have occurred prior to December 31, 2005, this Lock-Up
Letter Agreement shall have no further force and effect.
Yours very truly,
--------------------------------
Name:
EXHIBIT B
OFFICERS' CERTIFICATE
1. I have reviewed the Registration Statement and the Prospectus.
2. The representations and warranties of the Company as set forth in this
Agreement are true and correct as of the time of purchase and, if
applicable, the additional time of purchase.
3. The Company has performed all of its obligations under this Agreement as
are to be performed at or before the time of purchase and at or before the
additional time of purchase, as the case may be.
4. The conditions set forth in paragraphs (f) and (g) of Section 6 of this
Agreement have been met.
5. The financial statements and other financial information (including without
limitation any pro forma financial information) included in the
Registration Statement and the Prospectus fairly present in all material
respects the financial condition, results of operations, and cash flows of
the Company as of, and for, the periods presented in the Registration
Statement.
EXHIBIT C
Form of Opinion of ▇▇▇▇▇ Day