Exhibit 1
EXECUTION VERSION
25,100,000 SHARES OF COMMON STOCK
PLACEMENT AGREEMENT
September 18, 2003
[ ]
[ ]
[ ]
[ ]
Ladies and Gentlemen:
CONSOL Energy Inc., a Delaware corporation (the "Company"), confirms its
agreement with [ ] ("[ ]"), whereby [ ] shall act as placement agent for the
Company with respect to the offering and sale of an aggregate of 11,000,000
shares (the "Primary Shares") of common stock, par value $0.01 per share (the
"Common Stock"), of the Company, and RWE Rheinbraun AG, a stock corporation
organized under the laws of The Federal Republic of Germany (the "Seller") and
a wholly-owned subsidiary of RWE AG, confirms its agreement with [ ], whereby
[ ] shall act as placement agent for the Seller with respect to the offering
and sale of an aggregate of 14,100,000 shares (the "Secondary Shares" and,
together with the Primary Shares, the "Shares") of Common Stock. This
placement agreement is referred to herein as this "Agreement."
The Shares are being offered in a private placement (the "Private
Placement") without being registered under the Securities Act of 1933, as
amended, and the rules and regulations thereunder (the "Securities Act"), in
reliance upon applicable exemptions from the registration requirements of the
Securities Act to "accredited investors" (as that term is defined in Rule
501(a) under the Securities Act), and non-U.S. persons under Regulation S
under the Securities Act. The Shares are being sold to those offerees listed
on Schedule 1 hereto (the "Purchasers"), each of whom has entered into the
agreements, and made the representations, set forth in the form of Purchaser
Letter/Subscription Agreement attached as Exhibit A hereto (the "Purchaser
Letter"). The Purchaser Letter of each Purchaser has been delivered on the
date hereof.
In connection with the offer and sale of the Shares, the Company has
prepared a preliminary private placement memorandum, subject to completion,
dated September 15, 2003 (the "Preliminary Private Placement Memorandum"), and
a final private placement memorandum, dated September 18, 2003 (the "Final
Private Placement Memorandum" and, together with the Preliminary Private
Placement Memorandum, the "Private Placement Memorandum"). The Private
Placement Memorandum sets forth certain information concerning the Company,
the Seller and the Shares. The Company hereby confirms that it has authorized
the use of the Preliminary Private Placement Memorandum and the Final Private
Placement Memorandum in connection with the offering and sale of the Shares.
Any references herein to the Preliminary Private Placement Memorandum and the
Final Private Placement Memorandum
shall be deemed to include all annexes and exhibits thereto and all documents
or filings incorporated by reference therein.
The Purchasers of the Shares will be entitled to the benefits of a
Registration Rights Agreement dated the Closing Date (as defined in Section
1(b) below) between the Company, on the one hand, and [ ] for the benefit of
the Purchasers and others, on the other hand (the "Registration Rights
Agreement"), to be substantially in the form attached as Exhibit B hereto. [ ]
will be entitled to the benefits of an Option Agreement dated the Closing Date
among the Seller, the Company and [ ] (the "Option Agreement") to be
substantially in the form attached as Exhibit C hereto.
Each of the Seller, the Company and [ ] agree as follows:
1. Purchase, Sale and Delivery of the Shares:
(a) The Shares. On the basis of the agreements herein, but subject to the
conditions herein set forth, (i) the Company agrees to offer and sell to each
Purchaser, upon the terms herein set forth, the number of Primary Shares set
forth opposite such Purchaser's name on Schedule 1 hereto and (ii) the Seller
agrees to offer and sell to each Purchaser, upon the terms herein set forth,
the number of Secondary Shares set forth opposite such Purchaser's name on
Schedule 1 hereto. The Shares will be sold by the Company and the Seller at a
purchase price of $17.82 per share. The purchase price for the Shares shall be
collected by [ ] and held in an [ ] bank account pending the Closing Date
(hereinafter defined). The Company shall pay [ ] a placement fee of $0.50 per
share for each Primary Share sold by the Company. The Seller shall pay [ ] a
placement fee of $0.50 per share for each Secondary Share sold by the Seller.
The placement fee to be paid by the Company with respect to the Primary Shares
and by the Seller with respect to the Secondary Shares is referred to herein
in each case as the "Placement Fee".
(b) The Closing Date. Delivery of the Shares and payment therefor shall
be made at the offices of Cravath, Swaine & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other place as may be agreed to by the Company,
the Seller and [ ], at 11:00 a.m. Eastern time, on September 23, 2003, or such
other time and date as [ ], the Company and the Seller shall agree (the time
and date of such closing are called the "Closing Date").
(c) Payment and Delivery. At the Closing Date, subject to the
satisfaction of the closing conditions set forth herein, [ ] shall (i) pay to
the Company, by wire transfer of United States dollars in immediately
available funds, the aggregate purchase price for the Primary Shares, to the
extent such price has been received by [ ] from the Purchasers prior to the
Closing Date (net of the Placement Fee and any applicable withholding taxes),
against the Company's delivery, to the extent such net purchase price therefor
is paid by [ ] to the Company, of the certificates for the Primary Shares to [
] for each such Purchaser's account and (ii) pay to the Seller, by wire
transfer of United States Dollars in immediately available funds, the
aggregate purchase price for the Secondary Shares, to the extent such price
has been received by [ ] from the Purchasers prior to the Closing Date (net of
the Placement Fee and any applicable withholding taxes held in escrow as
described in paragraph (d) of this Section), against the delivery to the
extent such net purchase price therefor is paid by [ ] to the Seller, of the
certificates for the Secondary Shares to [ ] for each such Purchaser's
account.
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The certificates for Shares shall be in the names and amounts identified in
Schedule 1 hereto and shall bear legends in accordance with the Private
Placement Memorandum and Purchaser Letters. The parties hereto agree that the
Company and the Seller are selling the Shares directly to the Purchasers, and
[ ] (i) shall not purchase any Shares, (ii) shall not use its own funds with
respect to the purchase of the Shares by Purchasers and (iii) assumes no
obligation, responsibility or liability with respect to any failure of any
Purchaser to deliver sufficient funds or otherwise satisfy such Purchaser's
obligations.
(d) Withholding Tax Escrow. Pursuant to the terms of the Escrow Agreement
attached hereto as Exhibit D, the escrow agent named therein (the "Escrow
Agent") shall hold in escrow 10% of the aggregate applicable gross purchase
price for the Secondary Shares being sold by the Seller (the "Escrow Amount")
until such date (the "Determination Date") as the United States Internal
Revenue Service (the "IRS") issues a final determination (the "Determination")
with respect to the Seller's application for a withholding certificate
allowing for the reduction or elimination of U.S. withholding tax on the sale
of Secondary Shares. By the later of (i) 10 calendar days following the
Determination Date and (ii) five business days following receipt by the Escrow
Agent of notice of the Determination Date, the Escrow Agent shall, on behalf
of the Purchasers, pay to the IRS that portion of the Escrow Amount equal to
the amount of withholding set forth in the Determination, if any, and shall
pay the remainder of the Escrow Amount, if any, to the Seller by wire transfer
of United States dollars in immediately available funds.
(e) Payment to Purchasers Contingent on Sale of Option Shares. If [ ]
exercises its option under the Option Agreement to place any Option Shares (as
defined in the Option Agreement) and the Market Price (as defined in the
Option Agreement) paid per Option Share in such placement exceeds $17.82 (the
amount of such excess for any such placement, multiplied by the number of
Option Shares sold in such placement, is referred to herein as the "Option
Excess" for such placement), the Seller agrees to pay to each Purchaser such
Purchaser's Applicable Percentage (as defined below) of the Option Excess for
such placement, to be paid to such Purchaser no later than three business days
following the date of the closing of such placement by check or wire transfer
to an account designated by such Purchaser. "Applicable Percentage" means,
with respect to any Purchaser, the percentage of the aggregate number of
Shares being purchased by all Purchasers that such Purchaser purchased
pursuant to Section 1(a) above. The Purchasers shall have no right to receive
any proceeds from sales of shares of Common Stock by the Seller subsequent to
the Option Period that are not made pursuant to an exercise of [ ]'s option to
place Option Shares under the Option Agreement. The Company shall not be
responsible for or have any liability to [ ], the Seller or any Purchaser with
respect to the Option Shares and Option Excess.
2. Representations and Warranties of the Seller: The Seller represents
and warrants to [ ] and the Company that, as of the date of this Agreement:
(a) To the extent that any statements or omissions made in the
Preliminary Private Placement Memorandum are made in reliance upon and in
conformity with written information furnished to the Company by the Seller
expressly for use therein, the Preliminary Private Placement Memorandum, on
the date thereof, did not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading. To
the extent that any statements or omissions made in the Final Private
Placement Memorandum are made in reliance upon and in conformity with written
information furnished to the Company by the Seller expressly for use therein,
on the date hereof, the Final Private Placement Memorandum does not (and any
amendment or supplement thereto, at the date thereof, will not), contain any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
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circumstances under which they were made, not misleading. The Company, [ ] and
the Seller hereby confirm and agree that the only information furnished to the
Company by the Seller expressly for use in the Private Placement Memorandum is
(i) the number of shares (but not the percentages) set forth in the second and
third sentences in the first paragraph of the cover page, in the second
sentence of "Private Placement Memorandum Summary -- The Offering -- Seller,"
in the first sentence of the paragraph under the caption "Risk Factors --
Following completion of this offering, RWE will own approximately ____% of
CONSOL's outstanding common stock and may be able, together with one or more
other holders of CONSOL common stock to control significant business decisions
by CONSOL" and in the first sentence of the first paragraph under "Risk
Factors -- CONSOL's share price may decline due to shares eligible for future
sale" ("Risk Factor A"), (ii) the information in the second and third
sentences of the second paragraph of Risk Factor A and (iii) the information
under the caption "Escrow of Withholding Taxes."
(b) The Seller has been duly formed and is validly existing and in good
standing under the laws of its jurisdiction of formation.
(c) The Seller has full corporate power and authority to enter into and
perform this Agreement and to consummate the transactions contemplated herein.
(d) Neither the Seller nor any of its affiliates ("Affiliates") (as that
term is defined in Regulation D under the Securities Act ("Regulation D"))
(other than the Company and its subsidiaries as to whom no representations or
warranties are made hereby) nor any person acting on their behalf (other than
[ ] as to whom no representations or warranties are made hereby) (i) has,
directly or indirectly, made offers or sales of any security, or solicited
offers to buy any security, under circumstances that would require the
registration of the Shares under the Securities Act; or (ii) has engaged or
will engage in any form of general solicitation or general advertising (within
the meaning of Regulation D) in connection with any offer or sale of the
Shares in the United States or (iii) has engaged or will engage in any
directed selling efforts (as that term is defined in Regulation S) with
respect to the Shares sold outside the United States to non-U.S. persons (as
defined in Regulation S); and the Seller and its Affiliates and any person
acting on their behalf (other than [ ] and the Company and its subsidiaries as
to whom no representations or warranties are made hereby) have complied and
will comply with the offering restriction requirements of Regulation S.
(e) The Seller is the record and beneficial owner of the Shares being
sold by it, free and clear of any encumbrance or claim.
(f) The Option Agreement, the Escrow Agreement and this Agreement have
been duly authorized by the Seller. This Agreement has been duly executed and
delivered by the Seller, and at the Closing Date the Option Agreement and the
Escrow Agreement will have been
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duly executed and delivered by the Seller. Section 1(e) of this Agreement
constitutes, and at the Closing Date the Option Agreement and the Escrow
Agreement will constitute, legal, valid and binding obligations of the Seller,
enforceable in accordance with their respective terms, except as may be
limited or otherwise affected by (a) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other laws relating to or affecting
the rights of creditors generally, (b) principles of equity, whether
considered at law or equity and (c) principles of public policy limiting the
right to indemnification.
(g) The sale of the Shares being sold by the Seller, and the compliance
by the Seller with all of the provisions of this Agreement, the Option
Agreement and the Escrow Agreement (all such agreements being referred to
collectively as the "Seller Transaction Documents") and the consummation of
the transactions herein and therein contemplated, will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, (i) any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Seller is a party or
by which the Seller is bound, (ii) result in any violation of the provisions
of the organizational documents of the Seller, or (iii) result in any
violation of any statute or any order, rule or regulation of any court or
governmental agency or body, domestic or foreign, having jurisdiction over the
Seller, except in the case of clauses (i), (ii) and (iii), for any such
conflict, breach, violation or default which would not reasonably be expected
to have a material adverse effect on the Seller's ability to consummate the
transactions contemplated hereby or on the enforceability of any documents
entered into by the Seller in connection therewith.
(h) No consent, approval, authorization or order of, or filing,
registration or qualification by the Seller with, any court or governmental
agency or body, domestic or foreign, having jurisdiction over the Seller is
required for the offering and sale of the Shares being sold by the Seller or
the consummation by the Seller of the other transactions contemplated by this
Agreement or the Option Agreement, except such filings as may be required by
the Exchange Act.
3. Representations and Warranties of the Company: The Company represents
and warrants to [ ] and the Seller that, as of the date of this Agreement:
(a) The Preliminary Private Placement Memorandum, on the date thereof,
did not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. On the date hereof
and on the Closing Date, the Final Private Placement Memorandum did not, and
will not (and any amendment or supplement thereto, at the date thereof and at
the Closing Date, will not), contain any untrue statement of a material fact
or omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided, however, that the Company does not make any representation or
warranty as to the information contained in or omitted from the Preliminary
Private Placement Memorandum or the Final Private Placement Memorandum, or any
amendment or supplement thereto, in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of [ ] or the
Seller specifically for inclusion therein.
(b) The documents annexed to and deemed to be a part of the Preliminary
Private Placement Memorandum and the Final Private Placement Memorandum, to
the extent they were filed with the Securities and Exchange Commission (the
"Commission"), conformed in all material
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respects to the requirements of the Securities Exchange Act of 1934, as
amended, (the "Exchange Act") and the rules and regulations of the Commission
thereunder, when they were filed with the Commission, and when read together
with the other information in the Preliminary Private Placement Memorandum or
the Final Private Placement Memorandum, as the case may be, at the time issued
do not, and as of the Closing Date will not, contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(c) Neither the Company nor any of its subsidiaries has sustained, since
the date of the latest financial statements of the Company incorporated by
reference in the Final Private Placement Memorandum or the documents annexed
thereto and deemed to be a part thereof, any material loss or interference
with its business that is material to the business of the Company and its
subsidiaries taken as a whole 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, otherwise than as set forth or
contemplated in the Final Private Placement Memorandum and, since the
respective dates as of which information is given in the Final Private
Placement Memorandum, there has not been any material change in the capital
stock or any material increase in the consolidated short-term or long-term
debt of the Company or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the business,
properties, prospects, financial condition or results of operations of the
Company and its subsidiaries taken as a whole, or any material transaction
entered into by the Company or any of its subsidiaries, in each case whether
or not in the ordinary course of business, otherwise than as set forth or
contemplated in the Final Private Placement Memorandum.
(d) The Company has been duly incorporated, is validly existing and is in
good standing under the laws of State of Delaware, with corporate power and
authority to own, lease and operate its properties and conduct its business as
described in the Private Placement Memorandum and to enter into and perform
this Agreement and to consummate the transactions contemplated herein; the
Company is duly qualified as a foreign corporation to transact business and is
in good standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to qualify or to be in good
standing would not reasonably be expected to have a material adverse effect on
the business, properties, financial condition or earnings of the Company and
its subsidiaries taken as a whole (a "Material Adverse Effect"); each
subsidiary of the Company, other than those subsidiaries which would not
constitute a "significant subsidiary" as defined in Item 1-02(w) of Regulation
S-X (each a "Subsidiary"), is a corporation, partnership, limited liability
company or business trust duly incorporated or organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation or
organization, with the requisite entity power and authority to own, lease and
operate its properties. Each Subsidiary is duly qualified as a foreign
corporation, partnership, limited liability company, business trust or other
organization to transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to
qualify or to be in good standing would not reasonably be expected to result
in a Material Adverse Effect.
(e) The Company has outstanding equity capitalization as set forth in the
Final Private Placement Memorandum (except for subsequent issuances, if any,
pursuant to employee benefit plans
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or pursuant to the exercise of convertible securities or options), and all of
the issued shares of capital stock of the Company, including without
limitation the Shares being sold by the Seller, have been duly and validly
authorized and issued and are fully paid and nonassessable; upon the issuance
and sale of the Shares being sold by the Company pursuant to the terms hereof,
the Shares being sold by the Company will have been duly and validly
authorized and issued and fully paid and nonassessable; except as otherwise
disclosed in the Final Private Placement Memorandum, all of the issued and
outstanding capital stock or other ownership interests of each Subsidiary of
the Company (i) have been duly authorized and validly issued, (ii) are fully
paid and nonassessable and (iii) except for shares necessary to qualify
directors or to maintain any minimum number of shareholders required by law,
are owned by the Company directly or through subsidiaries, free and clear of
any encumbrance or claim except as described in the Final Private Placement
Memorandum and except for such security interests, mortgages, pledges, liens,
encumbrances, claims or equities that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(f) [Intentionally left blank]
(g) The Option Agreement, the Registration Rights Agreement and this
Agreement have been duly authorized by the Company. This Agreement has been
duly executed and delivered by the Company and at the Closing Date the Option
Agreement and the Registration Rights Agreement will have been duly executed
and delivered by the Company. This Agreement constitutes, and at the Closing
Date the Option Agreement and the Registration Rights Agreement will
constitute, legal, valid and binding obligations of the Company, enforceable
in accordance with their respective terms, except as may be limited or
otherwise affected by (a) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other laws relating to or affecting the rights
of creditors generally, (b) principles of equity, whether considered at law or
equity and (c) principles of public policy limiting the right to
indemnification.
(h) The Registration Rights Agreement and the Option Agreement conform in
all material respects, and the Shares will conform, in all material respects,
to the descriptions thereof contained in the Final Private Placement
Memorandum.
(i) Assuming the truth and accuracy of the representations and warranties
of the Seller, the Company and [ ] in Sections 2(d), 3(x) and 4(b) of this
Agreement, and compliance by the Company and the Seller with their respective
covenants set forth in Sections 5(a)(iv), 5(a)(v), 5(b)(i) and 5(b)(ii), the
issuance and sale of the Shares, and the compliance by the Company with all of
the provisions of this Agreement, the Registration Rights Agreement (all such
agreements being referred to collectively as the "Transaction Documents") and
the consummation of the transactions herein and therein contemplated, will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any of the property or
assets of the Company or any of its subsidiaries pursuant to the terms of, (i)
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject, which
would reasonably be expected to have a Material Adverse Effect or affect the
validity of the Shares or the legal authority of the Company to comply with
the terms of the Transaction Documents; (ii) result in any violation of the
provisions of the organizational documents of the Company or any of its
subsidiaries; or (iii) result in any violation of any statute
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or any order, rule or regulation of any court or governmental agency or body,
domestic or foreign, having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties which would reasonably be
expected to have a Material Adverse Effect or affect the validity of the
Shares or the legal authority of the Company to comply with the Transaction
Documents.
(j) The sale of the Shares, and the compliance by the Company with all of
the provisions of the Transaction Documents and the consummation of the
transactions contemplated therein, will not result in a "change of control" of
the Company under (i) any statute or any order, rule or regulation of any
court or governmental agency or body, or regulatory authority, foreign or
domestic, having jurisdiction over the Company or (ii) any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company is a party or by which it is bound. For purposes hereof,
"change of control" and similar terms shall have the meaning given thereto in
the applicable statute, order, rule, regulation, indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument.
(k) No consent, approval, authorization or order of, or filing,
registration or qualification by the Company with, any court or governmental
agency or body, domestic or foreign, having jurisdiction over the Company is
required for the offering and sale of the Shares or the consummation by the
Company of the other transactions contemplated by this Agreement or the
Registration Rights Agreement except such filings as may be required by the
Securities Act or the Exchange Act.
(l) Other than as set forth in the Final Private Placement Memorandum,
there are no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property of the Company or
any of its subsidiaries is the subject which if determined adversely to the
Company, or such subsidiary, would individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect or which would
reasonably be expected to materially and adversely affect the consummation of
the transactions contemplated under this Agreement, the Registration Rights
Agreement, or the performance by the Company of its respective obligations
hereunder or thereunder; and, to the Company's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others.
(m) PricewaterhouseCoopers LLP and Ernst & Young, who have audited the
financial statements of the Company and its consolidated subsidiaries included
in or annexed to the Final Private Placement Memorandum, are independent
public accountants with respect to the Company as required by the Securities
Act.
(n) The audited financial statements, and the related notes thereto,
included in the documents annexed to or incorporated by reference into the
Private Placement Memorandum present fairly in all material respects the
consolidated financial position of the Company and its consolidated
subsidiaries and the consolidated results of its operations and the changes in
its consolidated cash flows, as of the dates and for the periods indicated,
and said financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved, except as otherwise stated therein; the unaudited
consolidated financial statements and the related notes thereto included in
the documents annexed to the Private Placement Memorandum present fairly in
all material respects the consolidated financial position of the Company and
its consolidated subsidiaries as of the dates and
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for the periods indicated and the results of its operations and the changes in
its consolidated cash flows, subject to year-end audit adjustments, have been
prepared in accordance with generally accepted accounting principles applied
on a consistent basis throughout the periods involved, except for the absence
of notes thereto and as otherwise stated therein and have been prepared on a
basis substantially consistent with that of the audited financial statements
referred to above except as otherwise stated therein.
(o) All information related to the Company's coal reserves (in the
aggregate and by resource group) included in its Annual Report on Form 10-K/A
for the year ended December 31, 2002, as amended through the date of the
Private Placement Memorandum at the time such report was filed with the
Commission (collectively, the "Company Coal Reserve Information") (i) was
accurate in all material respects and (ii) complied in all material respects
with the requirements of the Exchange Act and the rules and regulations of the
Commission thereunder; all assumptions used in the calculation of the Company
Coal Reserve Information were reasonable.
(p) The Company and each of its subsidiaries owns and possesses all such
patents, patent rights, trademarks, trademark rights, trade names, trade name
rights, service ▇▇▇▇ rights and copyrights as the Company considers necessary
for the conduct of the businesses of the Company or such subsidiaries as now
conducted without any infringement upon rights of others which, individually
or in the aggregate, would have a Material Adverse Effect. There is no
individual patent or patent license used by the Company or any subsidiary in
the conduct of its business the loss of which would have a Material Adverse
Effect.
(q) Neither the Company, nor any of its subsidiaries (i) is in violation
of its certificate or articles of incorporation or bylaws or comparable
governing instruments or (ii) is in breach or violation of any of the terms or
provisions of, or with the giving of notice or lapse of time, or both, would
be in default under, any contract, indenture, mortgage, deed of trust, loan
agreement, note, lease, partnership agreement, or other agreement or
instrument to which it is a party or by which it is bound or to which its
properties or assets may be subject, except for such violations or defaults
that would not, individually or in the aggregate, be reasonably expected to
have a Material Adverse Effect.
(r) Except as set forth or contemplated in the Final Private Placement
Memorandum, the Company and each of its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the appropriate
federal, state or foreign regulatory authorities, necessary to conduct their
respective businesses, except for any such license, certificate, permit or
authorization the absence of which, individually or in the aggregate, would
not reasonably be expected to result in a Material Adverse Effect, and neither
the Company nor any such subsidiary has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would reasonably be expected to
have a Material Adverse Effect, whether or not arising from transactions in
the ordinary course of business; and the Company and each of its subsidiaries
is in material compliance with all laws and regulations relating to the
conduct of its respective businesses as conducted as of the date hereof,
except where noncompliance with such laws or regulations would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
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(s) The Company and each of its subsidiaries own or lease all such
properties as are necessary to the conduct of their respective operations as
presently conducted, except where the failure to own or lease such properties
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(t) No labor problem or dispute with the employees of the Company or any
of its subsidiaries exists or to the knowledge of the Company is threatened,
and the Company is not aware of any existing or threatened labor disturbance
by the employees of any of its, or its respective subsidiaries', principal
suppliers, contractors or customers, any of which would reasonably be expected
to have a Material Adverse Effect, except as set forth or contemplated in the
Final Private Placement Memorandum.
(u) The Company and its subsidiaries are (i) in compliance with any and
all applicable foreign, federal, state and local laws and regulations relating
to the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental Laws");
(ii) have received and are in compliance with all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct
their respective businesses; and (iii) have not received notice of any actual
or potential liability for the investigation or remediation of any disposal or
release of hazardous or toxic substances or wastes, pollutants or
contaminants, except, in the cases of each of clauses (i) through (iii), as
would not, individually or in the aggregate, have a Material Adverse Effect,
whether or not arising from transactions in the ordinary course of business,
and except as set forth or contemplated in the Final Private Placement
Memorandum.
(v) The Company is not, and upon the offering and sale of the Shares as
herein contemplated will not be, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(w) There is and has been no material failure on the part of the Company
or any of the Company's directors or officers, in their capacities as such, to
comply with any provision of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002.
(x) Neither the Company, nor any of its Affiliates (other than the Seller
and any Affiliates of the Seller that control the Company, as to whom no
representations or warranties are made hereby) nor any person acting on their
behalf (other than [ ] as to whom no representations or warranties are made
hereby) (i) has directly or indirectly made offers or sales of any security,
or solicited offers to buy any security, under circumstances that would
require the registration of the Shares under the Securities Act; or (ii) has
engaged or will engage in any form of general solicitation or general
advertising (within the meaning of Regulation D) in connection with any offer
or sale of the Shares in the United States or (iii) has engaged or will engage
in any directed selling efforts (as that term is defined in Regulation S) with
respect to the Shares sold outside the United States to Non-U.S. Persons (as
defined in Regulation S); and the Company and its Affiliates (other than the
Seller and any Affiliates of the Seller that control the Company, as to whom
no representations or warranties are made hereby) and any person acting on
their behalf (other than [ ] as to whom no representations or warranties are
made hereby) have complied and will comply with the offering restriction
requirements of Regulation S.
10
(y) It is not necessary, in connection with the offer, sale and delivery
of the Shares to the Purchasers under this Agreement and the Final Private
Placement Memorandum, to register the Shares under the Securities Act,
assuming that the representations and warranties of Seller and [ ] in Sections
2 and 4 hereof, respectively, and the representations and warranties of the
Purchasers set forth in the Purchaser Letters are true and the Seller, [ ] and
each Purchaser have not breached and will not breach their respective
representations and warranties in Sections 2 and 4 of this Agreement or, in
the case of the Purchasers, in the Purchaser Letters.
(z) The Company has not taken, directly or indirectly, any action
designed to cause or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in the
stabilization or manipulation of the price of any security of the Company to
facilitate the offering and sale of the Shares.
Any certificate signed by any officer of the Company and delivered to [ ]
or counsel for [ ] in connection with the offering of the Shares shall be
deemed a representation and warranty by the Company as to matters covered
thereby to [ ].
4. Representations and Warranties of [ ]: [ ] represents and warrants to
the Seller and the Company, and hereby agrees, as follows:
(a) [ ] has not made any offers of the Shares to any person prior to the
date hereof not in conformity with the terms hereof, and after the date hereof
will make no offer of the Shares not in conformity with the terms hereof. The
offer of the Shares by [ ] will be made only in those jurisdictions designated
by [ ] for which there is an effective qualification or exemption from
registration of the offering of Shares in such jurisdictions by a
broker-dealer registered under the laws of such jurisdictions.
(b) [ ] has not solicited, and will not solicit, offers to buy the Shares
by any form of general solicitation or general advertising, including but not
limited to the methods described in Rule 502(c) under the Securities Act, or
in any manner involving a public offering within the meaning of Section 4(2)
of the Securities Act. [ ] has not engaged and will not engage in any directed
selling efforts (as that term is defined in Regulation S under the Securities
Act) with respect to the Shares sold outside the United States to non-U.S.
persons (as defined in Regulation S under the Securities Act) and [ ] and any
person acting on its behalf have complied and will comply with the offering
restriction requirements of Regulation S.
(c) [ ] and its representatives who have participated and will
participate in the offer of the Shares were, and will continue to be,
throughout the offering, registered as broker-dealers or salesmen, as
required, or are exempt from such registration, in each jurisdiction in which
[ ] offers the Shares.
(d) [ ] has complied and will comply with all requirements imposed upon
it by the Securities Act, and by all applicable state securities laws and
regulations, to permit the continuance of offers of the Shares, in accordance
with the provisions hereof, the Preliminary Private Placement Memorandum, the
Final Private Placement Memorandum and such laws and regulations.
11
(e) [ ] is (i) duly registered as a broker-dealer under the Exchange Act
and (ii) a member in good standing of the National Association of Securities
Dealers, Inc.
(f) In soliciting purchasers for the Shares, [ ] and its representatives
have utilized and will utilize only the Private Placement Memorandum and [ ]
and its representatives have not used and will not use any other solicitation
material or advertisement without the prior written approval of the Seller and
the Company. [ ] and its representatives have not and will not make any
representations or furnish any information in connection with this Agreement
or the offering of the Shares other than that contained in the Private
Placement Memorandum.
(g) If requested by the Company, [ ] shall use its commercially
reasonable efforts to obtain from prospective purchasers a confidentiality
agreement in form and substance reasonably satisfactory to the Company.
[ ] understands that the Company and, for the purposes of the opinions to
be delivered to [ ] pursuant to Section 6 hereof, counsel to the Company,
counsel to the Seller and counsel to [ ] will rely upon the accuracy and the
truth of the forgoing representations and [ ] hereby consents to such
reliance.
5. Certain Agreements:
(a) The Company hereby agrees with [ ] and the Seller, as follows:
(i) to prepare the Final Private Placement Memorandum in a form
reasonably approved by [ ] and to furnish promptly (and with respect to
the initial delivery of such Final Private Placement Memorandum, not
later than 10:00 a.m. (New York City time) on the second day following
the execution and delivery of this Agreement) to [ ] as many copies of
the Final Private Placement Memorandum (and any amendments or supplements
thereto) as [ ] may reasonably request for the purposes contemplated by
this Agreement;
(ii) to advise [ ] and the Seller promptly, confirming the general
nature of such advice in writing, of (A) the happening of any event known
to the Company at any time prior to the Closing Date, which, in the
reasonable judgment of the Company, would require the making of any
change in the Final Private Placement Memorandum then being used so that
the Final Private Placement Memorandum would not include 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 are made, not misleading and to
prepare and furnish, at the Company's expense, to [ ] (and to any persons
reasonably designated by [ ]) promptly any proposed amendments or
supplements to the Final Private Placement Memorandum as may be necessary
so that the Final Private Placement Memorandum does not include or omit
to state such material fact, and (B) the receipt of any notification with
respect to the modification, rescission, withdrawal or suspension of the
qualification of the Shares, or of any exemption from such qualification
or from registration of the Shares, for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for
any of such purposes and, if any government agency or authority should
issue any such order, to make every reasonable effort to obtain the
lifting or removal of such order as soon as possible;
12
(iii) not to amend or supplement the Preliminary Private Placement
Memorandum or the Final Private Placement Memorandum for a period of 30
days from the date hereof unless [ ] shall previously have been advised
thereof and shall have consented thereto (which consent shall not be
unreasonably withheld or delayed); provided that consent of [ ] shall not
be required for the filing by the Company with the SEC, at the request of
the SEC, of any amendment to any previously filed Company report;
(iv) that neither the Company nor any of its Affiliates (other than
the Seller and any Affiliates of the Seller that control the Company)
will solicit any offer to buy or offer or sell the Shares by means of any
form of general solicitation or general advertising (within the meaning
of Regulation D) or engage in any directed selling efforts (as defined in
Rule 902 of Regulation S) with regard to the Shares;
(v) that neither the Company nor any of its Affiliates (other than
the Seller and any Affiliates of the Seller that control the Company)
will sell, offer for sale or solicit offers to buy or otherwise negotiate
in respect of any security (as defined in the Securities Act) the
offering of which security will be integrated with the Private Placement
in a manner which would require the registration under the Securities Act
of the sale of the Shares to the Purchasers;
(vi) that the Company will not take, and will use all commercially
reasonable efforts to cause its Affiliates (other than the Seller and any
Affiliates of the Seller that control the Company) not to take, directly
or indirectly, any action designed to, or that might be reasonably
expected to, cause or result in stabilization or manipulation of the
price of the Shares;
(vii) that, except as permitted by the Securities Act, neither the
Company nor any of its Affiliates (other than the Seller and any
Affiliates of the Seller that control the Company) will distribute any
offering materials in connection with the offering and sale of the Shares
as contemplated hereby, other than the Preliminary Private Placement
Memorandum, the Final Private Placement Memorandum and any related
marketing materials developed jointly and approved by the Seller, the
Company and [ ];
(viii) to pay all expenses, fees and taxes in connection with (A)
the preparation of the Preliminary Private Placement Memorandum and the
Final Private Placement Memorandum, and any amendments or supplements
thereto, and the printing and furnishing of copies of each thereof to [ ]
(including costs of mailing and shipment), (B) the issuance, sale and
delivery of the Primary Shares, including any stock or other transfer
taxes or duties payable upon the sale of the Shares to the Purchasers,
(C) the fees and expenses of any transfer agent or registrar for the
Common Stock, (D) the costs and expenses of the Company incurred in
connection with the marketing of the Shares, including "road show" costs
and expenses, and (E) the performance of the Company's other obligations
hereunder; provided, however, that the Company shall not pay the fees or
expenses (including without limitation legal expenses) incurred by [ ];
and
13
(ix) that, until the board of directors of the Company has
determined otherwise, the Company will conduct its affairs in such a
manner so as to ensure that the Company will not be an "investment
company" within the meaning of the Investment Company Act.
(b) The Seller hereby agrees with [ ] and the Company as follows:
(i) the Seller will not solicit any offer to buy or offer or sell
the Shares by means of any form of general solicitation or general
advertising (within the meaning of Regulation D);
(ii) the Seller will not sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any security (as defined in the
Securities Act) the offering of which security will be integrated with
the Private Placement in a manner which would require the registration
under the Securities Act of the offer and sale of the Shares to the
Purchasers;
(iii) the Seller will not take, directly or indirectly, any action
designed to, or that might be reasonably expected to, cause or result in
stabilization or manipulation of the price of the Shares; and
(iv) that, except as permitted by the Securities Act, the Seller
will not distribute any offering materials in connection with the
offering and sale of the Shares as contemplated hereby, other than the
Preliminary Private Placement Memorandum, the Final Private Placement
Memorandum and any related marketing materials developed jointly and
approved by the Seller, the Company and [ ].
(c) The Company agrees as follows:
The Company will increase by one the number of directors on its board of
directors and to cause the appointment of a nominee selected by [ ] as
promptly as possible following the Closing Date. Such nominee must be
"independent" (as defined by applicable securities laws and New York Stock
Exchange regulations) and acceptable to the board of directors of the Company
in its reasonable judgment. The Company shall use all commercially reasonable
efforts to cause such nominee to be elected as a director of the Company at
the Company's next meeting of stockholders at which members of the board of
directors are elected and to cause such nominee to be a member of the
Company's board of directors for no less than three years following the date
of initial appointment.
(d) The Seller agrees as follows:
(i) The Seller will use all commercially reasonable efforts to
cause:
(A) one representative of the Seller to resign from the
Company's board of directors, if the Seller's holdings of Common
Stock fall to 39% or below but remain in excess of 25% of all shares
entitled to be voted in the election of directors;
14
(B) a cumulative total of two representatives of the Seller to
resign from the Company's board of directors, if the Seller's
holdings of Common Stock fall to 25% or below but remain in excess
of 15% of all shares entitled to be voted in the election of
directors;
(C) a cumulative total of three representatives of the Seller
to resign from the Company's board of directors, if the Seller's
holdings of Common Stock fall to 15% or below but remain in excess
of 5% of all shares entitled to be voted in the election of
directors; and
(D) all representatives of the Seller to resign from the
Company's board of directors, if the Seller's holdings of Common
Stock fall to 5% or below of all shares entitled to be voted in the
election of directors.
(ii) The Seller shall pay all stock or other transfer taxes or
duties payable upon the sale of the Secondary Shares to the Purchasers.
6. Conditions of Purchasers' Obligations: The obligation of the
Purchasers to purchase the Shares in accordance with the terms hereof shall be
subject to (i) the accuracy in all respects of those representations and
warranties of the Seller and the Company contained herein that are qualified
by terms such as "material," "materially," "Material Adverse Effect" and
similar qualifications as to materiality and (ii) the accuracy in all material
respects of those representations and warranties of the Seller and the Company
contained herein that are not so qualified by terms such as "material,"
"materially," "Material Adverse Effect" and similar qualifications as to
materiality, as of the date and time that this Agreement is executed and
delivered by the parties hereto (the "Execution Time") and as of the Closing
Date as though made on and as of such date, be, to the accuracy of the
statements of the Company's and Seller's officers contained in any
certificates delivered pursuant to the provisions hereof, to the performance
by the Seller and the Company of their respective covenants and agreements
hereunder and to the following additional conditions:
(a) The Company shall furnish to [ ] on the Closing Date an opinion of
▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, counsel for the Company, addressed to [ ] and dated the
Closing Date and in form reasonably satisfactory to [ ], substantially as set
forth on Exhibit E hereto.
(b) The Seller shall furnish to [ ] on the Closing Date an opinion of
Cravath, Swaine & ▇▇▇▇▇ LLP, counsel for the Seller, addressed to [ ] and
dated the Closing Date and in form satisfactory to [ ], substantially as set
forth in Exhibit F hereto.
(c) The Seller shall furnish to [ ] on the Closing Date an opinion of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq., Senior Counsel, International Legal Affairs, of the
Seller, addressed to [ ] and dated the Closing Date and in form satisfactory
to [ ] substantially as set forth in Exhibit G hereto.
(d) [ ] shall have received certificates, addressed to [ ] dated the
Closing Date, of duly authorized officers of the Company on behalf of the
Company, to the effect that:
(i) the Final Private Placement Memorandum and all amendments or
supplements thereto, or modifications thereof, if any, do not contain an
untrue statement of
15
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;
(ii) between the time of execution of this Agreement and the Closing
Date,
(A) except as set forth or contemplated in the Final Private
Placement Memorandum, no event constituting a Material Adverse
Effect on the Company shall have occurred,
(B) except as set forth or contemplated in the Final Private
Placement Memorandum, no transaction which is material to the
Company and its subsidiaries taken as a whole shall have been
entered into by the Company or any subsidiary and
(C) the Commission shall not have issued any order, decree or
stop order preventing the use of the Final Private Placement
Memorandum or any amendment or supplement thereto, or any order
asserting that the offer and sale of the Shares to the Purchasers
contemplated by this Agreement are subject to the registration
requirements of the Securities Act;
(iii) The representations and warranties of the Company set forth in
this Agreement that are qualified by terms such as "material,"
"materially," "Material Adverse Effect" and similar qualifications as to
materiality are true and correct in all respects, and those that are not
so qualified are true and correct in all material respects, as of the
Closing Date, as though made on and as such time (except to the extent
that such representations and warranties speak as of another time, in
which case such representations and warranties that are qualified by
terms such as "material," "materially," "Material Adverse Effect" and
similar qualifications as to materiality shall be true and correct in all
respects, and those that are not so qualified shall be true and correct
in all material respects, in each case as of such other time).
(e) [ ] shall have received certificates, dated the Closing Date, of two
officers of the Seller, on behalf of the Seller, to the effect that the
representations and warranties of the Seller set forth in this Agreement that
are qualified by terms such as "material," "materially," "Material Adverse
Effect" and similar qualifications as to materiality are true and correct in
all respects, and those that are not so qualified are true and correct in all
material respects, as of the Closing Date, as though made on and as such time
(except to the extent that such representations and warranties speak as of
another time, in which case such representations and warranties that are
qualified by terms such as "material," "materially," "Material Adverse Effect"
and similar qualifications as to materiality shall be true and correct in all
respects, and those that are not so qualified shall be true and correct in all
material respects, in each case as of such other time).
(f) On or before the Closing Date, the Company shall have executed and
delivered to [ ] the Registration Rights Agreement.
(g) On or before the Closing Date, the Seller shall have executed and
delivered to [ ] the Option Agreement.
16
(h) On or before the Closing Date, the Seller shall have executed and
delivered to [ ] and the escrow agent the Escrow Agreement.
(i) The Seller and the Company shall have furnished to [ ] such other
documents and certificates as [ ] may reasonably request.
(j) [ ] shall receive a certificate of the Secretary of the Company
certifying (i) the Certificate of Incorporation and any amendments thereto,
(ii) the Bylaws and any amendments thereto, (iii) that all corporate action
has been taken on the part of the Company necessary to authorize the execution
and delivery of this Agreement, the Registration Rights Agreement and the
other offering documents and the transactions contemplated herein and therein,
(iv) resolutions of the Board of Directors of the Company approving the
original issuance and sale of the Shares to the Seller, and (v) a specimen
Common Stock certificate.
All opinions, certificates, letters and documents delivered pursuant to
this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to [ ] and counsel for [ ].
The Company and the Seller, as the case may be, shall furnish to [ ] such
copies of such opinions, certificates, letters and documents in such
quantities as [ ] and counsel for [ ] shall reasonably request.
7. Termination:
(a) This Agreement may be terminated at the option of the Purchasers of a
majority of the Shares by giving notice to the Company and the Seller prior to
the Closing Date if, in the sole discretion of the Purchasers of a majority of
the Shares, any of the following makes it inadvisable to proceed with the
purchase of the Shares to be delivered at the Closing Date:
(i) the Company shall have, in the reasonable judgment of the
Purchasers of a majority of the Shares, sustained any Material Adverse
Effect;
(ii) trading generally in securities on the New York Stock Exchange
or Nasdaq National Market shall have been suspended or minimum or maximum
prices shall generally have been established on either such exchange or
market system;
(iii) a banking moratorium shall have been declared by New York or
United States authorities; or
(iv) there shall have been any outbreak or escalation of national or
international hostilities or any other calamity or crisis, including
without limitation any terrorist attack or similar attack, in each case
resulting in a material adverse change in United States financial
markets.
(b) Termination of this Agreement pursuant to this Section 7 shall be
without liability of any party to any other party except for the expenses to
be paid by the Company pursuant to Section 5 and except as provided in Section
8 hereof.
17
8. Indemnification and Contribution:
(a) The Company agrees to indemnify, defend and hold harmless [ ], the
Seller and any person who controls [ ] or the Seller within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against any loss, expense, liability, damage or claim (including the
reasonable cost of investigation) which, jointly or severally, [ ], the Seller
or such controlling person may incur under the Securities Act, the Exchange
Act or otherwise, insofar as such loss, expense, liability, damage or claim
arises out of or is based upon (i) any breach of any representation, warranty
or covenant of the Company contained in Sections 3(x), 3(y), 5(a)(iv) and
5(a)(v) hereof or (ii) any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Private Placement Memorandum, or
the Final Private Placement Memorandum or any other offering materials
approved in writing by the Company prior to the use thereof, 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 Preliminary Private Placement Memorandum
or the Final Private Placement Memorandum or necessary to make the statements
made therein, in the light of the circumstances under which they were made,
not misleading, except insofar as any such loss, expense, liability, damage or
claim arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission of a material fact contained in and
in conformity with information furnished in writing by [ ] or the Seller to
the Company expressly for use in such Preliminary Private Placement Memorandum
or Final Private Placement Memorandum, provided, however, that the indemnity
agreement contained in this subsection (a) with respect to the Preliminary
Private Placement Memorandum or the Final Private Placement Memorandum shall
not inure to the benefit of [ ] (or to the benefit of any person controlling [
]) with respect to any person asserting any such loss, expense, liability,
damage or claim which is the subject thereof if the Preliminary Private
Placement Memorandum or the Final Private Placement Memorandum or any
amendment or supplement thereto prepared with the consent of [ ] and furnished
to [ ] prior to the Closing Date corrected any such alleged untrue statement
or omission and if [ ] failed to send or give a copy of the corrected
Preliminary Private Placement Memorandum or Final Private Placement Memorandum
or amendment or supplement thereto to such person at or prior to the written
confirmation of the sale of Shares to such person, unless such failure
resulted from noncompliance by the Company or the Seller with their
obligations under this Agreement.
If any claim or action is brought against, or any loss, expense,
liability or damage (including the reasonable cost of investigation) is
incurred by, [ ], the Seller or any controlling person in respect of which
indemnity may be sought against the Company pursuant to the preceding
paragraph, [ ] or the Seller, as the case may be, shall promptly notify the
Company in writing of the institution of such claim or action or the
incurrence of such loss, expense, liability or damage, and the Company shall
assume the defense of such claim or action or the response to such loss,
expense, liability or damage, including the employment of counsel and payment
of reasonable fees and expenses associated therewith, provided, however, that
any failure or delay to so notify the Company will not relieve the Company of
any obligation hereunder, except to the extent that its ability to defend such
claim or action or mitigate such loss, expense, liability or damage is
materially prejudiced by such failure or delay. [ ], the Seller or any
controlling 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 [ ], the Seller or such controlling person unless the employment of
such counsel shall have been authorized in writing by the Company or the
18
Company shall not have employed counsel to have charge of the defense of or
response to such claim, action, loss, expense, liability or damage, within a
reasonable time or such indemnified party or parties shall have reasonably
concluded (based on the advice of counsel) that there may be defenses
available to it or them which are different from or additional to those
available to the Company (in which case the Company shall not have the right
to direct the defense of such claim or action on behalf of the indemnified
party or parties), in any of which events such reasonable 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 firm of attorneys for each of [ ], the Seller or their respective
controlling persons in any one action or series of related actions in the same
jurisdiction representing the indemnified parties who are parties to such
action). Anything in this paragraph to the contrary notwithstanding, the
Company shall not be liable for any settlement of any such claim or action
effected without its written consent.
(b) Seller agrees to indemnify, defend and hold harmless [ ], the Company
and any person who controls [ ] or the Company (other than Seller) within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
from and against any loss, expense, liability, damage or claim (including the
reasonable cost of investigation) which, jointly or severally, [ ], the
Company or such controlling person may incur under the Securities Act, the
Exchange Act or otherwise, insofar as such loss, expense, liability, damage or
claim arises out of or is based upon any untrue statement of a material fact
contained in the Preliminary Private Placement Memorandum or the Final Private
Placement Memorandum (or such as amended or supplemented by the Company), or
arise out of or are based upon the omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or omission was made in the Preliminary Private Placement
Memorandum or the Final Private Placement Memorandum (or such as amended or
supplemented by the Company) in reliance upon and in conformity with written
information furnished to the Company by the Seller expressly for use therein.
The statements specified in the final sentence of Section 2(a) constitute the
only information furnished by or on behalf of the Seller to the Company for
purposes of Section 2(a) and this Section 8.
If any claim or action is brought against [ ] or the Company or any such
person in respect of which indemnity may be sought against the Seller pursuant
to the foregoing paragraph, [ ], the Company or such person shall promptly
notify the Seller in writing of the institution of such action and the Seller
shall assume the defense of such action, including the employment of counsel
and payment of reasonable fees and expenses associated therewith. [ ], 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 the Seller in connection with the defense
of such action or the Seller shall not have employed counsel to have charge of
the defense of such action within a reasonable time or such indemnified party
or parties shall have reasonably concluded (based on the advice of counsel)
that there may be defenses available to it or them which are different from or
additional to those available to the Seller (in which case the Seller shall
not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such reasonable fees and
expenses shall be borne by the Seller and paid as incurred (it being
understood, however, that the Seller shall not
19
be liable for the expenses of more than one separate firm of attorneys in any
one action or series of related actions in the same jurisdiction representing
the indemnified parties who are parties to such action). Anything in this
paragraph to the contrary notwithstanding, the Seller shall not be liable for
any settlement of any such claim or action effected without the written
consent of the Seller.
(c) [ ] agrees to indemnify, defend and hold harmless the Company, its
directors and any person who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against (i) any loss, expense, liability, damage or claim (including the
reasonable cost of investigation) which, jointly or severally, the Company or
any such person may incur under the Securities Act, the Exchange Act or
otherwise, insofar as such loss, expense, liability, damage or claim arises
out of or is based upon any breach of any representation, warranty or covenant
of [ ] contained in the first sentence of Section 4(a) and in Section 4(b) or
(ii) any loss, expense, liability, damage or claim (including the reasonable
cost of investigation) which jointly or severally, the Company, the Seller or
any such person may incur under the Securities Act, the Exchange Act or
otherwise insofar as such loss, expense, liability, damage or claim arises out
of or is based on any untrue statement or alleged untrue statement of a
material fact contained in and in conformity with information furnished in
writing by [ ] to the Company expressly for use in the Preliminary Private
Placement Memorandum or the Final Private Placement Memorandum (or such 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 in connection with such
information or necessary to make such information, in the light of the
circumstances under which they were made, not misleading. [ ] agrees to
indemnify, defend and hold harmless the Seller, its directors and any person
who controls the Seller within the meaning of Section 15 of the Securities Act
or Section 2 of the Exchange Act as to any loss, expense, liability, damage or
claim of the Seller or any such person referenced in clause (ii) of the
preceding sentence. The statements set forth under Section 20 hereinbelow
constitute the only information furnished by or on behalf of [ ] to the
Company for purposes of Section 3(a) above and this Section 8.
If any claim or action is brought against the Company, the Seller or
any such person in respect of which indemnity may be sought against [ ]
pursuant to the foregoing paragraph, the Company, the Seller or such person
shall promptly notify [ ] in writing of the institution of such action and [ ]
shall assume the defense of such action, including the employment of counsel
and payment of reasonable fees and expenses associated therewith. The Company,
the Seller 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, the Seller or such person unless the employment of
such counsel shall have been authorized in writing by [ ] in connection with
the defense of such action or [ ] shall not have employed counsel to have
charge of the defense of such action within a reasonable time or such
indemnified party or parties shall have reasonably concluded (based on the
advice of counsel) that there may be defenses available to it or them which
are different from or additional to those available to [ ] (in which case [ ]
shall not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such fees and expenses
shall be borne by [ ] and paid as incurred (it being understood, however, that
[ ] shall not be liable for the expenses of more than one separate firm of
attorneys for each of the Company, the Seller or their respective controlling
persons in any one action or series of related actions in the same
jurisdiction representing the indemnified
20
parties who are parties to such action). Anything in this paragraph to the
contrary notwithstanding, [ ] shall not be liable for any settlement of any
such claim or action effected without the written consent of [ ].
(d) If the indemnification provided for in this Section 8 is unavailable
to an indemnified party under subsections (a), (b) and (c) of this Section 8
in respect of any losses, expenses, liabilities, damages or claims referred to
therein, then each applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, expenses, liabilities, damages
or claims (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, the Seller and [ ] from the offering of the
Shares or (ii) if (but only 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, the Seller and [ ] in connection with
the statements or omissions which resulted in such losses, expenses,
liabilities, damages or claims, as well as any other relevant equitable
considerations. The relative benefits received by the Company, the Seller and
[ ] shall be deemed to be in the same proportion as the total proceeds from
the offering received by the Company and the Seller bear to the Placement Fee
received by [ ] provided that, as between the Company and [ ], or the Seller
and [ ], benefits received by [ ] shall be limited to the Placement Fee
received by [ ] from the sale of shares by the Company or by the Seller,
respectively, and not the aggregate Placement Fee. The relative fault of the
Company, the Seller and [ ] 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 supplied by the
Company or by the Seller or by [ ] 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, claims, damages and liabilities referred to above shall be deemed
to include any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any claim or action.
The Company, the Seller and [ ] agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in subsection (c)(i) and,
if applicable (ii), above. Notwithstanding the provisions of this Section 8, [
] shall not be required to contribute any amount in excess of the Placement
Fee applicable to the Shares purchased by the Purchasers. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
9. Survival: The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company, the Seller, their
respective officers, the Purchasers and [ ] set forth in or delivered in
connection with this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement shall remain in full force and effect, regardless
of (i) any investigation made by or on behalf of the Company, the Seller, any
of their respective officers or directors, the Purchasers, [ ] and each
person, if any, who controls [ ] within the meaning of the Securities Act or
the Exchange Act and their respective trustees, directors, officers,
employees, agents and controlling persons referred to in Section 8 hereof and
(ii) delivery of and payment for the Shares. The respective agreements,
covenants, indemnities
21
and other statements set forth in Sections 5(a)(viii) and 8 hereof shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement.
10. Notices: All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telex, telecopier or air courier guaranteeing overnight delivery:
(a) if to the Company: CONSOL Energy Inc.
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Consol Plaza
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Seller: RWE
Rheinbraun AG
Attn: General Counsel,
▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇
▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
of Germany
Telephone: 49 (0) 221/▇▇▇-▇▇▇▇▇
Facsimile: 49 (0) 221/480-1345
with a copy to: Cravath, Swaine & ▇▇▇▇▇ LLP
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Worldwide Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
22
(c) if to [ ]: [ ]
Attn: [ ]
[ ]
[ ]
[ ]
[ ]
[ ]
with a copy to: Hunton & ▇▇▇▇▇▇▇▇ LLP
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Riverfront Plaza, East Tower
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(d) if to the Purchasers: To each Purchaser at its address
specified in its Purchaser Letter
All such notices and communications shall be deemed to have been duly
given when received. Any party by notice to the other party may designate
additional or different addresses for subsequent notices or communications.
11. Governing Law; Consent to Jurisdiction: THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. The parties hereto agree
to be subject to, and hereby irrevocably submit to, the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York or the Supreme Court of the State of New York sitting in New York
County, in respect of any suit, action or proceeding arising out of or
relating to this Agreement or the transactions contemplated herein, and
irrevocably agree that all claims in respect of any such suit, action or
proceeding may be heard and determined in any such court. Each of the parties
hereto irrevocably waives, to the fullest extent permitted by applicable law,
any objection to the laying of the venue of any such suit, action or
proceeding brought in any such court and any claim that any such suit, action
or proceeding has been brought in an inconvenient forum.
12. Waiver of Jury Trial: TO THE EXTENT PERMITTED BY LAW, EACH OF THE
PARTIES HERETO IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY OR ON BEHALF OF ANY PARTY RELATED
TO OR ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
EACH PARTY HERETO (a) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER
AND (b) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
23
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
13. Parties in Interest: The Agreement herein set forth has been and is
made solely for the benefit of the Purchasers, [ ], the Company, the Seller
and the controlling persons, trustees, directors and officers referred to in
Sections 8 and 9 hereof, and their respective successors, assigns, executors
and administrators. No other person, partnership, association or corporation
shall acquire or have any right under or by virtue of this Agreement. The
parties hereto agree that Purchasers shall be third party beneficiaries to the
agreements made by the Seller in Sections 1(d) and 1(e) of the Agreement, and
each Purchaser shall have the right to enforce such agreements directly to the
extent it deems such enforcement necessary or advisable to protect its rights
hereunder.
14. Amendments and Waivers: Neither this Agreement nor any term hereof
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought.
15. Successors: This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties. The
rights and obligations of any party hereto may not be assigned by such party
without the express written consent of each other party hereto, and any
attempted assignment without such consent shall be invalid.
16. Counterpart and Facsimile Signatures: This Agreement may be in signed
counterparts, each of which shall be an original and all of which together
shall constitute one and the same agreement, and may be executed by facsimile.
17. Headings: The section headings in this Agreement have been inserted
as a matter of convenience of reference and are not a part of this Agreement.
18. Severability: In the event that any one or more of the provisions
contained herein is held invalid, illegal or unenforceable in any respect for
any reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions hereof shall not be in any
way impaired or affected thereby, but only to the extent that giving effect to
such provision and the remaining provisions hereof is in accordance with the
intent of the parties as reflected in this Agreement.
19. Entire Agreement: This Agreement (including the Exhibits hereto)
constitutes the entire agreement and understanding of the parties hereto with
respect to the matters and transactions contemplated hereby supersedes all
prior agreements and understanding whatsoever relating to such matters and
transactions.
20. Furnished Information: The Company and [ ] hereby confirm and agree
that the only information furnished to the Company by [ ] expressly for use in
the Private Placement Memorandum is the information set forth in the last
sentence of the second paragraph under the heading "Private Placement."
21. Default by Any Purchaser: In the event that any Purchaser shall
default in its obligation to purchase and pay for any Shares hereunder, the
proportion of Primary Shares and
24
Secondary Shares in the aggregate number of Shares being purchased by each
other Purchaser hereunder shall be reallocated in such proportion (as
determined by [ ] in consultation with the Seller and the Company) so that the
aggregate number of Primary Shares being purchased by all Purchasers hereunder
shall in all events be 11,000,000.
[SIGNATURE PAGE FOLLOWS]
25
Please acknowledge and accept the foregoing provisions hereof by signing
this Agreement in the space indicated below.
Very truly yours,
RWE RHEINBRAUN AG, a stock corporation
organized under the laws of The Federal
Republic of Germany
By: /s/ ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Counsel
CONSOL ENERGY INC., a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
ACKNOWLEDGED AND ACCEPTED:
[ ],
By: /s/ [ ]
--------------------------------
Name:
Title:
26
SCHEDULE 1
PURCHASERS
27
EXHIBIT A
FORM OF PURCHASER'S LETTER/SUBSCRIPTION AGREEMENT
A-1
EXHIBIT B
FORM OF REGISTRATION RIGHTS AGREEMENT
B-1
EXHIBIT C
FORM OF OPTION AGREEMENT
C-1
EXHIBIT D
FORM OF ESCROW AGREEMENT
D-1
EXHIBIT E
FORM OF OPINION OF COMPANY COUNSEL
E-1
EXHIBIT F
FORM OF OPINION OF CRAVATH, SWAINE & ▇▇▇▇▇ LLP
F-1
EXHIBIT G
FORM OF OPINION OF SELLER'S GENERAL COUNSEL
G-1
