EXHIBIT 2.4
FIRST AMENDMENT TO
BUSINESS COMBINATION AGREEMENT
This First Amendment to the Business Combination Agreement (this
"AMENDMENT") is entered into as of May 10 2005, by and among ICG, Inc. (f/k/a
International Coal Group, Inc.) ("PARENT"), International Coal Group, Inc.
(f/k/a ICG Holdco, Inc.) ("HOLDCO"), CoalQuest Merger Sub LLC ("MERGER SUB"),
CoalQuest Development LLC (the "COMPANY"), and the members of the Company (the
"MEMBERS").
RECITALS:
A. Parent, Holdco, Merger Sub, the Company and the members of the Company
are parties to the Business Combination Agreement, dated as of March 31, 2005
(the "BUSINESS COMBINATION AGREEMENT"); and
B. Parent, Holdco, Merger Sub, the Company and the Members desire to amend
the Business Combination Agreement as set forth herein.
NOW, THEREFORE, the parties agree as follows:
1. Definitions. Capitalized terms not defined in this Amendment have the
meanings given such terms in the Business Combination Agreement.
2. Amendments.
2.1 Articles I and II of the Business Combination Agreement are hereby
amended and restated in their entireties to read as set forth on Annex 1
attached hereto.
2.2 Section 7.07 of the Business Combination Agreement is hereby amended
by deleting it in it and by substituting in lieu thereof the following:
7.07 Indemnification; Directors and Officers Insurance. For six
years from and after the Effective Time, Holdco agrees to, and
to cause the Company to, indemnify and hold harmless all past
and present managers, directors and officers of the Company
and its Subsidiaries, to the same extent such persons are
indemnified as of the date of this Agreement by the Company or
one of its Subsidiaries pursuant to its limited liability
company agreement, certificate of incorporation, bylaws or
other constituent document, as in existence on the date
hereof, for acts or omissions occurring at or prior to the
Effective Time. Holdco will cause the Company to provide, for
an aggregate period of not less than six years from
the Effective Time, each of the Company's and its
Subsidiaries' current managers, directors and officers (or
comparable Persons) an insurance and indemnification policy
that provides coverage for events occurring prior to the
Effective Time that is no less favorable than the existing
policy or policies or, if substantially equivalent insurance
coverage is unavailable, the best available coverage;
provided, however, that the Company will not be required to
pay a premium for such required insurance in excess of 400% of
the premium paid by the Company for such coverage currently.
2.3 Section 7.09 of the Business Combination Agreement is hereby amended
by deleting it in it and by substituting in lieu thereof the following:
7.09 Registration Rights. As soon as practicable after the Closing,
Holdco will enter into a Registration Rights Agreement, in
substantially the form attached hereto as Exhibit A, with each
Member of the Company (or Blocker Owner, if applicable).
2.4 Section 10.01(a) of the Business Combination Agreement is hereby
amended by deleting the definitions of "Merger Share Number" and "IPO Deadline"
contained therein and by substituting in lieu thereof the following definitions:
"CONTRIBUTION SHARE NUMBER" means the lesser of (i) (x) 11,451,548
shares of Holdco Common Stock multiplied by (y) the Parent Exchange
Number (such product, the "MAXIMUM CONTRIBUTION SHARE NUMBER"), and
(ii) if the IPO Completion has occurred, the number of shares of
Holdco Common Stock equal to $101,750,000 divided by the price per
share at which the Holdco Common Stock is offered to the public in
the IPO.
"IPO DEADLINE" means the earliest to occur of (i) Xxxxx 00, 0000,
(xx) the date on which the Board of Directors of Parent or Holdco
determines to abandon the IPO, and (iii) the IPO Completion. For
purposes hereof, "ABANDON" means an express determination by the
Board of Directors of Parent or Holdco not to proceed with the IPO
prior to March 31, 2006 and will not include a determination by the
Board of Directors of Parent or Holdco to temporarily withdraw the
Holdco Form S-1, for example, as a result of market conditions at
the time.
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2.5 Section 10.01(a) of the Business Combination Agreement is hereby
amended to include the following additional definition:
"PARENT EXCHANGE AMOUNT" means a number or fraction equal to the
number of shares of Holdco Common Stock that each share of Parent
Common Stock (as defined in the Anker Agreement) is to be converted
into pursuant to the terms of the Anker Agreement, and which will be
specified in a certificate signed by the Chairman of the Board, the
Chief Executive Officer or the Chief Financial Officer of Parent and
delivered to the Company and Anker; provided that if no such
certificate is delivered prior to the Effective Time, the Parent
Exchange Amount will be one.
2.6 Section 10.01(b) of the Business Combination Agreement is hereby
amended by deleting the references to "Effective Time," "Closing," "Merger,"
"Merger Consideration" and "Maximum Merger Share Number" contained therein and
by substituting in lieu thereof the following:
TERM SECTION
---- --------
Blocker Corp 1.01(b)
Blocker Owners 1.01(b)
Closing 1.01(c)
Contribution 1.01(a)
Contribution Consideration 1.02(a)
Effective Time 1.01(a)
Maximum Contribution Share Number 10.01(a)
2.7 The Business Combination Agreement is amended such that all
references to, and obligations and rights of, each of Merger Sub and the
Surviving Entity are hereby deleted, and Merger Sub is removed as a party to the
Business Combination Agreement.
2.8 The Business Combination Agreement is amended such that (i) all
references to "Merger Consideration" contained therein are deleted and
references to "Contribution Consideration" are substituted in lieu thereof, (ii)
all references to the "Merger" contained therein are deleted and references to
the "Contribution" are substituted in lieu thereof, and (iii) all references to
the "Anker Acquisition" contained therein are deleted and references to the
"Anker and Parent Acquisition" are substituted in lieu thereof.
2.9 Schedule 4.03 of the Business Combination Agreement is amended by
adding the following after "All filings and registrations necessary under
Parent's permits to reflect the change in ownership":
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to the extent required to be made prior to the Closing, with
all such filings and registrations required to be made
following the Closing being made following the Closing.
2.10 Schedule 5.01 of the Business Combination Agreement is amended
to be renumbered Schedule 6.01.
3. Incorporation. Section 10.02 and Article XI of the Business
Combination Agreement are hereby incorporated mutatis mutandi into this
Amendment.
4. Effect on Business Combination Agreement. Except as specifically
amended by this Amendment, the Business Combination Agreement will remain in
full force and effect and is hereby ratified and confirmed.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, Parent, Holdco, Merger Sub, the Company and the
Members have caused this Amendment to be executed by their respective officers
thereunto duly authorized as of the date first written above.
ICG, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title:
COALQUEST DEVELOPMENT LLC
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Manager
INTERNATIONAL COAL GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title:
COALQUEST MERGER SUB, LLC
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Manager
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WLR COALQUEST HOLDING CORP.
By: /s/ Xxxxxx X. Xxxx
-------------------------------------
Name: Xxxxxx X. Xxxx
Title:
XXXXXX AND XXXXX XXXXX
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title:
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title:
WHOLESALE REALTORS SUPPLY
By: XX Xxxx & Co LLC, on behalf of
Wholesale Realtors Supply pursuant to
the CoalQuest Instruction/Authorization
dated March 25, 2005
By: /s/ Xxxxxx X. Xxxx
-------------------------------------
Name: Xxxxxx X. Xxxx
Title:
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ANNEX 1
ARTICLE I
THE CONTRIBUTION
1.01 The Contribution. (a) As soon as practicable after
satisfaction or, to the extent permitted hereunder, waiver of all conditions to
the Contribution, each of the Members will assign, contribute, convey, transfer
and deliver to Holdco such Member's entire right, title and interest in its
Company Membership Interests, and in exchange for such interests, Holdco will
issue to such Members the Contribution Consideration pursuant to the terms
hereof (such contribution and issuance, the "CONTRIBUTION," and, the date of the
Contribution, the "EFFECTIVE TIME"). The Closing will in no event occur less
than 5 Business Days after the later to occur of the delivery of the Company
Audited Financial Statements and the Parent Audited Financial Statements.
(b) With respect to any Members (each, a "BLOCKER CORP") that are
wholly-owned subsidiaries formed to hold the Company Membership Interests for
the benefit of certain tax-exempt or foreign investors, either directly or
through a partnership or similar entity (the "BLOCKER OWNERS"), each such
Blocker Owner will be permitted to assign, contribute, convey, transfer and
deliver to Holdco its equity in the Blocker Corp as its part of the
Contribution, in place of the assignment, contribution, conveyance, transfer and
delivery of the Company Membership Interests by the Blocker Corp, and the
Contribution Consideration to be issued in connection therewith will be issued
to such Blocker Owner; provided, however, prior to the Effective Date, in a form
reasonably acceptable to Holdco, such Blocker Owner must
(i) represent and warrant to Holdco that (A) the Blocker
Corp has no liabilities of any kind or nature whatsoever and will not have
any at the Effective Date and (B) the equity of the Blocker Corp
transferred pursuant to this Section 1.01(b) and this Agreement represents
all the issued and outstanding equity of the Blocker Corp;
(ii) make to Holdco, as of the Effective Date, the
representations and warranties in Article V of this Agreement, with the
equity of the Blocker Corp substituted for references to the Company
Membership Interests;
(iii) indemnify and hold harmless in full Holdco and its
Affiliates for any losses, liabilities, claims, damages, expenses or costs
arising from a breach of the representations and warranties described in
clause (i); and
(iv) deliver to Holdco the certificate(s) evidencing all
outstanding equity of the Blocker Corp, together with an executed stock
power conveying the same to Holdco.
(c) Upon the terms and subject to the conditions of this
Agreement, the closing of the Contribution (the "CLOSING") will take place on
the Closing Date at the offices of Xxxxx Day, 000 X. 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, as soon as practicable after satisfaction or, to the extent
permitted hereunder, waiver of all
conditions to the Contribution, or at such other time or place as the parties
hereto may agree.
1.02 Exchange of Membership Interests. At the Effective Time:
(a) In exchange for each Member's Company Membership Interest (or
each Blocker Owner's Blocker Corp equity, if applicable) outstanding immediately
prior to the Effective Time, without any action on the part of the Member (or
Blocker Owner, if applicable), such Member (or Blocker Owner, if applicable)
will be entitled to receive the number of shares of Holdco Common Stock equal to
the Contribution Share Number multiplied by the Percentage evidenced by such
Company Membership Interest (or the Company Membership Interest owned by the
Blocker Corp, if applicable) calculated as of immediately prior to the Effective
Time to the nearest one-hundredth of a percent (the "CONTRIBUTION
CONSIDERATION"). Fractional shares of Holdco Common Stock will be rounded up or
down to the next whole share of Holdco Common Stock.
(b) Certificates representing whole shares of Holdco Common Stock
will be issued in accordance with Section 1.04. If, prior to the Effective Time,
the number of outstanding Company Membership Interests or shares of Holdco
Common Stock has been increased, decreased, changed into or exchanged for a
different number or kind of shares or securities as a result of a
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar change in capitalization, an appropriate
and proportionate adjustment will be made to the Contribution Consideration.
(c) All Company Membership Interests exchanged for the right to
receive Holdco Common Stock pursuant to this Article I, without any action on
the part of the Members, will be transferred, on the books and records of the
Company, to Holdco. At the Effective Time, Holdco will succeed to and assume all
of the rights and obligations of a member of the Company to the extent of the
Company Membership Interests so exchanged, including all allocations of each
Members' capital accounts and allocations of profits and losses. The Company
hereby waives its right of first offer with respect to the transfer of Company
Membership Interests from the Members to Holdco pursuant to the terms of this
Agreement. As of the Effective Time, Holdco agrees to accept, assume, adopt and
approve in writing all of the terms and provisions of the Company Operating
Agreement. The manager of the Company consents to the assignment by the Members
to Holdco of the Company Membership Interests, and, on the Effective Date,
Holdco will be deemed admitted as a member of the Company.
(d) To the extent Section 1.01(b) applies, all equity of any
Blocker Corp exchanged for the right to receive Holdco Common Stock pursuant to
this Article I, without any action on the part of the Blocker Owner other than
as contemplated by Section 1.01(b), will be transferred, on the books and
records of the Blocker Corp, to Holdco, and such Blocker Corp will issue such
certificates as are necessary to reflect the transfer of ownership of the
Blocker Corp equity.
1.03 Closing of Transfer Records. After the close of business on
the Closing Date, transfers by the Members of the Company Membership Interests
outstanding prior to the Effective Time will not be made on the membership
transfer books of the Company, and transfers by any Blocker Owners of the equity
of any Blocker Corp outstanding prior to the Effective Time will not be made on
the membership transfer books of such Blocker Corp.
1.04 Issuance of Certificates. (a) Subject to Section 1.05, as soon
as practicable after the Effective Time, Holdco will mail to each holder of
Company Membership Interests (or Blocker Owner, if applicable) certificate(s)
representing the number of whole shares of Holdco Common Stock to which such
holder of Company Membership Interests (or Blocker Owner, if applicable) has
become entitled pursuant to the provisions of this Article I.
(a) No Contribution Consideration will be issued to a Person other
than the Person in whose name the Company Membership Interests (or Blocker Corp
equity, if applicable) are registered on the books of the Company (or Blocker
Corp, if applicable). Notwithstanding the foregoing, neither Holdco nor any
other party hereto will be liable to a holder of Company Membership Interests or
(Blocker Corp equity, if applicable) for any Contribution Consideration
delivered to a public official pursuant to applicable abandoned property,
escheat or similar laws.
1.05 Early Issuance. If the Effective Time occurs prior to the IPO
Deadline, Holdco will deposit, with an escrow agent selected by the Company, for
the benefit of the holders of Company Membership Interests (or Blocker Corp
equity, if applicable), certificates representing shares of Holdco Common Stock
equal to the Maximum Contribution Share Number, which shares will be held in
escrow (such shares, "ESCROWED SHARES") until the IPO Deadline. The Escrowed
Shares will be deemed outstanding from and after the Effective Time, with the
result that any dividends or distributions thereon or other rights in respect
thereof will be added to and also held in escrow, and such Escrowed Shares will
be voted in accordance with the instructions of the Beneficial Owners thereof in
accordance with their relative interest therein. If the Maximum Contribution
Share Number exceeds the finally determined Contribution Share Number, such
excess shares will be returned to Holdco upon the IPO Deadline and be held in
Holdco's treasury.
ARTICLE II
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