5,000,000 SHARES
PEABODY ENERGY CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
May 1, 2003
Xxxxxx Brothers Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
X.X. Xxxxxxx & Sons, Inc.
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Certain stockholders of Peabody Energy Corporation, a Delaware
corporation (the "COMPANY"), named in Schedule 2 hereto (the "SELLING
STOCKHOLDERS") propose to sell 5,000,000 shares (the "FIRM STOCK") of the
Company's Common Stock, par value $0.01 per share (the "COMMON Stock").
In addition, certain of the Selling Stockholders propose to grant to
the Underwriters named in Schedule 1 hereto (the "UNDERWRITERS") an option to
purchase up to an additional 750,000 shares of the Common Stock on the terms and
for the purposes set forth in Section 3 (the "OPTION STOCK"). The Firm Stock and
the Option Stock, if purchased, are hereinafter collectively called the "STOCK."
This is to confirm the agreement concerning the purchase of the Stock from the
Selling Stockholders by the Underwriters.
Section 1. Representations, Warranties and Agreements of the Company.
The Company represents, warrants and agrees that:
(a) A registration statement on Form S-3 with respect to the Stock
has (i) been prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "SECURITIES ACT"), and the rules and
regulations (the "RULES AND REGULATIONS") of the Securities and Exchange
Commission (the "COMMISSION") thereunder, (ii) been filed with the Commission
under the Securities Act, and (iii) become effective under the Securities Act.
Copies of such registration statement and each of the amendments thereto have
been delivered by the Company to you. As used in this Agreement, "EFFECTIVE
TIME" means the date and the time as of which such
registration statement, or the most recent post-effective amendment thereto, if
any, was declared effective by the Commission; "EFFECTIVE DATE" means the date
of the Effective Time; "PRELIMINARY PROSPECTUS" means each prospectus included
in such registration statement, or amendments thereof, before it became
effective under the Securities Act and any prospectus filed with the Commission
by the Company with the consent of the Representatives pursuant to Rule 424(a)
of the Rules and Regulations; "REGISTRATION STATEMENT" means such registration
statement, as amended at the Effective Time, including any documents
incorporated by reference therein at such time and all information contained in
the final prospectus filed with the Commission pursuant to Rule 424(b) of the
Rules and Regulations and deemed to be a part of the registration statement as
of the Effective Time pursuant to Rule 430A of the Rules and Regulations; and
"PROSPECTUS" means the prospectus supplement and the accompanying prospectus and
any and all information incorporated by reference therein at such time, in the
form first used to confirm sales of Stock. Reference made herein to any
Preliminary Prospectus or to the Prospectus shall be deemed to refer to and
include any documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Securities Act, as of the date of such Preliminary Prospectus
or the Prospectus, as the case may be, and any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include any document filed under the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), after the date of such Preliminary
Prospectus or the Prospectus, as the case may be, and incorporated by reference
in such Preliminary Prospectus or the Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement shall be deemed to
include any annual report of the Company filed with the Commission pursuant to
Section 13(a) or 15(d) of the Exchange Act after the Effective Time that is
incorporated by reference in the Registration Statement. If the Company has
filed an abbreviated registration statement to register additional shares of
Common Stock pursuant to Rule 462(b) under the Securities Act (the "RULE 462
REGISTRATION STATEMENT"), then any reference herein to the term "REGISTRATION
STATEMENT" shall be deemed to include such Rule 462 Registration Statement. The
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or the
Prospectus will, when it becomes effective or is filed with the Commission, as
the case may be, conform, in all material respects to the requirements of the
Securities Act and the Rules and Regulations and do not and will not, as of the
applicable effective date (as to the Registration Statement and any amendment
thereto) and as of the applicable filing date (as to the Prospectus and any
amendment or supplement thereto) in light of the circumstances in which they
were made contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided that no representation or warranty is made as
to information contained in or omitted from the Registration Statement or the
Prospectus in reliance upon and in conformity with written information furnished
to the Company
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through the Representatives by or on behalf of any Underwriter specifically for
inclusion therein.
(c) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Securities Act
or Exchange Act, as applicable, and the Rules and Regulations, and none of such
documents contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein not misleading in light
of the circumstances in which they were made; and any further documents so filed
and incorporated by reference in the Prospectus, when such documents become
effective or are filed with Commission, as the case may be, will conform in all
material respects to the requirements of the Securities Act or Exchange Act, as
applicable, and the Rules and Regulations and will not contain an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein not misleading in light of the circumstances in which
they were made.
(d) The Company and each of its subsidiaries (as defined in
Section 17) have been duly incorporated or organized, as the case may be, and
are validly existing as their respective business entities and in good standing
under the laws of their respective jurisdictions of incorporation or
organization, as the case may be, are duly qualified to do business and are in
good standing as foreign corporations in each jurisdiction in which their
respective ownership or lease of property or the conduct of their respective
businesses requires such qualification, and have all power and authority
necessary to own or hold their respective properties and to conduct the
businesses in which they are engaged, except where the failure to so qualify to
be in good standing would not reasonably be expected to have a material adverse
effect on the financial condition, business, properties or results of operations
of the Company and its subsidiaries taken as a whole (a "MATERIAL ADVERSE
EFFECT"); and none of the subsidiaries of the Company other than Black Beauty
Coal Company, Caballo Coal Company, Coal Properties Corp., Gold Fields Mining
Corporation, Peabody Coal Company, Peabody Development Company, Peabody Holding
Company, Inc., Peabody Natural Resources Company, Peabody Western Coal Company
and Powder River Coal Company is a "significant subsidiary," as such term is
defined in Rule 405 of the Rules and Regulations.
(e) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Prospectus; and all of the issued shares of capital stock or membership
interests, as the case may be, of each wholly-owned subsidiary of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable and (except for directors' qualifying shares) are owned directly
or indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims.
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(f) The shares of the Stock to be sold by the Selling Stockholders
to the Underwriters hereunder have been duly and validly authorized.
(g) This Agreement has been duly authorized, executed and
delivered by the Company.
(h) The execution, delivery and performance of this Agreement by
the Company, the compliance by the Company with all of the provisions of this
Agreement and the consummation of the transactions contemplated hereby will not
(i) conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which 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, (ii) result in any violation of the
provisions of the Certificate of Incorporation or by-laws of the Company or any
of its subsidiaries or (iii) result in the violation of any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties or assets, except in the case of clauses (i) and (iii), such
conflicts, breaches or violations that in the aggregate would not reasonably be
expected to have a Material Adverse Effect; and except for the registration of
the Stock under the Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange Act, and
applicable state securities laws in connection with the purchase and
distribution of the Stock by the Underwriters, no consent, approval,
authorization or order of, or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby.
(i) Except as set forth in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to file a registration statement under
the Securities Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement filed
by the Company under the Securities Act.
(j) Except as set forth in the Registration Statement, the Company
has not sold or issued any shares of Common Stock during the six-month period
preceding the date of the Prospectus, including any sales pursuant to Rule 144A
under, or Regulations D or S of, the Securities Act.
(k) Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest audited financial statements included in the
Prospectus, any material loss or interference with its business that has had a
Material Adverse Effect, whether from fire, explosion, flood or other calamity,
whether or not covered by
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insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Prospectus; and,
since such date, there has not been any material change in the capital stock or
material increase in the long-term debt of the Company or any of its
subsidiaries or any change, in or affecting the general affairs, management,
consolidated financial position, stockholders' equity, results of operations,
business or prospects of the Company and its subsidiaries that has had or could
reasonably be expected to have a Material Adverse Effect, other than as set
forth or contemplated in the Prospectus.
(l) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or included in
the Prospectus present fairly the financial condition and results of operations
of the entities purported to be shown thereby, at the dates and for the periods
indicated, and the consolidated historical financial statements have been
prepared in conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved.
(m) Ernst & Young LLP, who have certified certain financial
statements of the Company, whose report appears in the Prospectus and who have
delivered the initial letter referred to in Section 9(f) hereof, are and have
been independent public accountants as required by the Securities Act and the
Rules and Regulations during the periods covered by the financial statements on
which they reported.
(n) The Company and each of its subsidiaries have good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them, in each case free and clear of all
liens, encumbrances and defects, except such as are described in the Prospectus
or that would not reasonably be expected to have a Material Adverse Effect; and
all real property held under lease by the Company and its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, is held by them
under valid, subsisting and enforceable leases, with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company and its subsidiaries.
(o) To the knowledge of the Company, the Company and each of its
subsidiaries carry, or are covered by, insurance in such amounts and covering
such risks as is adequate for the conduct of their respective businesses and the
value of their respective properties and as is customary for companies engaged
in similar businesses in similar industries.
(p) Except as set forth in the Prospectus, 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 or assets of the Company or any of its
subsidiaries is the subject which, if determined adversely to the Company or any
of its subsidiaries, would be reasonably likely to have a Material Adverse
Effect; and to the best of the Company's
5
knowledge, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(q) The conditions for use of Form S-3, as set forth in the
General instructions thereto, have been satisfied.
(r) There are no contracts or other documents that are required to
be described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations that have not
been described in the Prospectus or filed as exhibits to the Registration
Statement.
(s) No relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, which is required to be
described in the Prospectus that is not so described.
(t) No labor disturbance by the employees of the Company exists
or, to the knowledge of the Company, is imminent, which would reasonably be
expected to have a Material Adverse Effect, except as disclosed in the
Prospectus.
(u) Except as would not reasonably be expected to have a Material
Adverse Effect, the Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "REPORTABLE EVENT" (as defined in ERISA) has occurred
with respect to any "PENSION PLAN" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "PENSION PLAN" or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "CODE"); and each "PENSION PLAN" for which the
Company would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would cause the loss of
such qualification, except as would not reasonably be expected to have a
Material Adverse Effect.
(v) The Company has filed (or obtained extensions in filing) all
federal, state and local income and franchise tax returns required to be filed
through the date hereof (other than those the nonfiling of which would not be
reasonably likely to have a Material Adverse Effect) and has paid all taxes due
thereon, other than those being contested in good faith and for which reserves
have been provided in accordance with GAAP, those currently payable without
penalty or interest or the nonpayment of which would not be reasonably likely to
have a Material Adverse Effect. No tax deficiency has been determined adversely
to the Company or any of its subsidiaries that has had (nor does the Company
have any knowledge of any tax deficiency which, if determined
6
adversely to the Company or any of its subsidiaries, would reasonably be
expected to have) a Material Adverse Effect.
(w) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be disclosed in
the Prospectus, the Company has not (i) issued or granted any securities (other
than pursuant to the Company's employee benefit plans), (ii) incurred any
liability or obligation, direct or contingent, other than liabilities and
obligations that were incurred in the ordinary course of business, (iii) entered
into any transaction not in the ordinary course of business, or (iv) declared or
paid any dividend on its capital stock.
(x) The Company (i) makes and keeps accurate books and records and
(ii) maintains internal accounting controls that provide reasonable assurance
that (A) transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit preparation
of its financial statements and to maintain accountability for its assets, (C)
access to its assets is permitted only in accordance with management's
authorization and (D) the reported accountability for its assets is compared
with existing assets at reasonable intervals.
(y) Neither the Company nor any of its subsidiaries (i) is in
violation of its organizational documents, (ii) is in default, and no event has
occurred which, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or condition
contained in any material indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which it is a party or by which it is bound or
to which any of its properties or assets is subject, or (iii) is in violation of
any law, ordinance, governmental rule, regulation or court decree to which it or
its property or assets may be subject or has failed to obtain any material
license, permit, certificate, franchise or other governmental authorization or
permit necessary to the ownership of its property or to the conduct of its
business, except, in the cases of clauses (ii) and (iii), such defaults, events,
violations or failures that in the aggregate would not reasonably be expected to
have a Material Adverse Effect.
(z) Except as set forth in the Prospectus, there has been no
storage, disposal, generation, manufacture, refinement, transportation, handling
or treatment of toxic wastes, medical wastes, hazardous wastes or hazardous
substances by the Company or any of its subsidiaries (or, to the knowledge of
the Company, any of their predecessors in interest) at, upon or from any of the
property now or previously owned or leased by the Company or its subsidiaries in
violation of any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit or that would require remedial action under any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit, except for any
violation or remedial action that would not have, or would not be reasonably
likely to have, singularly or in the aggregate with all such violations and
remedial actions, a Material Adverse Effect, except as set forth in, or
specifically contemplated by, the Prospectus; there has been no material spill,
discharge, leak, emission, injection, escape, dumping or release of any kind
onto such property or into the environment surrounding such property of any
toxic wastes, medical wastes, solid wastes, hazardous wastes or
7
hazardous substances due to or caused by the Company or any of its subsidiaries
or with respect to which the Company or any of its subsidiaries have knowledge,
except for any such spill, discharge, leak, emission, injection, escape, dumping
or release that would not have or would not be reasonably likely to have,
singularly or in the aggregate with all such spills, discharges, leaks,
emissions, injections, escapes, dumpings and releases, a Material Adverse
Effect; and the terms "HAZARDOUS WASTES," "TOXIC WASTES," "HAZARDOUS SUBSTANCES"
and "MEDICAL WASTES" shall have the meanings specified in any applicable local,
state, federal and foreign laws or regulations with respect to environmental
protection.
(aa) Neither the Company nor any subsidiary is, or, after giving
effect to the offering and sale of the Stock as described in the Prospectus,
will be, an "investment company" as defined in the Investment Company Act of
1940, as amended.
(bb) The market-related and industry data included in the
Prospectus are based upon estimates by the Company derived from sources that the
Company believes to be reliable and accurate in all material respects.
(cc) The Company has such permits, licenses, franchises,
certificates, consents, orders and other approvals or authorizations of any
governmental or regulatory authority ("PERMITS"), including, without limitation,
any permits or approvals required by the United States Environmental Protection
Agency, the United States Office of Surface Mining Reclamation and Enforcement
and corresponding state agencies, as are necessary under applicable law to own
its properties and to conduct its businesses in the manner described in the
Prospectus, except to the extent that the failure to have such Permits would not
reasonably be expected to have a Material Adverse Effect. The Company has
fulfilled and performed in all material respects, all its material obligations
with respect to the Permits, and, to the best knowledge of the Company, no event
has occurred that allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material impairment of
the rights of the holder of any such Permit, subject in each case to such
qualification as may be set forth in the Prospectus and except to the extent
that any such revocation or termination would not reasonably be expected to have
a Material Adverse Effect.
Section 2. Representations, Warranties and Agreements of the Selling
Stockholders. Each Selling Stockholder severally represents, warrants and agrees
that:
(a) The Selling Stockholder has, and immediately prior to the
First Delivery Date (as defined in Section 5 hereof) the Selling Stockholder
will have full right, power and authority to sell, assign, transfer and deliver
the shares of Stock to be sold by the Selling Stockholder hereunder on such
date; and upon delivery of such shares and payment therefor pursuant hereto the
several Underwriters will acquire a security entitlement with respect to such
shares on the Closing Date and no action based on an adverse claim may be
asserted against the Underwriters with respect to such shares.
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(b) The Selling Stockholder has duly and irrevocably executed and
delivered a power of attorney (the "POWER OF ATTORNEY" and, together with all
other similar agreements executed by the other Selling Stockholders, the "Powers
of Attorney") appointing one or more persons, as attorneys-in-fact, with full
power of substitution, and with full authority (exercisable by any one or more
of them) to execute and deliver this Agreement and to take such other action as
may be necessary or desirable to carry out the provisions hereof on behalf of
the Selling Stockholder.
(c) The Selling Stockholder has full right, power and authority to
enter into this Agreement and the Power of Attorney; the execution, delivery and
performance of this Agreement and the Power of Attorney by the Selling
Stockholder and the consummation by the Selling Stockholder of the transactions
contemplated hereby and thereby will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Selling Stockholder is a party or by which the Selling
Stockholder is bound or to which any of the property or assets of the Selling
Stockholder is subject, nor will such actions result in any violation of the
provisions of any partnership agreement, certificate of incorporation or deed of
trust of the Selling Stockholder or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over the Selling
Stockholder or the property or assets of the Selling Stockholder; and, except
for the registration of the Stock under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as may be required
under the Exchange Act and applicable state securities laws in connection with
the purchase and distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution, delivery and
performance of this Agreement or the Power of Attorney by the Selling
Stockholder and the consummation by the Selling Stockholder of the transactions
contemplated hereby and thereby.
(d) The Registration Statement and the Prospectus and any further
amendments or supplements to the Registration Statement or the Prospectus, when
they become effective or are filed with the Commission, as the case may be, do
not and will not, as of the applicable effective date (as to the Registration
Statement and any amendment thereto) and as of the applicable filing date (as to
the Prospectus and any amendment or supplement thereto in light of the
circumstances in which they were made) contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided that this representation
and warranty is made only as to information contained in or omitted from the
Registration Statement or the Prospectus under the caption "Selling
Stockholders" relating to such Selling Stockholder.
(e) The Selling Stockholder has no reason to believe that the
representations and warranties of the Company contained in Section 1 hereof are
not
9
materially true and correct, is familiar with the Registration Statement and the
Prospectus (as amended or supplemented) and has no knowledge of any material
fact, condition or information not disclosed in the Registration Statement, as
of the effective date, or the Prospectus (or any amendment or supplement
thereto) in light of the circumstances in which they were made, as of the
applicable filing date, which has adversely affected or may adversely affect the
business of the Company and is not prompted to sell shares of Common Stock by
any information concerning the Company that is not set forth in the Registration
Statement and the Prospectus.
(f) The Selling Stockholder has reviewed the Registration
Statement and the Prospectus, and, although the Selling Stockholder has not
independently verified and is not passing upon and assumes no responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement and Prospectus, the Selling Stockholder has no reason to
believe that the Registration Statement, as of the effective date thereof,
contains an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements contained
therein not misleading or that the Prospectus, on the date thereof or on the
date hereof, contains an untrue statement of a material fact or omits to state a
material fact or necessary to make the statements contained therein, in light of
the circumstances under which they were made, not misleading.
(g) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has constituted
or which might reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the shares of the Stock.
Section 3. Purchase of the Stock by the Underwriters. On the basis of
the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, each Selling Stockholder hereby agrees to sell
the number of shares of the Firm Stock set forth opposite its name in Schedule 2
hereto to the several Underwriters and each of the Underwriters, severally and
not jointly, agrees to purchase the number of shares of the Firm Stock set forth
opposite that Underwriter's name in Schedule 1 hereto. Each Underwriter shall be
obligated to purchase from each Selling Stockholder that number of shares of the
Firm Stock that represents the same proportion of the number of shares of Firm
Stock to be sold, as the number of shares of the Firm Stock set forth opposite
the name of such Underwriter in Schedule 1 hereto represents of the total number
of shares of the Firm Stock to be purchased by all of the Underwriters pursuant
to this Agreement. The respective purchase obligations of the Underwriters with
respect to the Firm Stock shall be rounded among the Underwriters to avoid
fractional shares, as the Representatives may determine.
In addition, on the basis of the representations and warranties
contained in, and subject to the terms and conditions of, this Agreement, Xxxxxx
Brothers Merchant Banking Partners II L.P. and certain of its affiliates grant
to the Underwriters an option to purchase up to 750,000 shares of Option Stock.
Such option is granted solely for the purpose of covering over-allotments in the
sale of Firm Stock and is exercisable as
10
provided in Section 5 hereof. Shares of Option Stock shall be purchased
severally for the account of the Underwriters in proportion to the number of
shares of Firm Stock set forth opposite the name of such Underwriters in
Schedule 1 hereto. The respective purchase obligations of each Underwriter with
respect to the Option Stock shall be adjusted by the Representatives so that no
Underwriter shall be obligated to purchase Option Stock other than in 100 share
amounts.
The price of both the Firm Stock and any Option Stock shall be
$25.37375 per share.
The Selling Stockholders shall not be obligated to deliver any of the
Stock to be delivered on any Delivery Date (as hereinafter defined), except upon
payment for all the Stock to be purchased on such Delivery Date as provided
herein.
Section 4. Offering of Stock by the Underwriters. Upon authorization by
the Representatives of the release of the Firm Stock, the several Underwriters
propose to offer the Firm Stock for sale upon the terms and conditions set forth
in the Prospectus.
Section 5. Delivery of and Payment for the Stock. Delivery of and
payment for the Firm Stock shall be made at the offices of Weil, Gotshal &
Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 A.M., New York
City time, on the fourth full business day following the date of this Agreement
or at such other date or place as shall be determined by agreement between the
Representatives and the Company. This date and time are sometimes referred to as
the "FIRST DELIVERY DATE." On the First Delivery Date, the Selling Stockholders
shall deliver or cause to be delivered security entitlements with respect to the
Firm Stock to the Representatives for the account of each Underwriter against
payment to or upon the order of the Selling Stockholders of the purchase price
by wire transfer in immediately available funds. Time shall be of the essence,
and delivery at the time and place specified pursuant to this Agreement is a
further condition of the obligation of each Underwriter hereunder. Upon
delivery, the Firm Stock shall be registered in such names and in such
denominations as the Representatives shall request in writing not less than two
full business days prior to the First Delivery Date.
The option granted in Section 3 will expire 30 days after the date of
this Agreement and may be exercised in whole or in part from time to time but in
no event more than twice, by written notice being given to the Company and the
Selling Stockholders by the Representatives. Such notice shall set forth the
aggregate number of shares of Option Stock as to which the option is being
exercised, the names in which the shares of Option Stock are to be registered,
the denominations in which the shares of Option Stock are to be issued and the
date and time, as determined by the Representatives, when the shares of Option
Stock are to be delivered; provided, however, that this date and time shall not
be earlier than the First Delivery Date nor earlier than the second business day
after the date on which the option shall have been exercised nor later than the
fifth business day after the date on which the option shall have been exercised.
The date and time the shares of Option Stock are delivered are sometimes
referred to as a
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"SECOND DELIVERY DATE" and the First Delivery Date and any Second Delivery Date
are sometimes each referred to as a "DELIVERY DATE."
Delivery of security entitlements with respect to and payment for the
Option Stock shall be made at the place specified in the first sentence of the
first paragraph of this Section 5 (or at such other place as shall be determined
by agreement between the Representatives and the Company) at 10:00 A.M., New
York City time, on such Second Delivery Date. On such Second Delivery Date, the
Selling Stockholders who are selling the Option Stock shall deliver or cause to
be delivered the security entitlements with respect to the certificates
representing the Option Stock to the Representatives for the account of each
Underwriter against payment to or upon the order of such Selling Stockholders of
the purchase price by wire transfer in immediately available funds. Time shall
be of the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Option Stock shall be registered in such names and
in such denominations as the Representatives shall request in the aforesaid
written notice.
Section 6. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than Commission's close of business on the second
business day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A(a)(3) under the
Securities Act; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus prior to the last Delivery Date
except as permitted herein; to advise the Representatives, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish the
Representatives with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the Company
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering or sale of
the Stock; to advise the Representatives, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, of the suspension of the qualification of the Stock for offering or
sale in any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or the Prospectus
or suspending any such qualification, to use promptly its best efforts to obtain
its withdrawal.
(b) To furnish promptly to each of the Representatives and to
counsel for the Underwriters a signed copy of the Registration Statement as
originally filed with
12
the Commission, and each amendment thereto filed with the Commission, including
all consents and exhibits filed therewith.
(c) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits) and (ii)
each Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus; and, if the delivery of a prospectus is required at any time after
the Effective Time in connection with the offering or sale of the Stock or any
other securities relating thereto and if at such time any events shall have
occurred as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary to amend or
supplement the Prospectus in order to comply with the Securities Act, to notify
the Representatives and, upon their request, to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended or
supplemented Prospectus that will correct such statement or omission or effect
such compliance.
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Company and the Representatives, be required by
the Securities Act or requested by the Commission.
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus, any document
incorporated by reference in the Prospectus or any prospectus pursuant to Rule
424 of the Rules and Regulations, to furnish a copy thereof to the
Representatives and counsel for the Underwriters and obtain the consent of the
Representatives to the filing which consent shall not be unreasonably withheld.
(f) As soon as practicable after the Effective Date, to make
generally available to the Company's security holders and to deliver to the
Representatives an earning statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Securities Act and the
Rules and Regulations (including, at the option of the Company, Rule 158).
(g) For a period of five years following the Effective Date, to
furnish to the Representatives, to the extent such information is not freely
available on the Internet, copies of all materials furnished by the Company to
its shareholders and all public reports and all reports and financial statements
furnished by the Company to the principal national securities exchange upon
which the Common Stock may be listed pursuant to requirements of or agreements
with such exchange or to the Commission pursuant to the Exchange Act or any rule
or regulation of the Commission thereunder.
13
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for offering and
sale under the securities laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Stock; provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation, to file a
general consent to service of process in any jurisdiction or to subject itself
to taxation in respect of doing business in any jurisdiction in which it is
otherwise not subject.
(i) For a period of 60 days from the date of the Prospectus, not
to, directly or indirectly, (1) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device that is designed to, or
could be expected to, result in the disposition by any person at any time in the
future of) any shares of Common Stock or securities convertible into or
exchangeable for Common Stock (other than the Stock and shares issued pursuant
to employee benefit plans, qualified stock option plans or other employee
compensation plans existing on the date hereof or pursuant to currently
outstanding options, warrants or rights and shares to be issued as consideration
in an acquisition), or sell or grant options, rights or warrants with respect to
any shares of Common Stock or securities convertible into or exchangeable for
Common Stock (other than the grant of options pursuant to option plans existing
on the date hereof), or (2) enter into any swap or other derivatives transaction
that transfers to another, in whole or in part, any of the economic benefits or
risks of ownership of such shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or other securities, in cash or otherwise, in each case without the prior
written consent of Xxxxxx Brothers Inc. on behalf of the Underwriters.
(j) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary shall become an "investment company" as
defined in the Investment Company Act of 1940, as amended.
Section 7. Further Agreements of the Selling Stockholders. Each of the
Selling Stockholders agree:
(a) For a period of 60 days from the date of the Prospectus, not
to, directly or indirectly, (1) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed to, or
could be expected to, result in the disposition by any person at any time in the
future of) any shares of Common Stock or securities convertible into or
exchangeable for Common Stock (other than the Stock to be sold by the Selling
Stockholders hereunder) or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of such shares of Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise, in each case without the
prior written consent of Xxxxxx Brothers Inc; provided, however, that the
foregoing shall not prohibit the Selling Stockholders other than Xxxxxx Brothers
Merchant Banking Partners II L.P.
14
and its affiliates from exercising options to acquire and selling up to 450,000
shares of Common Stock, in the aggregate, during such 60-day period.
Notwithstanding the foregoing, gifts or transfers to (A) the Selling
Stockholder's immediate family or (B) a trust or partnership the beneficiary and
sole partners of which are members of the Selling Stockholder's immediate family
and/or the Selling Stockholder, shall not be prohibited by this agreement if the
donee or transferee agrees in writing to be bound by the foregoing in the same
manner as it applies to the Selling Stockholder. In addition, this provision
shall not prohibit the exercise of any stock options or warrants, or rights
relating to the conversion of convertible debt, except that the shares of Common
Stock obtained upon any such exercise shall be subject to the limitations on
disposition herein.
(b) That the Stock to be sold by the Selling Stockholder hereunder
is subject to the interest of the Underwriters and the other Selling
Stockholders hereunder, and that the obligations of the Selling Stockholder
hereunder shall not be terminated by any act of the Selling Stockholder, by
operation of law or the occurrence of any other event.
(c) To deliver to the Representatives prior to the First Delivery
Date a properly completed and executed United States Treasury Department Form
W-8 (if the Selling Stockholder is a non-United States person) or Form W-9 (if
the Selling Stockholder is a United States person).
Section 8. Expenses. The Company agrees to pay (a) the costs incident
to the sale and delivery of the Stock and any taxes payable in that connection;
(b) the costs incident to the preparation, printing and filing under the
Securities Act of the Registration Statement and any amendments and exhibits
thereto; (c) the costs of distributing the Registration Statement as originally
filed and each amendment thereto and any post-effective amendments thereof
(including, in each case, exhibits), any Preliminary Prospectus, the Prospectus
and any amendment or supplement to the Prospectus or any document incorporated
by reference therein, all as provided in this Agreement; (d) the costs of
producing and distributing this Agreement, and any other related documents in
connection with the offering, purchase, sale and delivery of the stock; (e) the
costs of delivering and distributing the Powers of Attorney; (f) the filing fees
incident to securing the review by the National Association of Securities
Dealers, Inc. of the terms of sale of the Stock; (g) any applicable listing or
other fees; (h) the fees and expenses (not in excess, in the aggregate, of
$10,000) of qualifying the Stock under the securities laws of the several
jurisdictions as provided in Section 6(h) and of preparing, printing and
distributing a Blue Sky Memorandum (including related fees and expenses of
counsel to the Underwriters); (i) the costs and expenses of the Company relating
to investor presentations on any "ROAD SHOW" undertaken in connection with the
marketing of the offering of the Stock, including, without limitation, expenses
associated with the production of road show slides and graphics, fees and
expenses of any consultants engaged in connection with the road show
presentations with the prior approval of the Company, travel and lodging
expenses of the representatives and officers of the Company and any such
consultants, and the cost of any aircraft chartered in connection with the road
show; and (j) all other costs and expenses incident to the performance of the
15
obligations of the Company and the Selling Stockholders under this Agreement;
provided that, except as provided in this Section 8 and in Section 13, the
Underwriters shall pay their own costs and expenses, including the fees and
expenses of their counsel, any transfer taxes on the Stock that they may sell
and the expenses of advertising any offering of the Stock made by the
Underwriters.
Section 9. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
and the Selling Stockholders contained herein, to the performance by the Company
and the Selling Stockholders of their obligations hereunder, and to each of the
following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a); no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated by the
Commission; and any request of the Commission for inclusion of additional
information in the Registration Statement or the Prospectus or otherwise shall
have been complied with.
(b) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Powers of Attorney,
the Stock, the Registration Statement and the Prospectus, and all other legal
matters relating to this Agreement and the transactions contemplated hereby
shall be reasonably satisfactory in all material respects to counsel for the
Underwriters, the Company and the Selling Stockholders shall have furnished to
such counsel all documents and information that they may reasonably request to
enable them to pass upon such matters.
(c) Xxxxxxx Xxxxxxx & Xxxxxxxx shall have furnished to the
Representatives its written opinion, as counsel to the Company, addressed to the
Underwriters and dated such Delivery Date, in form and substance reasonably
satisfactory to the Representatives.
(d) The respective counsel for each of the Selling Stockholders
shall each have furnished to the Representatives its written opinion, addressed
to the Underwriters and dated the First Delivery Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that:
(i) Such Selling Stockholder has full right, power and
authority to enter into this Agreement and the Power of Attorney; the
execution, delivery and performance of this Agreement and the Power of
Attorney by such Selling Stockholder and the consummation by such
Selling Stockholder of the transactions contemplated hereby and thereby
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any statute, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument known to such counsel to which such Selling
16
Stockholder is a party or by which such Selling Stockholder is bound or
to which any of the property or assets of such Selling Stockholder is
subject, nor will such actions result in any violation of any
partnership agreement, certificate of incorporation or deed of trust of
such Selling Stockholder or any statute or any order, rule or
regulation known to such counsel of any court or governmental agency or
body having jurisdiction over such Selling Stockholder or the property
or assets of such Selling Stockholder; and, except for the registration
of the Stock under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental agency or
body is required for the execution, delivery and performance of this
Agreement or the Power of Attorney by such Selling Stockholder and the
consummation by such Selling Stockholder of the transactions
contemplated hereby and thereby;
(ii) This Agreement has been duly executed and delivered
by or on behalf of each Selling Stockholder;
(iii) A Power-of-Attorney has been duly executed and
delivered by each Selling Stockholder and constitute the valid and
binding agreement of each Selling Stockholder, enforceable in
accordance with its respective terms;
(iv) Immediately prior to the First Delivery Date, each
Selling Stockholder had a security entitlement with respect to the
shares of Stock to be sold by the Selling Stockholder under this
Agreement free and clear of all liens, encumbrances, equities or claims
and full right, power and authority to sell, assign, transfer and
deliver such shares to be sold by the Selling Stockholder hereunder;
and
(v) A security entitlement with respect to the shares of
Stock to be sold by each Selling Stockholder under this Agreement, has
been transferred to each of the several Underwriters and no action
based on an adverse claim may be asserted against the Underwriters with
respect to such offered securities.
In rendering such opinion, such counsel may (i) state that its opinion is
limited to matters governed by the Federal laws of the United States of America,
the laws of the State of New York and the general corporate or partnership law,
as the case may be, of the state of the Selling Stockholder's incorporation or
organization, as the case may be, and that such counsel is not admitted in the
jurisdiction in which the Selling Stockholder is incorporated or organized, as
the case may be, and (ii) in rendering the opinion in Section 9(d)(iv) above,
rely upon a certificate of such Selling Stockholder in respect of matters of
fact as to ownership of and liens, encumbrances, equities or claims on the
shares of Stock sold by such Selling Stockholder, provided that such counsel
shall furnish copies thereof to the Representatives and state that such counsel
believes that both the Underwriters and such counsel are justified in relying
upon such certificate. In the case of the opinion
17
delivered for Xxxxxx Brothers Merchant Banking Partners II L.P. and certain of
its affiliates who are selling Stock in the Offering (the "XXXXXX SELLING
STOCKHOLDERS"), such counsel shall also have furnished to the Representatives a
written statement, addressed to the Underwriters and dated the First Delivery
Date, in form and substance satisfactory to the Representatives, to the effect
that (x) such counsel has acted as counsel to such Selling Stockholder in
connection with the preparation of the Registration Statement and (y) based on
the foregoing, no facts have come to the attention of such counsel that lead it
to believe that the Registration Statement, as of the Effective Date, contained
any untrue statement of a material fact relating to such Selling Stockholder or
omitted to state such a material fact required to be stated therein or necessary
in order to make the statements therein not misleading, or that the Prospectus
contains any untrue statement of a material fact relating to such Selling
Stockholder or omits to state such a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading. The foregoing opinion and statement may be qualified by a
statement to the effect that such counsel does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus.
(e) The Representatives shall have received from Weil, Gotshal &
Xxxxxx LLP, counsel for the Underwriters, such opinion or opinions, dated such
Delivery Date, with respect to the issuance and sale of the Stock, the
Registration Statement, the Prospectus and other related matters as the
Representatives may reasonably require, and the Company shall have furnished to
such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(f) At the time of execution of this Agreement, the
Representatives shall have received from Ernst & Young LLP a letter or letters,
in form and substance satisfactory to the Representatives, addressed to the
Underwriters and dated the date hereof (i) confirming that they are independent
public accountants within the meaning of the Securities Act and are in
compliance with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission and (ii)
stating, as of the date hereof (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Prospectus, as of a date not more than five days
prior to the date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily covered by
accountants' "comfort letters" to underwriters in connection with registered
public offerings.
(g) With respect to the letter or letters of Ernst & Young LLP
referred to in the preceding paragraph and delivered to the Representatives
concurrently with the execution of this Agreement (the "INITIAL LETTERS"), the
Representatives shall have received from Ernst & Young LLP a letter (the
"BRING-DOWN LETTER"), addressed to the Underwriters and dated such Delivery Date
(i) confirming that they are independent public accountants within the meaning
of the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01
18
of Regulation S-X of the Commission, (ii) stating, as of the date of the
bring-down letter (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information is given
in the Prospectus, as of a date not more than five days prior to the date of the
bring-down letter), the conclusions and findings of such firm with respect to
the financial information and other matters covered by the initial letters, and
(iii) confirming in all material respects the conclusions and findings set forth
in the initial letters.
(h) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board, its
President or a Vice President and its Chief Financial Officer stating that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of such Delivery Date; the
Company has complied in all material respects with all its agreements
contained herein; and the conditions set forth in Sections 9(a), 9(j)
and 9(k) have been fulfilled; and
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of the
Effective Date, the Registration Statement and Prospectus did not
include any untrue statement of a material fact and did not omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading (with respect to the
Prospectus, in light of the circumstances under which they were made),
and (B) since the Effective Date no event has occurred that should have
been set forth in a supplement or amendment to the Registration
Statement or the Prospectus.
(i) Each Selling Stockholder (or one or more attorneys-in-fact on
behalf of the Selling Stockholders) shall have furnished to the Representatives
on the First Delivery Date a certificate, dated the First Delivery Date, signed
by, or on behalf of, the Selling Stockholder (or one or more attorneys-in-fact)
stating that the representations, warranties and agreements of the Selling
Stockholder contained herein are true and correct as of the First Delivery Date
and that the Selling Stockholder has complied with all agreements contained
herein to be performed by the Selling Stockholder at or prior to the First
Delivery Date.
(j) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus (A) any loss or interference with
its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus
or (B) since such date there shall not have been any material change in the
capital stock or material increase in the long-term debt of the Company or any
of its subsidiaries or any change in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations of
the Company and its subsidiaries, otherwise than as set forth or contemplated in
the
19
Prospectus, the effect of which, in any such case described in clause (A) or
(B), is, in the judgment of the Representatives, so material and adverse as to
make it impracticable or inadvisable to proceed with the public offering or the
delivery of the Stock being delivered on such Delivery Date on the terms and in
the manner contemplated in the Prospectus.
(k) Subsequent to the execution and delivery of this Agreement (i)
no downgrading shall have occurred in the rating accorded the Company's debt
securities by any "nationally recognized statistical rating organization," as
that term is defined by the Commission for purposes of Rule 436(g)(2) of the
Rules and Regulations and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities.
(l) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or in
the over-the-counter market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or the
settlement of such trading generally shall have been materially disrupted or
minimum prices shall have been established on any such exchange or such market
by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium shall have
been declared by Federal or state authorities, (iii) the United States shall
have become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a declaration
of a national emergency or war by the United States, or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions, including without limitation as a result of terrorist
activities after the date hereof, or the effect of international conditions on
the financial markets in the United States shall be such, as to make it, in the
judgment of the Representatives, impracticable or inadvisable to proceed with
the public offering or delivery of the Stock being delivered on such Delivery
Date on the terms and in the manner contemplated in the Prospectus.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
Section 10. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each
Underwriter, its officers and employees and each person, if any, who controls
any Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to
purchases and sales of Stock), to which that Underwriter, officer, employee or
controlling person may become subject, under the
20
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained (A) in any Preliminary Prospectus,
the Registration Statement or the Prospectus or in any amendment or supplement
thereto, or (B) in any materials or information provided to investors by, or
with the approval of, the Company in connection with the marketing of the
offering of the Stock ("MARKETING MATERIALS"), including any road show or
investor presentations made to investors by the Company (whether in person or
electronically), (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or in any
amendment or supplement thereto, or in any Marketing Materials, any material
fact required to be stated therein or necessary to make the statements therein
not misleading, or (iii) any act or failure to act or any alleged act or failure
to act by any Underwriter in connection with, or relating in any manner to, the
Stock or the offering contemplated hereby, and that is included as part of or
referred to in any loss, claim, damage, liability or action arising out of or
based upon matters covered by clause (i) or (ii) above (provided that the
Company shall not be liable under this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction that such
loss, claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter through
its gross negligence or willful misconduct), and shall reimburse each
Underwriter and each such officer, employee or controlling person promptly upon
demand for any legal or other expenses reasonably incurred by that Underwriter,
officer, employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action (i) arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or the Prospectus, or in
any such amendment or supplement, in reliance upon and in conformity with
written information concerning such Underwriter furnished to the Company through
the Representatives by or on behalf of any Underwriter specifically for
inclusion therein which information consists solely of the information specified
in Section 10(f); or (ii) results solely from an untrue statement of material
fact contained in, or the omission of a material fact from, such preliminary
prospectus, which untrue statement or omission was corrected in the Prospectus
(as then amended or supplemented) if the Company shall sustain the burden of
proving that the Underwriters sold Shares to the person alleging such loss,
claim, damage, liability or action without sending or giving, at or prior to the
written confirmation of such sale, a copy of the Prospectus (as then amended or
supplemented) if the Company had previously furnished copies thereof to the
Underwriters within a reasonable amount of time prior to such sale or such
confirmation, and the Underwriters failed to deliver the corrected Prospectus,
if required by law to have so delivered it and if delivered would have cured the
defect giving rise to such loss, claim, damage, liability or action. The
foregoing indemnity agreement is in addition to any liability that the Company
may otherwise have to any Underwriter or to any officer, employee or controlling
person of that Underwriter.
21
(b) Each Selling Stockholder, severally and not jointly, shall
indemnify and hold harmless each of the Company and each Underwriter, its
officers and employees and each person, if any, who controls the Company or any
Underwriter within the meaning of Section 15 of the Securities Act, from and
against any loss, claim, damage or liability (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim), or any action in respect thereof
(including, but not limited to, any loss, claim, damage or liability or action
relating to purchases and sales of Stock), to which the Company or that
Underwriter, officer, employee or controlling person may become subject, insofar
as such loss, claim, damage, liability or action arises out of, or is based
upon, (i) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto or (ii) the omission or
alleged omission to state in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or in any amendment or supplement thereto, any
material fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or the omission or alleged omission: (x)
relates to information under the caption "Selling Stockholders" relating to such
Selling Stockholder; or (y) was made in conformity with written information
concerning such Selling Stockholder furnished to the Company by or on behalf of
that Selling Stockholder specifically for inclusion therein; provided, however,
that the indemnification contained in this paragraph (b) with respect to the
Preliminary Prospectus shall not inure to the benefit of the Company or any
Underwriter (or to the benefit of any officers or employees of the Company or
any Underwriter or of any person controlling the Company or such Underwriter) on
account of any such loss, claim, damage, liability or action arising from the
sale of Stock by such Underwriter to any person if the untrue statement or
alleged untrue statement or omission or alleged omission of a material fact
contained in the Preliminary Prospectus was corrected in the Prospectus and the
Underwriter sold Stock to that person without sending or giving at or prior to
the written confirmation of such sale, a copy of the Prospectus (as then amended
or supplemented) if the Company has previously furnished sufficient copies
thereof to the Underwriter on a timely basis to permit such sending or giving.
The foregoing indemnity agreement is in addition to any liability which the
Selling Stockholders may otherwise have to the Company or any Underwriter or any
officer, employee or controlling person of the Company or that Underwriter.
Notwithstanding any other provision of this Agreement, the liability of each
Selling Stockholder under this Section 10(b) to all such indemnified parties and
under Section 2(e) shall not exceed the net amount received by each such Selling
Stockholder (after deducting any underwriting discount) from the sale of the
Stock pursuant to this Agreement.
(c) Each Underwriter, severally and not jointly, shall indemnify
and hold harmless the Company, the Selling Stockholders, the Company's officers
and employees, each of its directors, and each person, if any, who controls the
Company within the meaning of the Securities Act, from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof,
to which the Company or any such director, officer or controlling person may
become subject, under the Securities Act
22
or otherwise, insofar as such loss, claim, damage, liability or action arises
out of, or is based upon, (i) any untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto, or (ii)
the omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, any material fact required to be stated therein or necessary to make
the statements therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information concerning
such Underwriter furnished to the Company through the Representatives by or on
behalf of that Underwriter specifically for inclusion therein, and shall
reimburse the Company and any such director, officer or controlling person for
any legal or other expenses reasonably incurred by the Company or any such
director, officer or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability that any Underwriter may otherwise have to the Company
or any such director, officer, employee or controlling person.
(d) Promptly after receipt by an indemnified party under this
Section 10 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 10, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability that it may have under this Section 10 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
that it may have to an indemnified party otherwise than under this Section 10.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representatives shall have the right to employ counsel to represent jointly
the Representatives and those other Underwriters and their respective officers,
employees and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Underwriters
against the Company or any Selling Stockholder under this Section 10 if, in the
reasonable judgment of the Representatives, it is advisable for the
Representatives and those Underwriters, officers, employees and controlling
persons to be jointly represented by separate counsel, and in that event the
reasonable fees and expenses of such separate counsel shall be paid by the
Company or any Selling Stockholder. No indemnifying party shall (i) without the
prior
23
written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(e) If the indemnification provided for in this Section 10 shall
for any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 10(a), 10(b) or 10(c) in respect of any loss, claim, damage
or liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Selling Stockholders on the one hand and the
Underwriters on the other from the offering of the Stock or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Selling Stockholder on the one hand and the Underwriters on the other with
respect to the statements or omissions that resulted in such loss, claim, damage
or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Stockholders on the one hand and the Underwriters on the other with
respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Stock purchased under this Agreement
(before deducting expenses) received by the Company and the Selling
Stockholders, on the one hand, and the total underwriting discounts and
commissions received by the Underwriters with respect to the shares of the Stock
purchased under this Agreement, on the other hand, bear to the total gross
proceeds from the offering of the Stock under this Agreement, in each case as
set forth in the table on the cover page of the Prospectus. The relative fault
shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company, the Selling Stockholder or
the Underwriters, the intent of the parties and their relative knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholder and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this Section 10 were to
be determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation that does not
take into account the equitable considerations referred to herein. The amount
paid or
24
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section 10
shall be deemed to include, for purposes of this Section 10(e), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 10(e), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Stock
underwritten by it and distributed to the public was offered to the public
exceeds the amount of any damages that such Underwriter has otherwise paid or
become liable to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 10(e) are several in proportion to their respective underwriting
obligations and not joint.
(f) The Underwriters severally confirm and the Company
acknowledges that the statements with respect to the public offering of the
Stock by the Underwriters set forth on the cover page of, the [fourth, eighth,
ninth and twentieth] paragraphs appearing under the caption "Underwriting" in,
the Prospectus are correct and constitute the only information concerning such
Underwriters furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement and the
Prospectus.
Section 11. Defaulting Underwriters. If, on either Delivery Date, any
Underwriter defaults in the performance of its obligations under this Agreement,
the remaining non-defaulting Underwriters shall be obligated to purchase the
Stock that the defaulting Underwriter agreed but failed to purchase on such
Delivery Date in the respective proportions that the number of shares of the
Firm Stock set opposite the name of each remaining non-defaulting Underwriter in
Schedule 1 hereto bears to the total number of shares of the Firm Stock set
opposite the names of all the remaining non-defaulting Underwriters in Schedule
1 hereto; provided, however, that the remaining non-defaulting Underwriters
shall not be obligated to purchase any of the Stock on such Delivery Date if the
total number of shares of the Stock that the defaulting Underwriter or
Underwriters agreed but failed to purchase on such date exceeds 9.09% of the
total number of shares of the Stock to be purchased on such Delivery Date, and
any remaining non-defaulting Underwriter shall not be obligated to purchase more
than 110% of the number of shares of the Stock that it agreed to purchase on
such Delivery Date pursuant to the terms of Section 4. If the foregoing maximums
are exceeded, the remaining non-defaulting Underwriters, or those other
underwriters satisfactory to the Representatives who so agree, shall have the
right, but shall not be obligated, to purchase, in such proportion as may be
agreed upon among them, all the Stock to be purchased on such Delivery Date. If
the remaining Underwriters or other underwriters satisfactory to the
Representatives do not elect to purchase the shares that the defaulting
Underwriter or Underwriters agreed but failed to purchase on such Delivery Date,
this Agreement (or, with respect to the Second Delivery Date, the obligation of
the Underwriters to purchase,
25
and of the Selling Stockholders to sell, the Option Stock) shall terminate
without liability on the part of any non-defaulting Underwriter or the Selling
Stockholders, except that the Company and the Selling Stockholders will continue
to be liable for the payment of expenses to the extent set forth in Sections 8
and 13. As used in this Agreement, the term "UNDERWRITER" includes, for all
purposes of this Agreement unless the context requires otherwise, any party not
listed in Schedule 1 hereto who, pursuant to this Section 11, purchases Stock
that a defaulting Underwriter agreed to, but failed to, purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Selling Stockholders for damages caused by its
default. If other underwriters are obligated or agree to purchase the Stock of a
defaulting or withdrawing Underwriter, either the Representatives or the Company
may postpone the Delivery Date for up to seven full business days in order to
effect any changes that in the opinion of counsel for the Company or counsel for
the Underwriters may be necessary in the Registration Statement, the Prospectus
or in any other document or arrangement.
Section 12. Termination. The obligations of the Underwriters hereunder
may be terminated by the Representatives by notice given to and received by the
Selling Stockholders prior to delivery of and payment for the Firm Stock if,
prior to that time, any of the events described in Sections 9(j), 9(k) or 9(l),
shall have occurred or if the Underwriters shall decline to purchase the Stock
for any reason permitted under this Agreement.
Section 13. Reimbursement of Underwriters' Expense. If the Selling
Stockholders shall fail to tender the Stock for delivery to the Underwriters by
reason of any failure, refusal or inability on the part of the Selling
Stockholders to perform any agreement on its part to be performed, or because
any other condition of the Underwriters' obligations hereunder required to be
fulfilled by the Selling Stockholders (including, without limitation, with
respect to the transactions) is not fulfilled, the Selling Stockholders will
reimburse the Underwriters for all reasonable out-of-pocket expenses (including
fees and disbursements of counsel) incurred by the Underwriters in connection
with this Agreement and the proposed purchase of the Stock, and upon demand the
Selling Stockholders shall pay the full amount thereof to the Representatives.
If this Agreement is terminated pursuant to Section 11 by reason of the default
of one or more Underwriters, the Selling Stockholders shall not be obligated to
reimburse any defaulting Underwriter on account of those expenses.
Section 14. Notices, Etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to Xxxxxx Brothers Inc., 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Syndicate Department (Fax: 000-000-0000), with
a copy, in the case of any notice pursuant to Section 10(d), to the Director of
Litigation, Office of the General Counsel, Xxxxxx Brothers Inc., 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, XX 00000;
26
(b) if to the Company, shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Chief Financial Officer (Fax: 000-000-0000);
(c) if to a Selling Stockholder, shall be delivered or sent by
mail, telex or facsimile transmission to such Selling Stockholder at the address
set forth on Schedule 2 hereto.
provided, however, that any notice to an Underwriter pursuant to Section 10(d)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company and the
Selling Stockholders shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Underwriters by
Xxxxxx Brothers Inc. on behalf of the Representatives.
Section 15. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the Company,
the Selling Stockholders, and their respective successors. This Agreement and
the terms and provisions hereof are for the sole benefit of only those persons,
except that (A) the representations, warranties, indemnities and agreements of
the Company contained in this Agreement shall also be deemed to be for the
benefit of the person or persons, if any, who control any Underwriter within the
meaning of Section 15 of the Securities Act and (B) the indemnity agreement of
the Underwriters contained in Section 10(c) of this Agreement shall be deemed to
be for the benefit of directors of the Company, its officers and employees and
any person controlling the Company within the meaning of Section 15 of the
Securities Act. Nothing in this Agreement is intended or shall be construed to
give any person, other than the persons referred to in this Section 15, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
Section 16. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Selling Stockholders and the
Underwriters contained in this Agreement or made by or on behalf on them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Stock and shall remain in full force and effect, regardless of
any investigation made by or on behalf of any of them or any person controlling
any of them.
Section 17. Definition of the Terms "BUSINESS DAY" and "SUBSIDIARY."
For purposes of this Agreement, (a) "BUSINESS DAY" means each Monday, Tuesday,
Wednesday, Thursday or Friday that is not a day on which banking institutions in
New York are generally authorized or obligated by law or executive order to
close and (b) "SUBSIDIARY" has the meaning set forth in Rule 405 of the Rules
and Regulations.
27
Section 18. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.
Section 19. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
Section 20. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
28
If the foregoing correctly sets forth the agreement between the
Company, the Selling Stockholders and the Underwriters, please indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
PEABODY ENERGY CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Executive Vice President and Chief Financial Officer
Accepted:
Xxxxxx Brothers Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
X.X. Xxxxxxx & Sons, Inc.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By Xxxxxx Brothers Inc.
By: /s/ Xxxxx Xxxxxx
--------------------------------------
Authorized Representative
The Selling Stockholders named
in Schedule 2 to this Agreement
(other than the Xxxxxx Selling Stockholders)
By: /s/ Xxxxxxx Xxxxxxx
--------------------------------------
Attorney-in-fact
The Xxxxxx Selling Stockholders
By: /s/ Xxxx Xxxxxxxxxx
--------------------------------------
Attorney-in-fact
SCHEDULE 1
Number of Shares of
Firm Stock to be
Underwriters Purchased
------------ -------------------
Xxxxxx Brothers Inc. 2,000,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated 1,000,000
Xxxxxx Xxxxxxx & Co. Incorporated 1,000,000
Bear, Xxxxxxx & Co. Inc. 500,000
X.X. Xxxxxxx & Sons, Inc. 500,000
=========
Total 5,000,000
SCHEDULE 2
Selling Stockholders Number of Shares
-------------------- ----------------
Xxxxxx Brothers Merchant Banking 4,867,825
Partners II L.P. and affiliates
c/x Xxxxxx Brothers Holdings Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Irl Xxxxxxxxx Xxxxxxxxxx Revocable Trust 75,000
c/o Peabody Energy Corporation
000 Xxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Xxxxxxx X. Xxxxxxx 7,500
c/o Peabody Energy Corporation
000 Xxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Xxxxxxx X. Xxxxxxx Revocable Trust 20,000
c/o Peabody Energy Corporation
000 Xxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Xxxxx X. Xxxxxxx, Xx. Revocable Trust U/T/A 10,000
c/o Peabody Energy Corporation
000 Xxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Indenture of Trust of Xxxxxxx X. Xxxxxxx 19,675
c/o Peabody Energy Corporation
000 Xxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
