CONSOL ENERGY INC.
22,600,000 SHARES OF COMMON STOCK
UNDERWRITING AGREEMENT
____________, 1999
________________, 1999
X.X. Xxxxxx Securities Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated,
As representatives (the
"Representatives") of the several
Underwriters listed in Schedule I
hereto
c/o X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
CONSOL Energy Inc., a Delaware corporation (the "Company"), proposes to
issue and sell to the several Underwriters listed in Schedule I hereto (the
"Underwriters"), an aggregate of 22,600,000 shares (the "Underwritten Shares")
and, at the election of the Underwriters, up to 3,390,000 additional shares (the
"Option Shares") of common stock, par value $.01 per share (the "Common Stock"),
of the Company. The Underwritten Shares and the Option Shares are herein
referred to as the "Shares".
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement, including a prospectus, relating to the Shares. The registration
statement as amended at the time when it shall become effective, including
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rule 430A under the Securities Act, is referred to
in this Agreement as the "Registration Statement", and the prospectus in the
form first used to confirm sales of Shares is referred to in this Agreement as
the "Prospectus". If the Company has filed an abbreviated registration
statement 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 Company and the Underwriters have agreed that up to ______ Underwritten
Shares (the "Reserved Shares") shall be reserved for sale by the Underwriters to
certain eligible directors, officers, employees and retirees of the Company, as
part of the distribution of the Shares by the Underwriters, subject to the terms
of this Agreement, the applicable rules, regulations and interpretations of the
National Association of Securities Dealers, Inc. (the "NASD") and all other
applicable laws, rules and regulations. To the extent that such Reserved Shares
are not orally confirmed for purchase by such eligible persons by the end of the
first business day after the date of this Agreement, such Reserved Shares may be
offered to the public as part of the public offering contemplated hereby.
The Company hereby agrees with the Underwriters as follows:
1. The Company agrees to sell the Underwritten Shares to the several
Underwriters as hereinafter provided, and each Underwriter, upon the basis of
the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase, severally and not jointly,
from the Company at a purchase price per share of $______ (the "Purchase Price")
the number of Underwritten Shares set forth opposite such Underwriter's name on
Schedule I hereto.
In addition, the Company agrees to sell the Option Shares to the several
Underwriters and the Underwriters shall have the option to purchase at their
election up to 3,390,000 Option Shares for the sole purpose of covering over-
allotments in the sale of the Underwritten Shares. Each Underwriter, on the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, shall have the option to purchase, severally and
not jointly, from the Company at the Purchase Price that portion of the number
of Option Shares as to which such election shall have been exercised (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
such number of Option Shares by a fraction the numerator of which is the number
of Underwritten Shares set forth opposite such Underwriter's name on Schedule I
hereto and the denominator of which is the total number of Underwritten Shares
set forth in Schedule I hereto, for the sole purpose of covering over-allotments
(if any) in the sale of the Underwritten Shares by the several Underwriters.
The Underwriters may exercise the option to purchase the Option Shares at
any time (but not more than once) on or before the thirtieth day following the
date of this Agreement, by written notice to the Company from X.X. Xxxxxx
Securities Inc. on behalf of the several Underwriters. Such notice shall set
forth the aggregate number of Option Shares as to which the option is being
exercised and the date and time when the Option Shares are to be delivered and
paid for which may be the same date and time as the Closing Date (as hereinafter
defined) but shall not be earlier than the Closing Date nor later than the tenth
full Business
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Day (as hereinafter defined) after the date of such notice (unless such time and
date are postponed in accordance with the provisions of Section 9 hereof). Any
such notice shall be given at least two Business Days prior to the date and time
of delivery specified therein.
2. The Company understands that the Underwriters intend (i) to make a
public offering of the Shares as soon after (A) the Registration Statement has
become effective and (B) the parties hereto have executed and delivered this
Agreement, as in the judgment of the Representatives is advisable and (ii)
initially to offer the Shares upon the terms set forth in the Prospectus.
3. Payment for the Shares shall be made by wire transfer in immediately
available funds to the account specified to the Representatives by the Company,
in the case of the Underwritten Shares, on ___________, 1999, or at such other
time on the same or such other date, not later than the fifth Business Day
thereafter, as the Representatives and the Company may agree upon in writing or,
in the case of the Option Shares, on the date and time specified by the
Representatives in the written notice of the Underwriters' election to purchase
such Option Shares. The time and date of such payment for the Underwritten
Shares is referred to herein as the "Closing Date" and the time and date for
such payment for the Option Shares, if other than the Closing Date, is herein
referred to as the "Additional Closing Date". As used herein, the term
"Business Day" means any day other than a day on which banks are permitted or
required to be closed in New York City.
Payment for the Shares to be purchased on the Closing Date or the
Additional Closing Date, as the case may be, shall be made against delivery to
the Representatives for the respective accounts of the several Underwriters of
the Shares to be purchased on such date registered in such names and in such
denominations as the Representatives shall request in writing not later than two
full Business Days prior to the Closing Date or the Additional Closing Date, as
the case may be, with any transfer taxes payable in connection with the transfer
to the Underwriters of the Shares duly paid by the Company. The certificates
for the Shares will be made available for inspection and packaging by the
Representatives at the office of X.X. Xxxxxx Securities Inc. set forth above not
later than 1:00 P.M., New York City time, on the Business Day prior to the
Closing Date or the Additional Closing Date, as the case may be.
4. (a) The Company represents and warrants to each Underwriter that:
(i) no order preventing or suspending the use of any preliminary
prospectus has been issued by the Commission, and the preliminary prospectus
dated ___________ , 1999, and each preliminary prospectus filed pursuant to Rule
424 under the Securities Act, complied when so
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filed in all material respects with the Securities Act, and did not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the
Representatives expressly for use therein;
(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been instituted
or, to the knowledge of the Company, threatened by the Commission; and the
Registration Statement and Prospectus (as amended or supplemented if the Company
shall have furnished any amendments or supplements thereto) comply, or will
comply, as the case may be, in all material respects with the Securities Act 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 date of the Prospectus and any
amendment or supplement thereto, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and the Prospectus, as amended or
supplemented, if applicable, at the Closing Date or Additional Closing Date, as
the case may be, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading; and the
Prospectus, as amended or supplemented (including any prospectus wrapper), if
applicable, and any preliminary prospectus, at their respective times of
issuance and at the Closing Date or Additional Closing Date, as the case may be,
complied and will comply in all material respects with any applicable laws or
regulations of foreign jurisdictions in which the Prospectus, as amended or
supplemented (including any prospectus wrapper), if applicable, and any
preliminary prospectus are distributed in connection with the offer and sale of
any Reserved Shares; except that the foregoing representations and warranties
shall not apply to statements or omissions in the Registration Statement or the
Prospectus made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by such Underwriter through
the Representatives expressly for use therein;
(iii) the financial statements, and the related notes thereto, included in
the Registration Statement and the Prospectus present fairly in all material
respects the consolidated financial position of the Company and its consolidated
subsidiaries as of the dates indicated and the results of
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their operations and changes in their consolidated cash flows for the periods
specified; and said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis, and the
supporting schedules, if any, included in the Registration Statement present
fairly in all material respects the information required to be stated therein;
(iv) there has not been any change in the capital stock or long-term debt
of the Company or any of its subsidiaries, or any material adverse change in or
affecting the business, prospects, condition (financial or other), stockholders'
equity or results of operations of the Company and its subsidiaries, taken as a
whole (a "Material Adverse Change"), from that set forth or contemplated in the
Prospectus (as it stood at the time of execution and delivery of this
Agreement); and except as set forth or contemplated in the Prospectus (as it
stood at the time of execution and delivery of this Agreement) neither the
Company nor any of its subsidiaries has entered into any transaction or
agreement (whether or not in the ordinary course of business) material to the
Company and its subsidiaries taken as a whole;
(v) the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has been
duly qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in good
standing would not have a material adverse effect on the business, prospects,
condition (financial or other), stockholders' equity or results of operations of
the Company and its subsidiaries, taken as a whole (a "Material Adverse
Effect");
(vi) each of the Company's subsidiaries has been duly incorporated and is
validly existing as a corporation under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has been
duly qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such qualification, other
than where the failure to be so qualified or in good standing would not have a
Material Adverse Effect; and all the outstanding shares of capital stock of each
subsidiary of the Company have been duly authorized and validly issued, are
fully-paid
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and non-assessable, and (except, in the case of foreign subsidiaries, for
directors' qualifying shares and except as otherwise set forth in the
Prospectus) are owned by the Company, directly or indirectly, free and clear of
all liens, encumbrances, security interests and claims;
(vii) this Agreement has been duly authorized, executed and delivered by
the Company;
(viii) the Company has an authorized capitalization as set forth in the
Prospectus and such authorized capital stock conforms in all material respects
as to legal matters to the description thereof set forth in the Prospectus, and
all of the outstanding shares of capital stock of the Company have been duly
authorized and validly issued, are fully-paid and non-assessable and are not
subject to any pre-emptive or similar rights; and, except as described in or
expressly contemplated by the Prospectus, there are no outstanding rights
(including, without limitation, pre-emptive rights), warrants or options to
acquire, or instruments convertible into or exchangeable for, any shares of
capital stock or other equity interest in the Company or any of its
subsidiaries, or any contract, commitment, agreement, understanding or
arrangement of any kind relating to the issuance of any capital stock of the
Company or any such subsidiary, any such convertible or exchangeable securities
or any such rights, warrants or options;
(ix) the Shares have been duly authorized, and, when issued and delivered
to and paid for by the Underwriters in accordance with the terms of this
Agreement, will be duly issued and will be fully paid and non-assessable and
will conform in all material respects to the descriptions thereof in the
Prospectus; and the issuance of the Shares is not subject to any preemptive or
similar rights;
(x) neither the Company nor any of its subsidiaries is, or with the giving
of notice or lapse of time or both would be, in violation of or in default
under, its Certificate of Incorporation or By-Laws or 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 it or any of them or
any of their respective properties is bound, except for violations and defaults
which individually and in the aggregate are not material to the Company and its
subsidiaries taken as a whole; the issue and sale of the Shares to be sold by
the Company hereunder and the performance by the Company of its obligations
under this Agreement and the consummation of the transactions contemplated
herein will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or
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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, nor will any such action result in any violation of the provisions of
the Certificate of Incorporation or the By-Laws of the Company or any applicable
law or statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company, its subsidiaries or any of
their respective properties; and no consent, approval, authorization, order,
license, registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Shares to be sold by
the Company hereunder or the consummation by the Company of the transactions
contemplated by this Agreement, except such consents, approvals, authorizations,
orders, licenses, registrations or qualifications as have been obtained under
the Securities Act, such as may be required under state securities or Blue Sky
Laws and such as have been obtained under the laws and regulations of
jurisdictions outside the United States in which the Reserved Shares are
offered. However, no representation or warranty is made with respect to any
consent or approval required to be obtained by the Underwriters from the NASD in
connection with the offer and sale of the Shares.
(xi) other than as set forth or contemplated in the Prospectus, there are
no legal or governmental investigations, actions, suits or proceedings pending
or, to the knowledge of the Company, threatened against or affecting the Company
or any of its subsidiaries or any of their respective properties or to which the
Company or any of its subsidiaries is or may be a party or to which any property
of the Company or any of its subsidiaries is or may be the subject which, if
determined adversely to the Company or any of its subsidiaries, could
individually or in the aggregate reasonably be expected to result in a Material
Adverse Change, and, to the best of the Company's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others; and there are no statutes, regulations, contracts or other documents
that are required to be described in the Registration Statement or Prospectus or
to be filed as exhibits to the Registration Statement that are not described or
filed as required;
(xii) the Company and its subsidiaries have good and marketable title in
fee simple to all items of 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 or referred to in the
Prospectus (if required to be so described pursuant to the Securities Act) or
such as do not materially affect the value of such
7
property and do not interfere with the use made or proposed to be made of such
property by the Company and its subsidiaries; and any real property and
buildings held under lease by the Company and its subsidiaries are held by them
under valid, existing and enforceable leases with such exceptions as are not
material and do not interfere with the use made or proposed to be made of such
property and buildings by the Company or its subsidiaries;
(xiii) no relationship, direct or indirect, exists between or among the
Company or any or its subsidiaries on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of its subsidiaries
on the other hand, which is required by the Securities Act to be described in
the Registration Statement and the Prospectus which is not so described;
(xiv) no person has the right to require the Company to register any
securities for offering and sale under the Securities Act by reason of the
filing of the Registration Statement with the Commission or the issue and sale
of the Shares to be sold by the Company hereunder;
(xv) the Company is not and, after giving effect to the offering and sale
of the Shares, will not be an "investment company", as such term is defined in
the Investment Company Act of 1940, as amended (the "Investment Company Act");
(xvi) the Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida) relating to doing business
with the Government of Cuba or with any person or affiliate located in Cuba;
(xvii) Ernst & Young LLP, who have certified certain financial statements
of the Company and its subsidiaries, are independent public accountants as
required by the Securities Act;
(xviii) the Company and its subsidiaries have filed all federal, state,
local and foreign tax returns which have been required to be filed and have paid
all taxes shown thereon and all assessments received by them or any of them to
the extent that such taxes have become due and are not being contested in good
faith, except where the failure to file such returns or pay such taxes would not
have a Material Adverse Effect;
(xix) the Company has not taken nor will it take, directly or indirectly,
any action designed to, or that might be reasonably expected to,
8
cause or result in stabilization or manipulation of the price of the Common
Stock of the Company;
(xx) each of the Company and its subsidiaries owns, possesses or has
obtained all licenses, permits, certificates, consents, orders, approvals and
other authorizations from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities (including foreign
regulatory agencies), all self-regulatory organizations and all courts and other
tribunals, domestic or foreign, necessary to own or lease, as the case may be,
and to operate its properties and to carry on its business as conducted as of
the date hereof, except such as would not result in a Material Adverse Change,
and neither the Company nor any such subsidiary has received any actual notice
of any proceeding relating to revocation or modification of any such license,
permit, certificate, consent, order, approval or other authorization which, if
determined adversely to the Company or any of its subsidiaries could result in a
Material Adverse Change; and each of the Company and its subsidiaries is in
compliance with all laws and regulations relating to the conduct of its business
as conducted as of the date hereof, except where the failure to so comply would
not, singly or in the aggregate, result in a Material Adverse Change;
(xxi) there are no existing or, to the best knowledge of the Company,
threatened labor disputes with the employees of the Company or any of its
subsidiaries which are likely to have a Material Adverse Effect;
(xxii) the Company and its subsidiaries (A) are in compliance with any and
all applicable foreign, federal, state and local laws and regulations relating
to the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental Laws"),
(B) have received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses and
(C) are in compliance with all terms and conditions of any such permit, license
or approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a Material Adverse Effect, and except as set
forth or contemplated in the Registration Statement and the Prospectus; and
(xxiii) in the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business, operations
and properties of the Company and its subsidiaries, in the
9
course of which it identifies and evaluates associated costs and liabilities
(including (1) any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or any permit,
license or approval, (2) any related constraints on operating activities and (3)
any potential liabilities to third parties). On the basis of such review, the
Company has reasonably concluded that such associated costs and liabilities
would not, singly or in the aggregate, have a Material Adverse Effect, except as
set forth or contemplated in the Registration Statement and the Prospectus.
5. (a) The Company covenants and agrees with each of the several Underwriters
as follows:
(i) to use its best efforts to cause the Registration Statement to become
effective at the earliest possible time and, if required, to file the final
Prospectus with the Commission within the time periods specified by Rule 424(b)
and Rule 430A under the Securities Act, and to furnish copies of the Prospectus
to the Underwriters in New York City prior to 10:00 a.m., New York City time, on
the Business Day next succeeding the date of this Agreement in such quantities
as the Representatives may reasonably request;
(ii) to deliver, at the expense of the Company, to the Representatives two
signed copies of the Registration Statement (as originally filed) and each
amendment thereto, in each case including exhibits, and to each other
Underwriter a conformed copy of the Registration Statement (as originally filed)
and each amendment thereto, in each case without exhibits and, during the period
mentioned in Section 5 below, to each of the Underwriters as many copies of the
Prospectus (including all amendments and supplements thereto) as the
Representatives may reasonably request;
(iii) before filing any amendment or supplement to the Registration
Statement or the Prospectus, whether before or after the time the Registration
Statement becomes effective, to furnish to the Representatives a copy of the
proposed amendment or supplement for review and not to file any such proposed
amendment or supplement to which the Representatives reasonably object;
(iv) to advise the Representatives promptly, and to confirm such advice in
writing (A) when the Registration Statement has become effective, (B) when any
amendment to the Registration Statement has been filed or becomes effective, (C)
when any supplement to the Prospectus or any amended Prospectus has been filed
and to furnish the Representatives
10
with copies thereof, (D) of any request by the Commission for any amendment to
the Registration Statement or any amendment or supplement to the Prospectus or
for any additional information, (E) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any preliminary prospectus or the
Prospectus or the initiation or threatening of any proceeding for that purpose,
(F) of the occurrence of any event, within the period referenced in Section 5
below, 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 when the Prospectus is delivered to a purchaser, not misleading,
and (G) of the receipt by the Company of any notification with respect to any
suspension of the qualification of the Shares for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and to use its best efforts to prevent the issuance of any such stop
order, or of any order preventing or suspending the use of any preliminary
prospectus or the Prospectus, or of any order suspending any such qualification
of the Shares, or notification of any such order thereof and, if issued, to
obtain as soon as possible the withdrawal thereof;
(v) if, during such period of time after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters a
prospectus relating to the Shares is required by law to be delivered in
connection with sales by the Underwriters or any dealer, any event shall occur
as a result of which it is necessary to amend or supplement the Prospectus
(including any prospectus wrapper) in order to make the statements therein, in
light of the circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Prospectus
(including any prospectus wrapper) to comply with law, forthwith to prepare and
furnish, at the expense of the Company, to the Underwriters and to the dealers
(whose names and addresses the Representatives will furnish to the Company) to
which Shares may have been sold by the Representatives on behalf of the
Underwriters and to any other dealers upon request, such amendments or
supplements to the Prospectus as may be necessary so that the statements in the
Prospectus (including any prospectus wrapper) as so amended or supplemented will
not, in the light of the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus will comply with law;
(vi) to endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representatives shall
reasonably request and to continue such qualification in effect so
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long as reasonably required for distribution of the Shares; provided that the
Company shall not be required to (x) file a general consent to service of
process, (y) subject itself to taxation or (z) qualify as a foreign corporation
in any jurisdiction in which it is not otherwise required to do so;
(vii) to make generally available to its security holders and to the
Representatives as soon as practicable an earnings statement covering a period
of at least twelve months beginning with the first fiscal quarter of the Company
occurring after the effective date of the Registration Statement, which shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of
the Commission promulgated thereunder;
(viii) for a period of two years, to furnish to the Representatives copies
of all reports or other communications (financial or other) furnished to holders
of the Shares, and copies of any reports and financial statements furnished to
or filed with the Commission or any national securities exchange;
(ix) for a period of 180 days after the date of the initial public offering
of the Shares not to (A) offer, pledge, announce the intention to sell, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock
or (B) enter into any swap or other agreement that transfers, in whole or in
part, any of the economic consequences of ownership of the Common Stock, whether
any such transaction described in clause (A) or (B) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise, without
the prior written consent of X.X. Xxxxxx Securities Inc., other than (w) the
Shares to be sold by the Company hereunder, (x) the grant of options under
existing employee stock option plans, (y) any shares of Common Stock issued upon
the exercise of options granted under existing employee stock option plans and
(z) shares of Common Stock issued as consideration for the acquisition of any
business or assets;
(x) to use the net proceeds received by the Company from the sale of the
Shares pursuant to this Agreement in the manner specified in the Prospectus
under the caption "Use of Proceeds";
(xi) to use its best efforts to list, subject to notice of issuance, the
Shares on the New York Stock Exchange;
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(xii) whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
costs and expenses incident to the performance of its obligations hereunder,
including without limiting the generality of the foregoing, all costs and
expenses (A) incident to the preparation, registration, transfer, execution and
delivery of the Shares, including any transfer or other taxes payable thereon,
(B) incident to the preparation, printing and filing under the Securities Act of
the Registration Statement, the Prospectus and any preliminary prospectus
(including in each case all exhibits, amendments and supplements thereto), (C)
incurred in connection with the registration or qualification of the Shares
under the laws of such jurisdictions as the Representatives may designate
(including fees of counsel for the Underwriters and their disbursements), (D) in
connection with the listing of the Shares on the New York Stock Exchange, (E)
related to the filing with, and clearance of the offering by, the NASD
(including fees of counsel for the Underwriters and their disbursements), (F) in
connection with the printing (including word processing and duplication costs)
and delivery of this Agreement, the Preliminary and Supplemental Blue Sky
Memoranda and the furnishing to the Underwriters and dealers of copies of the
Registration Statement and the Prospectus, including mailing and shipping, as
herein provided, (G) any expenses incurred by the Company in connection with a
"road show" presentation to potential investors, (H) the cost of preparing stock
certificates, (I) the cost and charges of any transfer agent and any registrar
and (J) all costs and expenses of the Underwriters, including the fees and
disbursements of counsel for the Underwriters and all stamp duties, similar
taxes or duties or other taxes, if any, in connection with matters related to
the Reserved Shares which are designated by the Company for sale to certain
directors, officers, employees and retirees of the Company. It is understood,
however, that except as provided in this Section, Section 7 and Section 10, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, road show expenses and any advertising expenses connected with
any offers they make; and
(xiii) to the extent required by the rules of the NASD, to ensure that
the Reserved Shares will be restricted as required by the NASD or the NASD rules
from sale, transfer, assignment, pledge or hypothecation for a period of three
months following the date of this Agreement. The Underwriters will notify the
Company as to which purchasers of Reserved Shares will need to be so restricted.
At the request of the Underwriters, the Company will direct the transfer agent
to place a stop transfer restriction upon such Reserved Shares for such period
of time. Should the Company release, or seek to release, from such restrictions
any of the Reserved Shares, the Company agrees to reimburse the Underwriters for
13
any reasonable expenses (including, without limitation, legal expenses) they
incur in connection with such release.
6. The several obligations of the Underwriters hereunder to purchase
the Shares on the Closing Date or the Additional Closing Date, as the case may
be, are subject to the performance by the Company of its obligations hereunder
and to the following additional conditions:
(a) the Registration Statement shall have become effective (or if a
post-effective amendment is required to be filed under the Securities Act, such
post-effective amendment shall have become effective) not later than 5:00 P.M.,
New York City time, on the date hereof; and no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
shall be in effect, and no proceedings for such purpose shall be pending before
or threatened by the Commission; the Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Securities Act and in
accordance with Section 5 hereof; and all requests for additional information
shall have been complied with to the satisfaction of the Representatives;
(b) the representations and warranties of the Company contained herein
are true and correct on and as of the Closing Date or the Additional Closing
Date, as the case may be, as if made on and as of the Closing Date or the
Additional Closing Date, as the case may be, and the Company shall have complied
in all material respects with all agreements and all conditions on its part to
be performed or satisfied hereunder at or prior to the Closing Date or the
Additional Closing Date, as the case may be;
(c) subsequent to the execution and delivery of this Agreement and prior
to the Closing Date or the Additional Closing Date, as the case may be, there
shall not have occurred any downgrading, nor shall any notice have been given of
(i) any downgrading, (ii any intended or potential downgrading or (ii any review
or possible change that does not indicate an improvement, in the rating accorded
any securities of or guaranteed by the Company by any "nationally recognized
statistical rating organization", as such term is defined for purposes of Rule
436(g)(2) under the Securities Act;
(d) there shall not have been any change in the capital stock or long-
term debt of the Company or any of its subsidiaries or any Material Adverse
Change from that set forth or contemplated in the Prospectus (as it stood at the
time of execution and delivery of this Agreement), the effect of which in the
judgment of the Representatives makes it impracticable or
14
inadvisable to proceed with the public offering or the delivery of the Shares on
the Closing Date or the Additional Closing Date, as the case may be, on the
terms and in the manner contemplated in the Prospectus (as it stood at the time
of execution and delivery of this Agreement);
(e) the Representatives shall have received on and as of the Closing
Date or the Additional Closing Date, as the case may be, a certificate of an
executive officer of the Company, with specific knowledge about the Company's
financial matters, in form reasonably satisfactory to the Representatives to the
effect set forth in Sections 6, 6 and 6 and to the further effect that there has
not occurred any Material Adverse Change from that set forth or contemplated in
the Prospectus (as it stood at the time of execution and delivery of this
Agreement);
(f) Xxxxxx Xxxx & Priest LLP, outside counsel for the Company, shall
have furnished to the Representatives their written opinion, dated the Closing
Date or the Additional Closing Date, as the case may be, in form and substance
satisfactory to the Representatives, to the effect that:
(i) the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, with corporate power and authority to own its properties and
conduct its business as described in the Prospectus;
(ii) this Agreement has been duly authorized, executed and delivered by
the Company;
(iii) the authorized capital stock of the Company conforms in all
material respects as to legal matters to the description thereof contained in
the Prospectus;
(iv) the shares of capital stock of the Company outstanding prior to the
issuance of the Shares to be sold hereunder have been duly authorized and are
validly issued, fully paid and non-assessable;
(v) the Shares to be issued and sold hereunder have been duly
authorized, and when delivered to and paid for by the Underwriters in accordance
with the terms of this Agreement, will be validly issued, fully paid and non-
assessable and the issuance of the Shares is not subject to any preemptive or,
to such counsel's knowledge, similar rights;
15
(vi) the statements in the Prospectus under "Certain Relationships and
Related Party Transactions", "Certain Tax Considerations" and "Description of
Capital Stock", and in the Registration Statement in Items 14 and 15, insofar as
such statements constitute a summary of the terms of the Common Stock, legal
matters, documents or proceedings referred to therein, fairly present in all
material respects the information required pursuant to the rules and regulations
(the "Rules and Regulations") under the Securities Act to be disclosed with
respect to such terms, legal matters, documents or proceedings; and such counsel
does not know of any statutes, regulations, contracts or other documents that
are required pursuant to the Rules and Regulations to be described in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required;
(vii) such counsel is of the opinion that the Registration Statement and
the Prospectus and any amendments and supplements thereto (other than the
financial statements and related schedules and other financial and statistical
data therein, as to which such counsel need express no opinion) comply as to
form in all material respects with the requirements of the Securities Act, and
nothing has come to such counsel's attention that would cause such counsel to
believe that (other than the financial statements and related schedules and
other financial and statistical data therein, as to which such counsel need
express no belief) the Registration Statement or the prospectus included
therein at the time the Registration Statement became effective contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or that the Prospectus, as amended or supplemented, if applicable, contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(viii) the issue and sale of the Shares being delivered on the Closing
Date or the Additional Closing Date, as the case may be, and the performance by
the Company of its obligations under this Agreement and the consummation of the
transactions contemplated herein will not result in any violation of the
provisions of the Certificate of Incorporation or the By-Laws of the Company or
any U.S. or New York law or statute or the Delaware General
16
Corporation Law (the "GCL") or, to such counsel's knowledge, any rule or
regulation of any U.S. or New York court or governmental agency or body having
jurisdiction over the Company, its subsidiaries or any of their respective
properties or of any Delaware court, governmental agency or body with respect to
the GCL;
(ix) no consent, approval, authorization, order, license, registration
or qualification of or with any court or governmental agency or body is required
for the issuance by the Company of the Shares to be sold by it hereunder or the
consummation by the Company of the other transactions contemplated by this
Agreement, except such consents, approvals, authorizations, orders, licenses,
registrations or qualifications as have been obtained under the Securities Act
and as may be required under state securities or Blue Sky laws (as to which such
counsel need not express any opinion) in connection with the purchase and
distribution of the Shares by the Underwriters; and
(x) the Company is not and, after giving effect to the offering and sale
of the Shares, will not be an "investment company", as such term is defined in
the Investment Company Act.
(g) Xxxxxx X. Xxxxxx, Esq., general counsel for the Company, shall have
furnished to the Representatives his written opinion, dated the Closing Date or
the Additional Closing Date, as the case may be, in form and substance
satisfactory to the Representatives, to the effect that:
(i) the Company has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any business, so
as to require such qualification, other than where the failure to be so
qualified or in good standing would not have a Material Adverse Effect;
(ii) each of the Company's significant subsidiaries (as defined in Rule
1-02(w) of Regulation S-X under the Securities Act) has been duly incorporated
and is validly existing as a corporation under the laws of its jurisdiction of
incorporation with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus and has been
duly qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any
17
business, so as to require such qualification, other than where the failure to
be so qualified and in good standing would not have a Material Adverse Effect;
and all of the outstanding shares of capital stock of each such subsidiary have
been duly and validly authorized and issued, are fully paid and non-assessable,
and (except, in the case of foreign subsidiaries, for directors' qualifying
shares and except as otherwise set forth in the Prospectus) are owned directly
or indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims;
(iii) other than as set forth or contemplated in the Prospectus, to such
counsel's knowledge, there are no legal or governmental investigations, actions,
suits or proceedings pending or threatened in writing against the Company or any
of its subsidiaries or any of their respective properties or to which the
Company or any of its subsidiaries is or may be a party or to which any property
of the Company or its subsidiaries is or may be the subject which, if determined
adversely to the Company or any of its subsidiaries, could individually or in
the aggregate reasonably be expected to have a Material Adverse Effect;
(iv) the statements in the Prospectus under "Regulation", insofar as
such statements constitute a summary of the legal matters, documents or
proceedings referred to therein, fairly present in all material respects the
information called for with respect to such legal matters, documents or
proceedings; and such counsel does not know of any statutes, regulations,
contracts or other documents that are required pursuant to the Rules and
Regulations to be described in the Registration Statement or Prospectus or to be
filed as exhibits to the Registration Statement that are not described or filed
as required;
(v) nothing has come to such counsel's attention that would cause such
counsel to believe that (other than the financial statements and related
schedules and other financial and statistical data therein, as to which such
counsel need express no belief) the Registration Statement or the prospectus
included therein at the time the Registration Statement became effective
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus, as amended or supplemented, if
applicable, contains any untrue statement of a material fact or omits to state a
material fact
18
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(vi) the issue and sale of the Shares being delivered on the Closing
Date or the Additional Closing Date, as the case may be, and the performance by
the Company of its obligations under this Agreement and the consummation of the
transactions contemplated herein will not conflict with or result in a breach 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 known
to such counsel 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, nor
will any such action result in any violation of the provisions of the
Certificate of Incorporation or the By-Laws of the Company or any applicable law
or statute or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company, its subsidiaries or any of their
respective properties; and
(vii) to such counsel's knowledge, neither the Company nor any of its
subsidiaries has received any notice in writing of any proceeding relating to
the revocation or modification of any license, permit, certificate, consent,
order, approval or other authorization from any federal, state, local or other
governmental authority (including foreign regulatory agencies), any self-
regulatory organization, any court or other tribunal, domestic or foreign,
which, if determined adversely to the Company or any of its subsidiaries could
result in a Material Adverse Change.
In rendering such opinions, Xxxxxx Xxxx & Priest LLP and Xx. Xxxxxx may
rely (A) as to matters involving the application of laws other than the laws of
the United States, the State of New York (with respect to Xxxxxx Xxxx & Priest
LLP), the Commonwealth of Pennsylvania (with respect to Xx. Xxxxxx) and the
General Corporation Law of the State of Delaware, to the extent such counsel
deems proper and to the extent specified in such opinion, if at all, upon an
opinion or opinions (in form and substance reasonably satisfactory to
Underwriters' counsel) of other counsel reasonably acceptable to the
Underwriters' counsel, familiar with the applicable laws and (B) as to matters
of fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and certificates or other written statements of
officials of jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company. The opinions of such counsel for the
Company shall state that the opinion of any such other counsel upon which they
(or he) relied is in form satisfactory to such
19
counsel and, in such counsel's opinion, the Underwriters and they (or he) are
justified in relying thereon. With respect to the matters to be covered in
Section 6(f)(vii) and Section 6(g)(v) above counsel may state their opinion and
their (or his) belief are based upon their (or his) participation in the
preparation of the Registration Statement and the Prospectus and any amendment
or supplement thereto and review and discussion of the contents thereof but is
without independent check or verification except as specified.
The opinions of Xxxxxx Xxxx & Priest LLP and Xx. Xxxxxx described above
shall be rendered to the Underwriters at the request of the Company and shall so
state therein.
(h) on the effective date of the Registration Statement and the
effective date of the most recently filed post-effective amendment to the
Registration Statement and also on the Closing Date or Additional Closing Date,
as the case may be, Ernst & Young LLP shall have furnished to you letters, dated
the respective dates of delivery thereof, in form and substance satisfactory to
you, containing statements and information of the type customarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus, and in accountants' review reports to underwriters
pursuant to Statement on Standards for Attestation Engagements 8 with respect to
the section of the Prospectus captioned "Management's Discussion and Analysis of
Financial Condition and Results of Operations";
(i) the Representatives shall have received on and as of the Closing
Date or Additional Closing Date, as the case may be, an opinion of Xxxxx Xxxx &
Xxxxxxxx, counsel to the Underwriters, with respect to the due authorization and
valid issuance of the Shares, the Registration Statement, the Prospectus and
other related matters as the Representatives may reasonably request, and such
counsel shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(j) the Shares shall have been approved for listing on the New York
Stock Exchange, subject to official notice of issuance;
(k) on or prior to the Closing Date or Additional Closing Date, as the
case may be, the Company shall have furnished to the Representatives such
further certificates and documents as the Representatives shall reasonably
request;
20
(l) The "lock-up" agreements, each substantially in the form of Exhibit
A hereto, between you, Rheinbraun U.S. GmbH, Rheinbraun A.G. and DuPont Energy
Company (which collectively own 100% of the Common Stock immediately prior to
the transactions contemplated hereby) and certain officers and directors of the
Company relating to sales and certain other dispositions of shares of Common
Stock or certain other securities, delivered to you on or before the date
hereof, shall be in full force and effect on the Closing Date or Additional
Closing Date, as the case may be.
7. The Company agrees to indemnify and hold harmless each Underwriter
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 Securities Exchange
Act of 1934, as amended (the "Exchange Act"), from and against any and all
losses, claims, damages and liabilities (including, without limitation, the
legal fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
the Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) or any preliminary prospectus, or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the
Representatives expressly for use therein; provided, however, that the foregoing
indemnity agreement with respect to any preliminary prospectus or the Prospectus
shall not inure to the benefit of any Underwriter from whom the person asserting
any such losses, claims, damages or liabilities purchased Shares, or any person
controlling such Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the Prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
loss, claim, damage or liability.
The Company agrees to indemnify and hold harmless each Underwriter 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 and all losses, claims, damages and liabilities (including, without
limitation, the legal fees and other expenses incurred in connection with any
suit, action or proceeding or any claim asserted) arising out of (i) the
violation of any
21
applicable laws or regulations of foreign jurisdictions where any Reserved
Shares have been offered and (ii) any untrue statement or alleged untrue
statement of a material fact included in the supplement or prospectus wrapper
material distributed in foreign jurisdictions in connection with the reservation
and sale of the Reserved Shares or the omission or alleged omission therefrom of
a material fact necessary to make the statements therein, when considered in
conjunction with the Prospectus or preliminary prospectus, not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the
Representatives expressly for use therein.
In connection with the offer and sale of the Reserved Shares, the Company
agrees, promptly upon a request in writing, to indemnify and hold harmless the
Underwriters from and against any and all losses, claims, damages and
liabilities incurred by them as a result of the failure of eligible persons to
pay for and accept delivery of Reserved Shares which, by the end of the first
business day following the date of this Agreement, were subject to a properly
confirmed agreement to purchase.
Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement and each person who controls the Company within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act to the same extent
as the foregoing indemnity from the Company to each Underwriter, but only with
reference to information relating to such Underwriter furnished to the Company
in writing by such Underwriter through the Representatives expressly for use in
the Registration Statement, the Prospectus, any amendment or supplement
thereto, or any preliminary prospectus.
If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect of which indemnity may be sought pursuant to the preceding paragraphs
of this Section 7, such person (the "Indemnified Person") shall promptly notify
the person or persons against whom such indemnity may be sought (each an
"Indemnifying Person") in writing, and such Indemnifying Persons, upon request
of the Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Persons may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
and not the Indemnifying Persons unless (i) the Indemnifying Persons and the
22
Indemnified Person shall have mutually agreed to the contrary, (ii) the
Indemnifying Persons has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person or (iii) the named parties in
any such proceeding (including any impleaded parties) include both an
Indemnifying Person and the Indemnified Person and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that no Indemnifying Person
shall, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be reimbursed as they are incurred. Any such
separate firm for the Underwriters and such control persons of Underwriters
shall be designated in writing by X.X. Xxxxxx Securities Inc. and any such
separate firm for the Company, its directors, its officers who sign the
Registration Statement and such control persons of the Company shall be
designated in writing by the Company. No Indemnifying Person shall be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff,
each Indemnifying Person agrees to indemnify any Indemnified Person from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an Indemnified Person
shall have requested an Indemnifying Person to reimburse the Indemnified Person
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, such Indemnifying Person agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
Indemnifying Person of the aforesaid request and (ii) such Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance with such request
prior to the date of such settlement. No Indemnifying Person shall, without the
prior written consent of the Indemnified Person, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Person, unless such settlement includes an unconditional
release of such Indemnified Person from all liability on claims that are the
subject matter of such proceeding.
If the indemnification provided for in this Section 7 is unavailable to an
Indemnified Person or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person, in lieu of
indemnifying such Indemnified Person, shall contribute to the amount paid or
payable by such Indemnified Person as a result of such losses, claims, damages
or liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Shares or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to
23
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company on the one hand and the Underwriters on the
other hand in connection with the statements or omissions or in connection with
any violation of any applicable laws or regulations of foreign jurisdictions
where Reserved Shares have been offered referred to in this Section 7, which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other hand shall be deemed to be in
the same respective proportions as the net proceeds from the offering (before
deducting expenses) received by the Company and the total underwriting discounts
and the commissions received by the Underwriters, in each case as set forth in
the table on the cover of the Prospectus, bear to the aggregate public offering
price of the Shares. The relative fault of the Company on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement, omission or violation of any applicable laws or regulations of
foreign jurisdictions where Reserved Shares have been offered referred to in
this Section 7.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purposes) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Shares underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission of the nature referred
to in this Section 7. 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 pursuant to this
Section 7 are several in proportion to the respective number of Shares set forth
opposite their names in Schedule I hereto, and not joint.
24
The remedies provided for in this Section 7 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any indemnified
party at law or in equity.
The indemnity and contribution agreements contained in this Section 7 and
the representations and warranties of the Company set forth in this Agreement
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Underwriter or any person controlling any Underwriter or by or on behalf of
the Company, its officers or directors or any other person controlling the
Company and (iii) acceptance of and payment for any of the Shares.
8. Notwithstanding anything herein contained, this Agreement (or the
obligations of the several Underwriters with respect to the Option Shares) may
be terminated in the absolute discretion of the Representatives, by notice given
to the Company, if after the execution and delivery of this Agreement and prior
to the Closing Date (or, in the case of the Option Shares, prior to the
Additional Closing Date) (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange or the NASD, (ii) trading of any
securities of or guaranteed by the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities, or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in the judgment of the Represen tatives, is material
and adverse and which, in the judgment of the Representatives, makes it
impracticable to market the Shares being delivered at the Closing Date or the
Additional Closing Date, as the case may be, on the terms and in the manner
contemplated in the Prospectus.
9. This Agreement shall become effective upon the later of (x)
execution and delivery hereof by the parties hereto and (y) release of
notification of the effectiveness of the Registration Statement (or, if
applicable, any post-effective amendment) by the Commission.
If on the Closing Date or the Additional Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Shares
which it or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of Shares to be purchased on such date, the other Underwriters
shall be obligated severally in the proportions that the number of Shares set
forth opposite their respective names in Schedule I bears to the aggregate
number of Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other
25
proportions as the Representatives may specify, to purchase the Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date; provided that in no event shall the number of Shares that
any Underwriter has agreed to purchase pursuant to Section 1 be increased
pursuant to this Section 9 by an amount in excess of one-tenth of such number of
Shares without the written consent of such Underwriter. If on the Closing Date
or the Additional Closing Date, as the case may be, any Underwriter or
Underwriters shall fail or refuse to purchase Shares which it or they have
agreed to purchase hereunder on such date, and the aggregate number of Shares
with respect to which such default occurs is more than one-tenth of the
aggregate number of Shares to be purchased on such date, and arrangements
satisfactory to the Representatives and the Company for the purchase of such
Shares are not made within 36 hours after such default, this Agreement (or the
obligations of the several Underwriters to purchase the Option Shares, as the
case may be) shall terminate without liability on the part of any non-defaulting
Underwriter or the Company. In any such case either you or the Company shall
have the right to postpone the Closing Date (or, in the case of the Option
Shares, the Additional Closing Date), but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and in the Prospectus or in any other documents or arrangements may be effected.
Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
10. If this Agreement shall be terminated by the Underwriters, or any
of them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement or any condition of the Underwriters' obligations cannot be fulfilled,
the Company agrees to reimburse the Underwriters or such Underwriters as have so
terminated this Agreement with respect to themselves, severally, for all out-of-
pocket expenses (including the fees and expenses of its counsel) reasonably
incurred by the Underwriters in connection with this Agreement and the offering
contemplated hereunder.
11. This Agreement shall inure to the benefit of and be binding upon
the Company, the Underwriters, each affiliate of any Underwriter which assists
such Underwriter in the distribution of the Shares, any controlling persons
referred to herein and their respective successors and assigns. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any other person, firm or corporation any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. No purchaser of Shares from any Underwriter shall be deemed to be a
successor merely by reason of such purchase.
26
12. Any action by the Underwriters or the Representatives hereunder may
be taken by the Representatives jointly or by X.X. Xxxxxx Securities Inc. on
behalf of the Underwriters or the Representatives, and any such action taken by
the Representatives jointly or by X.X. Xxxxxx Securities Inc. shall be binding
upon the Underwriters. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or transmitted
by any standard form of telecommunication. Notices to the Underwriters shall be
given to the Representatives, c/o X.X. Xxxxxx Securities Inc., 00 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (telefax: (000) 000-0000); Attention: Syndicate
Department. Notices to the Company shall be given to it at CONSOL Energy Inc.,
CONSOL Plaza, 0000 Xxxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000 (telefax:
(000) 000-0000); Attention: Xxxxxxx Xxxxxx.
13. This Agreement may be signed in counterparts, each of which shall
be an original and all of which together shall constitute one and the same
instrument.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS
OF LAWS PROVISIONS THEREOF.
27
If the foregoing is in accordance with your understanding, please sign
and return four counterparts hereof.
Very truly yours,
CONSOL ENERGY INC.
By:
-------------------------------------
Name:
Title:
Accepted:_________, 1999
X.X. XXXXXX SECURITIES INC.
XXXXXXX LYNCH, PIERCE, XXXXXX
& XXXXX INCORPORATED
Acting severally on behalf of themselves
and the several Underwriters listed
in Schedule I hereto.
By: X.X. XXXXXX SECURITIES INC.
By:
-------------------------------------
Name:
Title:
28
SCHEDULE I
Number of Shares
Underwriter To Be Purchased
----------- ----------------
X.X. Xxxxxx Securities Inc. ...........................
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated.....
Total 2,600,000
EXHIBIT A
LOCK-UP AGREEMENT
_________________, 1999
X.X. Xxxxxx Securities Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated,
As representatives of the several
Underwriters listed in Schedule I
to the Underwriting Agreement
c/o X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CONSOL Energy Inc.
Ladies and Gentlemen:
The undersigned understands that you, as Representatives of the several
Underwriters, propose to enter into an Underwriting Agreement (the "Underwriting
Agreement") with CONSOL Energy Inc., a Delaware corporation (the "Company"),
providing for the public offering (the "Public Offering") by the several
Underwriters named in Schedule I to the Underwriting Agreement (the
"Underwriters"), of 22,600,000 shares (the "Shares") of common stock, par value
$.01 per share, of the Company (the "Common Stock").
In consideration of the Underwriters' agreement to purchase and make the
Public Offering of the Shares, and for other good and valuable consideration,
receipt of which is hereby acknowledged, the undersigned hereby agrees that,
without the prior written consent of X.X. Xxxxxx Securities Inc. on behalf of
the Underwriters, the undersigned will not, during the period ending 180 days
after the date of the final prospectus relating to the Public Offering (the
"Prospectus"), (1) offer, pledge, announce the intention to sell, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock of
the Company or any securities
1
convertible into or exercisable or exchangeable for Common Stock (including
without limitation, Common Stock which may be deemed to be beneficially owned by
the undersigned in accordance with the rules and regulations of the Securities
and Exchange Commission and securities which may be issued upon exercise of a
stock option or warrant) or (2) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. In addition, the undersigned agrees that, without the prior
written consent of X.X. Xxxxxx Securities Inc. on behalf of the Underwriters, it
will not, during the period ending 180 days after the date of the Prospectus,
make any demand for or exercise any right with respect to the registration of
any shares of Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock.
In furtherance of the foregoing, the Company, and any duly appointed
transfer agent for the registration or transfer of the securities described
herein, are hereby authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this lock-up agreement.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this lock-up agreement. All authority
herein conferred or agreed to be conferred and any obligations of the
undersigned shall be binding upon the successors, assigns, heirs or personal
representatives of the undersigned.
The undersigned understands that if the Underwriting Agreement does not
become effective, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Common Stock to be sold thereunder, the
undersigned shall be released from all obligations under this lock-up agreement.
The undersigned understands that the Underwriters are entering into the
Underwriting Agreement and proceeding with the Public Offering in reliance upon
this lock-up agreement.
2
This lock-up agreement shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect to the conflicts
of laws provisions thereof.
Very truly yours,
[NAME OF STOCKHOLDER]
By:
-------------------------------------
Name:
Title:
Accepted as of the date first
set forth above:
X.X. XXXXXX SECURITIES INC.
XXXXXXX LYNCH, PIERCE, XXXXXX
& XXXXX INCORPORATED
Acting severally on behalf of themselves
and the several Underwriters named in
Schedule I to the Underwriting
Agreement
By: X.X. XXXXXX SECURITIES INC.
By:
-----------------------------------
Name:
Title:
3
CROSS-REFERENCE TARGET LIST
===========================
NOTE: Due to the number of targets some target
names may not appear in the target pull-down list.
(This list is for the use of the wordprocessor only,
is not a part of this document and may be discarded.)
ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME
=========================== ========================== ============================= ===========================
1....................sell.agree
5(a)(i).........co.use.best.eff
5(a)(ix)(A)...........not.offer
5(a)(ix)(B)............not.swap
5(a)(v)............... pros.req
?......................sell.cov
?..................xxxx.xxx.xxx
?.................sell.not.swap
6(a)................... reg.eff
6(b)...............rep.war.true
6(c).............no.downgrading
6(d).............no.chg.cap.stk
6(f)(vii), 6(g)(v)....coun.opin
7......................co.indem
9.......................agt.eff
