Exhibit 1
---------
STOCK PURCHASE AGREEMENT
------------------------
STOCK PURCHASE AGREEMENT
------------------------
This STOCK PURCHASE AGREEMENT (the "Agreement"), dated as of February 13,
1998, between XXXXXXXX HOLDINGS, LTD. (the "Seller"), a Kentucky limited
partnership, and XXXXX RIVER COAL COMPANY (the "Purchaser"), a Virginia
corporation, recites and provides:
WHEREAS, the Seller collectively owns of record and beneficially 470,240
shares of common stock, par value $.01 per share (the "Company Common Stock"),
of Blue Diamond Coal Company, a Delaware corporation (the "Company") (such
Sellers' shares being referred to collectively as the "Shares");
WHEREAS, the Purchaser and the Seller entered into a proxy and option
agreement, (the "Option Agreement") dated December 15, 1997, pursuant to which
the Seller has agreed, among other things, to sell the Shares to the Purchaser
in exchange for the Purchase Price (as defined below);
WHEREAS, the Purchaser delivered to the Seller the notice required by
Paragraph 4(a) of the Option Agreement on February 11, 1998 notifying the Seller
that the Purchaser intended to purchase the Shares on the date hereof (the
"Closing Date"); and
WHEREAS, the Purchaser has previously delivered by wire transfer $1,000,000
in immediately available funds to the Seller as partial payment for the Shares.
NOW, THEREFORE, in consideration of the mutual promises herein contained
and other good and valuable consideration, receipt whereof is hereby
acknowledged, the Seller and the Purchaser agree as follows:
1. Sale and Purchase of the Shares.
--------------------------------
(a) Subject to the terms and conditions set forth herein, the Seller
agrees to sell, and the Purchaser agrees to buy, the Shares at a price per Share
equal to the Purchase Price. As payment in full for the Shares, the Purchaser
shall (i) agree to provide for the payment of the Contingency Amount (as defined
below); and (ii) wire transfer to an account designated by the Seller an amount
equal to $27,408,609.12.
(b) Simultaneously with the delivery of the Purchase Price, the Seller
shall deliver, assign and convey to the Purchaser a certificate or certificates
representing the Shares purchased by the Purchaser (together with appropriate
stock powers) or provide for the transfer of any shares held in street name by
means reasonably acceptable to Purchaser, free and clear of any and all
mortgages, liens, encumbrances, charges, claims, restrictions, pledges, security
interests or impositions.
(c) For purposes of this Agreement, the purchase price per Share (the
"Purchase Price") shall equal the sum of (i) $60.413 in cash plus (ii) the right
to receive after the Closing Date the Contingency Amount (as defined below), if
any, divided by (x) the number of shares of Company Common Stock issued and
outstanding on the date the Company is merged with the wholly owned subsidary of
the Purchaser or (y) the number of shares of Company Common Stock issued and
outstanding on the date the payment becomes due, if such merger does not occur.
For purposes of this Agreement, the contingency amount (the "Contingency
Amount") shall mean the amount to be paid to the shareholders of the Company and
the Seller, pursuant to the Contingency Agreement in the form attached hereto as
Exhibit A. If for any reason the merger between the Company and a wholly-owned
---------
Subsidiary of Purchaser does not occur, Purchaser will execute such documents as
may be necessary to convey to Seller its pro rata share of the Contingency
Amount.
2. Representations and Warranties of the Seller.
---------------------------------------------
The Seller represents and warrants to the Purchaser, as to the Company,
itself and with respect to its Shares, as follows:
(a) The Shares constitute all of the shares of Company Common Stock
beneficially owned (as defined in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended), directly or indirectly, by the Seller, other than
2,200 shares of Company Common Stock owned by Xxx Xxxxxxxx.
(b) The execution and delivery of this Agreement by the Seller does not,
and the performance by the Seller of its obligations hereunder will not,
constitute a violation of, conflict with, result in a default (or an event
which, with notice or lapse of time or both, would result in a default) under,
or result in the creation of any lien on any of the Shares under (i) any
contract, commitment, agreement, understanding, arrangement or restriction of
any kind to which the Seller is a party or by which the Seller is bound, (ii)
any judgment, writ, decree, order or ruling applicable to the Seller, or (iii)
the organizational documents of such Seller, if applicable.
(c) The Seller has full power and authority to execute, deliver and
perform this Agreement and to consummate the transactions contemplated hereby.
The execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly authorized
and except for the notices and filings referenced in paragraph (d) below, no
other actions on the part of the Seller are required in order to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by the Seller and, assuming due authorization, execution
and delivery by the Purchaser, constitutes a valid and binding agreement of the
Seller, enforceable against the Seller in accordance with its terms, except to
the extent that enforceability may be limited by applicable bankruptcy,
organization, insolvency, moratorium or other laws affecting the enforcement of
creditors' rights generally and by general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or at law.
(d) Neither the execution and delivery of this Agreement nor the
performance by the Seller of its obligations hereunder will (i) violate any
order, writ, injunction or judgment
-2-
applicable to the Seller or (ii) violate any law, decree, statute, rule or
regulation applicable to the Seller or require any consent, authorization or
approval of, filing with or notice to, any court, administrative agency or
other governmental body or authority, other than any required notices or
filings pursuant to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder (the "HSR
Act") or the federal securities laws.
(e) The Seller owns good, valid and marketable title to the Shares, free
and clear of any and all mortgages, liens, encumbrances, charges, claims,
restrictions, pledges, security interests or impositions. Upon delivery of the
Shares to the Purchaser at the closing and upon the Purchaser's payment therefor
in accordance with Section 1 hereto, good and valid title to the Shares, free
and clear of all mortgages, liens, encumbrances, charges, claims, restrictions,
pledges, security interests or impositions, will pass to the Purchaser.
3. Representations and Warranties of the Purchaser.
-----------------------------------------------
The Purchaser represents and warrants to the Seller as follows:
(a) The Purchaser is (i) duly organized and validly existing and in good
standing under the laws of the Commonwealth of Virginia, (ii) has the requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby, and (iii) has taken all
necessary corporate action to authorize the execution, delivery and performance
of this Agreement. This Agreement has been duly and validly executed and
delivered by the Purchaser and constitutes the legal, valid and binding
obligation of the Purchaser, enforceable against the Purchaser in accordance
with its terms, except to the extent that enforceability may be limited by
applicable bankruptcy, organization, insolvency, moratorium or other laws
affecting the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether such enforceability is considered in
a proceeding in equity or at law.
(b) The execution and delivery of this Agreement by the Purchaser does
not, and the performance by the Purchaser of its obligations hereunder will not,
constitute a violation of, conflict with, or result in a default (or an event
which, with notice or lapse of time or both, would result in a default) under,
its charter or bylaws or any contract, commitment, agreement, understanding,
arrangement or restriction of any kind to which the Purchaser is a party or by
which the Purchaser is bound or any judgment, writ, decree, order or ruling
applicable to the Purchaser.
(c) Neither the execution and delivery of this Agreement nor the
performance by the Purchaser of its obligations hereunder will violate any
order, writ, injunction, judgment, law, decree, statute, rule or regulation
applicable to the Purchaser or require any consent, authorization or approval
of, filing with, or notice to, any court, administrative agency or other
governmental body or authority, other than any required notices or filings
pursuant to the HSR Act or the federal securities laws.
-3-
4. Indemnification.
---------------
(a) The Seller shall indemnify and hold the Purchaser harmless from and
against, and agree to defend promptly the Purchaser from and reimburse the
Purchaser for, any and all losses, damages, costs, expenses, liabilities,
obligations and claims of any kind, including, without limitation, reasonable
attorneys' fees and other legal costs and expenses (hereinafter referred to
collectively as "Losses"), that the Purchaser may at any time suffer or incur,
or become subject to, as a result of or in connection with a breach of this
Agreement by the Seller.
(b) The Purchaser shall indemnify and hold the Seller harmless from and
against, and agree to defend promptly the Seller from and reimburse the Seller
for, any and all Losses that the Seller may at any time suffer or incur, or
become subject to, as a result of or in connection with a breach of this
Agreement by the Purchaser.
5. Miscellaneous.
--------------
(a) Expenses. Each of the parties hereto shall bear and pay all costs and
--------
expenses incurred by it or on its behalf in connection with the transactions
contemplated hereunder, including fees and expenses of its own financial
consultants, investment bankers, accountants and counsel.
(b) Entire Agreement. Except as otherwise expressly provided herein, this
----------------
Agreement contains the entire agreement between the parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral. The terms and conditions
of this Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns. Nothing in this Agreement,
expressed or implied, is intended to confer upon any party, other than the
parties hereto, and their respective successors and assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided herein.
(c) Assignment. Neither of the parties hereto may assign any of its rights
----------
or obligations under this Agreement to any other person, without the express
written consent of the other party.
(d) Counterparts. This Agreement may be executed in any number of
------------
counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
(e) Specific Performance. The parties agree that damages would be an
--------------------
inadequate remedy for a breach of the provisions of this Agreement by either
party hereto and that this Agreement may be enforced by either party hereto
through injunctive or other equitable relief.
(f) Governing Law. All questions concerning the construction, validity and
-------------
interpretation of this Agreement will be governed by and construed in accordance
with the domestic laws of the State of Delaware, without giving effect to any
choice of law provision or rule (whether of the State of Delaware or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Delaware.
-4-
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement
as of the day and year first written above.
XXXXXXXX HOLDINGS, LTD.
By: TYE Fork Coal Company, General Partner
By:/s/ Xxxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
XXXXX RIVER COAL COMPANY
By:/s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Chairman of the Board
