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EXHIBIT 10.3
STOCK PURCHASE AGREEMENT
between
XXXXXXXXX HOLDING COMPANY, INC.
and
XXXXXXXXX ACQUISITION COMPANY, INC.
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Dated as of September 22, 1995
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SALE OF STOCK OF
XXXXXXXXX MINING, INC.
MINING TECHNOLOGIES, INC.
ADDWEST MINING, INC.
XXXXXXXXX COAL HOLDING, INC.
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TABLE OF CONTENTS
SECTION PAGE
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1. Purchase and Sale of the Shares; Interim 1
Conduct of ARI and the Companies ................ 1
(a) Purchase Price ......................... 1
(b) Interim Control ........................ 1
(c) Pre-Closing Distributions .............. 2
(d) Working Capital Statement .............. 2
(e) Excess Working Capital ................. 2
(f) Disputes ............................... 3
(g) Access ................................. 3
(h) Tennessee Mining, Inc. ................. 3
2. Closing ......................................... 4
3. Conditions to Closing ........................... 4
(a) Buyer's Obligation ..................... 4
(b) Seller's Obligation .................... 6
(c) Pre-Closing and Post-Closing Actions.... 8
(d) Rescission ............................. 12
4. Representations and Warranties of Seller ........ 12
(a) Authority .............................. 12
(b) The Shares ............................. 13
(c) Organization and Standing of Each
Company ................................ 13
(d) Capital Stock of Each Company .......... 14
(e) Equity Interests ....................... 14
(f) Financial Statements; Undisclosed
Liabilities ............................ 14
(g) Taxes .................................. 15
(h) Tangible Personal Property ............. 16
(i) Real Property .......................... 16
(j) Contracts .............................. 17
(k) Litigation; Decrees .................... 20
(l) Benefit Plans .......................... 20
(m) Absence of Changes or Events ........... 22
(n) Compliance with Applicable Laws ........ 23
(o) Employee and Labor Relations ........... 24
(p) Licenses; Permits ...................... 25
(q) Bank Accounts and Powers of Attorney ... 25
(r) Transactions with Affiliates ........... 25
(s) Patents and Trademarks ................. 26
(t) Insurance .............................. 26
(u) AS IS .................................. 26
5. A. Covenants of Seller .......................... 27
(a) Access ................................. 27
(b) Pro Forma Balance Sheet ................ 27
(c) Supplemental Disclosure ................ 27
(d) No Solicitation ........................ 28
(e) Fees and Expenses ...................... 29
5. B. Covenants of Buyer ........................... 29
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(a) Buyer's Actions ........................ 29
(b) Supplemental Disclosure ................ 30
(c) Planned Closing of Any Company
Employment Site ........................ 30
(d) Ordinary Conduct ....................... 30
6. Representations and Warranties of Buyer ......... 32
(a) Authority .............................. 32
(b) Actions and Proceedings, etc. .......... 33
(c) Consents ............................... 33
(d) Qualification .......................... 34
(e) No Broker .............................. 34
(f) Investment Intent ...................... 34
(g) Contracts; Commitments ................. 34
7. Mutual Covenants ................................ 34
(a) Cooperation ............................ 34
(b) Best Efforts ........................... 35
(c) Antitrust Notification ................. 36
(d) Records ................................ 36
(e) Non Disclosure ......................... 37
(f) Litigation Support ..................... 37
(g) Release ................................ 37
8. Further Assurances .............................. 37
9. Indemnification ................................. 38
(a) Tax Indemnification .................... 38
(b) Other Indemnification by Seller ........ 39
(c) Indemnification by Buyer ............... 40
(d) Losses Net of Insurance, etc. .......... 41
(e) Termination of Indemnification ......... 41
(f) Procedures Relating to Indemnification
(g) (Other than Under Sections 9(a))........ 41
Procedures Relating to Indemnification
of Tax Claims .......................... 43
10. Tax Matters ..................................... 44
11. Assignment ...................................... 47
12. No Third-Party Beneficiaries .................... 47
13. Survival of Representations ..................... 47
14. Expenses ........................................ 47
15. Attorney Fees ................................... 47
16. Amendments ...................................... 47
17. Notices ......................................... 48
18. Interpretation .................................. 48
19. Counterparts .................................... 48
20. Entire Agreement ................................ 48
21. Fees ............................................ 49
22. Severability .................................... 50
23. Consent to Jurisdiction ......................... 50
24. Non-solicitation of Personnel ................... 50
25. Governing Law ................................... 51
26. Affiliate Defined ............................... 51
27. Termination ..................................... 51
28. Publicity ....................................... 51
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Exhibit A Form of Opinion of Counsel to Seller
Exhibit B Form of Opinion of Counsel to Buyer
Exhibit C Form of Indemnity Agreement (Bonds and Guarantees)
Exhibit D Form of Deed
Exhibit E Form of Release
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SCHEDULES
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1 Shares of Each Company and State of Incorporation
1(h)(ii) TMI Balance Sheet
3(a)(vi) Financing Terms
3(a)(vii) Certain Buyer Consents
3(b)(vii) XXX Xxxxx and Guarantees
3(b)(x) Certain Seller Consents
3(c)(i) Excluded Assets
3(c)(iii) Included Assets
3(c)(iv) Assumed Liabilities
4(a) Consents
4(b) Liens on Shares
4(e) Equity Interests
4(f)(i) Financial Statements
4(g)(ii) Exceptions to Tax Returns; Tax Examinations
4(g)(iii) Tax xx.xx. 341, 168(h) and 168(f)(8) Exceptions
4(g)(iv) Tax Statute of Limitations
4(h) Tangible Personal Property
4(i) Real Property
4(j) Contracts
4(k) Litigation
4(l)(i) Welfare and Company Plans
4(l)(ii) Company Plans Noncompliance
4(l)(v) Multiemployer Plans
4(l)(vi) Agreements with Present or Former Officers
4(l)(viii) Enhanced Benefits
4(m) Material Adverse Changes
4(n) Notice of Non-Compliance with Applicable Laws
4(n)(iii) Permit Blocking
4(o) Collective Bargaining Agreements
4(p) Licenses, Permits and Authorizations
4(q) Bank Accounts and Powers of Attorney
4(s) Patents and Trademarks
4(t) Policies of Insurance
5A(b) Pro Forma Balance Sheet
5B(a) Parties to be Removed from Bonds and Guarantees
5B(d) Exceptions to Ordinary Conduct
6(g) Contracts; Commitments
10(a) Allocation of Purchase Price
24 Non Solicitation of Company Employees
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STOCK PURCHASE AGREEMENT dated as of September 22, 1995, among
XXXXXXXXX HOLDING COMPANY, INC., a Delaware corporation ("Seller"), XXXXXXXXX
RESOURCES, INC., a Delaware corporation ("ARI"), XXXXXXXXX ACQUISITION COMPANY,
INC., a Kentucky corporation ("Buyer"), and XXXXX XXXXXXXXX, XXXXXX XXXXXXXXX
and XXXXX XXXXXXXXX (collectively, the "Xxxxxxxxx Group").
Buyer desires to purchase from Seller, and Seller desires to sell to
Buyer, all the issued and outstanding shares of common stock (the "Shares"), of
Xxxxxxxxx Mining, Inc., Mining Technologies, Inc., Addwest Mining, Inc. and
Xxxxxxxxx Coal Holding, Inc. (hereinafter each, including their subsidiaries,
referred to as a "Company" and collectively, as the "Companies"), such Shares
and the shares of each subsidiary being more fully described on Schedule 1
attached hereto.
The Xxxxxxxxx Group are parties to this Agreement for the purposes
of (i) making certain representations and warranties to Seller, and (ii)
guaranteeing the Buyer's indemnification obligations under Section 9 hereof.
ARI is a party to this Agreement for purposes of guaranteeing
Seller's indemnification obligations under Section 9 hereof.
Accordingly, the parties hereto hereby agree as follows:
1. Purchase and Sale of the Shares; Interim Conduct of ARI and
the Companies.
(a) Purchase Price. On the terms and subject to the
conditions of this Agreement, Seller will sell, transfer and deliver or cause to
be sold, transferred and delivered to Buyer, and Buyer will purchase from
Seller, free and clear of all liens, claims and encumbrances of any kind, the
Shares for an aggregate purchase price (the "Purchase Price") (subject to any
adjustments as set forth in Section 1(e) below) of THIRTY MILLION DOLLARS
($30,000,000.00) cash, plus the Royalty as defined in Section 1(h)(ii).
(b) Interim Control. Upon the execution of this Agreement,
and continuing throughout the interim period until Closing (the "Interim"), the
Buyer shall enter into immediate possession of the Companies, and Seller shall
cause Xxxxx Xxxxxxxxx, Xxxxxx Xxxxxxxxx and Xxxxx Xxxxxxxxx to be elected and
they shall remain directors (the "Directors") of each of the Companies during
the Interim. The Directors shall have the authority and the responsibility to
manage the day-to-day operations and activities of the Companies, but only in
the ordinary course of business and in a manner not inconsistent with this
Agreement, including, but not limited to Section 5B(d). It is understood and
agreed that in no event shall the Companies make contributions (capital or
otherwise) to Tennessee Mining, Inc. ("TMI") that would cause the TMI
Contribution (as defined below) limits to be exceeded.
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(c) Pre-Closing Distributions. It is understood and agreed
that from September 7, 1995, and continuing thereafter, no Company shall be
required to contribute funds, directly or indirectly, whether by dividend, loan
or otherwise, to Seller or any affiliate of Seller (other than another Company).
In the event that the Companies make any such distributions to Seller or any
affiliate of Seller, such funds will be reimbursed to the respective Companies
at the Closing.
(d) Working Capital Statement. Within sixty (60) days after
the Closing Date, Seller will prepare and deliver to Buyer a statement of
working capital for the Companies (the "Working Capital Statement") showing the
Companies' Combined Net Working Capital as of the close of business on the
Closing Date. "Companies' Combined Net Working Capital" means current assets
minus current liabilities of the Companies on a combined basis determined after
giving effect to the transactions to be consummated prior to or at the Closing
((i) eliminating the working capital effect of any Excluded Assets and Excluded
Liabilities to be distributed out of the Companies prior to the Closing and the
current portion of any liability for which the Companies shall not be
responsible, and (ii) including the working capital effect of any Included
Assets and Assumed Liabilities to be transferred to the Companies prior to the
Closing)), with current assets and current liabilities accounts calculated in
accordance with generally accepted accounting principles ("GAAP"), and on a
basis consistent with the past accounting practices of the Companies, except
that (x) deferred overburden shall be excluded from current assets and (y) the
accrued reclamation liabilities shall remain as stated on the July 31, 1995 Pro
Forma Balance Sheet attached as Schedule 5A(b). Notwithstanding the above, for
purposes of this Agreement, excluded from the Companies Combined Net Working
Capital shall be the following items: (1) except for the effect of the Owed
Contribution as described in Section 1(h)(ii), TMI, (2) the Equipment Payment,
as defined in Section 3(c), (3) any state and federal income tax liability, and
(4) the Consumers Power Liability and the Pittston Liability, both as defined in
Section 3(c)(iv)(B).
(e) Excess Working Capital. Subject to Section 1(h)(ii)
below, within 10 days after the final determination of the Companies Combined
Net Working Capital (as provided in Section 1(d) above), if the Companies
Combined Net Working Capital exceeds Zero Dollars ($0.00), the parties shall
adjust the Purchase Price by increasing the Purchase Price by an amount equal to
the difference between the Companies Combined Net Working Capital and $0.00. Any
such adjustment in the Purchase Price pursuant to this Section shall be paid in
cash by Buyer within 10 days after determination of the Companies Combined Net
Working Capital, by wire transfer of immediately available funds to a bank
account designated in writing by Seller.
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(f) Disputes. The Working Capital Statement will become
final for all purposes 30 days after receipt by Buyer unless Buyer has delivered
a detailed statement describing its objections thereto. Buyer and Seller will
use reasonable efforts to resolve any such objections. If the parties do not
achieve a final resolution within 15 days after Seller has received the
statement of objections, Buyer and Seller will within 10 days select a mutually
acceptable accounting firm to resolve any remaining objections. If Buyer and
Seller are unable to agree on the choice of an accounting firm, they will select
a nationally recognized accounting firm by lot (after excluding their respective
regular outside auditors). The selected accounting firm shall be retained
jointly by the parties on the condition, among other things, that it shall
notify the parties of its determination within 30 days after its selection. The
determination of the accounting firm so selected regarding the matters in
dispute will be set forth in writing and will be conclusive and binding upon the
parties and the Working Capital Statement shall thereupon become final. The
parties shall each pay one-half of the fees and expenses of such accounting
firm.
(g) Access. Buyer will make the books, records and financial
staff of the Companies available to Seller, its accountants and other
representatives at reasonable times and upon reasonable notice during the
preparation by Seller of the Working Capital Statement and the resolution by the
parties of any objections thereto. Buyer shall have reasonable access to the
working papers that Seller's accountants use or produce in the preparation and
calculation of the Working Capital Statement.
(h) Tennessee Mining, Inc.
(i) Reference is made to that certain letter agreement
(the "Put Agreement") dated August 4, 1995, by and among ARI and Buyer, pursuant
to which ARI obtained the right to transfer TMI to Buyer. It is understood and
agreed that the Put Agreement, which has been exercised by letter dated
September 6, 1995, remains effective, although it has been incorporated in the
terms of this Agreement. Should the transactions contemplated by this Agreement
not close for any reason, the parties will still close the transactions
contemplated by the Put Agreement, though any time limits therein relating to
the Closing of the transaction contemplated thereby shall be tolled from
September 5, 1995 to the date of expiration or termination of this Agreement.
(ii) Schedule 1(h)(ii) sets forth a pro forma balance
sheet of TMI (the "TMI Balance Sheet") reflecting the assets, liabilities and
working capital which TMI would have had if the Closing had occurred on July 31,
1995. Schedule 1(h)(ii) shows TMI's shareholder equity equal to approximately
$1,534,329.00. Since July 31, 1995 to the Closing, the Seller and the Companies
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shall have caused to be contributed to TMI an additional $2,500,000.00 (the "TMI
Contribution"). TMI shall not be entitled to receive more than the TMI
Contribution from the Seller and the Companies. Between July 31, 1995 and
September 7, 1995, ARI has contributed to TMI $1,160,610.00, leaving
$1,339,390.00 to be contributed to TMI after September 7, 1995 (the "Owed
Contribution"). Buyer shall pay, or cause to be paid, to the Seller an
overriding royalty equal to $1.00 per ton, up to a maximum $12,000,000.00 (the
"Royalty"), on all coal delivered to the Tennessee Valley Authority ("TVA")
under that certain coal supply contract between TMI and the TVA dated August 7,
1995 (the "TVA Contract"), on the terms and conditions set forth in the Put
Agreement. The Companies Combined Net Working Capital shall be adjusted downward
to reflect the Owed Contribution, and if the Companies Combined Net Working
Capital is negative, the Royalty shall be suspended and the Buyer shall receive
a credit and recoupment for the Royalty during such period of suspension until
the amount of the credit and recoupment is equal to the lesser of the negative
working capital or the Owed Contribution.
2. Closing. (a) The closing (the "Closing") of the purchase and
sale of the Shares shall be held at the offices of Xxxxx, Xxxx & Xxxxxxx, 2700
Lexington Financial Center, Lexington, Kentucky at 10:00 a.m. within three
business days of the satisfaction or waiver of the conditions to the Closing set
forth in Section 3 of this Agreement; provided, however, that if the Closing
shall not have occurred on or before November 6, 1995, either party shall have
the right to terminate all its rights and obligations hereunder, subject to the
provisions of Sections 1(h), 3(d), 7(e), 15, 27 and 28, which shall survive
termination of this Agreement. The date on which the Closing shall occur is
hereinafter referred to as the "Closing Date".
(b) At the Closing, (i) Buyer shall deliver to Seller, by wire
transfer to a bank account designated in writing by Seller immediately available
funds in an amount equal to the sum of (A) the Purchase Price, plus (B) the
Closing Tax Adjustment Amount (as defined in Section 9(a)), and (ii) Seller
shall deliver or cause to be delivered to Buyer certificates representing the
Shares, duly endorsed in blank or accompanied by stock powers duly endorsed in
blank in proper form for transfer, with appropriate transfer stamps, if any,
affixed.
3. Conditions to Closing. (a) Buyer's Obligation. The obligation
of Buyer to purchase and pay for the Shares is subject to the satisfaction (or
waiver by Buyer) as of the Closing of the following conditions:
(i) The representations and warranties of Seller and ARI
made in this Agreement shall be true and correct in all material
respects as of the date hereof and on and as of the
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Closing, as though made on and as of the Closing Date, and Seller
shall have performed or complied in all material respects with all
obligations and covenants required by this Agreement to be performed
or complied with by Seller by the time of the Closing; and Seller
shall have delivered to Buyer a certificate dated the Closing Date
and signed by an authorized officer of Seller confirming the
foregoing.
(ii) Buyer shall have received an opinion dated the Closing
Date of Xxxxx, Xxxx & Xxxxxxx PLLC, counsel to Seller, substantially
in the form of Exhibit A. Buyer also shall have received a copy of
an opinion addressed to ARI dated the Closing Date from special
Delaware counsel to ARI to the effect that the transactions
contemplated in this Agreement do not require the approval of the
stockholders of ARI under Delaware General Corporation Law.
(iii) No injunction or order of any court or administrative
agency of competent jurisdiction shall be in effect, and no statute,
rule or regulation of any governmental authority or instrumentality
shall have been promulgated or enacted, as of the Closing which
restrains or prohibits the purchase and sale of the Shares.
(iv) No action, suit or other proceeding by any person to
restrain or prohibit the purchase and sale of the Shares or seeking
material damages in connection therewith shall be pending which in
the written opinion of Buyer's counsel is reasonably likely to
succeed.
(v) The waiting period under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 0000 (xxx "XXX Xxx") shall have expired or been
terminated.
(vi) Financing shall be available to the Buyer from the CIT
Group under the terms and conditions set forth in Schedule 3(a)(vi).
(vii) Any consents required under the documents described on
Schedule 3(a)(vii) shall have been obtained.
(viii) The conditions to the ARI Shareholders' obligations
under that Agreement and Plan of Corporate Separation among Seller,
ARI, Xxxxx Xxxxxxxxx and Xxxxx Xxxxxxxxx shall have been satisfied
or waived.
(b) Seller's Obligation. The obligation of Seller to sell
and deliver the Shares to Buyer is subject to the satisfaction (or waiver by
Seller) as of the Closing of the following conditions:
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(i) The representations and warranties of Buyer and the Xxxxxxxxx
Group made in this Agreement shall be true and correct in all material
respects as of the date hereof and on and as of the Closing, as though
made on and as of the Closing Date, and Buyer and the Xxxxxxxxx Group
shall have performed or complied in all material respects with all
obligations and covenants required by this Agreement to be performed or
complied with by Buyer and the Xxxxxxxxx Group by the time of the Closing;
and Buyer and the Xxxxxxxxx Group shall have delivered to Seller a
certificate dated the Closing Date and signed by an authorized officer of
Buyer and by the Xxxxxxxxx Group confirming the foregoing.
(ii) Seller shall have received an opinion dated the Closing Date
of Xxxxx, Xxxxxxx & Xxxxx, counsel to Buyer and the Xxxxxxxxx GRoup,
substantially in the form of Exhibit B.
(iii) No injunction or order of any court or administrative agency
or instrumentality shall be in effect, and no statute, rule or regulation
of any governmental authority of competent jurisdiction shall have been
promulgated or enacted, as of the Closing which restrains or prohibits the
purchase and sale of the Shares.
(iv) No action, suit or other proceeding by any person to restrain
or prohibit the purchase and sale of the Shares or seeking material
damages in connection therewith shall be pending which in the written
opinion of Seller's counsel is reasonably likely to succeed.
(v) The waiting period under the HSR Act shall have expired or
been terminated.
(vi) Documentation from (A) PNC Bank ("PNC Bank", the Companies'
primary lender), individually and as agent for itself and Pittsburgh
National Bank, evidencing the release of each of ARI and Seller and their
respective assets under existing credit agreements, and (B) Provident Bank
evidencing the release of ARI under its guaranty of capitalized lease
obligations of TMI and the other Companies, satisfactory to ARI and Seller
in their sole discretion shall have been obtained.
(vii) At or prior to Closing, ARI and principals, directors,
officers and agents of ARI and its subsidiaries (excluding each Company),
shall have been removed and released from any liability or obligation
under all bonds and guarantees made for the benefit of the Companies,
including, but not limited to, the bonds and guarantees specified on
Schedule 3(b)(vii); or in the alternative, at Seller's option, shall have
been provided an Indemnity Agreement substantially
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in the form of the Indemnity Agreement attached hereto as Exhibit C. The
Buyer and the Xxxxxxxxx Group will use their best efforts to obtain the
above-described releases under the bonds and guarantees in an expeditious
manner.
(viii) Seller shall have received all necessary approvals of the
transactions contemplated by this Agreement from the Boards of Directors
of ARI and Seller, and where applicable, the Companies.
(ix) ARI shall have received a fairness opinion from a nationally
recognized investment banking firm to the effect that the sale of the
Shares and the transactions contemplated by this Agreement and the
Agreement of Split-Off and Reorganization are fair from a financial point
of view to the stockholders of ARI other than the Xxxxxxxxx Group.
(x) Any consents required under the documents described on
Schedule 3(b)(x) shall have been obtained.
(xi) Seller shall have received an opinion from special Delaware
counsel to the effect that the transactions contemplated in this Agreement
do not require the approval of the stockholders of ARI under Delaware
General Corporation Law.
(xii) A certificate of the Chief Executive Officer and the Chief
Financial Officer of the Buyer to the effect that after giving effect to
the transactions contemplated hereby and by any financing of Buyer to
consummate said transactions, the Buyer and the Companies are Solvent.
"Solvent" shall mean that after giving effect to the transactions
contemplated hereby and the financing (a) the sum of the assets, at a fair
valuation, of the Companies (taken as a whole) will exceed their debts;
(b) the Companies (taken as a whole) have not incurred and do not intend
to incur, and do not believe that they will incur, debts beyond their
ability to pay such debts as such debts mature; and (c) the Companies
(taken as a whole) will have sufficient capital with which to conduct
their business. For their purposes "debt" means any liability on a claim,
and "claim" means (i) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured
or (ii) right to an equitable remedy for breach of performance if such
breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured,
disputed, undisputed, secured or unsecured. In lieu of the foregoing,
Buyer may furnish a copy of any solvency certificate furnished to Buyer's
financing source, addressed to Seller.
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(xiii) The conditions to Seller's obligations under that Agreement
and Plan of Corporate Separation among Seller, ARI, Xxxxx Xxxxxxxxx and
Xxxxx Xxxxxxxxx shall have been satisfied or waived.
(c) Pre-Closing and Post-Closing Actions.
(i) Excluded Assets. Seller shall, before the Closing, use
commercially reasonable efforts to obtain all consents and permits, and to take
all other steps necessary for the conveyance, assignment and transfer subject to
existing liens, claims, encumbrances, defects in title and other liabilities
(contingent or otherwise) existing as of the date of this Agreement, of certain
personal and real property and other items from the Companies to Seller or its
affiliates ("Excluded Assets"). "Excluded Assets" shall mean the personal and
real property and other items described on Schedule 3(c)(i), including, but not
limited to, the right to receive (including the right to enforce the right to
receive) cash payments scheduled to be received under that certain Technology
Exchange Agreement between Mining Technologies, Inc. and BHP Australia Coal Pty.
Ltd. dated July 5, 1995 (the "BHP Agreement")(three separate payments totaling
$7,000,000.00 and specifically referred to in Sections 6(b),(c) and (d) of the
BHP Agreement). The $1,000,000.00 payment from BHP for mobile equipment (the
"Equipment Payment") under Section 6(e) of the BHP Agreement shall remain with
Mining Technologies, Inc.. With respect to any Excluded Assets which are unable
to be fully conveyed, assigned or transferred out of the Companies prior to the
Closing or in connection with the taking of any action with respect to those
Excluded Assets, Seller shall use commercially reasonable efforts to obtain all
consents and permits, and to take all other steps necessary for the conveyance,
assignment or transfer of such Excluded Assets to Seller or its affiliates as
soon as practicable after the Closing, and Buyer shall cooperate, and shall
cause the Companies to cooperate, with Seller and its affiliates, in all such
efforts, including requesting third parties to consent to such conveyances and
assignments, filing applications for the transfer of regulatory permits
pertaining to the Excluded Assets and executing and delivering such further
instruments and documents as Seller may reasonably request. As soon as all
necessary consents, permits and transfers of permits have been obtained and all
other steps necessary for the conveyance, assignment and transfer of the
Excluded Assets have been taken, Buyer shall cause the Companies or other
successor in interest to the Excluded Assets to execute and deliver such
agreements and instruments as may be necessary or appropriate to convey, assign
or transfer each such Excluded Asset to the designated affiliate of Seller free
and clear of any liens or encumbrances created or permitted by Buyer other than
liens in existence prior to the Closing. All costs and expenses except Taxes,
which are to be paid in accordance with Section 10(i) below,
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associated with the transfer of Excluded Assets shall be the sole responsibility
of Seller.
(ii) Excluded Liabilities. As of the Closing Date, Seller
shall assume and shall be solely responsible for, and Buyer and the Companies
shall have no responsibility for, and shall indemnify and hold Buyer harmless
against any liabilities or obligations of any Company of any nature, kind or
description whatsoever, known or unknown, absolute, contingent or otherwise,
which arise or accrue or are attributable to operations, activities, events or
occurrences with respect to the following (the "Excluded Liabilities"):
(A) The ownership, operation and maintenance of the Excluded
Assets, whether before or after the Closing Date.
(B) Income taxes for periods up to the Closing Date,
including (i) accrued state and federal income taxes, as of the Closing Date,
and (ii) state and federal income taxes resulting from the transaction, except
to the extent provided otherwise in Section 10(i).
(C) The assets, businesses and liabilities (contingent or
otherwise) of ARI and its subsidiaries (other than those relating to the
Companies).
(iii) Included Assets. Seller shall, before the Closing, use
commercially reasonable efforts to take all steps necessary for the conveyance,
assignment and transfer for no additional consideration and on an "as-is,
where-is" basis, subject to existing liens, claims, encumbrances, defects in
title and other liabilities (contingent or otherwise) existing as of the date of
this Agreement of the Included Assets from Seller or its affiliates to the
Companies. "Included Assets" shall mean the personal and real property and other
items described on Schedule 3(c)(iii), including, but not limited to,
miscellaneous real property located near or adjoining the Green Valley landfill,
which will be transferred pursuant to a Deed substantially in the form of
Exhibit D, excepting and reserving such easements, rights, licenses, rights of
ingress and egress as necessary to operate and maintain said landfill. With
respect to any Included Assets which are unable to be fully conveyed, assigned
or transferred to the Companies prior to the Closing or in connection with the
taking of any action with respect to those Included Assets, Seller shall use
commercially reasonable efforts to take all other steps necessary for the
conveyance, assignment or transfer of such Included Assets to Seller or its
affiliates as soon as practicable after the Closing, and Buyer shall cooperate,
and shall cause the Companies to cooperate, with Seller and its affiliates, in
all such efforts, including requesting third parties to consent to such
conveyances and assignments, filing applications for the transfer of regulatory
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permits pertaining to the Included Assets and executing and delivering such
further instruments and documents as Seller may reasonably request. As soon as
all other steps necessary for the conveyance, assignment and transfer of the
Included Assets have been taken, Seller shall cause its affiliates or other
successor in interest to the Included Assets to execute and deliver such
agreements and instruments as may be necessary or appropriate to convey, assign
or transfer each such Included Asset to the designated Company free and clear of
any liens or encumbrances created or permitted by Seller other than liens in
existence prior to the date of this Agreement. All costs and expenses except
Taxes, which are to be paid in accordance with Section 10(i), associated with
the transfer of Included Assets shall be the sole responsibility of Buyer.
(iv) Assumed Liabilities. As of the Closing Date, Buyer shall
assume and shall be solely responsible for, and Seller and ARI and its
affiliates shall have no responsibility for, and shall hold Seller, ARI and its
affiliates harmless against any liabilities or obligations of any nature, kind
or description whatsoever, known or unknown, absolute, contingent or otherwise,
which arise or accrue or are attributable to operations, activities, events or
occurrences with respect to the following (the "Assumed Liabilities"):
(A) The ownership, operation and maintenance of the
Included Assets, after the Closing Date and their transfer to Buyer.
(B) The liabilities specified on Schedule 3(c)(iv),
including, but not limited to, (1) liabilities or obligations owed to Pittston
Acquisition Company under that certain Stock Purchase Agreement dated as of
September 24, 1993, including, but not limited to, workers' compensation claims
and unmined minerals taxes (collectively, the "Pittston Liability"), (2) debt
obligations and liabilities to PNC Bank, (3) liabilities or obligations under
the bonds and guarantees specified on Schedule 3 (b)(vii), (4) obligations
arising under the settlement agreement with Consumers' Power dated June 28, 1994
(the "Consumers Power Liability"), and (5) certain ongoing or threatened
litigation ("Assumed Litigation").
(C) The Companies and their assets, businesses or
liabilities, contingent or otherwise except as otherwise expressly provided in
this Agreement.
(v) Assumed Litigation. With respect to the Assumed
Litigation specified on Schedule 3(c)(iv) and which ARI, and/or any of its
subsidiaries (except any of the Companies) is or becomes a party, the parties
agree as follows:
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16
(A) Buyer:
(1) shall assume control of and be responsible
for the Assumed Litigation,
(2) may contest and defend against the Assumed
Litigation at its sole expense in any manner it reasonably may deem appropriate
(including the choice of counsel and experts),
(3) may consent to the entry of any judgment or
enter into any settlement with respect to the Assumed Litigation with the prior
consent of Seller or any affiliates of Seller (which shall not be unreasonably
withheld) provided, however, that a release of ARI and its subsidiaries is
obtained,
(4) shall pay any final judgment or (provided
that Buyer has approved or consented thereto) settlement entered into with
respect to the claims of any party in the Assumed Litigation; provided, however,
the foregoing shall in no way limit the right of Buyer to exhaust its rights of
appeal at its own cost and expense prior to the payment of any judgment.
(B) After the Closing Date, Seller will provide, and
will cause each of its affiliates, if applicable, to provide, Buyer with full
access, at any reasonable time and from time to time, to such information and
data relating to the Assumed Litigation as Buyer may reasonably request, and
Seller will furnish and request independent accountants and outside legal
counsel of Seller or any affiliate to furnish to Buyer such additional
information or documents relating to the Assumed Litigation in the possession of
such persons as Buyer may from time to time reasonably request. In addition,
Seller will cooperate, and will cause its affiliates to cooperate, with Buyer
and its legal counsel in the defense or contest of the Assumed Litigation,
including making available their respective officers and other personnel to
attend hearings, depositions and trials, as Buyer may reasonably request in
connection with the defense or contest of the Assumed Litigation but Buyer shall
reimburse Seller and each of its affiliates for all costs and expenses incurred
in connection therewith.
(d) Rescission. In the event that either party elects to
terminate its rights and obligations hereunder in accordance with the terms of
this Agreement, the control of the Companies vested with the Buyer, and the
management authority vested in the Directors during the Interim pursuant to
Section 1(b) shall be automatically revoked and rescinded.
4. Representations and Warranties of Seller and ARI. For
purposes of Seller's and ARI's representations and warranties contained in this
Section 4, to the extent any representation or
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17
warranty is made to the best of Seller's and ARI's knowledge, such
representation or warranty is limited to the actual knowledge, without
investigation, of the individual members of ARI's board of directors and ARI's
executive officers, but excluding the Management Group. Seller hereby represents
and warrants, but only to the extent that Xxxxx Xxxxxxxxx, Xxxxxx Xxxxxxxxx,
Xxxxx Xxxxxxxxx, Xxxx Xxxxx, Xxxx Xxxxx, Xxxx Xxxxxxxx, Xxxx Xxxxxxx and Xxxxxx
Xxxxx (the "Management Group") do not have actual knowledge to the contrary as
of the date hereof, to Buyer as follows:
(a) Authority. Seller and ARI are corporations duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Seller and ARI have all requisite corporate power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. All corporate acts and other proceedings required to be taken by Seller
and ARI to authorize the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
properly taken. This Agreement has been duly executed and delivered by Seller
and ARI and constitutes a valid and binding obligation of Seller and ARI,
enforceable against Seller and ARI in accordance with its terms. The execution
and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby and compliance with the terms hereof will not,
conflict with, or result in any violation of or default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a material benefit
under, or result in the creation of any lien, claim or encumbrance of any kind
upon any of the properties or assets of any Company (including the Included
Assets) under, any provision of (i) the General Corporation Law of the State of
Delaware and the corporation laws of each state of incorporation of each Company
and each state where each Company is qualified or required to be qualified to
conduct business, (ii) the Certificate or Articles of Incorporation or By-laws
of each of Seller, ARI or any Company, (iii) any material note, bond, mortgage,
indenture, or deed of trust to which Seller, ARI or any Company is a party or by
which any of their respective properties or assets are bound except as disclosed
on Schedule 4(a) or (iv) any judgment, order or decree, or material statute,
law, ordi xxxxx, rule or regulation applicable to Seller, ARI or any Company or
the property or assets of Seller, ARI or any Company. Except as disclosed on
Schedule 4(a) and except in the ordinary course of business following the
Closing, no consent, approval, license, permit, order or authorization of, or
registration, declaration or filing with, any court, administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign, or any other third party is required to be obtained or made by or with
respect to Seller, ARI or any Company or any of their respective affiliates in
connection with (i) the execution and delivery of this Agreement or the
consummation of the transactions
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18
contemplated hereby or (ii) the conduct by any Company of its business following
the Closing as conducted on the date hereof, other than (A) compliance with and
filings under the HSR Act, (B) compliance with and filings under Section 13(a)
or 15(d), as the case may be, of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and (C) compliance with and filings under various Federal
and state environmental and/or mining laws.
(b) The Shares. The Shares and the shares of each Company
are duly authorized and validly issued and fully paid and non-assessable. Except
as described on Schedule 4(b), Seller and any Company that owns capital stock of
or other equity interests in any other Company have good and valid title to the
Shares, free and clear of any liens, claims and encumbrances of any kind. Upon
delivery to Buyer at the Closing of certificates representing the Shares, duly
endorsed by Seller for transfer to Buyer, and upon Seller's receipt of the
Purchase Price, good and valid title to the Shares will pass to Buyer, free and
clear of any liens, claims, encumbrances, security interests, options, charges
and restrictions of any kind. Other than this Agreement, or credit agreements
with any financial institution that Buyer is assuming, the Shares and the shares
of each Company are not subject to any voting trust agreement or other contract,
agreement, arrangement, commitment or understanding, including any such
agreement, arrangement, commitment or understanding restricting or otherwise
relating to the voting, dividend rights or disposition of the Shares or the
shares of any Company.
(c) Organization and Standing of Each Company. Each Company
is a corporation duly organized and validly existing under the laws of the state
identified on Schedule 1. Each Company is duly qualified and in good standing to
do business in each jurisdiction (shown on Schedule 1) in which the nature of
its busi ness or the ownership, leasing or holding of its properties makes such
qualification necessary, except such jurisdictions where the failure so to
qualify would not have a material adverse effect on the business, assets,
condition (financial or otherwise) or results of operations of the Company.
Seller has made available to Buyer true and complete copies of the Articles of
Incorporation, as amended to date, and the By-laws, as in effect on the date
hereof, of each Company. The stock certificate and transfer books of each
Company (which have been made available for inspection by Buyer) are true and
complete.
(d) Capital Stock of Each Company. The authorized capital
stock, par value per share, and the number of issued and outstanding shares for
each Company, is set forth on Schedule 1. The Shares and the shares of each
Company are duly authorized and validly issued and are fully paid and
nonassessable. Seller is the registered holder of the Shares. The Shares and the
shares of each Company have not been issued in violation of, and none of the
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19
Shares and none of the shares of any Company is subject to, any preemptive or
subscription rights in favor of any third party. Except as set forth above,
there are no shares of capital stock or other equity securities of any Company
outstanding. There are no outstanding warrants, options, agreements, convertible
or exchangeable securities or other commitments (other than this Agreement)
pursuant to which Seller or any Company is or may become obligated to issue,
sell, purchase, return or redeem any shares of capital stock or other securities
of any Company, and there are not any equity securities of any Company reserved
for issuance for any purpose.
(e) Equity Interests. Except as described on Schedule 4(e),
no Company directly or indirectly owns any capital stock of or other equity
interests in any corporation, partnership or other entity.
(f) Financial Statements; Undisclosed Liabilities.
(i) Attached is Schedule 4(f)(i), setting forth the
unaudited statement of assets, liabilities and parent investment of the combined
Companies as of December 31, 1994 (collectively, the "Balance Sheet"), and the
related statements of operating revenues and expenses and parent investment of
the combined Companies for each of the years in the three year period ended
December 31, 1994 and unaudited statement of assets, liabilities and parent
investment and such related statements for the year to date periods ended June
30, 1994 and June 30, 1995 (the financial statements described above,
collectively, the "Financial Statements").
(ii) The Financial Statements for all periods presented
reflect, in accordance with GAAP and on a consistent basis which is mutually
agreeable to the Buyer and Seller, the accounting results for only the assets
and liabilities and related revenues and expenses of the Companies and any other
transactions contemplated by this Agreement which should appropriately be
included.
(iii) Seller agrees to promptly provide to Buyer upon request
any other financial statements, data or information reasonably requested by
Buyer.
(iv) To the best of Seller's and ARI's knowledge, there are
no liabilities, contingent or otherwise, except as set forth on the Financial
Statements or arising out of the ordinary course of business since the dates of
the Financial Statements.
(g) Taxes.
(i) For purposes of this Agreement, (A) "Tax" or "Taxes"
shall mean all Federal, state, local and foreign taxes and assessments and any
other governmental impositions which may be
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20
imposed, no matter how measured or applied, including all interest, penalties
and additions imposed with respect to such amounts; (B) "Pre-Closing Tax Period"
shall mean all taxable periods ending on or before the Closing Date and the
portion ending on the Closing Date of any taxable period that includes (but does
not end on) such day; and (C) "Code" shall mean the Internal Revenue Code of
1986 and the Regulations thereunder, as amended.
(ii) Except as set forth on Schedule 4(g)(ii) or Schedule
4(l)(ii), (A) each Company and each affiliated group (within the meaning of
Section 1504 of the Code) or consolidated, combined or unitary group (under any
state or local Tax law) of which any such Company is or has been a member and
which ARI is the common parent within the meaning of Section 1504 of the Code or
any analogous provision of state or local Tax law (each such group, an
"Affiliated Group") has filed or caused to be filed in a timely manner (within
any applicable extension periods) all Tax returns, reports and forms required to
be filed by any taxing authority or any tax laws, including but not limited to
the Code and any applicable state, local or foreign tax laws, (B) all Taxes
shown to be due on such returns, reports and forms have been timely paid in full
or will be timely paid in full by the due date thereof, (C) no tax liens have
been filed and no claims are being asserted in writing with respect to any Taxes
and (D) no examinations or inquiries are currently being conducted by any taxing
authority.
(iii) Except as set forth in Schedule 4(g)(iii), (A) neither
Seller nor any of its affiliates has made with respect to any Company, or any
property held by any Company, any consent under Section 341 of the Code, (B) no
property of any Company is "tax-exempt use property" within the meaning of
Section 168(h) of the Code and (C) no Company is a party to any lease made
pursuant to Section 168(f)(8) of the Internal Revenue Code of 1954.
(iv) Except as set forth in Schedule 4(g)(iv), there are no
outstanding agreements or waivers extending the statutory period of limitation
applicable to any Tax returns required to be filed with respect to any Company,
and neither any Company nor any Affiliated Group has requested any extension of
time within which to file any Tax return, which return has not yet been filed.
(v) Reserves sufficient for the payment of all Taxes, other
than income Taxes, have been established.
(h) Tangible Personal Property. Schedule 4(h) is a list,
which has been prepared by the Management Group, of each item of tangible
personal property which will be owned or leased by any Company as of the
Closing. To the best of Seller's and ARI's knowledge, except as described in
Schedule 4(h), each Company owns all of its tangible personal property listed on
Schedule 4(h) and all other tangible personal property reflected on each of its
books
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21
and records as being owned by each of it, free and clear of all liens and
encumbrances, except for liens for ad valorem property taxes not yet due and
payable, purchase money security interests arising in the ordinary course of
their respective businesses, and each Company is entitled to possession of its
leased tangible personal property listed on Schedule 4(h), with all such leases
being valid and in full force and effect.
(i) Real Property. Schedule 4(i) is a list, which has been
prepared by the Management Group, of all real property which will be owned by
each Company as of the Closing. To the best of Seller's and ARI's knowledge,
Schedule 4(i) is (i) a true and complete description of all real property which
will be owned by each Company as of the Closing and all buildings and other
structures located thereon; (ii) an identification of all leases, subleases,
easements, licenses or other agreements, together with all amendments thereto,
under which each Company will be, as of the Closing, a lessor, lessee, licensor,
licensee, grantor, grantee or other party with respect to any real property or
any interest therein (except where a Company acquired its interest in such real
property subject to any of the foregoing); and (iii) an identification of all
options which will be held by each Company as of the Closing or contractual
obligations which will exist on the Closing Date on the part of each Company to
purchase or acquire any interest in any real property. Except as indicated in
Schedule 4(i), to the best of Seller's and ARI's knowledge, (i) each of Company
owns the real property described in Schedule 4(i) as owned by it in fee, free
and clear of all liens, encumbrances, equities, claims, covenants, conditions,
reservations, restrictions, easements, rights, rights of way and other
agreements arising by, through or under Seller or any Company or any of its or
their affiliates; (ii) each of the leases, subleases, easements, licenses,
agreements and options described in Schedule 4(i) is a valid, binding,
enforceable agreement of each of the parties thereto, and is in full force and
effect, and each Company has performed all covenants and obligations in all
material respects required to be performed by it under such lease, sublease,
easement, license, agreement and option and there exists no material default or
event which, with lapse of time or notice to it, would constitute a material
default by such Company; and (iii) neither Seller nor any Company has received
any notice that a lessor, grantor, licensor or optionor under any of such
leases, subleases, easements, licenses, agreements or options intends to cancel
or terminate any of such leases, subleases, agreements, licenses or options or
to exercise or not to exercise any option of any of such leases, subleases,
easements, licenses or agreements. To the best of Seller's and ARI's knowledge,
there are no eminent domain or condemnation proceedings pending or, threatened
against any asset or property of any Company.
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(j) Contracts. Schedule 4(j) has been prepared by the Management
Group. To the best of Seller's and ARI's knowledge, Schedule 4(j) contains a
list of agreements, contracts, personal property leases (other than those listed
on Schedule 4(i)) and commitments (whether written or oral) to which, as of the
Closing Date, any Company will be a party or which, as of the Closing Date, will
affect or bind any Company or any of its property (including the Included
Assets) (except those made in the ordinary course of business and requiring
aggregate future payments or performance by any Company or receipts having a
value of less than $30,000), including without limitation, the following:
(a) notes, mortgages, indentures, loan or credit agreements,
equipment lease agreements, security agreements and
other agreements and instruments reflecting obligations
for borrowed money or other monetary indebtedness or
otherwise relating to the borrowing of money by, or the
extension of credit to any Company or related to its
business and binding agreements or commitments to enter
into any such agreements or commitments;
(b) management consulting and employment agreements and
binding agreements or commitments to enter into same;
(c) coal sales agreements, purchase orders, contract bids or
other agreements and commitments to sell or offer to
sell coal, or to purchase or offer to purchase coal;
(d) coal sales agency agreements or commitments authorizing
any person to act as agent for the purchase or sale of
coal or to otherwise represent any Company in connection
with the purchase or sale of coal;
(e) contract mining agreements, whether as contract miner or
owner/employer;
(f) processing, storage, loading or transloading agreements
or other agreements or commitments pursuant to which any
Company utilizes or is obligated to utilize any
preparation plant, stockpile area, crushing plant,
screening plant, tipple, processing facility, rail car
or unit train loading facility, barge loading facility
or other installation or facility owned, leased or used
by it to process, wash, crush, grade, screen, store,
load, transload
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23
or ship coal for persons other than a Company (a "Third
Party") or any agreement or contract pursuant to which
any Third Party utilizes or is obligated to utilize any
preparation plant, stockpile area, crushing plant,
screening plant, tipple, processing facility, rail car
or unit train facility, barge loading facility or other
installation or facility owned, leased or used by such
Third Party to process, wash, crush, grade, screen,
store, load, transload or ship coal for any Company;
(g) agreements relating to the transportation and movement
of coal mined or sold by any Company or agreements or
commitments for any rates, tariffs or other charges
applicable to such transportation or movement;
(h) agreements to pay any overriding royalty, finder's fee,
commission or other compensation or consideration or to
pay any person in connection with or related to the
identification, purchase, sale, leasing or other
acquisition of any real property, equipment, machinery,
personal property, lease, contract, opportunity, permit,
license, authorization or other right or asset, tangible
or intangible, of any Company;
(i) option, purchase and sale or lease agreements involving
any real property, equipment, machinery, personal
property or other asset, tangible or intangible;
(j) agreements and purchase orders entered into or issued in
the ordinary course of business for the purchase or sale
of goods (other than coal), services, supplies or
capital assets;
(k) joint venture or other agreements involving the sharing
of profits or losses;
(1) contracts or agreements with ARI, Seller, or any
subsidiary or affiliate of either, or any director or
officer of ARI, Seller, or any subsidiary or affiliate
of either, or any person who is an immediate relative of
any such person, or any combination of such persons;
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(m) outstanding powers of attorney empowering any person,
company or other organization to act on behalf of any
Company;
(n) outstanding guarantees, subordination agreements,
indemnity agreements and other similar types of
agreements, whether or not entered into in the ordinary
course of business, which any Company is or may become
liable for or obligated to discharge, or any asset of
any Company is or may become subject to the satisfaction
of, any indebtedness, obligation, performance or
undertaking of any other person, except for
indemnification agreements contained in any of the
instruments listed in the Schedules hereto;
(o) contracts, orders, decrees or judgments preventing or
restricting any Company from carrying on business in any
location;
(p) agreements, contracts or commitments relating to the
acquisition of the outstanding capital stock or equity
interest of any business enterprise; and
(q) contracts, commitments or obligations not made in the
ordinary course of business and having unexpired terms
in excess of one year or requiring aggregate future
payments or receipts in excess of $30,000 or otherwise
material to the business or operations of any Company.
Buyer has had access and has obtained for itself true and complete copies of all
such written leases, agreements, contracts, commitments and related agreements
listed on Schedule 4(j), including all amendments, modifications, waivers and
elections applicable thereto.
To the best of Seller's and ARI's knowledge, except as set forth in
Schedule 4(j), such leases, agreements, contracts, commitments and related
agreements are valid and binding, enforceable in accordance with their
respective terms (subject to any applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws affecting generally
the enforcement of creditors' rights) and are in full force and effect. To the
best of Seller's and ARI's knowledge, except as disclosed in Schedule 4(j),
there is not under any such lease, contract, agreement, commitment or related
agreement, any existing material breach or material default (or event or
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25
condition, which after notice or lapse of time, or both, would constitute a
material breach or material default), by Seller or any Company, or to the
knowledge of Seller and ARI any other party thereto.
(k) Litigation; Decrees. No Company is a party to any material
(i.e., amount in controversy in excess of $100,000) lawsuit, claim (including
without limitation claims for occupational pneumoconiosis, occupational injury
and occupational disease), proceeding or investigation, and to the best of
Seller's and ARI's knowledge, no such lawsuit, claim, proceeding or
investigation has been threatened in writing within the last 24 months, by or
against or affecting any Company or any of its properties, assets, operations or
businesses other than as set forth on Schedule 4(k). No Company is in default
under any material judgment, order or decree of any court, administrative agency
or commission or other governmental authority or instrumen tality, domestic or
foreign, applicable to it or any of its proper ties, assets, operations or
businesses.
(l) Benefit Plans. (i) To the best of Seller's and ARI's
knowledge, no Company has ever maintained or contributed to, or now maintains or
contributes to, any "employee pension benefit plan" (as defined in Section 3(2)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
(referred to herein as a "Pension Plan") or "employee welfare benefit plan" (as
defined in Section 3(1) of ERISA) (referred to herein as a "Welfare Plan")
except such Welfare Plans disclosed on Schedule 4(l)(i). Schedule 4(l)(i) also
discloses any deferred compensation plan, bonus plan, incentive plan, disability
or other group insurance plan, stock option plan, employee stock purchase plan,
vacation plan, severance plan, sick leave plan or policy, holiday plan or
policy, maternity leave plan or policy or any other benefit plan, program,
agreement (including employment agreement or union contracts), arrangements or
commitments of any kind, maintained by any Company, that is not a Pension Plan
or Welfare Plan. Seller has delivered to Buyer true, complete and correct copies
of (A) each plan disclosed on Schedule 4(l)(i) (a "Company Plan") (or, in the
case of any unwritten Company Plans, descriptions thereof), (B) the most recent
annual report on Form 5500 filed with the Internal Revenue Service with respect
to each Company Plan (if any such report was required by applicable law), (C)
the most recent summary plan description for each Company Plan for which a
summary plan description is required by applicable law and (4) each trust
agreement and insurance or annuity contract relating to any Company Plan.
(ii) To the best of Seller's and ARI's knowledge, each Company Plan
has been administered in all material respects in accordance with its terms,
except as disclosed in Schedule 4(l)(ii). To the best of Seller's and ARI's
knowledge, each Company, its subsidiaries and all Company Plans are in
compliance
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26
in all material respects with the applicable provisions of ERISA and the
Internal Revenue Code of 1986, as amended (the "Code"), except as disclosed in
Schedule 4(l)(ii). To the best of Seller's and ARI's knowledge, except as
disclosed in Schedule 4(l)(ii), all reports, returns and similar documents with
respect to the Company Plans required to be filed with any governmental agency
or distributed to any Company Plan participant have been duly and timely filed
or distributed. To the best of Seller's and ARI's knowledge, except as disclosed
in Schedule 4(l)(ii), there are no investigations by any governmental agency,
termination proceedings or other claims (except claims for benefits payable in
the normal operation of the Company Plans), suits or proceedings against or
involving any Company Plan or asserting any rights or claims to benefits under
any Company Plan that could give rise to any material liability, and there are
not any facts that could give rise to any material liability in the event of any
such investigation, claim, suit or proceeding.
(iii) To the best of Seller's and ARI's knowledge, each Company Plan
that is a Welfare Plan (including any Welfare Plan covering retirees or other
former employees) may be amended or terminated without material liability to any
Company on or at any time after the Closing Date. To the best of Seller's and
ARI's knowledge, the Companies and its subsidiaries comply with the applicable
requirements of Section 4980B(f) of the Code with respect to each Company Plan
that is a group health plan, as such term is defined in Section 5000(b)(1) of
the Code.
(iv) To the best of Seller's and ARI's knowledge, neither Seller
nor any Commonly Controlled Entity (as defined below) maintains a Pension Plan
subject to Title IV of ERISA or Section 412 of the Code.
(v) To the best of Seller's and ARI's knowledge, except as
disclosed in Schedule 4(l)(v), at no time within the five years preceding the
Closing Date has Seller or any person or entity that, together with Seller, is
treated as a single employer under Section 414(b), (c), (m) or (o) of the Code
(each a "Commonly Controlled Entity") been required to contribute to any
"multiemployer plan" (as defined in Section 4001(a)(3) of ERISA), and neither
Seller nor any Commonly Controlled Entity has incurred any withdrawal liability,
within the meaning of Section 4201 of ERISA, which liability has not been fully
paid as of the date hereof, or announced an intention to withdraw, but not yet
completed such withdrawal, from any multiemployer plan. To the best of Seller's
and ARI's knowledge, except as disclosed on Schedule 4(l)(v), no action has been
taken and no circumstances exist that, alone or with the passage of time, could
result in either a partial or complete withdrawal from any multiemployer plan.
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27
(vi) Schedule 4(l)(vi) sets forth and identifies all agreements to
which any Company is a party, whether oral or in writing, with present or former
officers, directors or employees of, or consultants to, any Company which (A)
obligate any Company to pay, on any date or dates during the remaining term of
such agreement, an aggregate amount in excess of $100,000, or (B) cannot be
terminated on 60 days' notice.
(vii) To the best of Seller's and ARI's knowledge, neither any
Company nor any related person (within the meaning of section 9701(c)(2) of the
Code) has any liability under subtitle J of the Code (Coal Industry Health
Benefits).
(viii) To the best of Seller's and ARI's knowledge, except as set
forth in Schedule 4(l)(viii), no employee or former employee with any Company or
any beneficiary thereof will become entitled to any bonus, severance, job
security or similar benefits or any enhanced benefits as a result of the
transactions contemplated hereby.
(m) Absence of Changes or Events. Except as disclosed on Schedule
4(m) or otherwise expressly permitted by the terms of this Agreement (including
without limitation the distribution of Excluded Assets and excess working
capital as contemplated by this Agreement), to the best of Seller's and ARI's
knowledge, there has not been any material adverse change in the business,
assets, financial condition or results of operations of the Companies taken as a
whole since June 30, 1995 to the date hereof; and to the best of Seller's and
ARI's knowledge, Seller has caused the business of each Company, since June 30,
1995 to the date hereof, to be con ducted in the ordinary course and has made
all reasonable efforts consistent with past practices to preserve each such
Company's relationships with customers, suppliers and others with whom such
Company deals.
(n) Compliance with Applicable Laws. (i) Except as set forth in
Schedule 4(n), which has been prepared by the Management Group, to the best of
Seller's and ARI's knowledge, each Company is in compliance with all applicable
statutes, laws, ordinances, rules, orders and regulations of any governmental
authority or instrumentality, domestic or foreign (including, without
limitation, the Surface Mining Control and Reclamation Act of 1977, as amended
("SMCRA"), the Federal Mine Safety and Health Act of 1977, as amended, and the
Black Lung Benefits Reform Act of 1977, as amended), except where noncompliance
(individually or in the aggregate) would not have a material adverse effect on
the business, assets, condition (financial or otherwise) or results of
operations of such Company. In addition, each of the Companies is in material
compliance with, and in good standing under, applicable workers' compensation
and black lung laws. Except as set forth in Schedule 4(n), to the best of
Seller's and ARI's knowledge, Seller
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has not received any written communication from a governmental authority that
alleges that any Company is not in compliance, in all material respects, with
all material Federal, state, local or foreign laws, ordinances, rules and
regulations.
(ii) Except as set forth in Schedule 4(n), to the best of Seller's
and ARI's knowledge without investigation none of the operations or properties
of any Company is the subject of any Federal, state or foreign investigation
evaluating whether any remedial action is needed to respond to a release of any
Hazardous Substance (as hereinafter defined) into the environment, and neither
Seller nor any Company has received any written communication from a
governmental authority that alleges that any Company is not in compliance, and
each Company is in compliance, in all respects, except where noncompliance
(individually or in the aggregate) would not have a material adverse effect on
the business, assets, condition (financial or otherwise) or results of
operations of such Company, with all Federal, state, local or foreign laws,
ordinances, codes, rules and regulations relating to the environment
("Environmental Laws"). To the best of Seller's and ARI's knowledge, except as
set forth in Schedule 4(n), Seller (in respect of the business of each Company)
and each Company have filed all notices and compliance reports required to be
filed under any Environmental Law indicating past or present treatment, storage
or disposal of a Hazardous Substance or reporting a spill or release of a
Hazardous Substance into the environment. Except as set forth in Schedule 4(n),
to the best of Seller's and ARI's knowledge without investigation no Company has
any material contin gent liabilities in respect of its business in connection
with any Hazardous Substance that individually or in the aggregate would have a
material adverse effect on the business, assets, condition (financial or
otherwise) or results of its operations. "Hazardous Substance" shall mean: (i)
any hazardous, toxic or dangerous waste, substance or material defined as such
in (or for the purposes of) the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, Super Fund Amendments and
Reauthorization Act and any so-called superfund or superlien law, or any other
Environmental Law, including Environmental Laws relating to or imposing
liability or standards of conduct concerning any hazardous, toxic or dangerous
waste, substance or material in effect on the date of this Agreement, (ii)
petroleum, asbestos or PCBs and (iii) any other chemical, material or substance,
exposure to which is prohibited, limited or regulated by any Federal, state,
foreign or local governmental authority pursuant to any Environmental Law or any
health and safety or similar law, code, ordinance, rule or regulation, order or
decree, and which may or could pose a hazard to the health and safety of workers
at or users of any properties of any Company or cause offsite damage to adjacent
property owner or cause damage to the environment.
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(iii) To the best of Seller's and ARI's knowledge, neither Seller
nor any person or entity "owned or controlled" by Seller nor any person or
entity which "owns or controls" Seller has been notified by the Federal Office
of Surface Mining or the agency of any state administering the SMCRA (or any
comparable state statute), that it is (A) ineligible to receive additional
surface mining permits or (B) under investigation to determine whether its
eligibility to receive such permits should be revoked, i.e., "permit blocked",
except as set forth on Schedule 4(n)(iii). As used herein, the terms "owned or
controlled" and "owns or controls" shall be defined as set for in 30 C.F.R. ss.
773.5 (1991).
(o) Employee and Labor Relations. Except as set forth on Schedule
4(o), no Company is a party to, bound by, or negotiating any collective
bargaining agreement or any other agreement with any labor union, association or
other employee group, nor is any employee of any Company represented by any
labor union or similar association. No labor union or employee organization has
been certified or recognized as the collective bargaining representative of any
employees of any Company. There are no formal union organizational campaigns or
representation proceedings underway or to the best of Seller's and ARI's
knowledge pending or planned with respect to any employees of any Company nor to
the best of Seller's and ARI's knowledge are there any existing or pending or
planned labor strikes, work stoppages, slowdowns, disputes, grievances, unfair
labor practice charges, labor arbitration proceedings or other disturbances
affecting any employee of any Company, or affecting operations at or deliveries
to any mine or other facility of any Company. To the best of Seller's and ARI's
knowledge, except as described on Schedule 4(o) or Schedule 4(l)(i), each
Company has at all times complied in all material respects with all applicable
provisions of the National Labor Relations Act, as amended, the Fair Labor
Standards Act, as amended, and all other Federal and state laws, regulations,
and executive orders pertaining to employment, including without limitation all
provisions thereof relating to wages, hours and conditions, collective
bargaining, and the payment of unemployment benefits and taxes therefor, FICA
taxes and all similar taxes, and worker's compensation and occupational disease
benefits. Except as described on Schedule 4(o) or Schedule 4(l)(i), to the best
of Seller's and ARI's knowledge, no Company has any liability for any arrearages
of wages or for any delinquent unemployment, FICA or other employee taxes or for
any penalties or interest for failure to timely pay any such taxes due. To the
best of Seller's and ARI's knowledge, no Company has pending against it any
unfair labor practice charges, other administrative charges, claims, grievances
or lawsuits before any court, governmental agency, regulatory body or arbitrator
arising under any Federal or state law, regulation or executive order governing
employment.
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(p) Licenses; Permits. Schedule 4(p) has been prepared by the
Management Group. To the best of Seller's and ARI's knowledge, Schedule 4(p)
sets forth a true and complete list of all material licenses, permits,
certificates, bonds, approvals and other such authorizations issued or granted
to each Company by local, state or Federal governmental authorities or agencies.
To the best of Seller's and ARI's knowledge, except as disclosed on Schedule
4(p), all material licenses, permits, certificates, bonds, approvals or other
such authorizations of each Company are validly held by it, each Company has
complied with all material requirements in connection therewith and the same
will not be subject to suspension, modification or revocation as a result of
this Agreement or the consummation of the transactions contemplated hereby. To
the best of Seller's and ARI's knowledge, each Company has all material
licenses, permits, certificates, bonds, approvals and other such authorizations
from local, state or Federal government authorities or agencies which are
necessary for the conduct of each Company's business.
(q) Bank Accounts and Powers of Attorney. Schedule 4(q) contains a
complete and correct list and summary description showing (i) the name of each
bank in which any Company has an account or safe deposit box and the names of
all persons authorized to draw thereon or to have access thereto, and (ii) the
names of all persons, if any, holding powers of attorney from any Company.
(r) Transactions with Affiliates. Except as set forth in the
Schedules hereto, no Company has any outstanding contract, agreement or other
arrangement with Seller, ARI or any of its subsidiaries which will continue in
effect subsequent to the Closing.
(s) Patents and Trademarks. To the best of Seller's and ARI's
knowledge, no Company has any patents, trademarks, tradenames, service marks,
copyrights or patent applications pending, and are not subject to any license
agreements with third parties or agreements requiring royalty or other payments
in respect of such matters except as set forth on Schedule 4(s). To the best of
Seller's and ARI's knowledge, there are no claims pending or threatened against
any Company with regard to the infringement of any patents, trademarks,
tradenames, service marks, copyrights or patent applications pending.
(t) Insurance. Schedule 4(t) contains a complete and correct list
and summary description of all policies of insurance which are in effect,
including amounts thereof, in which any Company is named as the insured party,
has a beneficial interest or for which it has paid any premiums. Such policies
are in full force and effect and insure all assets and property of each Company
against loss or damage in amounts as set forth in such policies. Until the
Closing Date, Seller will cause each Company to maintain
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in full force and effect its presently existing insurance coverage, or insurance
comparable to such existing coverage.
(u) AS IS. BUYER AND THE XXXXXXXXX GROUP ACKNOWLEDGE THAT THE
XXXXXXXXX GROUP HAS BEEN INVOLVED IN THE OPERATIONS OF THE COMPANIES FROM THEIR
INCEPTION, AND THAT THE XXXXXXXXX GROUP IS WELL FAMILIAR WITH THE COMPANIES AND
THEIR OPERATIONS, ASSETS AND LIABILITIES. THE REPRESENTATIONS AND WARRANTIES OF
SELLER ARE A MATERIAL PART OF THIS AGREEMENT. THE LIMITATIONS AND QUALIFICATIONS
OF SELLER'S REPRESENTATIONS AND WARRANTIES ARE ALSO A MATERIAL PART OF THIS
AGREEMENT. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT OR IN DOCUMENTS OR
INSTRUMENTS EXECUTED PURSUANT TO THIS AGREEMENT, BUYER ACKNOWLEDGES THAT SELLER
HAS MADE NO REPRESENTATIONS REGARDING THE VALUE OR CONDITION OF THE ASSETS OF
THE COMPANIES. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE ASSETS OF
THE COMPANIES WILL BE HELD BY THE COMPANIES AT CLOSING "AS IS, WHERE IS" WITH NO
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, AS TO TITLE, OWNERSHIP, USE,
POSSESSION, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, QUANTITY OR
QUALITY OF RESERVES, MINING COSTS OR RATIOS, GRADE, RECOVERABILITY, VALUE,
MINEABILITY, CONDITION, OPERATION, DESIGN, CAPACITY, TAX TREATMENT OR OTHERWISE,
AND ALL SUCH REPRESENTATIONS AND WARRANTIES ARE EXPRESSLY DISCLAIMED. NOTHING
CONTAINED HEREIN SHALL BE CONSTRUED TO DIMINISH OR LIMIT THE EXPRESS
REPRESENTATIONS, WARRANTIES OR COVENANTS CONTAINED IN THIS AGREEMENT, AS THE
SAME MAY BE LIMITED OR QUALIFIED HEREIN.
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5. Covenants.
5A. Covenants of Seller. Seller covenants and agrees as follows:
(a) Access. Seller shall, and shall cause each Company, and its or
their officers, directors, employees and agents to, afford the officers,
employees and agents of Buyer complete access at all reasonable times, from the
date hereof to the Closing, to its or their officers, employees, agents,
properties, books and records, and shall furnish Buyer all financial, operating
and other data and information as Buyer, through its officers, employees or
agents, may reasonably request, but only to the extent that any of the foregoing
relates to any Company. Subject to applicable law or court orders, Buyer shall
cause all such information of a non-public nature to be retained confidentially.
If this Agreement is terminated, Buyer shall promptly return all such
information of a non-public nature provided by Seller, and shall promptly
destroy all analyses, compilations, studies or other documents of or prepared by
the Buyer from such non-public information. If this Agreement is terminated,
Buyer shall not use or disclose any confidential information obtained from
Seller or the Companies, or other information concerning the business or
properties of the Seller or the Companies. Buyer shall be responsible for
maintaining the confidentiality of such confidential and trade secret
information and ensuring that such information is not used or disclosed by its
employees, affiliates and agents, and Buyer shall be responsible for the acts of
its agents, employees and affiliates in that regard.
(b) Pro Forma Balance Sheet. Schedule 5A(b) sets forth a pro forma
balance sheet (the "Pro Forma Balance Sheet") reflecting the assets, liabilities
and working capital which each Company would have had if the Closing had
occurred on July 31, 1995 after the distribution of the Excluded Assets and the
Excluded Liabilities.
(c) Supplemental Disclosure. Seller shall have the continuing
obligation until the Closing to supplement or amend the Schedules hereto with
respect to any matter hereafter arising or discovered which, if existing or
known to Seller at the date of this Agreement, would have been required to be
set forth or described in such Schedules; provided, however, that, (i) for the
purpose of the rights and obligations of the parties hereunder, any such
supplemental or amended disclosure shall not be deemed to have been disclosed as
of the date of this Agreement unless so agreed in writing by Buyer, and (ii) no
such supplemental disclosure shall be required as a result of any act or
omissions of the Companies taken or permitted to be taken by the Directors (or
any of them) pursuant to Section 1(b) or otherwise.
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(d) No Solicitation. (i) Seller shall not, nor shall it permit any
of its affiliates to, nor shall it authorize or permit any officer, director or
employee of, or any investment banker, attorney or other advisor or
representative of, Seller or any of its affiliates to, (A) solicit or initiate,
or encourage the submission of, any Alternative Proposal (as hereinafter
defined), (B) participate in any discussions or negotiations regarding, or
furnish to any person any information with respect to, or take any other action
to facilitate any inquiries or the making of any proposal that constitutes, or
may reasonably be expected to lead to, any Alternative Proposal; provided,
however, that to the extent required by the fiduciary obligations of the Board
of Directors of Seller or ARI, as determined in good faith by such Board of
Directors, Seller may (1) in response to an unsolicited request therefor,
furnish information with respect to any of the Companies to any person pursuant
to a customary confidentiality agreement (as determined by Seller's independent
counsel) and discuss such information with such person, and (2) upon receipt by
the Company of an Alternative Proposal, participate in negotiations regarding
such Alternative Proposal. For purposes of this Agreement, "Alternative
Proposal" means any proposal for a merger or other business combination
involving any of the Companies or any proposal or offer to acquire in any
manner, directly or indirectly, an equity interest in, any voting securities of,
or a substantial portion of the assets of any of the Companies, other than the
transactions contemplated by this Agreement.
(ii) If the Board of Directors of Seller or ARI receives an
Alternative Proposal that, in the exercise of its fiduciary duties, it
determines to be a Superior Proposal (as hereinafter defined), the Board of
Directors may (subject to the following sentences) enter into an agreement with
respect to such Superior Proposal or terminate this Agreement, in each case at
any time after the second business day following Buyer's receipt of written
notice (a "Notice of Superior Proposal") advising Buyer that the Board of
Directors has received a Superior Proposal, specifying the material terms and
conditions of such Superior Proposal and identifying the person making such
Superior Proposal. In addition, if Seller proposes to enter into an agreement
with respect to any Superior Proposal, it shall pay, or cause to be paid, to
Buyer the Expense Reimbursement (as defined in Section 5A(e)). For purposes of
this Agreement, a "Superior Proposal" means any bona fide Alternative Proposal
to acquire, directly or indirectly, for consideration consisting of cash and/or
readily marketable securities or royalties, any of the Companies or all or
substantially all the assets of any of the Companies, and otherwise on terms
that the Board of Directors of Seller determines in its good faith reasonable
judgment to be more favorable to ARI's stockholders other than the Xxxxxxxxx
Group than the transactions contemplated by this Agreement.
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(iii) In addition to the obligations of Seller set forth in Section
5A(d)(ii), Seller shall promptly advise Buyer orally and in writing of any
request for information or of any Alternative Proposal, or any inquiry with
respect to or that could lead to any Alternative Proposal, the material terms
and conditions of such request, Alternative Proposal or inquiry, and the
identity of the person making any such Alternative Proposal or inquiry. The
Seller will keep Buyer reasonably informed of the status and details of any such
Alternative Proposal or inquiry.
(e) Fees and Expenses. (i) Except as provided below, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such fees or expenses,
whether or not such transactions are consummated.
(ii) The Seller shall reimburse, or cause to be reimbursed, to the
Buyer its documented out-of-pocket expenses, including attorney fees, reasonably
incurred by the Buyer in connection with the transactions contemplated hereby
(the "Expense Reimbursement"), concurrently with the Seller entering into any
agreement with respect to any Superior Proposal in accordance with Section
5A(d); unless Buyer or the Xxxxxxxxx Group shall have failed to perform in any
material respect any of their obligations under this Agreement, provided that
Seller shall in no event be obligated to reimburse Buyer and the Xxxxxxxxx Group
more than $350,000.00 of out-of-pocket expenses, plus any reasonable commitment
fee paid to Buyer's financing source.
5B. Covenants of Buyer. Buyer covenants and agrees as follows:
(a) Buyer's Actions. Buyer shall not take, nor permit the
Directors to take, any action that would, or that could reasonably be expected
to, result in (i) any of its representations and warranties set forth in this
Agreement becoming untrue in any material respect, or (ii) any of the conditions
to the purchase and sale of the Shares not being satisfied in any material
respect; and Buyer shall cooperate with Seller in the removal of liability and
obligations under bonds and guarantees as contemplated in Section 3(b)(vii)
hereof, including replacement of guarantees with those of Buyer, subject to the
provisions of Section 3(b)(vii). Buyer also agrees to provide such financial and
other information of Buyer as is necessary to accomplish such replacement or
substitution. If the removal of liabilities and obligations are unable to be
obtained as of the Closing Date with respect to each of those bonds and
guarantees described on Schedule 5B(a), or with respect to those bonds and
guarantees described on Schedule 3(b)(vii) if any such bonds or guarantees are
waived as a condition to Seller's obligation to close, then Buyer shall
indemnify the applicable guarantor or obligor from and against such liability,
obligation,
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loss or expenses arising out of or with respect to such bonds and guarantees and
shall execute an indemnity agreement to that effect in a form reasonably
satisfactory to Seller. After the Closing Date, Buyer shall also continue to
also use its best efforts to remove the parties listed on Schedule 5B(a) from
such liabilities or obligations. These foregoing provisions are supplementary
to, and do not waive or supersede, the provisions of the letter agreement, dated
August 14, 1995, between ARI and Xxxxx Xxxxxxxxx, relating to ARI's guaranty of
the capital lease financing provided by Provident Bank to TMI.
(b) Supplemental Disclosure. Buyer shall have the continuing
obligation until the Closing to supplement, or amend its Schedules with respect
to any matter hereafter arising or discovered which, if existing or known at the
date of this Agreement, would have been required to be set forth or described in
such Schedules; provided, however, that for the purpose of the rights and
obligations of the parties hereunder, any such supplemental or amended
disclosure shall not be deemed to have been disclosed as of the date of this
Agreement unless so agreed in writing by Seller.
(c) Planned Closing of Any Company Employment Site. Prior to
the Closing, Buyer shall have the continuing obligation to immediately advise
Seller of any planned or intended closing of any Company's employment sites
existing immediately prior to the Closing, or layoff of any Company's employees
employed immediately prior to Closing, where such closing or layoff may or will
be sufficient to invoke coverage of the Worker Adjustment and Retraining
Notification Act of 1989 for such Company.
(d) Ordinary Conduct. Except as set forth on Schedule 5B(d)
or otherwise expressly permitted by the terms of this Agreement, or as necessary
in connection with taking such actions with regard to the assets and liabilities
of the Companies as are contemplated by this Agreement (including without
limitation the distribution of Excluded Assets as contemplated by this
Agreement), from the date hereof to the Closing, Buyer in exercising its
management responsibility under this Agreement will cause the business of each
Company to be conducted in the ordinary course in substantially the same manner
as presently conducted and will make all reasonable efforts consistent with past
practices to preserve its relationships with customers, employees, suppliers and
others with whom such Company deals. In addition, except as set forth on
Schedule 5B(d) or otherwise expressly permitted by the terms of this Agreement
(including without limitation the distribution of Excluded Assets as
contemplated by this Agreement), neither Buyer nor Seller will permit any
Company to do any of the following without the prior written consent of Seller
or Buyer respectively:
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(i) amend its Articles of Incorporation or By-laws;
(ii) declare or pay any dividend or make any other
distributions to its shareholders whether or not upon or in respect
of any shares of its capital stock;
(iii) redeem or otherwise acquire any shares of its capital
stock or issue any capital stock or any option, warrant or right
relating thereto or any securities convertible into or exchangeable
for any shares of capital stock;
(iv) grant to any employee, officer or director any increase
in compensation or benefits, or enter into any employment contract
or adopt, amend or terminate any profit sharing, compensation,
bonus, deferred compensation, pension, retirement or other employee
benefit plan, agreement, fund, trust or arrangement, for the benefit
or welfare of any employee;
(v) incur or assume any liabilities, capitalized leases,
operating leases, bonds (without the prior written consent of the
Seller, which will not be unreasonably withheld or delayed),
obligations or indebtedness for borrowed money or guarantee any such
liabilities, obligations or indebtedness;
(vi) permit, allow or suffer any of its assets to be
subjected to any mortgage, pledge, lien, encumbrance, restriction or
charge of any kind;
(vii) cancel any material indebtedness (individually or in the
aggregate) or waive any claims or rights of substantial value;
(viii) except as contemplated by this Agreement, loan or
advance any amount to, or sell, transfer or lease any of its assets
to, or enter into any agreement or arrangement with Buyer or any of
its affiliates;
(ix) make any change in any method of accounting or
accounting practice or policy other than those required by generally
accepted accounting principles;
(x) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the assets of, or by
any other manner, any business or any corporation, partnership,
association or other business organization or division thereof or
otherwise acquire or agree to acquire any assets (other than
inventory) which are material individually, or in the aggregate, to
such Company;
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(xi) make or incur any capital expenditure or expenditures
which, individually, is in excess of $5,000 or, in the aggregate,
are in excess of $25,000;
(xii) sell, lease or otherwise dispose of, or agree to sell,
lease or otherwise dispose of, any of its assets, except in the
ordinary course of business consistent with past practice;
(xiii) enter into any lease of real property;
(xiv) enter into any new commitments for the sale or purchase
of coal or the purchase or disposition of coal properties or amend
any existing coal sales agreements;
(xv) hire or terminate any employee of the Companies without
cause, or pay or agree to pay any severance or termination pay with
respect thereto;
(xvi) engage in any transaction with the Xxxxxxxxx Group or
any of its affiliates (except as permitted by this Agreement); or
(xvii) agree, whether in writing or otherwise, to do any of
the foregoing.
Buyer shall not, and shall not permit any Company to, take any
action that would, or that could reasonably be expected to, result in (i) any of
its representations and warranties set forth in this Agreement becoming untrue,
(ii) any of the representations and warranties of Seller set forth in this
Agreement becoming untrue, or (iii) any of the conditions to the purchase and
sale of the Shares not being satisfied.
6. Representations and Warranties of Buyer. Buyer and the
Xxxxxxxxx Group, jointly and severally, hereby represent and warrant to Seller
as follows:
(a) Authority. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Kentucky. Buyer has all requisite corporate power and authority to enter into
this Agreement and to consummate the transactions contemplated hereby. All
corporate acts and other proceedings required to be taken by Buyer to authorize
the consummation of the transactions contemplated hereby have been duly and
properly taken. This Agreement has been duly executed and delivered by Buyer and
the Xxxxxxxxx Group and constitutes a valid and binding obligation of Buyer and
the Xxxxxxxxx Group, en forceable against Buyer and the Xxxxxxxxx Group in
accordance with its terms. The execution and delivery of this Agreement do not,
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and the consummation of the transactions contemplated hereby and compliance with
the terms hereof will not, conflict with, or result in any violation of or
default (with or without notice or lapse of time, or both) under, or give right
to a right of termination, cancellation or acceleration of any obligation or to
loss of a material benefit under, or result in the creation of any lien, claim,
encumbrance, security interest, option, charge or restriction of any kind upon
any of the properties or assets of the Buyer under, any provision of (i) the
Business Corporation Act of Kentucky, (ii) the Articles of Incorporation or
bylaws of Buyer, (iii) any material note, bond, mortgage, indenture, deed of
trust, license, lease, contract, commitment, agreement or arrangement to which
Buyer and the Xxxxxxxxx Group is a party or by which any of its properties are
bound or (iv) any judgment, order, or decree, or material statute, law,
ordinance, rule or regulation applicable to Buyer and the Xxxxxxxxx Group or its
property or assets. No consent, approval, license, permit order or authorization
of, or registration, declaration or filing with, any court, administrative
agency or commission or other governmental authority or instrumen tality,
domestic or foreign, is required to be obtained or made by or with respect to
Buyer or the Xxxxxxxxx Group in connection with the execution and delivery of
this Agreement or the consummation by Buyer and the Xxxxxxxxx Group of the
transactions contemplated hereby, other than (A) compliance with and filings
under the HSR Act and (B) compliance with and filings under Section 13(d) or 16,
as the case may be, of the Exchange Act.
(b) Actions and Proceedings, etc. There are no (i)
outstanding judgments, orders, writs, injunctions or decrees of any court,
governmental agency or arbitration tribunal against Buyer or the Xxxxxxxxx Group
which have an adverse effect on the ability of Buyer and the Xxxxxxxxx Group to
consummate the transactions contemplated hereby or (ii) actions, suits, claims
or legal, administrative or arbitration proceedings or investigations pending
or, to the best knowledge of Buyer, threatened against Buyer or the Xxxxxxxxx
Group, which are likely to have a material adverse effect on the ability of
Buyer and the Xxxxxxxxx Group to consummate the transactions contemplated
hereby.
(c) Consents. Subject to Section 6(a), no consent of any
party and no consent, license, approval or authorization of, or exemption by, or
filing, restriction or declaration with, any governmental authority, bureau,
agency or regulatory authority is required in connection with the execution,
delivery, validity or enforceability of this Agreement or the consummation of
the transactions contemplated hereby and thereby.
(d) Qualification. Buyer is duly qualified and in good
standing to do business in each jurisdiction in which the nature of its business
or the ownership, leasing or holding of its properties makes such qualification
necessary, except such jurisdictions where
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the failure so to qualify would not have a material adverse effect on the
business, assets, conditions (financial or otherwise) or results of operations
of Buyer. Buyer has made available to Seller true and complete copies of its
Articles of Incorporation, as amended to date, and its bylaws, as in effect on
the date hereof.
(e) No Broker. Buyer has not retained any broker or finder
nor has any finder or broker acted on behalf of Buyer in connection with this
Agreement or the transactions contemplated hereby.
(f) Investment Intent. Buyer and the Xxxxxxxxx Group are
acquiring the Shares solely for their own account for the purpose of investment
and not with a view to or for sale in connection with any distribution thereof,
and have no present intention or plan to effect any resale, assignment or
distribution of the Shares. Buyer and the Xxxxxxxxx Group acknowledge that the
Shares have not been registered or qualified under the Securities Act of 1933 or
any state securities laws and may be sold, assigned, pledge or otherwise
disposed of in the absence of such registration only pursuant to an exemption
from such registration. Buyer and the Xxxxxxxxx Group acknowledge that the
certificates evidencing the Shares shall each bear a restrictive legend to the
foregoing effect. Buyer and the Xxxxxxxxx Group have received such information
from Seller and the Companies as they have requested and acknowledge that there
are no representations or warranties, express or implied, except as expressly
set forth in this Agreement.
(g) Contracts; Commitments. Except as set forth on Schedule
6(g), to the best of Buyer's and the Xxxxxxxxx Group's knowledge, there are no
contracts, commitments or agreements (whether written or oral) to which the
Seller or any affiliate of the Seller (other than the Companies) is a party
pertaining to management consulting and employment agreements, finder's fees,
broker's or commission agreements, bonuses, or any binding agreements or
commitments to enter into same.
7. Mutual Covenants. Each of Seller and Buyer covenants and
agrees as follows:
(a) Cooperation. Buyer and Seller shall cooperate with each
other and shall cause their officers, employees, agents, auditors and
representatives to cooperate with each other after the Closing to ensure the
orderly transition of each Company from Seller to Buyer and to minimize any
disruption to the respective businesses of Seller, Buyer or any Company that
might result from the transactions contemplated hereby. Neither party shall be
required by this Section 7(a) to take any action that would unreasonably
interfere with the conduct of its business.
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(b) Best Efforts. (i) Subject to the terms and condi tions
of this Agreement, each party will use its best efforts to cause the consents of
or releases set forth in Section 3 to be obtained and the satisfaction of all
other conditions to the Closing to occur.
(ii) Seller shall use its best efforts to take, and cause to
be taken, all actions and to do, and cause to be done, all things necessary,
proper or advisable under applicable laws and regulations and otherwise, to
obtain prior to Closing all authorizations, consents and waivers ("Consents")
required from third parties to consummate and make effective the transactions
contemplated by this Agreement (which Consents shall include without limitation
those set forth on Schedule 4(a)), provided, however, that nothing contained
herein shall require Seller, Buyer or any Company to assume any additional
obligation or incur any additional liability in order to obtain Consents. Buyer
shall reasonably cooperate in such efforts. Each party agrees to keep the other
fully informed with respect to such efforts. In the event any Consent is not
obtained prior to Closing despite the best efforts of Seller and Buyer, Buyer
and Seller shall negotiate in good faith a mutually acceptable solution to the
failure to obtain any required Consent, but if a mutually acceptable solution is
not reached and the failure to obtain such Consent would have material adverse
consequences to the transactions contemplated by this Agreement, then in such
event the party or parties disadvantaged by failure to obtain such Consent shall
have the right to terminate this Agreement without any further liability to the
other party.
(iii) Notwithstanding the foregoing provisions of Section
7(b)(ii), with respect to consents required with respect to the documents
specified on Schedule 3(b)(x) (the "Early Consents"), within 30 days of
execution of this Agreement, Seller shall advise Buyer of any Early Consents
Seller reasonably determines that it will not be able to obtain prior to
Closing. Buyer shall thereupon have the right for an additional 15 days to
pursue the obtaining of such Early Consents which Seller has determined are not
obtainable. At the expiration of the aforesaid 45 day period, if Buyer and
Seller have not been able to agree on a mutually acceptable solution to the
failure to obtain any required Early Consent, then Seller shall have the right
for a period of five days following expiration of such 45 day period to
terminate this Agreement without any further liability to Buyer.
(iv) Buyer will use its best efforts to obtain the financing
required hereunder, and shall make diligent applications for said financing, and
shall keep Seller reasonably informed of its progress in that regard.
(c) Antitrust Notification. Each of ARI and Buyer will as
promptly as practicable, but in no event later than five
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business days following the execution and delivery of this Agreement, file with
the United States Federal Trade Commission (the "FTC") and the United States
Department of Justice (the "DOJ") the notification and report form required for
the transactions contemplated hereby and any supplemental information requested
in connection therewith pursuant to the HSR Act. Any such notification and
report form and supplemental information will be in substantial compliance with
the requirements of the HSR Act. Each of Buyer and Seller shall furnish to the
other such necessary information and reasonable assistance as the other may
request in connection with its preparation of any filing or submission which is
necessary under the HSR Act. Seller and Buyer shall keep each other apprised of
the status of any communications with, and inquiries or requests for additional
information from, the FTC and the DOJ and shall comply promptly with any such
inquiry or request. Each of Seller and Buyer will use its best efforts to obtain
any clearance required under the HSR Act for the purchase and sale of the
Shares. Each party shall be responsible for its filing fees relating to the
filing of HSR Act notification and report form.
(d) Records. (i) On the Closing Date, Seller shall deliver
or cause to be delivered to Buyer all original agreements, documents, books,
records and files (collectively, "Records"), in the possession of Seller
relating to the business and operations of each Company to the extent not then
in the possession of such Company, subject to the following exceptions:
(A) Buyer recognizes that certain Records may contain
incidental information relating to a Company or may relate primarily to
subsidiaries or divisions of Seller other than such Company, and that
Seller may retain such Records and shall provide copies of the relevant
portions thereof to Buyer; and
(B) Seller may retain any Tax returns, reports or forms, and
Buyer shall be provided with copies of such returns, reports or forms only
to the extent that they relate to any Company's separate returns or
separate Tax liability (including any successor liability under Treas.
Reg. 1.1502-6 or otherwise).
(C) Seller shall be entitled to retain copies of such
Records as it may desire for financial reporting, tax, employee benefits,
liability and other business purposes.
(ii) After the Closing, upon reasonable written notice, Buyer
and Seller agree to furnish or cause to be furnished to each other and their
representatives, employees, counsel and accountants access, during normal
business hours, such information (including Records pertinent to each Company)
and assistance relating to any Company as is reasonably necessary for financial
reporting and
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accounting matters, the preparation and filing of any Tax returns, reports or
forms or the defense of any Tax claim or assessment; provided, however, that
such access does not unreasonably disrupt the normal operations of Seller, Buyer
or such Company.
(e) Non Disclosure. Subject to applicable law or court
order, each party shall cause all such information of a non-public nature
obtained by it pursuant to this Agreement to be retained confidentially. If this
Agreement is terminated, each party shall promptly return all such information
of a non-public nature provided by the other party, shall promptly destroy all
analyses, compilations, studies or other documents of or prepared by it from
such non-public information, shall not use or disclose any such non-public
information to third parties and shall take reasonable step to cause its agents
and employees to comply with this provision.
(f) Litigation Support. The parties shall cooperate with
each other in the defense or contest, make available their personnel, and
provide such testimony and reasonable access to their books and records as shall
be necessary in connection with the defense or contest of any action, suit,
proceeding, hearing, investigation, charge, complaint or claim which questions
the validity of this Agreement or seeks to enjoin, retrain or prohibit the
transactions contemplated by this Agreement.
(g) Release. Each of the parties shall execute and deliver
at Closing a release substantially in the form of Exhibit E, mutually releasing
each other from any claims or liabilities except those arising under the
representations, warranties and covenants contained in this Agreement.
8. Further Assurances. From time to time, as and when
requested by either party hereto, the other party shall execute and deliver, or
cause to be executed and delivered, all such documents and instruments and shall
take, or cause to be taken, all such further or other actions, as such other
party may reasonably deem necessary or desirable to consummate the transactions
contemplated by this Agreement.
9. Indemnification. (a) Tax Indemnification.
(i) Seller shall indemnify Buyer and its affiliates
(including each Company) and each of their respective officers, directors,
employees and agents and hold them harmless from (A) all liability for Taxes of
any Company for the Pre-Closing Tax Period, (B) all liability (as a result of
Treasury Regulation ss. 1.1502-6 or otherwise) for Taxes of Seller, any
Affiliated Group or any member of any Affiliated Group, (C) all liability for
federal, state, and local income taxes resulting from the Section 338(h)(10)
election (or any comparable election under state or local Tax law)
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contemplated by Section 10(a) of this Agreement (other than state and local
income taxes arising out of a failure of any state or local jurisdiction to
treat a Section 338(h)(10) election in the same manner as such election is
treated for federal purposes), (D) Seller's share of the Taxes for which it is
responsible under Section 10(i) hereof, and (E) all liability for reasonable
legal fees and expenses attributable to any item in clause (A), (B), (C) or (D)
above.
(ii) Buyer shall, and shall cause each Company to, indemnify
Seller and its affiliates and each of their respective officers, directors,
employees and agents and hold them harmless from (A) all liability for Taxes of
each such Company (other than Taxes described in clauses (i)(A), (i)(B), (i)(C)
or (i)(D) of this Section 9(a)) (B) Buyer's share of the Taxes for which it is
responsible under Section 10(i) hereof, and (C) all liability for reasonable
legal fees and expenses attributable to any item in clause (A) or (B) above.
(iii) In the case of any taxable period that includes (but
does not end on) the Closing Date (each a "Straddle Period"):
(A) real, personal and intangible property Taxes not
reflected in the Companies Combined Net Working Capital as adjusted
pursuant to Section 1(d)("Property Taxes") of any Company
attributable to the Pre-Closing Tax Period shall be equal to the
amount of such Property Taxes for the entire Straddle Period
multiplied by a fraction, the numerator of which is the number of
days during the Straddle Period that are in the Pre-Closing Tax
Period and the denominator of which is the number of days in the
Straddle Period; and
(B) the Taxes of any Company (other than Property Taxes and
severance Tax) not reflected in the Companies Combined Net Working
Capital as adjusted pursuant to Section 1(d) attributable to the
Pre-Closing Tax Period shall be computed as if such taxable period
ended as of the close of business on the Closing Date.
Seller's indemnity obligation in respect of Taxes for a Straddle Period not
reflected in the Companies Combined Net Working Capital as adjusted pursuant to
Section 1(d) shall initially be effected by its payment to Buyer of the excess
of (x) such Taxes for the Pre-Closing Tax Period over (y) the amount of such
Taxes paid by Seller or any of its affiliates (other than any Company) at any
time plus the amount of such Taxes paid or accrued by any Company on or prior to
the Closing Date. Seller shall initially pay such excess to Buyer within five
days prior to the due date of any return, report or form with respect to
Straddle Period Taxes. If the amount of such Taxes paid by Seller or any of its
affiliates (other than any Company) at any time plus the amount of such Taxes
paid or accrued
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by any Company on or prior to the Closing Date exceeds the amount payable by
Seller pursuant to the preceding sentence, Buyer shall pay to Seller the amount
of such excess (a) in the case of Property Taxes, at the Closing (the "Closing
Tax Adjustment Amount") and (b) in all other cases, within five days prior to
the due date of the return, report or form with respect to the final liability
for such Taxes is required to be filed. The payments to be made pursuant to this
paragraph by Seller or Buyer with respect to a Straddle Period shall be
appropriately adjusted to reflect any final determination (which shall include
the execution of Form 870-AD or successor form) with respect to Straddle Period
Taxes.
(b) Other Indemnification by Seller. Seller shall indemnify
Buyer, its affiliates (including each Company) and each of their respective
officers, directors, employees and agents and hold them harmless from any loss,
liability, claim, damage or expense (including reasonable legal fees and
expenses) suffered or incurred by any such indemnified party (other than any
relating to Taxes, for which indemnification provisions are set forth in
paragraphs (a) and (g) of this Section 9) to the extent arising from (i) any
breach of any representation or warranty of Seller contained in this Agreement
or in any Schedule, certificate, instrument or other document delivered by it
pursuant hereto (ii) any breach of any covenant of Seller contained in this
Agreement, or (iii) any Excluded Liabilities, including any liability arising
out of the assets, business or liabilities (contingent or otherwise) of ARI and
its subsidiaries (other than those relating to the Companies). Seller's
obligation to indemnify Buyer under this Section 9(b) shall be subject to the
following:
(A) There shall be no limitation on the amount of liability
for breach of representations contained in Sections 4(a), (b), (c), (d), (e),
(g) and (s);
(B) There shall be no limitation on the amount of liability
for the Excluded Liabilities or the Excluded Assets;
(C) For all other obligations to indemnify under Section
9(b), Seller shall be responsible only for claims or losses (i) exceeding
$300,000.00 and only to the extent exceeding $300,000.00, (ii) of which Seller
is notified pursuant to Section 17 within one year of the Closing.
(c) Indemnification by Buyer. Buyer shall indemnify Seller,
its affiliates, and each of their respective officers, directors, employees and
agents and hold them harmless from any loss, liability, claim, damage or expense
(including reasonable legal fees and expenses) suffered or incurred by any such
indemnified party to the extent arising from (i) any breach of any
representation or warranty of Buyer contained in this Agreement or in any
Schedule, certificate, instrument or other document
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delivered by it pursuant hereto, (ii) any breach of any covenant of Buyer
contained in this Agreement, (iii) any breach of the covenant of Buyer contained
in this Agreement obligating Buyer to immediately notify Seller of any planned
or intended closing of employment sites or layoff of employees, involving any
Company's employment sites or employees existing immediately prior to the
Closing, where such closing or layoff may or will be sufficient to invoke
coverage of the Worker Adjustment and Retraining Notification Act of 1989 for
such Company, (iv) any Assumed Liabilities, (v) any liabilities or obligations
of any Company arising from violations of the covenants contained in Section
5B(d) and for which Seller did not give its consent, or (vi) any liabilities or
obligations of any Company whether arising from events which occur prior to, on
or after the Closing Date except to the extent Seller has breached any
representation or warranty with respect thereto and except for any Excluded
Liabilities. Buyer's obligation to indemnify under this Section 9(c) shall be
subject to the following:
(A) There shall be no limitation on the amount of liability
for breach of representations contained in Section 6(a);
(B) There shall be no limitation on the amount of liability
for the Assumed Liabilities or for any liabilities or obligations of any Company
(whether arising from events which occur prior to, on or after the Closing Date)
except to the extent Seller has breached any representation or warranty with
respect thereto and except for Excluded Liabilities; and
(C) For all other obligations to indemnify under Section
9(c), Buyer shall be responsible only for claims or losses (i) exceeding
$300,000.00 and only to the extent exceeding of $300,000.00, (ii) of which Buyer
is notified pursuant to Section 17 within one year of the Closing.
(d) Losses Net of Insurance, etc. The amount of any loss,
liability, claim, damage, expense or Tax for which indemnification is provided
under this Section 9 shall be net of any amounts recovered or recoverable by the
indemnified party under insurance policies with respect to such loss, liability,
claim, damage, expense or Tax and shall be (i) increased to take account of any
net Tax cost incurred by the indemnified party arising from the receipt of
indemnity payments hereunder (grossed up for such increase) and (ii) reduced to
take account of any net Tax benefit available to and/or realized by the
indemnified party arising from the incurrence or payment of any such loss,
liability, claim, damage, expense or Tax. In computing the amount of any such
Tax cost or Tax benefit, the indemnified party shall be deemed to recognize all
other items of income, gain, loss, deduction or credit before any item arising
from the receipt of any indemnity
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recognizing payment hereunder or the incurrence or payment of any indemnified
loss, liability, claim, damage, expense or Tax.
(e) Termination of Indemnification. The obligations to
indemnify and hold harmless a party hereto (i) pursuant to Section 9(a) shall
terminate 120 days after the time the applicable statute of limitations with
respect to the Tax liability in question expires (giving effect to any extension
thereof), (ii) pursuant to Section 9(b)(i) shall terminate when the applicable
representation or warranty terminates pursuant to Section 13, (iii) pursuant to
Section 9(h)(i) shall not terminate, (iv) with respect to any Excluded Liability
including any liability arising out of the assets, business or liabilities
(contingent or otherwise) of ARI and its subsidiaries (other than those relating
to the Companies) shall not terminate, (v) with respect to the Assumed
Liabilities, and any liabilities or obligations of the Companies (whether
arising from events which occur prior to, on or after the Closing Date to the
extent that Seller has breached any representation or warranty with respect
thereto) shall not terminate, and (vi) pursuant to any other provision to
indemnify and hold harmless hereunder shall terminate at the close of business
one year following the Closing Date; provided, however, that as to clauses (i)
and (ii) above such obligations to indemnify and hold harmless shall not
terminate with respect to any item as to which the person to be indemnified or
the related party hereto shall have, before the expiration of the applicable
period, previ ously made a claim by delivering a notice (stating in reasonable
detail the basis of such claim) to the indemnifying party.
(f) Procedures Relating to Indemnification (Other than Under
Sections 9(a)). In order for a party (the "indemnified party") to be entitled to
any indemnification provided for under this Agreement (other than under Sections
9(a) or (h)(i)) in respect of, arising out of or involving a claim or demand
made by any person, firm, governmental authority or corporation against the
indemnified party (a "Third Party Claim"), such indemnified party must notify
the indemnifying party in writing, and in reasonable detail, of the Third Party
Claim within 10 business days after receipt by such indemnified party of written
notice of the Third Party Claim; provided, however, that failure to give such
notifi cation shall not affect the indemnification provided hereunder except and
unless to the extent the indemnifying party shall have been materially
prejudiced as a result of such failure (the indemnifying party shall not be
liable for any expenses incurred during the period in which the indemnified
party failed to give such notice). Thereafter, the indemnified party shall
deliver to the indemnifying party, within five business days after the indem
nified party's receipt thereof, copies of all notices and documents (including
court papers) received by the indemnified party relating to the Third Party
Claim.
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If a Third Party Claim is made against an indemnified party,
the indemnifying party will be entitled to participate in the defense thereof
and, if it so chooses, to assume the defense thereof with counsel selected by
the indemnifying party and reasonably satisfactory to the indemnified party.
Should the indemnifying party so elect to assume the defense of a Third Party
Claim, the indemnifying party will not be liable to the indemnified party for
legal expenses subsequently incurred by the indemnified party in connection with
the defense thereof. If the indemnifying party assumes such defense, the
indemnified party shall have the right to participate in the defense thereof and
to employ counsel, at its own expense, separate from the counsel employed by the
indemnifying party, it being understood that the indemnifying party shall
control such defense. The indemnifying party shall be liable for the fees and
expenses of counsel employed by the indemnified party for any period during
which the indemnifying party has not assumed the defense thereof (other than
during any period in which the indemnified party shall have failed to give
notice of the Third Party Claim as provided above). If the indemnifying party
chooses to defend or prosecute any Third Party Claim, all of the parties hereto
shall cooperate in the defense or prosecution thereof. Such cooperation shall
include the retention and (upon the indemnifying party's request) the provision
to the indemnifying party of records and information which are reasonably
relevant to such Third Party Claim, and making employees available on a mutually
convenient and reasonable basis to provide additional information and
explanation of any material provided hereunder. Whether or not the indemnifying
party shall have assumed the defense of a Third Party Claim, the indemnified
party shall not admit any liability with respect to, or settle, compromise or
discharge, such Third Party Claim without the indemnifying party's prior written
consent (which consent shall not be unreasonably withheld or delayed).
(g) Procedures Relating to Indemnification of Tax Claims. If
either Seller or Buyer receives a written claim from any taxing authority that,
if successful, would result in an indemnity payment to Buyer, Seller or one of
their respective affiliates (a "Tax Claim"), the party receiving such Tax Claim
shall promptly notify the other party in writing of such Tax Claim.
With respect to any Tax Claim (other than those relating
solely to Taxes of any Company for a Straddle Period), the indemnifying party
shall control all proceedings taken in connection with such Tax Claim
(including, without limitation, selection of counsel) and, without limiting the
foregoing, may in its sole discretion forgo any and all administrative appeals,
proceedings, hearings and conferences with any taxing authority with respect
thereto, and may, in its sole discretion, either pay the Tax claimed and xxx for
a refund where applicable law permits such refund suits or contest such Tax
Claim in any permissible manner. The indemnifying party shall, however, consider
in good
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faith the advice of the indemnified party concerning the most appropriate forum
in which to proceed and other related matters (it being understood, however,
that all such decisions shall be left to the sole discretion of the indemnifying
party). Buyer and Seller shall jointly control all proceedings taken in
connection with any Tax Claim relating solely to Taxes of any Company for a
Straddle Period except for proceedings relating to Taxes of an Affiliated Group,
which shall be controlled by Seller. Buyer, Seller, any Company and each of
their respective affiliates shall cooperate with each other in contesting any
Tax Claim, which cooperation shall include, without limitation, the retention
and (upon request) the provision of records and information to the other party
that are reasonably relevant to such Tax Claim.
(h) The aggregate liability of Seller under this Section 9
shall not exceed the Purchase Price. The sole and exclusive remedy of Buyer for
damages exceeding such amount shall be a right of rescission.
(i) In no event shall either Buyer or Seller or any of their
respective affiliates, directors, officers, agents or attorneys be liable for
any indirect, special, extraordinary or consequential damages under this
Agreement or with respect to the transactions contemplated hereunder or in the
agreements attached as Exhibits hereto unless specifically and expressly
permitted by the terms and provisions thereof.
(j) The Xxxxxxxxx Group hereby jointly and severally,
guarantee the Indemnification obligations of the Buyer to Seller specified under
Section 9(a)(ii) and Section 9(c).
(k) ARI hereby guarantees the Indemnification obligations of
the Seller to Buyer specified under Section 9(a)(i) and Section 9(b).
10. Tax Matters. (a) Buyer and Seller shall timely make a
joint election under Section 338(h)(10) of the Code (and any comparable election
under state or local Tax law) with respect to each eligible Company, and
cooperate with each other in the completion and timely filing of such election
in accordance with the provisions of Regulation ss. 1.338(h)(10)-1 (or any
comparable provisions of state or local Tax law) or any successor provision.
Prior to the Closing, Seller and Buyer shall negotiate in good faith an
agreement to allocate the Purchase Price and such allocation shall be set forth
on Schedule 10(a) to be attached hereto. Neither Seller nor Buyer (nor any of
their respective affiliates) shall take any position on any Tax return or with
any taxing authority that is inconsistent with the purchase price allocation set
forth on Schedule 10(a).
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(b) For any Straddle Period, Buyer shall timely prepare and
file with the appropriate authorities all Tax returns, reports and forms (other
than Tax returns, reports and forms of an Affiliated Group) required to be filed
and will pay all Taxes due with respect to such returns, reports and forms;
provided that Seller will reimburse Buyer (in accordance with the procedures set
forth in Section 9(a)) for any amount owed by Seller pursuant to Section 9(a)
with respect to the taxable periods covered by such returns, reports or forms.
For any Straddle Period, Seller shall timely prepare and file all Tax returns,
reports and forms of an Affiliated Group and Buyer shall cause the eligible
Companies to consent to be included in such returns. For any taxable period of
any Company that ends on or before the Closing Date, other than for returns,
reports and forms which have been previously filed, Seller shall timely prepare
at its own expense and furnish to such Company (other than Tax returns, reports
and forms of an Affiliated Group) all Tax returns, reports and forms required to
be filed, and will pay all Taxes due with respect to such returns, reports and
forms in accordance with the provisions of Section 9(a). Buyer and Seller agree
to cause each Company to file all Tax returns, reports and forms for the period
including the Closing Date on the basis that the relevant taxable period ended
as of the close of business on the Closing Date, unless the relevant taxing
authority will not accept a return, report or form filed on that basis.
(c) Seller, each Company and Buyer shall reasonably cooperate,
and shall cause their respective affiliates, officers, employees, agents,
auditors and representatives reasonably to cooperate, in preparing and filing
all returns, reports and forms relating to Taxes, including maintaining and
making available to each other all records necessary in connection with Taxes
and in resolving all disputes and audits with respect to all taxable periods
relating to Taxes. Buyer and Seller recognize that each party and their
respective affiliates will need access, from time to time, after the Closing
Date, to certain accounting and Tax records and information held by any Company
or Seller to the extent such records and information pertain to events occurring
prior to the Closing Date; therefore, Buyer, Seller and their respective
affiliates agree, and Buyer agrees to cause each Company, (i) to use its
reasonable efforts to properly retain and maintain such records until such time
as the other party agrees that such retention and maintenance is no longer
necessary, and (ii) to allow Seller, Buyer and their respective agents and
representatives (and agents or representatives of any of their affiliates), at
times and dates mutually acceptable to the parties, to inspect, review and make
copies of such records as such party may deem necessary or appropriate from time
to time, such activities to be conducted during normal business hours and at the
expense of the party requesting such copies.
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(d) Any refunds or credits of Taxes of any Company for any
taxable period ending on or before the Closing Date shall be for the account of
Seller. Any refunds or credits of Taxes of any Company for any taxable period
beginning after the Closing Date shall be for the account of the Buyer. Any
refunds or credits of Taxes of any Company for any Straddle Period shall be
apportioned between Seller and Buyer in accordance with the formula in Section
9(a) as it relates to a Straddle Period. Other than for refunds or credits of an
Affiliated Group, Buyer shall, if Seller so requests and at Seller's expense and
if Buyer obtains, at Seller's expense, an opinion from outside tax counsel that
such action does not cause Buyer material harm, cause any Company to file for
and obtain any refunds or credits to which Seller is entitled under this Section
10(d). Buyer and Seller shall jointly control the presentation of any such
refund claim made on behalf of Seller. Buyer shall cause each Company to forward
to Seller any such refund due to Seller within 10 days after the refund is
received (or reimburse Seller for any such credit within 10 days after the
credit is allowed or applied against other Tax liabil ity); provided, however,
that any such amounts payable to Seller shall be net of any Tax cost to Buyer or
such Company, as the case may be, attributable to the receipt of such refund.
Notwithstanding the foregoing, the control of the prosecution of a claim for
refund of Taxes paid pursuant to a deficiency assessed subsequent to the Closing
Date as a result of an audit shall be governed by the provisions of Section
9(g).
(e) Seller shall be responsible for filing at its own expense
any amended consolidated, combined or unitary Tax returns, reports or forms for
taxable years ending on or prior to the Closing Date which are required as a
result of examination adjustments made by the Internal Revenue Service or by the
applicable state, local or foreign taxing authorities for such taxable years as
finally determined. For those jurisdictions in which separate Tax returns are
filed by any Company, any required amended returns resulting from such
examination adjustments, as finally determined, shall be prepared by Seller and
furnished to such Company for approval (which approval should not be
unreasonably withheld), signature and filing at least 30 days prior to the due
date for filing such returns.
(f) Seller shall deliver to Buyer at the Closing a certificate
stating that Seller is not a "foreign person" within the meaning of United
States Treasury regulations Section 1.1445-2T(b)(2), in the form specified by
such regulation.
(g) On the Closing Date, Buyer will cause each Company to
conduct its business in the ordinary course in substantially the same manner as
presently conducted and on the Closing Date will not permit such Company to
effect any extraordinary transactions (other than any such transactions
expressly required by applicable law or
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by this Agreement) that could result in Tax liability to such Company in excess
of Tax liability associated with the conduct of its business in the ordinary
course.
(h) Seller shall cause the provisions of any Tax sharing or
allocation agreement to which any Company is a party to be terminated on or
before the Closing Date, such that such Company shall not have any obligation
with respect to any such agreement after the Closing Date.
(i) Notwithstanding any other provision of this Agreement, the
Buyer and Seller shall each pay one half of the (i) expense for any applicable
sales, use or other transfer tax relating to the transfer of any equipment,
property or other assets conveyed pursuant to Section 3(c) of this Agreement,
(ii) income Taxes arising from the transfer of such equipment, property or other
assets, and (iii) liability for sales, use and other state and local transfer
and excise taxes arising from the Section 338(h)(10) election (or any comparable
election under state or local Tax law) contemplated by Section 10(a) of this
Agreement.
(j) In the event of a delay in the making of any payment
relating to Taxes by Buyer, Seller, a Company or any other person required
pursuant to Sections 9 and 10 hereof beyond the period expressly provided for
herein, the payor shall, in addition, pay to the payee interest at the prime
rate of interest of as published in and quoted by The Wall Street Journal from
time to time, which represents the base rate on corporate loans posted by at
least 75% of the nation's 30 largest banks.
11. Assignment. This Agreement and the rights and obligations
hereunder shall not be assignable or transferable by Buyer or Seller (including
by operation of law in connection with a merger, or sale of substantially all
the assets, of Buyer or Seller) without the prior written consent of the other
party hereto; provided, however, that Buyer may assign its right to purchase the
Shares hereunder to one or more subsidiaries or affiliates of Buyer without the
prior written consent of Seller; provided further, however, that no assignment
shall limit or affect the assignor's obligations hereunder.
12. No Third-Party Beneficiaries. Except as may be provided in
Section 9, this Agreement is for the sole benefit of the parties hereto and
their permitted assigns and nothing herein expressed or implied shall give or be
construed to give to any person or entity, other than the parties hereto and
such assigns, any legal or equitable rights hereunder.
13. Survival of Representations. The representations and
warranties in this Agreement and in any other document delivered in connection
herewith shall survive the Closing solely for purposes
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of Section 9 of this Agreement and (i) in the case of representations, other
than those contained in Sections 4(a), (b), (c), (d), (e), (g) and (s) and in
Sections 6(a)-(d) and (f), shall terminate at the close of business one year
following the Closing Date, (ii) in the case of the representations contained in
Sec tions 4(g) and (s) shall terminate upon the expiration of the applicable
statute of limitations and (iii) in the case of the representations contained in
Sections 4(a)-(e) and in Sections 6(a)-(d) and (f) shall not terminate.
14. Expenses. Whether or not the transactions contemplated
hereby are consummated, and except as otherwise provided in this Agreement, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such costs
or expenses.
15. Attorney Fees. Should any litigation be commenced
concerning this Agreement or the rights and duties of any party with respect to
it, the party prevailing shall be entitled, in addition to such other relief as
may be granted, to a reasonable sum for such party's attorney fees and expenses
determined by the court in such litigation or in a separate action brought for
that purpose.
16. Amendments. No amendment to this Agreement shall be
effective unless it shall be in writing and signed by both parties hereto. Each
party acknowledges that no officer, employee, agent or other representative of
the other party has authority, actual or apparent, to bind such other party to
any amendment or other modification of this Agreement, except pursuant to a
written document properly executed by an authorized representative of such other
party.
17. Notices. Notice and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed or sent by telecopy by the sending party, as follows:
(i) If to Buyer:
Xxxxxxxxx Acquisition Company, Inc.
0000 Xxxxx Xxx Xxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
(Telecopy No. (000) 000-0000)
Attention: Xxxxx Xxxxxxxxx
With copies to:
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53
Xxxxx X. Xxxxx, Esq.
Xxxxx, Tarrant & Xxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
(Telecopy No. (000) 000-0000)
(ii) If to Seller:
Xxxxxxxxx Resources, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
(Telecopy No. (000) 000-0000)
Attention: R. Xxxxxxx Xxxxxxxx,
Chief Financial Officer
With copies to:
Xxxxxx X. Xxxxxxxxx
Chairman of the Board
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(Telecopy No. (212 757-0577)
-48-
54
and
Xxxxxx X. Xxxxxxxx, Esq.
Xxxxxxx, Xxxx & Xxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(Telecopy No. (000) 000-0000)
and
Xxxx X. Xxxxxxxx, Esq.
Xxxxx, Xxxx & Xxxxxxx
2700 Lexington Financial Center
Xxxxxxxxx, Xxxxxxxx 00000
(Telecopy No. (000) 000-0000)
All notices and other communications given to any party hereto
in accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt if delivered by hand or overnight courier service
or sent by telecopy, or on the date five business days after dispatch by
certified or registered mail if mailed, in each case delivered, sent or mailed
(properly addressed) to such party as provided in this Section 17 or in
accordance with the latest unrevoked direction from such party given in
accordance with this Section 17.
18. Interpretation. The headings contained in this Agreement,
in any Exhibit or Schedule hereto and in the table of contents to this
Agreement, are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
19. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more such counterparts have been signed
by each of the parties and delivered to the other party. For purposes of this
Section 19, a counterpart shall be deemed delivered when transmitted by
facsimile and upon receipt of confirmation of such transmission by the
delivering party.
20. Entire Agreement. This Agreement, including the Exhibits
and Schedules attached hereto, constitutes the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter.
21. Fees. (a) Each party to this Agreement shall pay all
expenses incurred by it or on its behalf in connection with the preparation,
authorization, execution and performance of this
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55
Agreement, including, but not limited to, all fees and expenses of agents,
representatives, counsel and accountants.
(b) Each party to this Agreement shall hold the other party
harmless with respect to any broker's, finder's or other similar agent's fee
with respect to the transactions contemplated hereby claimed by any broker,
finder or similar agent engaged or employed by the indemnifying party.
22. Severability. If any provision of this Agreement or the
application of any such provision to any person or circumstance shall be held
invalid, illegal or unenforceable in any respect by a court of competent
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision hereof.
23. Consent to Jurisdiction. Each of Buyer and Seller
irrevocably submits to the exclusive jurisdiction of (a) the Circuit Court of
Xxxx County, Kentucky, and (b) the United States District Court for the Eastern
District of Kentucky, for the purposes of any suit, action or other proceeding
arising out of this Agreement or any transaction contemplated hereby. Each of
Buyer and Seller agrees to commence any action, suit or proceeding relating
hereto either in the United States District Court for the Eastern District of
Kentucky or, if, for jurisdictional reasons, such suit, action or other
proceeding may not be brought in such court, in the Circuit Court of Xxxx
County, Kentucky. Each of Buyer and Seller further agrees that service of any
process, summons, notice or document by U.S. registered mail to such party's
respective address set forth above shall be effective service of process for any
action, suit or proceeding in Kentucky with respect to any matters to which it
has submitted to jurisdiction as set forth above in the immediately preceding
sentence. Each of Buyer and Seller irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement or the transactions contemplated hereby in (a) the Circuit
Court of Xxxx County, Kentucky, or (b) the United States District Court for the
Eastern District of Kentucky, and hereby further irrevocably and unconditionally
waives and agrees not to plead or claim in any such court that any such action,
suit or proceeding brought in any such court has been brought in an inconvenient
forum.
24. Non-solicitation of Personnel. Except for the employees
whose names are set forth on Schedule 24 or otherwise agreed to by Seller and
Buyer in writing, Seller hereby agrees that for a period of one year following
the Closing Date neither it nor any person affiliated with it will, directly or
indirectly, solicit or recruit any employee of any Company or any employee of
Buyer or its affiliates previously employed by any Company or otherwise request
or cause any such employee to terminate his or her employment with any Company
or Buyer or its affiliates. Seller
-50-
56
acknowledges that the covenant contained in this Section is reasonable and
necessary to protect the legitimate business interests of Buyer.
25. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Kentucky.
26. Affiliate Defined. As used in this Agreement, the term
"affiliate" shall mean any person or entity that directly or indirectly
controls, is controlled by or is under common control with, any other person or
entity.
27. Termination.
(a) If a condition to Buyer's obligation to close in Section
3(a) is not satisfied on or before December 31, 1995, then Buyer shall have the
right to either waive the condition and acquire the Shares or terminate the
parties obligation to close the sale of the Shares under this Agreement. If
Buyer elects to acquire the Shares, then Buyer shall not seek indemnification
from Seller with respect to the event or facts giving rise to the failure of the
condition. If Buyer elects to terminate the parties' obligations to consummate
the transactions contemplated by this Agreement by reason of such failure, then
neither party shall have any liability to the other party in connection with the
failure to close (other than a failure caused by a party's breach of its
obligations under this Agreement), subject however to the provisions of Sections
1(h), 3(d), 7(e), 15 and 28.
(b) If a condition to Seller's obligation to close in Section
3(b) is not satisfied on or before December 31, 1995, then Seller shall have the
right to either waive the condition and sell the Shares or terminate the parties
obligation to close the sale of the Shares under this Agreement. If Seller
elects to sell the Shares, then Seller shall not seek indemnification from Buyer
with respect to the event or facts giving rise to the failure of the condition.
If Seller elects to terminate the parties' obligations to consummate the
transactions contemplated by this Agreement by reason of such failure, then
neither party shall have any liability to the other party in connection with the
failure to close (other than a failure caused by a party's breach of its
obligations under this Agreement), subject however to the provisions of Sections
1(h), 3(d), 7(e), 15 and 28.
28. Publicity. Through the period 30 days following Closing,
neither Seller nor Buyer shall issue any public announcement regarding the terms
of this Agreement or the transactions contemplated hereby without the prior
consent of the other party, unless required by law in which event each party
shall provide the other party with prior opportunity to comment on any
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57
such public announcement. After the Closing, neither Buyer nor Seller, nor any
of their affiliates, shall use or disclose, or permit to be used or disclosed,
any confidential information that is in their possession and which relates to
the other parties to this Agreement and the Companies.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the date first written above.
XXXXXXXXX HOLDING COMPANY, INC.
By /s/ Xxxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxxxx
-----------------------
Title: Chairman
-----------------------
XXXXXXXXX RESOURCES, INC.
By /s/ Xxxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxxxx
-----------------------
Title: Chairman
-----------------------
XXXXXXXXX ACQUISITION COMPANY, INC.
By /s/ Xxxxx Xxxxxxxxx
--------------------------------
Name:
-----------------------
Title:
-----------------------
/s/ Xxxxx Xxxxxxxxx
-----------------------------------
XXXXX XXXXXXXXX
/s/ Xxxxxx Xxxxxxxxx
-----------------------------------
XXXXXX XXXXXXXXX
/s/ Xxxxx Xxxxxxxxx
-----------------------------------
XXXXX XXXXXXXXX
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58
INDEMNITY AGREEMENT
THIS IS AN INDEMNITY AGREEMENT dated as of November 1, 1995,
among XXXXXXXXX ENTERPRISES, INC. (f/k/a Xxxxxxxxx Acquisition
Company, Inc. ("AEC"), XXXXX XXXXXXXXX, XXXXXX XXXXXXXXX and XXXXX
XXXXXXXXX (collectively, the "Xxxxxxxxx Group"), XXXXXXXXX
RESOURCES, INC. ("ARI") and XXXXXXXXX HOLDING COMPANY, INC.
("Xxxxxxxxx Holding"), (Xxxxxxxxx Holding, together with ARI,
collectively "Xxxxxxxxx").
Recitals
Reference is made to that certain Stock Purchase Agreement (the "Stock
Purchase Agreement") dated September 22, 1995, between AEC and Xxxxxxxxx
Holding pursuant to which Xxxxxxxxx Holding sold to AEC all of the issued and
outstanding stock of certain subsidiaries (together with their respective
subsidiaries, collectively, the "Companies").
Reference is hereby made to all guaranty obligations of ARI or AHC for
the benefit of the Companies, including, but not limited to, the guaranty
obligations referred to on Schedule A to this Agreement, and all obligations of
ARI under bonds for the benefit of the Companies, including, but not limited
to, the bonds described on Schedule B to this Agreement (the guaranty and bond
obligations are collectively referred to as the "ARI Obligations").
In connection with the transactions contemplated by the Stock Purchase
Agreement, AEC and the Xxxxxxxxx Group have agreed to execute and deliver this
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each of the parties to this
Agreement, the parties agree as follows:
WITNESSETH:
1. Each of AEC and the Xxxxxxxxx Group, jointly and severally,
(each an "Indemnitor", and collectively, the "Indemnitors") hereby agrees to
indemnify, defend and hold Xxxxxxxxx and its or their respective agents,
directors, officers, attorneys and affiliates (individually, an "Indemnified
Party" and collectively, the "Indemnified Parties") harmless from and against
any loss, liability, claim, damage and expense (including reasonable legal fees
and expenses) suffered or incurred by an Indemnified Party under the ARI
Obligations.
2. In order for an Indemnified Party to be entitled to any
indemnification provided for under this Agreement arising out of or involving a
claim or demand made by any person, firm, governmental
59
authority or corporation against the Indemnified Party (a "Third Party Claim"),
such Indemnified Party must notify the Indemnitors in writing, and in
reasonable detail, of the Third Party Claim within 10 business days after
receipt by such Indemnified Party of written notice of the Third Party Claim;
provided, however, that failure to give such notification shall not affect the
indemnification provided hereunder except and unless to the extent the
Indemnitors shall have been actually prejudiced as a result of such failure
(the Indemnitors shall not be liable for any expenses incurred during the
period in which the Indemnified Party failed to give such notice). Thereafter,
the Indemnified Party shall deliver to the Indemnitors, within five business
days after the Indemnified Party's receipt thereof, copies of all notices and
documents (including court papers) received by the Indemnified Party relating
to the Third Party Claim.
3. If a Third Party Claim is made against an Indemnified Party, the
Indemnitors will be entitled to participate in the defense thereof and, if it
so chooses, to assume the defense thereof with counsel selected by the
Indemnitors and reasonably satisfactory to the Indemnified Party. Should the
Indemnitors so elect to assume the defense of a Third Party Claim, the
Indemnitors will not be liable to the Indemnified Party for legal expenses
subsequently incurred by the indemnified party in connection with the defense
thereof. If the Indemnitors assume such defense, the Indemnified Party shall
have the right to participate in the defense thereof and to employ counsel, at
its own expense, separate from the counsel employed by the Indemnitors, it
being understood that the Indemnitors shall control such defense. The
Indemnitors shall be liable for the fees and expenses of counsel employed by
the Indemnified Party for any period during which the Indemnitors have not
assumed the defense thereof (other than during any period in which the
Indemnified Party shall have failed to give notice of the Third Party Claim as
provided above). If the Indemnitors choose to defend or prosecute any Third
Party Claim, all of the parties hereto shall cooperate in the defense or
prosecution thereof. Such cooperation shall include the retention and (upon the
Indemnitors' request) the provision to the Indemnitors of records and
information which are reasonably relevant to such Third Party Claim, and making
employees available on a mutually con venient and reasonable basis to provide
additional information and explanation of any material provided hereunder.
Whether or not the Indemnitors shall have assumed the defense of a Third Party
Claim, the Indemnified Party shall not admit any liability with respect to, or
settle, compromise or discharge, such Third Party Claim without the
Indemnitors' prior written consent (which consent shall not be unreasonably
withheld).
4. Should any litigation be commenced concerning this Agreement or
the rights and duties of any party with respect to it, the party prevailing
shall be entitled, in addition to such other
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60
relief as may be granted, to a reasonable sum for such party's attorney fees
and expenses determined by the court in such litigation or in a separate action
brought for that purpose.
5. No amendment to this Agreement shall be effective unless it
shall be in writing and signed by both parties hereto. Each party acknowledges
that no officer, employee, agent or other representative of the other party has
authority, actual or apparent, to bind such other party to any amendment or
other modification of this Agreement, except pursuant to a written document
properly executed by an authorized representative of such other party.
6. This Agreement constitutes the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter. No representation, promise or statement of intention has been
made by either party that is not embodied herein, and neither party shall be
bound by or liable for any alleged representation, promise or statement of
intention not so set forth.
7. If any provision of this Agreement or the application of any
such provision to any person or circumstance shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof.
9. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Kentucky, without regard to its conflicts
of law rules.
10. All notice or communications under this Agreement shall be in
writing and shall be (1) mailed by registered or certified mail, return receipt
requested, (2) hand delivered, or (3) delivered by overnight carrier, to the
parties at the addresses set forth below their names on the signature page(s)
to this Agreement, and any notice so addressed and mailed or delivered to
and/or deposited with such carrier, freight prepaid, shall be deemed to have
been given when so mailed if mailed; or delivered if hand-delivered; or
delivered to such overnight courier if delivered by overnight courier. The
parties hereto may at any time, and from time to time, change the address(es)
to which notice shall be mailed, transmitted or otherwise delivered by written
notice setting forth the changed address(es).
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61
IN WITNESS WHEREOF, the parties have executed this as of the date set
out on the preamble hereto, but actually on the date(s) set forth below.
XXXXXXXXX ENTERPRISES, INC.
By /s/ Xxxxx Xxxxxxxxx
---------------------------------------
Title: President
-----------------------------------
Date: 11/1/95
------------------------------------
Address:
0000 Xxxxx Xxx Xxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
/s/ Xxxxx Xxxxxxxxx
-----------------------------------------
XXXXX XXXXXXXXX
Date: 11/1/95
------------------------------------
Address:
0000 Xxxxx Xxx Xxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
/s/ Xxxxxx Xxxxxxxxx
-----------------------------------------
XXXXXX XXXXXXXXX
Date: 11/1/95
------------------------------------
Address:
0000 Xxxxx Xxx Xxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
/s/ Xxxxx Xxxxxxxxx
-----------------------------------------
XXXXX XXXXXXXXX
Date: 11/1/95
------------------------------------
Address:
0000 Xxxxx Xxx Xxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
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62
XXXXXXXXX RESOURCES, INC.
By /s/ R. Xxxxxxx Xxxxxxxx
--------------------------------
Title: V.P.
----------------------------
Date: 11/1/95
-----------------------------
Address:
000 Xxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
Attn: President
XXXXXXXXX HOLDING COMPANY, INC.
By /s/ R. Xxxxxxx Xxxxxxxx
--------------------------------
Title: Sec/Treas
----------------------------
Date: 11/1/95
-----------------------------
Address:
000 Xxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
Attn: President
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63
Schedule 3(c)(iv)
ASSUMED LIABILITIES
* Indemnification Claims of Pittston Acquisition Company
Liabilities or obligations owed to Pittston Acquisition Company under
that certain Stock Purchase Agreement dated September 24, 1993 and other
agreements executed in connection therewith, including, but not limited to,
workers' compensation claims and unmined minerals taxes
* Debt Obligations and Liabilities to PNC Bank
* Liabilities or Obligations Under Bonds and Guarantees Specified on
Schedule 3(b)(vii)
* Obligations Arising Under the Settlement Agreement With Consumers Power
Company, including but not limited to, Agreement dated June 28, 1994 between
Seller and Pittston Acquisition Company
* Obligations Arising Under Contract/Commitment to Xxxxxx Xxxxxxx, and Relating
to Commissions, Fees, Brokerage Arrangements, Described in Attached Letter
Dated September 6, 1995.
CERTAIN ONGOING OR THREATENED LITIGATION AS SET FORTH BELOW:
Xxxxxxxxx, Inc. v. Kentucky Natural Resources and Environmental Protection
Cabinet
Office of Administration Hearings
File No. XXX-00000-000
Xxxxxx Xxxxx, Xxxxx Xxxxx and Xxxx Xxxxxx x. Xxxxxxxxx, Inc. and Xxxxxxxxx
Resources, Inc.
United States District Court, Eastern District of Kentucky Case No. 91-405
Xxxx X. Xxxxx x. Xxxxxxxxx, Inc.
EEOC Charge No. 241910604
Equal Employment Opportunity Commission x. Xxxxxxxxx, Inc.
United States District Court, Eastern District of Kentucky No. 93-159
Xxxx X. XxXxx, Xx. v. Xxxxx X. Xxxxxxx, et al.,
Fayette Circuit Court, 22d Judicial Division, First Division No. 89-CI-4113,
and all related actions, claims or suits, whether pending, on appeal, or
threatened
64
See Attached List of Additional Litigation
65
September 6, 1995
Xx. Xxxx Xxxxxxxx
Chief Financial Officer
Xxxxxxxxx Resources, Inc.
Dear Xxxx:
I have been asked to explain the contract between myself and Xxxxxxxxx
relating to payments due and a potential final payoff to allow a clean break
with no future payments.
The contract is accurate except for two areas. These are:
(a) Upon execution of the Pittston contract, I was asked to look over the
Marketing, purchased coal, distribution areas, and I agreed to this for the
$15,000 becoming a monthly fee plus individual projects would continue to be
spelled out for separate fees.
(b) The project areas worked on were:
(1) NuEast -- HWM $.10 clean ton if profitable.
(2) Colony Bay - HWM $.10 raw ton.
(3) Spot Coal Sales made other than T.V.A.
(4) Converting the Alloy Royalty into Cash (i.e. $1.8MM @ 3%).
(5) Converting the Pittston Sales Contract to Cash (i.e. $3.8MM @ 3%).
(6) Sale of Coal to X.Xx - (27,000 tons @ .25/ton) completed.
(7) Sale of Coal to Pen Coal (115,000 tons @ .25/ton) continuing.
(8) New Contract for D.P.&L. - (.25/ton if acquired) long term.
(9) Straight Creek HWM w/Cyprus - $.10 raw ton if executed.
(10) Owe $100,000 plus interest on NuEast note!
For the sake of simplicity and a clean break, I propose a final payment of
$50,000 plus allow me to keep my vehicle (on the books for $0). I will waive
all right to all future payment streams. These are listed below:
(1) NuEast - $0 no profit
(2) Colony Bay - $0 contract terminated
(3) Listed in #6 & 7 $0
(4) $54,000 due
(5) $114,000 due
(6) $6,750 due
(7) 28,750 due plus 35,000 T.P.M. thru 12/31 plus a 3 year
reopener among parties for 20,000 tons (if totally
completed - $35,000 until 12/31. Then 5,000 mos
for 36 mos = $180,000.)
66
(8) 600,000 tons yr. for 16 yrs. @ .25 = $2,250,000 if totally completed.
(9) 100,000 tons Mo. x .10 ton for 3 yrs = $360,000.
Less (10) $100,000 note plus interest until Pittston $3.8 fee which closes
interest and nets positive.
I have hand written this for confidentiality. I am in Tennessee, give me
a call.
Thanks,
Xxxxxx
67
XXXXXXXXX RESOURCES, INC.
CURRENT LITIGATIONS
AUGUST 14, 1995
68
Xxxxxxxxx Mining, Inc.
Current Litigations
1
XXXXXXXXX MINING, INC.
CURRENT LITIGATIONS
AUGUST 1995
JOB 17
Civil Action No. 89-CI-797
Pike Circuit Court; Big Xxxxx Company, et xx x. Xxxxxxxxx Inc.
(Property areas A - G)
JOB 11 - JOB 14
Civil Action No. 92-CI-638
Pike Circuit Court; Xxxx Xxxxx, et xx x. Xxxxxxxxx, Inc. d/b/a Delta Energy
Corporation, Xxxxx X. Xxxxx and Xxxx X. Xxxxxx
(Property dispute)
This action was filed by plaintiffs alleging that Xxxxxxxxx failed to pay
royalties on coal mined, removed and transported from plaintiff's
property. The action seeks both compensatory and punitive damages
against all defendants, including Xxxxxxxxx, Inc. This action was
previously set for trail but continued by the Court. Xxxxxxxxx filed a
crossclaim against the other named defendants for indemnity and/or
contribution for any amount of damages that may be awarded in favor of
plaintiffs.
IVY CREEK
Civil Action No. 90-CI-6171
Xxxxx Circuit Court; Xxxxxxxxx, Inc., Xxxxxxxx Xxxxx, Xxxxxxx Xxxxx, et xx x.
Xxxxx Xxxxxxx and Xxxxx Xxxxxxx.
(Property line dispute.) Royalty possibly paid to the wrong lessor.
IVY CREEK
Civil Action No. 93-CI-353
Pike County Circuit Court; Xxxxx X. Xxxx and Xxxxxxx Xxxx, his wife, x.
Xxxxxxxxx, Inc. and Costain Coal, Inc.
(Blasting claim)
TURNHOLE
Civil Action No. 00-XX-0000
Xxxx Xxxxxxx Xxxxx; Xxxxxx Xxxxx and Xxxx Xxxxx x. Xxxxxxxxx, Inc., et al.
(Blasting claim)
This is an action filed by the plaintiffs against Xxxxxxxxx, Inc. and
other alleging damage to plaintiffs' property by mining activities and
failure to pay rent or royalties for the use of the property.
Xxxxxxxxx obtained the right of entry on this property through a Lease
Agreement from Citation Coal Corporation, another named defendant.
This action is being defended by the law firm of Xxxx & Xxxxx on behalf
of Chubb & Son Insurance Company who has been put on notice of this
claim.
69
Xxxxxxxxx Mining, Inc.
Current Litigations
2
TURNHOLE
Civil Action No. 00-XX-00000
Xxxx Xxxxxxx Xxxxx; Xxxxx X. Xxxxxxx and Xxxx Xxx Xxxxxxx x. Xxxxxxxxx Inc.
(Blasting Claim)
JOB 17
Civil Action No. 93-CI-1397
Pike Circuit Court; Xxxx and Xxxxxx Xxx, his wife, x. Xxxxxxxxx, Inc.
(Blasting claim)
IVY H
Civil Action No. 94-CI-469
Pike Circuit Court; Xxxxx Xxxxx v. Unit Coal et al Declared Judgment - no
exposure, we will pay into Court
(Property dispute) No exposure
This is a declaratory judgment action filed by Xxxxxxxxx Mining against
Xxxxx Xxxxx and others requesting the Court to determine the rights of
the parties under certain Lease and Sublease Agreements between
Xxxxxxxxx Mining, Inc., Xxxxx Xxxxx, Unit Coal Corporation and others.
Xxxxxxxxx seeks a binding judgment from the Court determining the true
owners of the mineral estate of the property.
JOB 17
Civil Action No. 94-CI-00266
Xxxx Circuit Court; Xxxxx Valley Enterprises x. Xxxxxxxxx Mining, Inc.
(Dispute involving "Slab Coal") No exposure.
INDIAN RUN
Civil Action No. 92-CI-00489
Greenup County Circuit Court; Xxxxx and Xxxxx Xxxxx x. Xxxxxxxxx Inc.
(Blasting claim)
JOB 0
Xxxxx Xxxxxx Xx. 00-XX-00000
Xxxxxxx Xxxxxx Circuit Court; Xxx and Xxxxxxx Xxxxxx x. Xxxxxxxxx Inc.
(Property claim) Settled.
some minor dozer work and a quit claim deed to approximately 5 acres
where a pond is located.
Civil Action No. 90-CI-495
Xxxx Circuit Court, 44th Judicial District; Xxxxxx Xxx Xxxxxx, et xx x. Great
Western Land Management, Inc. x. Xxxxxxxxx, Inc. et al. XXXXX XXXXXX, ATTY
HANDLING CASE.
70
Xxxxxxxxx Mining, Inc.
Current Litigations
3
Suites and Cross-Claims related to the Knuckles Heirs V. Great Western Land
Management, Inc. and involving Xxxxxxxxx Inc., Adalex Resources and South
Mississippi Electric Power Association described in Xxxxx, Xxxx & Heyburn's
letter of January 20, 1993 addressed to Xxxxxx Xxxxxxxx & Co. and
additionally, correspondence to Xxxxxxxxxx, Xxxxxx & Hornday dated February 1,
1993 related to the Southern Illinois Mining Company. XXXXX XXXXXX & XXX
XXXXXX, ATTORNEYS HANDLING CASE.
Civil Action No. 94-CI-00217
Xxxxx Circuit Court; Xxxxxxx Xxxxxxxx, et xx x. Xxxxxxxxx Inc. and Rocky Top
Energies, Inc.
(Royalty dispute regarding the Gross Sales Price)
This action was filed by the plaintiffs seeking damages from Xxxxxxxxx,
Inc. and Rocky Top Energies, Inc. for failure to pay royalties pursuant
to certain Lease Agreement entered into between the plaintiffs and Rocky
Top Energies, Inc. in 1978 and subsequently subleased to Xxxxxxxxx, Inc.
Civil Action 91-CI-00397
Xxxx Circuit Court; Xxxxxxxxx Inc. v. Xxxx Xxxx, Xxxxx Xxxx Coal Company, Xxxxx
Fuels, Inc. and R.M. Mining, Inc.
Supreme Court
This is a declaratory judgment action brought by Xxxxxxxxx to declare the
rights of parties pursuant to an attempt by the parties to enter into a
definitive written agreement for purchase by Xxxxxxxxx of certain assets
owned by the defendants.
The trial court entered a Summary Judgment in favor of Xxxxxxxxx
declaring that the parties never entered into a binding contract. The
Court of Appeals affirmed the Summary Judgment entered by the Xxxx
Circuit Court and this action is presently pending before the Kentucky
Supreme Court.
Civil Action CA-93-CI00267
Greenup Circuit Court; Xxxx Xxxxxx x. Xxxxxxxxx, Inc.
(Blasting claim)
Civil Action No. 94-CI-000340
Pike Circuit Court; X.X. Xxxxxx x. Xxxxxxxxx, Inc.
(Blasting claim)
Civil Action 00-XX-000000
Xxxx Xxxxxxx Xxxxx; Xxxxxx Xxxxxx X. Xxxxxxxxx, Inc.
(Property dispute) No exposure
This action was filed by the heirs of Xxxx Xxxxxx alleging damages for
failure to pay wheelage pursuant to the terms of an Agreement dated June
18, 1992 and for the damage to plaintiff's property by erecting a hollow
fill on the property without authorization from plaintiffs.
71
Xxxxxxxxx Mining, Inc.
Current Litigations
4
Xxxxxxxxx Holding Company, Inc. v. Southern Illinois Mining Co. and Xxxxxx
Mining Company
Classic Coal Corporation v. Southern Illinois Mining Company, et al
XXXX XXXX, ATTY HANDLING CASE
Xxxxxx & Price, Inc. v. Southern Illinois Mining Company
Tennessee Wildlife Resources Agency v. Tennessee Mining, Inc.
NO MONETARY LOSS
OSM LAWSUIT
Action Number 94-464C; Pending U.S. Court of Federal Claims, Washington, D.C.:
Lawsuit regarding abandoned mine land. THE GOVERNMENT HAS NOT ANSWERED SUIT.
XXXXXX XXXXXX, ATTY HANDLING CASE HAS APPT WITH
JUSTICE DEPARTMENT ON OCT. 24, 1994
No exposure
Civil Action No. 95-CI-00834-Pike County Circuit Court
Xxxxxx Xxxxx and Xxxx Xxx Xxxxx, his wife, x. Xxxxxxxx, Inc.
(Blasting complaint)
Civil Action No. 95-CI-00843-Pike County Circuit Court
Xxxxxxx Xxxxx and Xxxxx Xxxxxxx Xxxxx, his wife, x. Xxxxxxxxx, Inc.
(Blasting complaint)
**NOTE: ALL SETTLEMENT AMOUNTS WHETHER PUNITIVE OR OTHERWISE ARE ESTIMATED AND
IN NO WAY REPRESENT THE TRUE OR ACCURATE FINDINGS OF ANY COURT.
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SCHEDULE
4(K)
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Schedule 4(k)
LITIGATION
Xxxxxxxxx Mining, Inc. v. The United States
United States Court of Federal Claims
Case No. 94-464C
Addwest Mining, Inc./Tri-City Turf Club and X.X. Xxxxxxx and Xxxxxxxxx Xxxxxxx
United States Bankruptcy Court, Eastern District of Kentucky
State of Tennessee v. Tennessee Mining, Inc., et al.
Civil Action No. 10041
Addwest Mining, Inc. x. Xxxxx Construction of Indiana, Inc. and Green Coal
Company, Inc.
Daviess Circuit Court, Division II
Case No. 94-CI-00311
Xxxx X. XxXxx, Xx. v. Xxxxx X. Xxxxxxx, et al.,
Fayette Circuit Court, 22d Judicial Division, First Division No. 89-CI-4113,
and all related actions, claims or suits, whether pending, on appeal, or
threatened
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XXXXXXXXX MINING - XXXXXXXXX RESOURCES
PENDING LITIGATION
CLAIMS AND ASSESSMENTS
The following is a list of pending litigation, claims and
assessments involving Xxxxxxxxx Resources, Inc., or one of its subsidiaries.
1. Xxxxxx Xxxxx x. Xxxxxxxxx, Inc. and Xxxxxxxxx Resources, Inc., U.S.
District Court, Eastern District of Kentucky, Pikeville, Kentucky, Civil
Action No. 91-405.
The only remaining claim is Jefferson Coals claim for costs and attorneys
fees against Xxxxxxxxx.
2. Xxxxxxxxx, Inc. v. Xxxx Xxxx, Xxxxx Xxxx Coal Company, Xxxxx Fuels, Inc.
and R.M. Mining, Inc., Xxxx Circuit Court Civil Action No. 91-CI-00397.
This is a declaratory judgment action brought by Xxxxxxxxx to declare the
rights of the parties pursuant to an attempt by the parties to enter into a
definitive written agreement for purchase by Xxxxxxxxx of certain assets
owned by the defendants.
The trial court entered a Summary Judgment in favor of Xxxxxxxxx declaring
that the parties never entered into a binding contract. The Court of
Appeals affirmed the Summary Judgment entered by the Xxxx Circuit Court and
this action is presently pending before the Kentucky Supreme Court.
This litigation claims damages for breach of contract in the amount of $4
million.
3. Xxxx Xxxxx, et xx x. Xxxxxxxxx, Inc. d/b/a Delta Energy Corporation, Xxxxx
X. Xxxxx and Xxxx X. Xxxxxx, Xxxx Circuit Court, Civil Action No.
92-CI-638.
This action was filed by plaintiffs alleging that Xxxxxxxxx failed to pay
royalties on coal mined, removed and transported from plaintiffs' property.
The action seeks both compensatory and punitive damages against all
defendants, including Xxxxxxxxx, Inc.
This action was previously set for trial but continued by the Court.
Xxxxxxxxx filed a crossclaim against the other named defendants for
indemnity and/or contribution for any amount of damages that may be awarded
in favor of the plaintiffs.
4. Xxxxxxxxx, Inc. v. Xxxxx Xxxxx and Loo-Con Energies, Inc., Xxxx Circuit
Court, Civil Action No. 89-CI-1006.
This is a declaratory action filed by Xxxxxxxxx, Inc. requesting the Court
to declare the rights of the parties pursuant to an Agreement entered into
between Xxxxx Xxxxx and Xxxxxxxxx, Inc. dated November 18, 1988.
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Xxxxx is holding two notes payable by Xxxxxxxxx Resources in the amount of
$100,000 each. The first payable is 10/14/95 and the last is 10/14/96.
Interest at 7% from 10/14/94 until paid.
The Loo-Con claim stems from an Agreement dated June 10, 1986, between
Xxxxxxxxx and CJC Leasing whereby Xxxxxxxxx acknowledged in the Agreement
and agreed to assume an obligation of NOR Mining to pay Loo-Con the sum of
twenty-five (25) cents per ton for coal mined, removed and sold from a
certain permitted area and the sum of ten (10) cents per ton for coal mined
from the mountain top area subject to the CJC Agreement.
5. Millis and Xxxx Xxxxxxx v. Hawkeye Coal Company, Pike Circuit Court, Civil
Action No. 86-CI-1737.
This is an action by the plaintiffs against Hawkeye Coal Company for
trespass to plaintiffs' property and failure to pay royalties pursuant to a
Lease Agreement entered into between the parties on February 24, 1972. The
plaintiffs seek both compensatory and punitive damages.
Xxxxxxxxx obtained a Sublease from Hawkeye of the Xxxxxxx' lease and all
the Sublease contains an indemnity clause to hold Hawkeye harmless from
any and all claims which are brought by any third parties as a result of
Xxxxxxxxx'x acts or omissions on the property.
This case was thought to have been settled in 1993 by Xxxxxxxxx
contributing $20,000 toward settlement. However, Millis Xxxxxxx died in
1992 and his heirs have rejected the proposed settlement and the case is
presently pending in the Pike Circuit Court.
6. Xxxxxx Xxxxx and Xxxx Xxxxx x. Xxxxxxxxx, Inc., et al, Pike Circuit Court,
Civil Action No. 92-CI-1563.
This is an action filed by the plaintiffs against Xxxxxxxxx, Inc. and
others alleging damage to plaintiffs' property by mining activities and
failure to pay rent or royalties for the use of the property.
Xxxxxxxxx obtained the right of entry on this property through a Lease
Agreement from Citation Coal Corporation, another named defendant.
This action is being defended by the law firm of Xxxx & Xxxxx on behalf of
Chubb & Son Insurance Company who has been put on notice of this claim.
2
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7. Xxxxxxxxx Mining, Inc. v. Xxxxx Xxxxx, et al, Pike Circuit Court, Civil
Action No. 94-CI-00469.
This is a declaratory judgment action filed by Xxxxxxxxx Mining against
Xxxxx Xxxxx and others requesting the Court to determine the rights of
the parties under certain Lease and Sublease Agreements between Xxxxxxxxx
Mining, Xxxxx Xxxxx, Unit Coal Corporation and others. Xxxxxxxxx seeks a
binding judgment from the Court determining the true owners of the
mineral estate of the property.
8. Greedis Xxxxxx x. Xxxxxxxxx, Inc., Pike Circuit Court, Civil Action No.
94-CI-267.
This action was filed by the heirs of Xxxx Xxxxxx, alleging damages for
failure to pay wheelage pursuant to the terms of an Agreement dated June
18, 1992, and for damage to plaintiff's property by erecting a hollow
fill on the property without authorization from plaintiffs.
9. Xxxxxxx Xxxxxxxx, et xx x. Xxxxxxxxx, Inc., Xxxxx Circuit Court, Civil
Action No. 94-CI-00217.
This action was filed by the plaintiffs seeking damages from Xxxxxxxxx,
Inc. and Rocky Top Energies, Inc. for failure to pay royalties pursuant
to a certain Lease Agreement entered into between the plaintiffs and
Rocky Top Energies, Inc. in 1978 and subsequently Subleased to Xxxxxxxxx,
Inc.
10. Xxxxxx Xxxxxx, et xx x. Xxxxxxxxx, Inc., Xxxxxxxxx Mining, Inc. and Mar
Pike Coal Company, NREPC Permit Nos. 898-0409, 898-0330 and 498-0215.
The Dworaks are contesting the issuance of these permits originally to
Unit Coal Company and subsequently to Xxxxxxxxx, Inc. and Xxxxxxxxx
Mining, Inc. All these claims are presently pending before the Department
of Natural Resources with exception of 498-0125 and 898-0330, the
issuance of which has been appealed to the Franklin Circuit Court by the
Xxxxxx'x.
11. Xxxxxxxxx Mining, Inc. x. Xxxxx Brothers Investments, et al, Xxxxx
Circuit Court, Civil Action No. 94-CI-00520.
This is an action filed by Xxxxxxxxx Mining, Inc. for declaratory
judgment against Xxxxx Brothers Investments, et al requesting the Court
to determine the rightful owners of certain real estate, the ownership of
which is claimed by Xxxxx Brothers as well as Harkins Mineral Associates
and Bull Creek Coal Corporation.
Xxxxxxxxx seeks a binding judgment from the Court determining the
rightful owners of the mineral rights to the property so that royalties
owned by Xxxxxxxxx for mining the property can be paid to the rightful
owners.
3
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12. Xxxxxxxxx, Inc. et al v. Xxxxx Xxxxxxx, Xxxxx Circuit Court, Civil Action
No. 90-CI-617.
This is a declaratory judgment action filed by Xxxxxxxxx and other
property owners against Xxxxxxx and requesting the Court determine the
rightful owners of property claimed by both Xxxxxxx and the other named
plaintiffs.
13. Xxxx Xxxxxxx x. Xxxxxxxxx Mining, Inc., Xxxxx Circuit Court No.
94-CI-730.
This is a suit for breach of contract for failure to construct home site
on plaintiff's property.
14. Xxxxxxx Hehenecker x. Xxxxxxxxx Mining, Inc., Xxxxx Circuit Court No.
95-CI-00062.
This is a suit for failure to pay all royalties due under lease
agreement.
PENDING WORKERS' COMPENSATION CLAIMS AND NATURAL
RESOURCES AND ENVIRONMENTAL PROTECTION CABINET PROCEEDINGS
1. Xxxxxxx Xxxxxx x. Xxxxxxxxx, Inc. X.X. Claim No. 93-20842.
2. Xxxxx Xxxx Xxxxxx x. Xxxxxxxxx, Inc., W.C. Claim No. 93-14360.
3. Xxxxxx Xxxxxxx x. Xxxxxxxxx, Inc., W.C. Claim No. 92-48973.
4. Xxxxx Xxxxxx, Xx. v. Addwest Mining, W.C. Claim No. 94-03869.
5. Xxxxxx Xxxxx x. Xxxxxxxxx, Inc., W.C. Claim No. 94-15318.
6. Xxxx Xxxx x. Xxxxxxxxx, Inc. X.X. Claim No. 93-41851.
7. Xxxx Xxxxxx et xx x. Xxxxxxxxx Mining, Inc., Claim for Wheelage.
8. Xxx Xxxxxxxx x. Xxxxxxxxx Mining, Inc., W.C. Claim No. 95-15271.
9. Xxxxxxx Xxxxxxx x. Xxxxxxxxx Mining, Inc., W.C. Claim No. 94-05819.
10. Xxxxxx Xxxxxxxx x. Xxxxxxxxx Mining, Inc., W.C. Claim No. 94-52356.
11. Xxxxxx Xxxx x. Xxxxxxxxx Mining, Inc., W.C. Claim No. 94-44436.
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12. Xxxxxx Xxxxxxxx x. Xxxxxxxxx Mining, Inc., W.C. Claim No. 94-10027.
13. Xxxxx Xxxxx x. Xxxxxxxxx Mining, Inc., W.C. Claim Nos. 95-03862 and
95-00751.
14. Department of Mines and Minerals x. Xxxxxxxxx Mining, Inc., Blasting
Citation No. 1908.
15. NREPC x. Xxxxxxxxx Mining, Inc., Noncompliance No. 046195.
16. NREPC x. Xxxxxxxxx Mining, Inc., Noncompliance No. 41-0847.
17. NREPC x. Xxxxxxxxx Mining, Inc., Permit No. 898-0425.
18. NREPC x. Xxxxxxxxx Mining, Inc., Noncompliance No. 510502.
19. NREPC x. Xxxxxxxxx Mining, Inc., Noncompliance No. 41-0666.
20. Xxxxxxx Xxxx x. Xxxxxxxxx Mining, Inc., W.C. Claim No. 93-13692.
21. Ova Xxxxxxxx x. Xxxxxxxxx Mining, Inc., W.C. No. 93-46264.
22. Xxxxx Xxxxx x. Xxxxxxxxx Mining, Inc., W.C. No. 94-15550.
23. Xxxxx Xxxxxxxx x. Xxxxxxxxx Resources, Inc., W.C. No. 95-20678.
24. NREPC x. Xxxxxxxxx Mining, Inc., Noncompliance No. 410653.
NEW RIVER LIME
1. Xxxxxx Xxxxx et al v. New River Lime, Inc., Xxxxx Circuit Court,
property ownership dispute over X.X. Xxxxxxx Heirs tract.
5
