SETTLEMENT AND RELEASE AGREEMENT
Exhibit
2.27
SETTLEMENT AND RELEASE
AGREEMENT
SETTLEMENT
AND RELEASE AGREEMENT, dated as of November 17, 2008 (this “Agreement”), by and
among Cliffs Natural Resources Inc. (f/k/a Cleveland-Cliffs Inc), an Ohio
corporation (“Cliffs”), Alpha
Merger Sub, Inc. (f/k/a Daily Double Acquisition, Inc.), a Delaware corporation
and wholly-owned subsidiary of Cliffs (“Merger Sub”), and
Alpha Natural Resources, Inc., a Delaware corporation (“Alpha”).
RECITALS:
WHEREAS,
Cliffs, Merger Sub and Alpha entered into and are bound by an Agreement and Plan
of Merger, dated as of July 15, 2008 (the “Merger
Agreement”);
WHEREAS,
Alpha and Cliffs are parties to a lawsuit styled Alpha Natural Resources,
Inc. v. Cliffs Natural Resources, Inc., C.A. No. 4133-VCL, currently
pending in the Court of Chancery of the State of Delaware (the “Lawsuit”);
WHEREAS,
Alpha has asserted claims and causes of action against Cliffs in the
Lawsuit;
WHEREAS, Cliffs denies each of the
claims and causes of action asserted by Alpha in the Lawsuit; and
WHEREAS,
each of Cliffs, Merger Sub and Alpha, without any admission of liability or
wrongdoing of any kind, wishes to avoid the uncertainty and costs of litigation
proceedings with one another and to resolve the Lawsuit on the terms and
conditions set forth herein.
AGREEMENT:
NOW,
THEREFORE, in consideration of the mutual agreements set forth in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:
ARTICLE
I
TERMINATION
OF THE MERGER AGREEMENT; PUBLICITY
SECTION
1.01. Termination of the Merger
Agreement. Pursuant to Section 7.01(a) of the Merger
Agreement, Cliffs, Merger Sub and Alpha hereby agree to terminate the Merger
Agreement, effective upon the receipt of the Settlement Amount by Alpha in
accordance with Section 2.01 hereof (the time of such receipt, the “Release
Time”).
SECTION
1.02. Publicity. Promptly
following 4:00 pm on the date on which Cliffs notifies and provides to Alpha the
federal reference number for the wire payment of the Settlement Amount (or, if
such federal reference number is notified and provided to Alpha after 4:00 pm,
then promptly after Alpha is notified of and provided with such federal
reference number), the parties will jointly issue a press release regarding this
Agreement and the matters contemplated hereby in a form that has been previously
agreed upon by Alpha and Cliffs.
ARTICLE
II
SETTLEMENT
AMOUNT AND PAYMENT OF EXPENSES
SECTION
2.01. (a) Payment of Settlement
Amount. The parties hereto agree that Cliffs will, as promptly
as practicable on the date hereof, pay Alpha in immediately available funds via
wire transfer $70,000,000 (the “Settlement Amount”),
in accordance with the following instructions:
|
Bank
Name:
|
Bank
of America
|
|
Account
Name:
|
Alpha
Natural Resources Inc
|
|
Account
Number:
|
5590099528
|
|
ABA
Number:
|
000000000
|
|
SWIFT
|
XXXXXX0X
|
The
foregoing obligation to pay the Settlement Amount is unconditional and such
payment shall be made without set-off or counterclaim of any kind. In
the event that Alpha shall not have received the Settlement Amount by 5:00 pm on
November 18, 2008, then Alpha shall have the right, exercisable in its sole
discretion, either to terminate this Agreement (in which case, this Agreement
shall be deemed never to have had any force or effect) or to enforce its rights
under this Agreement.
(b) Payment of Certain
Expenses. In connection with the filing of the Registration
Statement on Form S-4 on August 12, 2008 in connection with the proposed merger,
Cliffs paid the United States Securities and Exchange Commission a registration
fee of $186,190 (the “Registration
Fee”). Accordingly, the parties hereto agree that Alpha will,
as promptly as practicable on the date hereof, pay Cliffs in immediately
available funds via wire transfer $93,095 in accordance with the following
instructions:
|
Bank
Name:
|
Fifth
Third Bank
|
|
Branch:
|
Cincinnati
|
|
Account
Name:
|
Cliffs
Natural Resources Inc.
|
|
Account
Number:
|
0099974584
|
|
ABA
Number:
|
000000000
|
|
SWIFT
|
XXXXXX0X
|
The
foregoing payment obligation is unconditional and such payment shall be made
without set-off or counterclaim of any kind. In the event that Cliffs
shall not have received such payment by
5:00 pm
on November 18, 2008, then Cliffs shall have the right, exercisable in its sole
discretion, either to terminate this Agreement (in which case, this Agreement
shall be deemed never to have had any force or effect) or to enforce its rights
under this Agreement. Cliffs will promptly, and in any event within 3
business days following any offset referred to below, pay Alpha by wire transfer
of immediately available funds to an account designated in writing by Alpha,
one-half of the portion of the Registration Fee that is utilized to offset
filing fees otherwise payable by Cliffs, a majority-owned subsidiary of Cliffs,
or any person that owns more than 50% of Cliffs’ outstanding voting securities
or any of their respective successors in connection with any subsequent
registration statement(s).
In
addition, Xxxxx, Inc., the financial printer for the proposed transaction, has
informed Cliffs that the aggregate fees and expenses payable in connection with
the preparation and printing of the Registration Statement on Form S-4
(including the joint proxy statement/prospectus) is $393,525 (the “Xxxxx
Payment”). Cliffs, as the customer of Xxxxx, Inc. is the
billing party with respect to the Xxxxx payment. Xxxxx has agreed to
send Alpha on November 17, 2008, an invoice for one-half of the Xxxxx
Payment. Alpha agrees to promptly pay the amount of $196,762.50 to
Xxxxx upon receipt of such invoice sent to the attention of Xxxxxx Xxxxxx via
facsimile at 000-000-0000. The foregoing payment obligation is
unconditional and such payment shall be made without set-off or counterclaim of
any kind. In the event that Alpha fails to make such payment of
$196,762.50 to Xxxxx within one business day after receipt of such invoice, then
Cliffs shall have the right, exercisable in its sole discretion, either to
terminate this Agreement (in which case, this Agreement shall be deemed never to
have had any force or effect) or to enforce its rights under this
Agreement.
ARTICLE
III
RELEASE
AND DISMISSAL OF LITIGATION
SECTION
3.01. Release. Effective
upon the Release Time, each of Cliffs, Merger Sub and Alpha, on behalf of itself
and its affiliates (as defined in the Merger Agreement), and all officers,
directors, principals, divisions, employees, attorneys, agents or other persons
or entities acting or purporting to act on behalf of or under the control of the
respective party (each, a “Releasor”), hereby
releases each other party hereto and its affiliates (as defined in the Merger
Agreement), and all officers, directors, principals, divisions, employees,
attorneys, agents or other persons or entities acting or purporting to act on
behalf of or under the control of said party (each, a “Releasee”) from any
and all claims, counterclaims, demands, actions, causes of action, suits,
damages, liabilities, losses, payments, rights, obligations, debts, costs and
expenses (including attorneys’ fees and costs) of any kind or nature, fixed or
contingent, direct or indirect, in law or equity, several or otherwise, known or
unknown, suspected or unsuspected (“Claims”), that it may
have against any Releasee relating to or arising from the Merger Agreement,
including any negotiations, disclosures or statements relating thereto and/or
any transactions contemplated thereby, as well as any Claims relating to or
arising out of the facts or subject
matter
which were asserted or could have been asserted in the Lawsuit, including any
and all Claims arising out of or relating in any way to Cliffs’ postponement of
the special meeting of its stockholders from November 21, 2008 to December 19,
2008 (the “Released
Claims”), and agrees not to file, initiate, prosecute, or assist in
(except as required by law), any lawsuit, arbitration or other legal proceeding
against any Releasee concerning any such Released Claims; provided, that
nothing in this Section 3.01 shall be deemed to limit or restrict in any way the
ability of any party hereto to commence (or recommence) an action asserting any
Claims against any other party hereto in the event of a material breach of this
Agreement by such other party.
SECTION
3.02. Stipulation of
Dismissal. Within two business days following the date on
which the Release Time occurs, the parties shall execute and file with the Court
of Chancery in Delaware a Stipulation of Dismissal in the form attached hereto
as Exhibit
A.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES
Each of
Cliffs and Merger Sub, on the one hand, and Alpha, on the other hand, hereby
represents and warrants to the other as of the date hereof as
follows:
SECTION
4.01. Existence;
Authority. It is a corporation duly incorporated and validly
existing under the laws of its state of incorporation. It has the
requisite corporate power and authority to enter into this Agreement and to
perform its obligations hereunder.
SECTION
4.02. Due
Authorization. Its execution and delivery of this Agreement
and the performance of its obligations under this Agreement have been duly
authorized by all requisite corporate action.
SECTION
4.03. Enforceability. This
Agreement constitutes its binding, valid and legal obligation and may be
enforced against it in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors’ rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).
SECTION
4.04. No
Conflicting Agreements. The execution and delivery by it of
this Agreement and the performance by it of its obligations hereunder do not and
will not (a) violate, conflict with or result in a breach of any terms of
its certificate of incorporation, articles, regulations or any other similar
document, (b) violate, conflict with or result in a breach of, or result in a
default or event of default (or an event which with notice, lapse of time, or
both, would constitute a default or event of default), or give rise to any right
of acceleration or termination or any additional payment obligation, under the
terms of any deed, mortgage, trust, lease or other contract to which it is a
party, (c) result in the creation or imposition of any lien upon any part of its
assets, properties or business, or (d) violate any legal requirement applicable
to it.
SECTION
4.05. Consents. No
consent, waiver, approval, authorization, exemption, license, declaration, or
action of, filing with or notice to any person, including any governmental
authority, is required in connection with the execution, delivery and
performance by it of this Agreement or the performance of its obligations
hereunder.
SECTION
4.06. Voluntary Execution; Advice
of Counsel. It has freely and voluntarily executed and
delivered this Agreement and, in so doing, has not relied on any inducements,
promises or representations that are not contained herein. It has
been advised by legal counsel as to the meaning and consequences of this
Agreement and acknowledges its understanding of all the provisions of this
Agreement and the consequences of such provisions.
ARTICLE
V
MISCELLANEOUS
SECTION
5.01. Further
Assurances. Each of Cliffs, Merger Sub and Alpha shall,
from time to time after the date hereof, at the reasonable request of any other
party hereto and without further consideration, execute and deliver such further
documents and instruments and take such further actions as may be reasonably
necessary to effectuate the termination and other transactions and the releases
set forth in Sections 1.01 and Article III of this Agreement.
SECTION
5.02. Good
Faith Settlement. This Agreement represents the good faith settlement of
a dispute and neither such settlement, this Agreement, nor any of the terms or
provisions of this Agreement shall be construed as an admission of any liability
or wrongdoing upon the part of any party hereto or any other person or
entity.
SECTION
5.03. Entire Agreement; No
Third-Party Beneficiaries. This Agreement, together with the
Exhibits hereto, Merger Agreement and the Confidentiality Agreement (as defined
in the Merger Agreement), (a) constitutes the entire agreement, and
supersedes all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter of this Agreement and (b) is not
intended to confer upon any person other than the parties and the Releasees any
rights or remedies.
SECTION
5.04. Governing
Law. This Agreement and any dispute arising out of, relating
to, or in connection with this Agreement is to be governed by, and construed in
accordance with, the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflict of laws
thereof.
SECTION
5.05. Assignment. Neither
this Agreement nor any of the rights, interests or obligations under this
Agreement may be assigned, in whole or in part, by operation of Law or otherwise
by any of the parties hereto or Releasees without the prior written consent of
the other parties. Any assignment in violation of this
Section 5.05 will be void and of no effect. Subject to the
preceding two sentences, this Agreement is binding upon, inures to the benefit
of, and is enforceable by, the parties and their respective successors and
assigns and shall inure to the benefit of the Releasees and their respective
successors.
SECTION
5.06. Consent to
Jurisdiction.
(a) Each
of the parties hereto (i) consents to submit itself to the personal jurisdiction
of the chancery courts located in the State of Delaware or if jurisdiction in
such court is not available, any federal or state court located in the Borough
of Manhattan in the State of New York in the event any dispute arises between
the parties out of, relating to or in connection with this Agreement or any of
the transactions contemplated by this Agreement, (ii) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other request
for leave from any such court and (iii) agrees that it will not bring any
action against the other party arising out of, relating to or in connection with
this Agreement or any of the transactions contemplated by this Agreement in any
court other than the chancery courts in the State of Delaware or, if under
applicable law jurisdiction in such court is not available, any federal or state
court located in the Borough of Manhattan in the State of New York.
(b) EACH
PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE BETWEEN THE
PARTIES UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION IT MAY BRING AGAINST
THE OTHER PARTY DIRECTLY OR INDIRECTLY ARISING OUT OF, RELATING TO OR IN
CONNECTION WITH THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION
HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH
PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH
WAIVERS, (II) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH
WAIVERS, (III) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (IV) IT HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 5.06(b).
SECTION
5.07. Amendment;
Waiver. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties. Any
agreement on the part of a party to any such extension or waiver will be valid
only if set forth in an instrument in writing signed on behalf of such
party. The failure of any party to this Agreement to assert any of
its rights under this Agreement or otherwise will not constitute a waiver of
such rights.
SECTION
5.08. Interpretation. When
a reference is made in this Agreement to an Article or Section, such reference
is to an Article or Section of this Agreement unless otherwise
indicated. The headings contained in this Agreement are for reference
purposes only and do not affect in any way the meaning or interpretation of this
Agreement. Whenever the words “include,” “includes” or “including”
are used in this Agreement, they will be deemed to be followed by the words
“without limitation.” The words “hereof,” “herein” and “hereunder”
and words of similar import when used in this Agreement will refer to this
Agreement as a whole and not to any particular provision of this Agreement,
except as otherwise specified. The
definitions
contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter
genders of such term. Any reference to a date or time in this
Agreement shall be deemed to be such date or time in New York
City. The parties hereto have participated jointly in the negotiating
and drafting of this Agreement and, in the event an ambiguity or question of
intent arises, this Agreement shall be construed as jointly drafted by the
parties hereto and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provision of this
Agreement.
SECTION
5.09. Specific
Performance. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise
breached. The parties accordingly agree that the parties will be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this Agreement, this
being in addition to any other remedy to which they are entitled at law or in
equity.
SECTION
5.10. Notices. All
notices, requests, claims, demands and other communications under this Agreement
must be in writing and will be deemed given if delivered personally, sent by
facsimile (which is confirmed) or sent by a nationally recognized overnight
courier service (providing proof of delivery) to the parties at the following
addresses (or at such other address for a party as is specified by like
notice):
if to
Cliffs or Merger Sub, to:
Cliffs
Natural Resources Inc.
0000
Xxxxxxxx Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxx,
Xxxx 00000-0000
Facsimile
No.: 000-000-0000
Attention:
Xxxxxx X. Xxxx, Esq.
General
Counsel and Secretary
with a
copy to:
Xxxxx
Day
Xxxxx
Xxxxx
000
Xxxxxxxx Xxxxxx
Xxxxxxxxx,
Xxxx 00000
Facsimile
No.: (000) 000-0000
Attention: Xxxx
X. Xxxxxx
Xxxxx X. Xxxxxxxxx
and if to
Alpha, to:
X.X. Xxx
0000
Xxxxxxxx,
Xxxxxxxx 00000
Facsimile
No.: (000) 000-0000
Attention: Xxxxxx
X. Xxxxxx, Esq.
Vice President and General
Counsel
with a
copy to:
Xxxxxx
Xxxxxxxx Xxxxx & Xxxxxxxx LLP
Xxx
Xxxxxxx Xxxxx
Xxx Xxxx,
XX 00000
Facsimile
No.: (212) 225 -3999
Attention: Xxxxx
X. Xxxxxxxxxx
Xxxxxx X. Xxxxx
SECTION
5.11. Counterparts. This
Agreement may be executed in one or more counterparts, all of which will be
considered one and the same agreement and will become effective when one or more
counterparts have been signed by each of the parties and delivered to the other
parties. Each party hereto agree to provide an original signed
version of this Agreement to any other party hereto upon request.
[Remainder of page intentionally left
blank.]
.
IN
WITNESS WHEREOF, the undersigned have executed this Settlement and Release
Agreement, as of the date first written above.
CLIFFS
NATURAL RESOURCES INC.
By: /s/
Xxxxxxx X.
Xxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: President
and Chief Executive Officer
ALPHA
MERGER SUB, INC.
By: /s/ Xxxxxx
X. Xxxx,
Xx.
Name: Xxxxxx X. Xxxx, Xx.
Title: Vice
President, Secretary and Treasurer
By: /s/
Xxxxxxx X.
Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Chairman
and Chief Executive Officer
