Exhibit
10.26                                                                                                                                                                                                                                                                                   EXECUTION
VERSION

STOCK PURCHASE AGREEMENT
 
dated as of June 30, 2014
 
among
 
SUNRISE COAL, LLC,
 
VECTREN UTILITY SERVICES, INC.
 
and
 
VECTREN FUELS, INC.
 

DB2/ 25090051.18
 

 
 
 
 
 

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Article I
 
   DEFINITIONS; construction
1
 
1.1
 
Definitions
   
1.2
 
Construction
   
Article II
 
   PURCHASE AND SALE OF THE COMMON STOCK
13
 
2.1
 
Purchase and Sale of the Common Stock
   
2.2
 
Closing
   
2.3
 
Calculation and Payment of Purchase Price on the Closing Date
   
2.4
 
Purchase Price Adjustment
   
2.5
 
Closing Deliveries
   
2.6
 
Withholding
   
Article III
 
   REPRESENTATIONS AND WARRANTIES OF THE SELLER
20
 
3.1
 
Organization and Good Standing
   
3.2
 
Authority and Enforceability
   
3.3
 
No Conflicts; Consents
   
3.4
 
Common Stock Ownership
   
3.5
 
Brokers’ Fees
   
3.6
 
U.S. Status of Seller
   
Article IV
 
   REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY
22
 
4.1
 
Organization and Good Standing
   
4.2
 
Capitalization
   
4.3
 
No Conflicts; Consents
   
4.4
 
Financial Statements; No Undisclosed Liabilities; Accounts Receivable
   
4.5
 
Taxes
   
4.6
 
Compliance with Law; Permits
   
4.7
 
Personal Property
   
4.8
 
Real Property
   
4.9
 
Intellectual Property
   
4.1
 
Absence of Certain Changes or Events
   
4.11
 
Contracts
   
4.12
 
Litigation
   
4.13
 
Intentionally omitted
   
4.14
 
Labor and Employment Matters
   
4.15
 
Environmental
   
4.16
 
Insurance
   
4.17
 
Customers and Suppliers
   
4.18
 
Affiliate Transactions
   
4.19
 
Bank Accounts
   
4.2
 
Coal Reserves
   
4.21
 
Royalties
   
4.22
 
Bonds
   
4.23
 
Books and Records
   
4.24
 
Brokers
   
4.25
 
No Other Representations and Warranties
   
Article V
 
   REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
38
 
5.1
 
Organization and Good Standing
   
5.2
 
Authority and Enforceability
   
5.3
 
No Conflicts; Consents
   
5.4
 
Financing
   
5.5
 
Brokers
   
5.6
 
Purchase for Investment
   
5.7
 
Independent Investigation
   
Article VI
 
   COVENANTS
40
 
6.1
 
Restrictions on Equity Interest Transfers
   
6.2
 
Conduct of Business
   
6.3
 
Access to Information; Notification
   
6.4
 
Resignations
   
6.5
 
Termination or Transfer of Certain Obligations
   
6.6
 
Confidentiality
   
6.7
 
Public Announcements
   
6.8
 
Employee Matters
   
6.9
 
Tax Matters
   
6.1
 
Regulatory Approvals
   
6.11
 
Access to Books and Records
   
6.12
 
Further Assurances
   
6.13
 
Release
   
6.14
 
Exclusivity
   
6.15
 
Restrictive Covenants
   
6.16
 
Financing
   
6.17
 
Support Obligations
   
6.18
 
WARN Notice
   
6.19
 
Other Funds
   
6.2
 
Like-Kind Exchange
   
6.21
 
Use of Name
   
Article VII
 
   CONDITIONS TO CLOSING
57
 
7.1
 
Conditions to Obligations of the Purchaser and the Seller
   
7.2
 
Conditions to Obligations of the Purchaser
   
7.3
 
Conditions to Obligations of the Seller
   
Article VIII
 
   TERMINATION
60
 
8.1
 
Termination
   
8.2
 
Purchaser Termination Fee
   
8.3
 
Effect of Termination
   
Article IX
 
   INDEMNIFICATION
62
 
9.1
 
Survival
   
9.2
 
Indemnification by the Seller
   
9.3
 
Indemnification by the Purchaser
   
9.4
 
Indemnification Procedure for Third Party Claims
   
9.5
 
Indemnification Procedures for Non-Third Party Claims
   
9.6
 
Other Matters Relating to Indemnification
   
Article X
 
   MISCELLANEOUS
67
 
10.1
 
Notices
   
10.2
 
Amendments and Waivers
   
10.3
 
Expenses
   
10.4
 
Assignment and Delegation
   
10.5
 
Successors and Assigns
   
10.6
 
Governing Law
   
10.7
 
Consent to Jurisdiction
   
10.8
 
Specific Performance: Limitation on Damages
   
10.9
 
“As Is” Sale; No Reliance
   
10.1
 
Certain Limitations
   
10.11
 
Counterparts
   
10.12
 
Third Party Beneficiaries
   
10.13
 
Entire Agreement
   
10.14
 
Captions
   
10.15
 
Severability
   
10.16
 
Interpretation; Disclosure Schedules
           
Annexes
     
Annex I
–
Coal Inventory Methodology
 
Annex II
–
Working Capital Methodology
 
Annex III
–
Net Plant Value Methodology
 
Annex IV
–
Example Closing Date Purchase Price Calculation
 

Exhibits
     
Exhibit A
–
Seller Guaranty
 
Exhibit B-1
–
Interim Services Agreement (Oaktown #1)
 
Exhibit B-2
–
Interim Services Agreement (Oaktown #2)
 
Exhibit B-3
–
Interim Services Agreement (Prosperity)
 
Exhibit C-1
–
Contractor Termination Agreement (Oaktown)
 
Exhibit C-2
–
Contractor Termination Agreement (Prosperity)
 
Exhibit D-1
–
Lafayette Termination Notice (Oaktown)
 
Exhibit D-2
–
Lafayette Termination Notice (Prosperity)
 

 
 
 
 
 

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STOCK PURCHASE AGREEMENT
 
This STOCK PURCHASE AGREEMENT is dated as of June 30, 2014 (this “Agreement”),
among Sunrise Coal, LLC, an Indiana limited liability company (the “Purchaser”),
Vectren Utility Services, Inc., an Indiana corporation (the “Seller”), and
Vectren Fuels, Inc., an Indiana corporation (the “Company”).
 
WHEREAS, the Seller owns all of the issued and outstanding common stock, without
par value, of the Company (the “Common Stock”); and
 
WHEREAS, the Seller desires to sell all of the Common Stock to the Purchaser,
and the Purchaser desires to purchase all of the Common Stock from the Seller,
in each case upon the terms and subject to the conditions set forth in this
Agreement.
 
NOW, THEREFORE, in consideration of the foregoing premises and the respective
representations, warranties, covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
 
ARTICLE I      
 
DEFINITIONS; CONSTRUCTION
 
1.1           Definitions.  Except as otherwise explicitly provided herein, when
used in this Agreement, the following terms shall have the meanings ascribed to
them in this Section 1.1.
 
“Accounts Receivable” means any trade or note account receivable and other
rights to payment owed to the Company or its Subsidiaries.
 
“Action” has the meaning set forth in Section 4.12.
 
“Adjustment Notice” has the meaning set forth in Section 2.4(e).
 
“Affiliate” means, with respect to any specified Person, any other Person
directly or indirectly Controlling, Controlled by or under common Control with
such specified Person.  The Contractors will not be deemed to be Affiliates of
the Seller.
 
“Agreement” has the meaning set forth in the preamble hereto.
 
“Ancillary Agreements” means the Seller Guaranty and the other agreements,
instruments and documents delivered pursuant to this Agreement and the other
Ancillary Agreements.
 
“Balance Sheet” has the meaning set forth in Section 4.4(a).
 
“Base Purchase Price” has the meaning set forth in Section 2.1.
 
“Benefit Plan” means any Plan, existing at the Closing Date or prior thereto,
established, sponsored or to which contributions have at any time been made by
the Company or any ERISA
 

DB2/ 25090051.18
 

 
 
 
 
 

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Affiliate, or any predecessor of any of the foregoing, or under which any
employee, former employee, director, agent or independent contractor of the
Company or any ERISA Affiliate thereof or any beneficiary thereof is covered, is
eligible for coverage, has benefit rights, or for which the Company or any ERISA
Affiliate is a party, is subject or may have Liabilities.  For the avoidance of
doubt, Benefit Plans do not include any benefit plans of the Contractors.

“Bonds” means surety or other bonds, letters of credit or other security issued
by or for any Permits, performance under Coal Supply Agreements, or as a deposit
for goods or services provided to or for the benefit of the Company or its
Subsidiaries.
 
“Books and Records” means minutes books; books of account; manuals; general,
financial, warranty and shipping records; invoices; stockholders, customer and
supplier lists; correspondence; engineering, maintenance and operating records;
advertising and promotional materials; credit records of customers and other
documents, records and files, in each case related to the business of the
Company or its Subsidiaries, including books and records relating to, and
tangible embodiments of, Company Intellectual Property.
 
“Business Day” means a day other than a Saturday, Sunday or other day on which
banks located in Indianapolis, Indiana are authorized or required by Law to
close.
 
“Cash” means all cash and cash equivalents held by the Company or its
Subsidiaries, determined in accordance with GAAP.  For the avoidance of doubt,
(a) Cash shall be calculated net of issued but uncleared checks and drafts, and
(b) Cash shall include checks and drafts received by the Company or its
Subsidiaries as of the Closing but not yet deposited.
 
“Closing” has the meaning set forth in Section 2.2.
 
“Closing Date” has the meaning set forth in Section 2.2.
 
“Closing Date Net Plant Value” means the Net Plant Value as of the Closing Date.
 
“Closing Date Net Working Capital” means the Net Working Capital as of the
Closing Date.
 
“Closing Date Purchase Price” has the meaning set forth in Section 2.3(a).
 
“Coal Reserves” means the coal reserve estimates of the Company and its
Subsidiaries as reported in the reserve studies listed on Section 1.1(a) of the
Seller’s Disclosure Schedule.
 
“Coal Supply Agreements” has the meaning set forth in Section 4.11(a)(iv).
 
“Code” means the Internal Revenue Code of 1986 and the rules and regulations
promulgated thereunder.
 
“Common Stock” has the meaning set forth in the recitals hereto.
 
“Company” has the meaning set forth in the preamble hereto.
 
 
 

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“Company Contracts” has the meaning set forth in Section 4.11(a).
 
“Company Customers” has the meaning set forth in Section 4.17.
 
“Company Intellectual Property” has the meaning set forth in Section 4.9(a).
 
“Company Material Suppliers” has the meaning set forth in Section 4.17.
 
“Confidentiality Agreement” means the Confidentiality Agreement between Hallador
Energy Company and Seller Parent dated as of March 31, 2014.
 
“Contract” means any agreement, contract, license, lease, commitment,
arrangement or understanding, written or oral, including any invoice, sales
order or purchase order, other than the Leases or Rights of Way.
 
“Contract Mining Agreements” means the Contract Mining and Coal Supply Agreement
dated January 14, 2000 between Prosperity Mine, LLC and Five Star Mining, Inc.,
as amended, and the Contract Mining Agreement dated November 23, 2009 between
Oaktown Fuels Mine No. 1, LLC and Black Panther Mining, LLC, as amended.
 
“Contractor” and “Contractors” means Five Star Mining, Inc. and Black Panther
Mining, LLC.
 
“Contractor Material Suppliers” has the meaning set forth in Section 4.17.
 
“Contractor Termination Agreements” has the meaning set forth in Section 6.5(d).
 
“Contractor Termination Royalties” means the royalty payments payable to Five
Star Mining, Inc. for any coal mined from the Prosperity mine reserve following
the termination of the Contract Mining Agreement with Five Star Mining, Inc. as
specifically set forth in such Contractor Termination Agreement.
 
“Control” means, when used with respect to any Person, the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by Contract or otherwise and the terms
“Controlling” and “Controlled” shall have meanings correlative to the foregoing.
 
“Deductible” has the meaning set forth in Section 9.6(a).
 
“De Minimis Claim Amount” has the meaning set forth in Section 9.6(a).
 
“Determination Date” has the meaning set forth in Section 2.4(h).
 
“Disclosure Schedules” means the Purchaser’s Disclosure Schedule and the
Seller’s Disclosure Schedule.
 
“Dispute” has the meaning set forth in Section 2.4(f).
 
 
 
 

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“DOJ” has the meaning set forth in Section 6.9(g).
 
“Election Allocations” has the meaning set forth in Section 6.9(f)(iii).
 
“Employees” has the meaning set forth in Section 4.14(a).
 
“Environment” means all air, surface water, groundwater, or land, including land
surface or subsurface, including all fish, wildlife, biota and all other natural
resources.
 
“Environmental Law” means all federal, state, local, provincial and foreign,
civil and criminal Laws, Environmental Permits and Contracts with any
Governmental Entity, relating to the protection of the Environment, or governing
the handling, use, generation, treatment, storage, transportation, disposal,
manufacture, distribution, formulation, packaging, labeling or Release of or
exposure to Hazardous Materials.
 
“Environmental Permit” means any federal, state or local Permits required or
issued by any Governmental Entity under or in connection with any Environmental
Law, including any and all Orders or Contracts issued by or entered into with a
Governmental Entity under any applicable Environmental Law.
 
“Equity Financing” has the meaning set forth in Section 5.4.
 
“Equity Financing Letter” has the meaning set forth in Section 5.4.
 
“Equity Interest” means any capital stock, partnership or limited liability
company interest (as applicable) or other equity (including equity appreciation
rights) or voting interest or any security or evidence of indebtedness
convertible into or exchangeable or exercisable for any capital stock,
partnership or limited liability company interest, or any warrant or option to
acquire any of the foregoing.
 
“ERISA” means the Employee Retirement Income Security Act of 1974 and the rules
and regulations promulgated thereunder.
 
“ERISA Affiliate” means any person (within the meaning of Section 3(9) of ERISA)
who is, or at any time was, a member of a controlled group (within the meaning
of Section 412(d)(3) of the Code) that includes, or at any time included, the
Company or any Affiliate thereof, or any predecessor of any of the foregoing.
 
“Estimated Cash Amount” has the meaning set forth in Section 2.4(a).
 
“Estimated Closing Balance Sheet” has the meaning set forth in Section 2.4(a).
 
“Estimated Net Plant Value” has the meaning set forth in Section 2.4(a).
 
“Estimated Net Plant Value Adjustment Amount” has the meaning set forth in
Section 2.4(c).
 
 
 

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“Estimated Net Working Capital” has the meaning set forth in Section 2.4(a).
 
“Estimated Net Working Capital Adjustment Amount” has the meaning set forth in
Section 2.4(b).
 
 “Estimated Purchaser Paid Indebtedness Amount” has the meaning set forth in
Section 2.4(a).
 
“Final Balance Sheet” has the meaning set forth in Section 2.4(e).
 
“Final Cash Amount” has the meaning set forth in Section 2.4(e).
 
“Final Indebtedness Amount” has the meaning set forth in Section 2.4(e).
 
“Final Net Plant Value” has the meaning set forth in Section 2.4(e).
 
“Final Net Working Capital” has the meaning set forth in Section 2.4(e).
 
“Financial Statements” has the meaning set forth in Section 4.4(a).
 
“Financing” has the meaning set forth in Section 5.4.
 
“Financing Definitive Agreements” has the meaning set forth in Section 6.16(a).
 
“FTC” has the meaning set forth in Section 6.9(g).
 
“GAAP” has the meaning set forth in Section 4.4(a).
 
“Governmental Entity” means any entity or body exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to United States federal, state, local or municipal government, foreign,
international, multinational or other government, including any department,
commission, board, agency, bureau, subdivision, instrumentality, official or
other regulatory, administrative or judicial authority thereof, and any
arbitrator, including any authority or other quasi-governmental entity
established by a Governmental Entity to perform any of such functions, and any
non-governmental regulatory body to the extent that the rules and regulations or
orders of such body have the force of Law.
 
“Hazardous Material” means petroleum, petroleum hydrocarbons or petroleum
products, petroleum by-products, radioactive materials, asbestos or
asbestos-containing materials, gasoline, diesel fuel, pesticides, radon, urea
formaldehyde, mold, lead or lead-containing materials, polychlorinated
biphenyls, and any other chemicals, materials, substances or wastes in any
amount or concentration which are now or hereafter (a) become defined as or
included in the definition of “hazardous substances,” “hazardous materials,”
“hazardous wastes,” “extremely hazardous wastes,” “restricted hazardous wastes,”
“toxic substances,” “toxic pollutants,” “pollutants,” “regulated substances,”
“solid wastes” or “contaminants,” or words of similar import, under any
Environmental Law or (b) are regulated by or for which Liability can be imposed
under any Environmental Law.
 
 
 

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“Highly Confident Letter” has the meaning set forth in Section 5.4.
 
“HSR Act” means the Hart-Scott Rodino Antitrust Improvements Act of 1976.
 
“Income Taxes” means Taxes imposed on or measured by reference to net income or
receipts, and franchise and similar Taxes.
 
“Income Tax Returns” means Tax Returns relating to Income Taxes.
 
“Indebtedness” means:  (a) any indebtedness, whether or not contingent, for
borrowed money; (b) any obligations evidenced by bonds, debentures, notes or
other similar instruments; (c) any obligations to pay the deferred purchase
price of property or services; (d) any obligations as lessee under leases that
have been, or should be, recorded as capitalized leases under GAAP; (e) any
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to acquired property; (f) any obligations,
contingent or otherwise, under or with respect to acceptance credit, letters of
credit or similar facilities; (g) any obligation with respect to interest rate
and currency cap, collar, hedging or swap Contracts; (h) any obligation secured
by a Lien; (i) a guarantee of the obligations of any other Person other than a
subsidiary of the Company; (j) any guaranty of any of the foregoing; (k) any
accrued interest, fees and charges in respect of any of the foregoing; and
(l) any prepayment premiums and penalties, and any other fees, expenses,
indemnities and other amounts payable, as a result of the prepayment or
discharge of any of the foregoing, but excluding Bonds, Contractor Termination
Royalties, Lafayette Pre-Closing Payments and Reclamation Liabilities.
 
“Indemnitee” means any Person that is seeking indemnification from an Indemnitor
pursuant to the provisions of this Agreement.
 
“Indemnitor” means any party to this Agreement from which any Indemnitee is
seeking indemnification pursuant to the provisions of this Agreement.
 
“Indemnitor Defense Review Period” has the meaning set forth in Section 9.4(b).
 
“Infringing” has the meaning set forth in Section 4.9(b).
 
“Initial Resolution Period” has the meaning set forth in Section 2.4(e).
 
“Intellectual Property” means any and all of the following in any jurisdiction
throughout the world: (i) trademarks and service marks, including all
applications and registrations and the goodwill connected with the use of and
symbolized by the foregoing; (ii) copyrights, including all applications and
registrations related to the foregoing; (iii) trade secrets and confidential
know-how; (iv) patents and patent applications; (v) internet domain name
registrations; and (vi) other intellectual property and related proprietary
rights, interests and protections.
 
“Interim Financial Statements” has the meaning set forth in Section 4.4(a).
 
“Knowledge of the Seller” or any similar phrase means, with respect to any fact
or matter, the actual knowledge of the individuals set forth on Section 1.1(b)
of the Seller’s Disclosure Schedule, without inquiry.
 
 
 

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“Lafayette Agreements” means the Sales Marketing Agreement dated May 24, 2000
between the Company and Lafayette Coal Company (n/k/a Lafayette Energy Company),
as amended, and the Oaktown No. 1 Mine Sales Marketing Agreement dated May 25,
2010 between Oaktown Fuels Mine No. 1, LLC, the Company and Lafayette Energy
Company.
 
“Lafayette Pre-Closing Payments” means the commissions due to Lafayette Energy
Company under the Lafayette Agreements, but only to the extent that such
commissions are attributable to sales revenues actually received prior to the
Closing Date or to the extent associated with Accounts Receivable assigned to
the Seller and actually received by the Seller.
 
“Lafayette Termination Notices” has the meaning set forth in Section 6.5(e).
 
“Law” means any law (including common law), statute, constitution, treaty,
charter, ordinance, code, Order, rule, regulation and any other binding
requirement or determination of any Governmental Entity.
 
“Lease” means any lease or sublease relating to Leased Real Property to which
any of Company or its Subsidiaries is a party or by which it is bound.
 
“Leased Real Property Interests” means all real property and real property
interests leased or subleased by the Company or its Subsidiaries.
 
“Liabilities” means any direct or indirect liabilities, obligations, expenses,
Indebtedness, claims, losses, damages, deficiencies, guarantees, endorsements or
commitments of any nature whatsoever, asserted or unasserted, known or unknown,
absolute or contingent, accrued or unaccrued, due or to become due, liquidated
or unliquidated, matured or unmatured or otherwise.
 
 “Lien” means, with respect to any property or asset, any lien (statutory or
otherwise), mortgage, pledge, charge, security interest, hypothecation,
community property interest, equitable interest, servitude, option, right
(including rights of first refusal), restriction (including restrictions on
voting, transfer or other attribute of ownership), lease, license, other rights
of occupancy, adverse claim, reversion, reverter, preferential arrangement or
any other encumbrance in respect of such property or asset.
 
“Loan Financing” has the meaning set forth in Section 5.4.
 
“Losses” has the meaning set forth in Section 9.2.
 
“Material Adverse Effect” means, when used in connection with the Company or any
of its Subsidiaries, any event, change, circumstance, development or effect that
individually or in the aggregate, is reasonably likely to be materially adverse
to the business, results of operations or financial condition of the Company and
its Subsidiaries taken as a whole, excluding any such events, changes or effects
resulting from or arising in connection with (i) changes in Laws, rules or
regulations of general applicability or applicability to the coal industry;
(ii) changes or conditions generally affecting the U.S. and global coal
industry; (iii) changes or conditions generally affecting the U.S. and global
economy or financial markets; (iv) acts of war (whether or not declared), armed
hostilities or terrorism, or the escalation or worsening thereof; (v) any action
taken (or omitted to be taken) with the written consent of
 
 
 

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or at the written request of the Purchaser, or any effect resulting from the
Purchaser’s refusal to consent to a reasonable request of the Seller; (vi) any
matter set forth in the Seller’s Disclosure Schedule to the extent that it is
readily apparent from the face of the disclosure of such matter that such matter
could reasonably be expected to result in a Material Adverse Effect; (vii) any
changes in applicable tax and financial accounting rules (including GAAP);
(viii) the announcement, pendency or completion of the transactions contemplated
by this Agreement, other than with respect to losses or threatened losses of
customers prior to the expiration of existing contracts; (ix) any natural or
man-made disaster or acts of God; (x) any failure by the Company to meet any
internal or published projections, forecasts or revenue or earnings predictions
(provided that the underlying causes of such failures (subject to the other
provisions of this definition) shall not be excluded); (xi) the identity of the
Purchaser; (xii) seasonal fluctuations in the business of the Company; (xiii) a
notice of a pattern of violations at the Prosperity mine from the Mine Safety
and Health Administration; or (xiv) the Lafayette Termination Notices; provided,
further, however, that any event, change, circumstance, development or effect
referred to in clauses (i) through (iv), (vii) and (ix) immediately above shall
be taken into account in determining whether a Material Adverse Effect has
occurred or is reasonably likely to occur only to the extent that such event,
change, circumstance, development or effect has a disproportionate adverse
effect on the Company compared to other companies in the coal mining business
and in the same general geographic region as the Company.
 
    “Minimum Coal Inventory Amount” means an amount of coal in inventory equal
to (i) 800,000 tons minus (ii) the lesser of (A) the total amount of coal
inventory purchased by the Seller or one of its Affiliates immediately prior to
Closing pursuant to Section 2.3(f) and (B) 300,000 tons of coal.
 
“Mining Operations” means the coal mining operations at the Oaktown 1, Oaktown 2
and Prosperity mines as presently conducted, including processing and
reclamation.
 
“Mining Permits” means those Permits that are directly related to the Mining
Operations, including those so designated in Section 4.6(b)(i) of the Seller’s
Disclosure Schedule.
 
“Mining Regulations” means the Federal Surface Mining Control and Reclamation
Act, 30 U.S.C. Section 1201, et seq. (SMCRA), and analogous state Laws; the
federal Mine Safety and Health Act of 1977, as amended (MSHA), and analogous
state Laws, and any Environmental Law to the extent that any Mining Permit was
issued pursuant to the requirements of such Environmental Law.
 
“Multiemployer Plan” means a Plan that is a multiemployer plan within the
meaning of Section 3(37) of ERISA with respect to which the Company or any ERISA
Affiliate has an obligation to contribute or has or could have withdrawal
Liability under Section 4201 of ERISA.
 
“Net Plant Value” means the net book value of all property and equipment, mining
property, mine development costs, and asset retirement obligation assets, in
each case calculated in accordance with GAAP consistently applied and in
accordance with the methodology set out on Annex III.
 
 
 

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“Net Working Capital” means, with respect to the Company and its Subsidiaries,
current assets (excluding Cash, deferred Tax assets, Accounts Receivable from
the Seller or an Affiliate thereof and any Accounts Receivable assigned to the
Seller pursuant to Section 2.3(e), but including advance royalties paid by the
Company or its Subsidiaries that have not yet been used to offset earned
royalties) less current liabilities (excluding Income Taxes, deferred Tax
liabilities and payables to the Seller or an Affiliate thereof and the current
portion of long-term Indebtedness, but including mine and rail reclamation
obligations), in each case calculated in accordance with GAAP consistently
applied and in accordance with the methodology set out on Annex II; provided
that for purposes of determining current assets, (i) the coal inventory included
in current assets will be determined in accordance with the methodology set
forth on Annex I and (ii) the parts inventory included in current assets will be
valued on the same basis as such inventory is valued in the Financial
Statements.  For the avoidance of doubt, Net Working Capital shall not include
any amount that is included in Net Plant Value.
 
“Notice of Claim” has the meaning set forth in Section 9.4(a).
 
“Objection Notice” has the meaning set forth in Section 2.4(e).
 
“Objection Period” has the meaning set forth in Section 2.4(e).
 
“Order” means any order, award, injunction, judgment, decree, ruling, subpoena
or verdict or other decision issued, promulgated or entered by or with any
Governmental Entity or arbitrator of competent jurisdiction.
 
“Organizational Documents” means, with respect to any entity, the certificate of
incorporation or formation, the articles of incorporation, by-laws, articles of
organization, partnership agreement, limited liability company agreement,
formation agreement, joint venture agreement or other similar organizational
documents of such entity (in each case, as amended).
 
“Outside Date” shall mean November 26, 2014.
 
“Owned Real Property Interests” means real property and interests in real
property owned in fee by the Company or its Subsidiaries.
 
“Owned Real Property Parcel” means any parcel or tract of property in which
Company or a Subsidiary has Owned Real Property Interests.
 
“Permit” means any authorization, approval, consent, certificate, declaration,
filing, notification, qualification, registration, license, permit or franchise
or any waiver of any of the foregoing, of or from, or to be filed with or
delivered to, any Person or pursuant to any Law.
 
“Permitted Liens” means (a) building restrictions, easements, covenants, rights
of way and other similar restrictions and agreements and/or conditions imposed
by Permits or other impositions by any Governmental Entity which do not
materially impair the current or proposed use of the properties they affect as
those properties are currently used; (b) Liens for taxes not yet delinquent or
being contested in good faith by appropriate procedures; (c) Liens arising from
Leases or rights retained by a lessor arising from those Leases;  (d) rights of
any owner of any interest other than the Company’s or its Subsidiaries’ interest
in the Real Property, including owners of surface, oil and gas, or other
minerals or interests not subject to the Leases; (e) mechanic’s, carriers’,
workmen’s, repairmen’s or other like Liens arising or incurred in the ordinary
course of business or which are being disputed in good faith; and (f) any other
imperfections of title, if any, in each case that have not and would not
materially impair the current or proposed use of the properties they effect as
those properties are currently used.
 
 
 

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“Person” means an individual, a corporation, a partnership, a limited liability
company, a trust, an unincorporated association or a Governmental Entity.
 
“Plan” means any bonus, incentive compensation, deferred compensation, pension,
profit sharing, retirement, stock purchase, stock option, stock ownership, stock
appreciation rights, restricted stock, phantom stock, stock or cash award,
deferred compensation, leave of absence, layoff, stay, vacation, day or
dependent care, legal services, cafeteria, life, health, welfare,
post-retirement, accident, disability, worker’s compensation or other insurance,
severance, separation, change of control, employment or other employee benefit
plan, practice, policy, agreement or arrangement of any kind, whether written or
oral, or whether for the benefit of a single individual or more than one
individual including any “employee benefit plan” within the meaning of
Section 3(3) of ERISA.
 
“Policies” has the meaning set forth in Section 4.16.
 
“Post-Closing Period” means any taxable period or portion thereof beginning
after the Closing Date.  The portion of a Straddle Period that begins on the day
following the Closing Date shall constitute a Post-Closing Period.
 
 “Pre-Closing Period” means any taxable period or portion of a Straddle Period
that is not a Post-Closing Period.
 
“Proposal” has the meaning set forth in Section 6.14.
 
“Proposed Balance Sheet” has the meaning set forth in Section 2.4(e).
 
“Proposed Cash Amount” has the meaning set forth in Section 2.4(e).
 
“Proposed Indebtedness Amount” has the meaning set forth in Section 2.4(e).
 
“Proposed Net Plant Value” has the meaning set forth in Section 2.4(e).
 
“Proposed Net Working Capital” has the meaning set forth in Section 2.4(e).
 
“Purchased Balance Sheet” has the meaning set forth in Section 4.4(a).
 
“Purchase Price” has the meaning set forth in Section 2.1.
 
“Purchase Price Adjustment Deficit” has the meaning set forth in Section 2.4(g).
 
“Purchase Price Adjustment Surplus” has the meaning set forth in Section 2.4(g).
 
“Purchaser” has the meaning set forth in the preamble hereto.
 
 
 

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“Purchaser Indemnitees” has the meaning set forth in Section 9.2.
 
“Purchaser Paid Indebtedness” has the meaning set forth in Section 2.3(c).
 
“Purchaser Termination Fee” has the meaning set forth in Section 8.2.
 
“Purchaser’s Disclosure Schedule” means the disclosure schedule dated and
delivered as of the date hereof by the Purchaser to the Seller, which is
attached to this Agreement.
 
“Purchaser’s Fundamental Representations” has the meaning set forth in
Section 9.1(a).
 
“Real Property” has the meaning set forth in Section 4.8(a).
 
“Reclamation Liabilities” means all obligations or liabilities (a) arising from
Permits; or (b) associated with or arising from the reclamation (including
mitigation), decommissioning, deconstruction, disposal, or final retirement of
mine sites, rail sidings and yards, coal piles, coal processing facilities and
other facilities, and disturbances associated with any mining or mining-related
activities conducted by or for the Company or its Subsidiaries.
 
“Release” means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping or disposing of a Hazardous
Material.
 
“Representatives” has the meaning set forth in Section 6.3(a).
 
“Restricted Period” has the meaning set forth in Section 6.15(a).
 
“Reviewing Party” has the meaning set forth in Section 2.4(f).
 
“Rights of Way” means all easements, right of way, prescriptive rights, and
other ways of necessity, whether of record or not, used in connection with or
necessary for the conduct of the Mining Operations.
 
“Section 338(h)(10) Election” has the meaning set forth in Section 6.9(f)(i).
 
“Section 338(h)(10) Election Form” has the meaning set forth in
Section 6.9(f)(ii).
 
“Section 338 Forms” has the meaning set forth in Section 6.9(f)(ii).
 
“Seller” has the meaning set forth in the preamble hereto.
 
“Seller Guarantor” means Vectren Enterprises, Inc., an Indiana corporation.
 
“Seller Guaranty” means a guarantee of performance of the Seller’s obligations
under this Agreement and the other Ancillary Agreements by Seller Guarantor,
substantially in the form attached hereto as Exhibit A.
 
“Seller Indemnitees” has the meaning set forth in Section 9.3.
 
“Seller Parent” means Vectren Corporation, an Indiana corporation.
 
 
 

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“Seller’s Disclosure Schedule” means the disclosure schedule dated and delivered
as of the date hereof by the Seller to the Purchaser, which is attached to this
Agreement.
 
“Seller’s Fundamental Representations” has the meaning set forth in
Section 9.1(a).
 
“Site” means any of the Real Property currently or previously owned, leased or
operated (directly or through the Contractors) by:  (a) the Company or its
Subsidiaries; or (b) any entities previously owned by the Company or its
Subsidiaries, in each case including all soil, subsoil, surface waters and
groundwater thereat.
 
“Straddle Period” has the meaning set forth in Section 6.9(a)(iii).
 
“Subsidiary” means, with respect to any Person, any other Person that is
directly or indirectly Controlled by such Person.
 
“Support Obligations” has the meaning set forth in Section 6.17.
 
“Target Net Plant Value” means $297,988,656.
 
“Target Net Working Capital” means $20,251,711.
 
“Tax” or “Taxes” means any and all federal, state, local, or foreign net or
gross income, gross receipts, net proceeds, sales, use, ad valorem, value added,
franchise, bank shares, withholding, payroll, employment, excise, property,
abandoned property, escheat, deed, stamp, alternative or add-on minimum,
environmental, profits, windfall profits, transaction, license, lease, service,
service use, occupation, severance, energy, Transfer Taxes, unemployment, social
security, workers’ compensation, capital, premium, and other taxes, assessments,
customs, duties, fees, levies, or other governmental charges of any nature
whatever, whether disputed or not, together with any interest, penalties,
additions to tax, or additional amounts with respect thereto and  any liability
in respect of any the foregoing payable by reason of contract, assumption,
transferee or successor liability, operation of Law, Treasury Regulation §
1.1502-6 (or any analogous or similar provision of Law) or otherwise.
 
“Taxing Authority” means any Governmental Entity having jurisdiction with
respect to any Tax.
 
“Tax Returns” means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
 
“Third Party” means a Person not a party to this Agreement.
 
“Third Party Claim” has the meaning set forth in Section 9.4(a).
 
“Third Party Defense” has the meaning set forth in Section 9.4(b).
 
“Transaction Expenses” has the meaning set forth in Section 10.3.
 
 
 

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“WARN Act” means the Worker Adjustment and Retraining Notification Act of 1988.
 
“Working Capital and Net Plant Value Methodology” has the meaning set forth in
Section 2.4(d).
 
“$” means United States dollars.
 
1.2 Construction.  For the purposes of this Agreement, except as otherwise
expressly provided herein or unless the context otherwise requires (a) the
meaning assigned to each term defined herein shall be equally applicable to both
the singular and the plural forms of such term and vice versa, and words
denoting any gender shall include all genders as the context requires; (b) where
a word or phrase is defined herein, each of its other grammatical forms shall
have a corresponding meaning; (c) the terms “hereof,” “herein,” “hereunder,”
“hereby” and “herewith” and words of similar import shall, unless otherwise
stated, be construed to refer to this Agreement as a whole and not to any
particular provision of this Agreement; (d) when a reference is made in this
Agreement to an Article, Section, paragraph, Exhibit or Schedule, such reference
is to an Article, Section, paragraph, Exhibit or Schedule of this Agreement
unless otherwise specified; (e) the words “include,” “includes” and “including”
when used in this Agreement shall be deemed to be modified by the words “without
limitation,” unless otherwise specified; (f) the use of the word “or” is not
intended to be exclusive unless expressly indicated otherwise; (g) the word
“shall” shall be construed to have the same meaning and effect of the word
“will;” (h) a reference to any party to this Agreement or any other agreement or
document shall include such party’s predecessors, successors and permitted
assigns; (i) a reference to any Law means such Law as amended, modified,
codified, replaced or reenacted, from time to time, and all rules and
regulations promulgated thereunder; and (j) all accounting terms used and not
defined herein have the respective meanings given to them under GAAP.
 
ARTICLE II
PURCHASE AND SALE OF THE COMMON STOCK
 
2.1 Purchase and Sale of the Common Stock.  Upon the terms and subject to the
conditions set forth in this Agreement, at the Closing, the Seller will sell,
transfer and deliver, and the Purchaser will purchase from the Seller, all of
the Common Stock (free and clear of all Liens, subscriptions, options, warrants,
calls, proxies, commitments and rights to acquire shares of any kind) for an
aggregate purchase price equal to $296,000,000 (the “Base Purchase Price”),
subject to adjustments pursuant to Section 2.4 (as finally adjusted, the
“Purchase Price”); provided that in no event shall the Purchase Price exceed
$325,000,000.  Payment of the Purchase Price shall be made in accordance with
Sections 2.3 and 2.4.
 
2.2 Closing.  The consummation of the transactions contemplated by this
Agreement (the “Closing”) shall take place at the offices of the Purchaser, 1183
East Canvasback Dr., Terre Haute, Indiana 47802, at 10:00 a.m. on the date that
is two Business Days after the satisfaction (or waiver as provided herein) of
the conditions set forth in Article VII (other than those conditions that by
their nature will be satisfied at the Closing), unless another time, date or
place is agreed to in writing by the parties.  The date upon which the Closing
occurs is herein referred to as the “Closing Date.”  The Closing will be deemed
effective as of 11:59 p.m. Central Time on the Closing Date.
 
 
 

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2.3 Calculation and Payment of Purchase Price on the Closing Date.
 
(a) Calculation of the Closing Date Purchase Price.  The aggregate amount to be
paid to the Seller on the Closing Date (the “Closing Date Purchase Price”) is
equal to the Base Purchase Price plus the Estimated Cash Amount (determined in
accordance with Section 2.4(a), plus or minus, as applicable, the Estimated Net
Working Capital Adjustment Amount (determined in accordance with
Section 2.4(b)), plus or minus, as applicable, the Estimated Net Plant Value
Adjustment Amount (determined in accordance with Section 2.4(c)), less the
Estimated Purchaser Paid Indebtedness Amount, which the Purchaser will pay on
behalf of the Company pursuant to Section 2.3(c), plus any adjustment amount
pursuant to Section 6.5(e)(i); provided that the Closing Date Purchase Price
shall not exceed $325,000,000.  An example calculation of the Closing Date
Purchase Price is set forth on Annex IV hereto.
 
(b) Payment of the Closing Date Purchase Price.  At the Closing, the Purchaser
shall pay to the Seller by wire transfer of immediately available funds to an
account designated in writing by the Seller no fewer than five Business Days
prior to the Closing Date an amount equal to the Closing Date Purchase Price.
 
(c) Payment of Purchaser Paid Indebtedness.  At the Closing, the Purchaser shall
pay on behalf of the Company all of the Indebtedness described on Section 2.3(c)
of the Seller’s Disclosure Schedule (the “Purchaser Paid Indebtedness”) to the
holder or holders thereof in accordance with, and upon receipt by the Purchaser
of, a fully executed pay-off letter and any other applicable discharges and lien
release documentation, in each case, in form and substance reasonably acceptable
to the Purchaser and, in each case, delivered by the Company to the Purchaser on
or prior to the Closing Date.
 
(d) Third Party Payments.  Notwithstanding that the Purchaser is obligated to
make on behalf of the Company certain payments to Third Parties pursuant to this
Section 2.3, it is acknowledged that the underlying obligations in respect of
which such payments are being made are not the obligations of the Purchaser and
the Purchaser shall only be liable hereunder to make payments to such Third
Parties in such amounts as the Purchaser is directed to make in accordance with
the terms hereof.
 
(e) The Seller and the Company shall, and shall cause each of the Company’s
Subsidiaries to, use their reasonable best efforts prior to the Closing to
minimize the Estimated Net Plant Value Adjustment Amount to the maximum extent
possible through the management of the operations of the business of the Company
and its Subsidiaries, including with respect to capital expenditures to be made
by the Company or its Subsidiaries; provided that neither the Seller nor the
Company shall take any action pursuant to this Section 2.3(e) that would
compromise safety at the Mining Operations.
 
(f) If when calculated in accordance with Section 2.3(a), the Closing Date
Purchase Price exceeds $325,000,000, the Seller shall notify the Purchaser and
provide reasonable supporting documentation of the adjustments to the Base
Purchase Price and the calculation of the Closing Date Purchase Price.  Subject
to the Purchaser’s right to dispute such adjustments, the Company shall assign
to the Seller certain Accounts Receivable
 
 
 

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prior to the Closing on a basis mutually agreeable to the Purchaser and the
Seller (such agreement not to be unreasonably withheld, conditioned or delayed),
in order to reduce the Estimated Net Working Capital such that the Closing Date
Purchase Price does not exceed $325,000,000.  To the extent additional measures
are required to reduce the Closing Date Purchase Price to $325,000,000, the
Purchaser and the Seller shall discuss in good faith other methods as shall be
mutually agreeable to the Purchaser and the Seller (such agreement not to be
unreasonably withheld, conditioned or delayed) of reducing the Closing Date
Purchase Price to such amount. The Purchaser agrees that those methods will
include, at the Seller’s election, the purchase of existing coal inventory by
the Seller or one of its Affiliates immediately prior to Closing at the spot
market price to the extent necessary to reduce the Closing Date Purchase Price
to $325,000,000, with the provision that the purchased inventory will be stored
separately at the mine where the inventory is located at the time of sale and
will be maintained there under a separate contractual arrangement to be entered
into by the Purchaser and the Seller (or its Affiliate), which will include the
reimbursement of the Purchaser’s reasonable handling charges and any necessary
or advisable measures to protect the Seller’s (or its Affiliate’s) interest in
the purchased inventory, including a security interest therein; provided that no
such purchase of inventory by the Seller or its Affiliate shall be permitted to
the extent it would cause the condition set forth in Section 7.2(d) to fail to
be satisfied.
  
2.4 Purchase Price Adjustment.
 
(a) Estimated Closing Date Balance Sheet Certificate.  At least five Business
Days prior to the Closing Date, the Company and the Seller shall jointly prepare
and deliver to the Purchaser (i) a reasonable good faith estimate of the
consolidated balance sheet for the Company as of the Closing Date (the
“Estimated Closing Balance Sheet”), (ii) a reasonable good faith estimate of the
Closing Date Net Working Capital (the “Estimated Net Working Capital”),
(iii) the resulting Estimated Net Working Capital Adjustment Amount, (iv) a
reasonable good faith estimate of the Closing Date Net Plant Value (the
“Estimated Net Plant Value”), (v) the resulting Estimated Net Plant Value
Adjustment Amount, (vi) a reasonable good faith estimate of the Cash, if any, of
the Company as of the Closing Date (as reflected on the Estimated Closing
Balance Sheet) (the “Estimated Cash Amount”), (vii) a reasonable good faith
estimate of the Indebtedness of the Company to be paid by the Purchaser as of
the Closing Date (the “Estimated Purchaser Paid Indebtedness Amount”), and
(viii) a certificate of the chief financial officer of the Company certifying
the foregoing.  Prior to the delivery of the Estimated Closing Balance Sheet,
(1) representatives of the Purchaser and the Seller shall jointly survey,
measure and calculate the coal inventory using the inventory methodology set
forth on Annex I, which coal inventory calculation shall be used in determining
the Estimated Net Working Capital, and (2) representatives of the Purchaser and
the Seller shall jointly measure and calculate the parts inventory, which
determination shall be used in the parts inventory calculation to be used in
determining the Estimated Net Working Capital.
 
(b) Estimated Net Working Capital Adjustment Amount.  The Base Purchase Price
shall be increased on a dollar-for-dollar basis to the extent the Estimated Net
Working Capital is greater than the Target Net Working Capital, and shall be
reduced on a dollar-for-dollar basis to the extent the Estimated Net Working
Capital is less than the Target Net Working Capital (the “Estimated Net Working
Capital Adjustment Amount”).
 
(c) Estimated Net Plant Value Adjustment Amount.  The Base Purchase Price shall
be increased on a dollar-for-dollar basis to the extent the Estimated Net Plant
Value is greater than the Target Net Plant Value, and shall be reduced on a
dollar-for-dollar basis to the extent the Estimated Net Plant Value is less than
the Target Net Plant Value (the “Estimated Net Plant Value Adjustment Amount”).
 
(d) Working Capital and Net Plant Value Methodology.  The Estimated Closing
Balance Sheet and the Final Balance Sheet (and the individual elements thereof,
including Net Working Capital and Net Plant Value) shall be prepared and
determined in accordance with GAAP, with such modifications as are specified in
the policies, principles, procedures and methodologies as set forth in
Annexes I, II and III and made a part hereof (the “Working Capital and Net Plant
Value Methodology”).  Each of the deliveries set forth in this Section 2.4 shall
be prepared in accordance with the Working Capital and Net Plant Value
Methodology.
 
(e) Final Balance Sheet.  On the Closing Date and promptly following the
Closing, representatives of the Purchaser and Seller shall jointly survey,
measure and calculate the coal inventory using the inventory methodology set
forth on Annex I, which coal inventory calculation shall be used in determining
the Proposed Net Working Capital.  Within 90 days following the Closing Date,
the Purchaser shall prepare and deliver to the Seller a notice (an “Adjustment
Notice”), which shall include a consolidated balance sheet of the Company as of
the Closing Date prepared in accordance with GAAP and the methodologies
specified in Annexes I, II and III (the “Proposed Balance Sheet” and, in its
final and binding form after resolution of any disputes pursuant to this
Section 2.4, the “Final Balance Sheet”) setting forth its calculation of (i) the
Cash of the Company and its Subsidiaries as of the Closing Date (the “Proposed
Cash Amount”, and, in its final and binding form after resolution of any
disputes pursuant to this Section 2.4, the “Final Cash Amount”), (ii) the
Indebtedness of the Company and its Subsidiaries as of the Closing Date that was
not paid by the Purchaser pursuant to Section 2.3(c) or previously satisfied
prior to the Closing (the “Proposed Indebtedness Amount”, and, in its final and
binding form after resolution of any disputes pursuant to this Section 2.4, the
“Final Indebtedness Amount”), (iii) the Closing Date Net Working Capital (the
“Proposed Net Working Capital”, and, in its final and binding form after
resolution of any disputes pursuant to this Section 2.4, the “Final Net Working
Capital”), and (iv) the Closing Date Net Plant Value (the “Proposed Net Plant
Value”, and, in its final and binding form after resolution of any disputes
pursuant to this Section 2.4, the “Final Net Plant Value”), together with the
calculations utilized in, and the supporting documentation for the preparation
of the Proposed Balance Sheet, the calculation of the Proposed Net Working
Capital and the calculation of the Proposed Net Plant Value.  The Seller shall
have a period of 60 days (the “Objection Period”) after delivery of the
Adjustment Notice in which to request additional information which shall be
promptly provided by the Purchaser and to provide written notice to the
Purchaser of any objections to the Proposed Balance Sheet and the calculation
thereof (the “Objection Notice”).  The Objection Notice shall set forth in
reasonable detail the item of the Adjustment Notice to which each objection
relates and the basis for each such objection.  If the Seller delivers an
Objection Notice within the Objection Period, the Seller and the Purchaser shall
attempt in good faith to resolve any dispute concerning the items subject to
such Objection Notice.  If the Seller and the Purchaser do not resolve any
dispute arising in connection with the Proposed Balance Sheet and its
constituent parts within 30 days after the date of delivery of the Objection
Notice, which 30-day period may be extended by written agreement of the
Purchaser and the Seller (such period, as it may be extended, the “Initial
Resolution Period”), such dispute shall be resolved in accordance with the
procedures set forth in Section 2.4(f).  The Proposed Balance Sheet and the
resulting Proposed Net Working Capital, Proposed Net Plant Value, Proposed Cash
Amount and Proposed Indebtedness Amount shall be deemed to be accepted by the
Seller, and shall become final and binding on the parties hereto on the earlier
of (x) the expiration of the Objection Period without delivery to the Purchaser
of an Objection Notice or (y) the date on which all objections provided for in a
timely-delivered Objection Notice have been resolved by the parties or as
provided for in Section 2.4(f).
 
(f) Dispute Resolution Mechanism.  If the Purchaser and the Seller have not been
able to resolve the matters set forth in the Objection Notice (the “Dispute”)
within the Initial Resolution Period, either party may submit such disputed
matters to Crowe Horwath LLP (the “Reviewing Party”).  Both parties shall submit
to the Reviewing Party all materials and information to be considered by the
Reviewing Party as promptly as practicable and in any event within 30 days
following the initial submission of the Dispute to the Reviewing Party.  The
fees and expenses of the Reviewing Party incurred in the resolution of the
disputed matters set forth in the Objection Notice shall be borne by the
Purchaser, on the one hand, and the Seller, on the other hand, in proportion to
the relative amounts of the aggregate disputed amount as to which such party
prevailed, as determined by the Reviewing Party.  The Reviewing Party shall make
a determination regarding the Dispute (and written notice thereof shall be given
to the Seller and the Purchaser) as promptly as practicable, but in any event
within 30 days following the date on which the last item of information
regarding the Dispute has been delivered to the Reviewing Party.  The Reviewing
Party will decide only the matters specifically raised in the Dispute based
solely on the submissions made to the Reviewing Party which may include factual
testimony and legal memoranda.  The Reviewing Party will provide a written
explanation in reasonable detail of the resolution of each matter raised in the
Dispute, including the basis therefor; provided, however, that the Reviewing
Party shall only decide the specific items under dispute by the parties. The
determination of the Reviewing Party shall be final and binding on the Purchaser
and the Seller, and the decision rendered pursuant to this Section 2.4(f) may be
filed as a judgment in any court of competent jurisdiction.  For the avoidance
of doubt, nothing in this Section 2.4(f) shall preclude either party from
pursuing any other remedy it may have under other provisions of this Agreement
with respect to matters other than the matters governed by this provision.
 
(g) Post-Closing Purchase Price Adjustments.
 
(i) If (A) the Final Net Working Capital is less than the Estimated Net Working
Capital, the Purchase Price shall be reduced on a dollar-for-dollar basis by an
amount equal to such deficit, or (B) the Final Net Working Capital is greater
than the Estimated Net Working Capital, the Purchase Price shall be increased by
an amount equal to such surplus.
 
(ii) If (A) the Final Net Plant Value is less than the Estimated Net Plant
Value, the Purchase Price shall be reduced on a dollar-for-dollar basis by an
amount equal to such deficit, or (B) the Final Net Plant Value is greater than
the Estimated Net Plant Value, the Purchase Price shall be increased by an
amount equal to such surplus.
 
(iii) If (A) the Final Cash Amount is less than the Estimated Cash Amount, the
Purchase Price shall be reduced on a dollar-for-dollar basis by an amount equal
to such deficit, or (B) the Final Cash Amount is greater than the Estimated Cash
Amount, the Purchase Price shall be increased by an amount equal to such
surplus.
 
(iv) If (A) the Final Indebtedness Amount is greater than the Estimated
Purchaser Paid Indebtedness Amount, the Purchase Price shall be reduced on a
dollar-for-dollar basis by an amount equal to such surplus, or (B) the Final
Indebtedness Amount is less than the Estimated Purchaser Paid Indebtedness
Amount, the Purchase Price shall be increased by an amount equal to such
surplus.
 
The net amount of the adjustments to the Purchase Price under this
Section 2.4(g) shall be the “Purchase Price Adjustment Deficit” if the net
amount of the adjustments would, in the aggregate, reduce the Purchase Price
hereunder, or the “Purchase Price Adjustment Surplus” if the net amount of the
adjustments would, in the aggregate, increase the Purchase Price hereunder.
 
(h) Payment Regarding Purchase Price Adjustments.  Upon determination of the
Final Net Working Capital, the Final Net Plant Value, the Final Cash Amount and
the Final Indebtedness Amount in accordance with this Section 2.4 (such date of
determination, the “Determination Date”), (i) if there is a Purchase Price
Adjustment Deficit, the Seller shall pay to the Purchaser within five Business
Days after the Determination Date, by wire transfer of immediately available
funds an amount equal to the Purchase Price Adjustment Deficit; and (ii) if
there is a Purchase Price Adjustment Surplus, the Purchaser shall, within five
Business Days after the Determination Date, pay to the Seller by wire transfer
of immediately available funds an amount equal to the Purchase Price Adjustment
Surplus.
 
2.5 Closing Deliveries.
 
(a) Documents Delivered by the Seller.  At or prior to the Closing, the Seller
will deliver to the Purchaser each of the following:
 
(i)       certificates representing the Common Stock, duly endorsed in blank or
accompanied by stock powers duly endorsed in blank in proper form for transfer;
 
(ii)       a properly prepared certificate of non-foreign status, as required
pursuant to Treas. Reg. §1.1445-2(b)(2), duly executed by the Seller;
 
(iii)            the Section 338(h)(10) Election Form (as described in Section
6.9(f)), duly executed by the Seller;
 
(iv) pay-off letters, in customary form, duly executed by the Company and the
holders of any Purchaser Paid Indebtedness and any inter-company or Affiliate
obligations to be discharged prior to closing and any other applicable
discharges or lien release documentation, in each case, in form and substance
reasonably acceptable to the Purchaser;
 
(v)       the corporate record book, stockholder ledger and all other corporate
records of each of the Company and its Subsidiaries;
 
(vi)            a certificate, in form and substance reasonably acceptable to
the Purchaser, duly executed by the Secretary of the Company certifying:
 
(A) that attached to such certificate is a copy of duly adopted resolutions of
the board of directors of the Company approving this Agreement and authorizing
the execution and delivery of this Agreement, including the Ancillary
Agreements, and the consummation of the transactions contemplated hereby and
thereby;
 
 
(B) that such resolutions have not been amended, modified or rescinded and are
in full force and effect; and
 
 
(C) that attached to such certificate is a true and correct copy of the
Organizational Documents of each of the Company and its Subsidiaries, each of
which are in full force and effect and have not been amended, modified or
rescinded.
 
(vii) a certificate of existence for each of the Company and its Subsidiaries
dated within 30 days prior to the Closing Date issued by the secretary of state
of the applicable state of organization and foreign qualification good standing
certificates for the Company and its Subsidiaries in each of the jurisdictions
set forth in Sections 4.1 and 4.2(b) of the Seller’s Disclosure Schedule, as
applicable;
 
(viii) a copy of the duly adopted resolutions of the board of directors of the
Seller, certified by an officer of the Seller, approving this Agreement and
authorizing the execution and delivery of this Agreement, including the
Ancillary Documents to be executed and delivered by the Seller pursuant hereto,
and the consummation of the transactions contemplated hereby and thereby;
 
(ix) all approvals, consents and waivers set forth on Section 7.2(g) of the
Seller’s Disclosure Schedule, each of which approvals, consents and waivers
shall be (1) in full force and effect, (2) not subject to any condition or other
qualification and (3) in form and substance reasonably satisfactory to the
Purchaser;
 
(x) a landlord estoppel certificate for each Lease with Templeton Coal Company
in form and substance reasonably satisfactory to the Purchaser;
 
(xi) evidence of the assignment of the Accounts Receivable in accordance with
Section 2.3(f) in a form mutually agreeable to the Purchaser and the Seller;
 
(xii) the Seller Guaranty, duly executed by Seller Guarantor;
 
(xiii) duly executed copies of each of the Contractor Termination Agreements and
the Lafayette Termination Notices;
 
(xiv) interim services agreements with the Contractors, substantially in the
forms attached hereto as Exhibit B-1, B-2 and B-3, duly executed by the
Contractors; and
 
(xv) such other documents and items as are reasonably necessary or appropriate
to effect the consummation of the transactions contemplated hereby or which may
be customary under local Law.
 
(b) Documents Delivered by the Purchaser.  At or prior to the Closing, the
Purchaser will deliver to the Seller each of the following:
 
(i) payment of the Closing Date Purchase Price to be paid pursuant to the
methods and determined in accordance with Section 2.3;
 
(ii) a copy of the duly adopted resolutions of the board of directors of the
Purchaser, certified by an officer of the Purchaser, approving this Agreement
and authorizing the execution and delivery of this Agreement, including the
Ancillary Documents to be executed and delivered by the Purchaser pursuant
hereto, and the consummation of the transactions contemplated hereby and
thereby; and
 
(iii) such other documents and items as are reasonably necessary or appropriate
to effect the consummation of the transactions contemplated hereby or which may
be customary under local Law.
 
2.6 Withholding.  The Company, the Purchaser and their Affiliates will be
entitled to deduct and withhold from the amounts otherwise payable pursuant to
this Agreement to any Person such amounts as they determine, in good faith and
after due consultation with the Seller, are required to be deducted and withheld
with respect to the making of such payment under the Code, or any provision of
state, local or foreign Tax Law.  In the event that any amount is so deducted
and withheld,  such withheld amounts will be treated for all purposes of this
Agreement as having been paid to the Person to whom the payment from which such
amounts were withheld was made.
 
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
 
The Seller represents and warrants to the Purchaser as of the date hereof and as
of the Closing as follows:
 
3.1 Organization and Good Standing.  The Seller is duly organized and validly
existing under the Laws of the State of Indiana.
 
3.2 Authority and Enforceability.  The Seller has the requisite legal capacity
to execute and deliver this Agreement and the Ancillary Agreements to which it
is a party, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby.  The execution,
delivery and performance by the Seller of this Agreement and the Ancillary
Agreements to which it is a party and the consummation by the Seller of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary action on the part of the Seller and no other action is necessary on
the part of the Seller to authorize this Agreement or any Ancillary Agreement to
which it is a party or to consummate the transactions contemplated hereby and
thereby.  This Agreement and each Ancillary Agreement to which it is a party
have been duly executed and delivered by the Seller.  Assuming due
authorization, execution and delivery by the Purchaser and each other party
thereto, this Agreement and each such Ancillary Agreement constitutes a legal,
valid and binding obligation of the Seller, enforceable against the Seller in
accordance with its terms, except as limited by (a) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar Laws relating
to creditors’ rights generally and (b) general principles of equity, whether
such enforceability is considered in a proceeding in equity or at Law.
 
3.3 No Conflicts; Consents.
(a) The execution and delivery by the Seller of this Agreement and the Ancillary
Agreements to which it is a party does not, the performance by the Seller of its
obligations hereunder and thereunder and the consummation of the transactions
contemplated hereby and thereby (in each case with or without the giving of
notice or lapse of time or both) will not, directly or indirectly, (i) violate
any Law, Order or other restriction of any Governmental Entity to which the
Seller may be subject or (ii) violate, breach, conflict with or constitute a
default or an event creating any additional rights (including rights of
amendment, impairment, modification, suspension, revocation, acceleration,
termination or cancellation), impose additional obligations or result in a loss
of any rights, result in the creation of any Lien or require a consent or the
delivery of notice, under any Contract or Permit to which the Seller is a party
or by which the Seller is bound or to which any of the shares of Common Stock
are subject.  There is no Action pending or, to the Knowledge of the Seller,
threatened against or affecting its shares of Common Stock.
 
(b) Except as set forth on Section 3.3(b) of the Seller’s Disclosure Schedule,
the Seller is not required to give any notice to, make any filing with or obtain
any authorization, consent or approval of any Governmental Entity in order for
the parties to consummate the transactions contemplated hereby and by the
Ancillary Agreements.
 
3.4 Common Stock Ownership.
 
(a) The Seller has good and valid title to, and holds of record and owns
beneficially, all of the Common Stock, free and clear of all Liens,
subscriptions, warrants, calls, proxies, commitments, restrictions and rights to
acquire shares of any kind.  The shares of Common Stock are the only Equity
Interests in the Company owned of record or beneficially by the Seller and the
Seller does not own (or have any rights in or to acquire) any other Equity
Interests in the Company or any other securities convertible into, or
exercisable or exchangeable for, equity or voting interests in the Company.  The
shares of Common Stock were not issued in violation of (i) any Contract to which
the Seller is or was a party or by which the Seller or its properties or assets
is or was subject or (ii) of any preemptive or similar rights of any
Person.  This Agreement, together with the other documents executed and
delivered at the Closing by the Seller, will be effective to transfer valid
title to the Common Stock to the Purchaser, free and clear of all Liens,
subscriptions, warrants, calls, proxies, commitments and Contracts of any kind.
 
(b) The Seller is not party to (i) any voting agreement, voting trust,
registration rights agreement, stockholder or member agreement or other similar
arrangement with respect to the equity or voting interests in the Company or
(ii) any Contract obligating the Seller to vote or dispose of any Equity
Interests in the Company or which has the effect of restricting or limiting the
transfer, voting or other rights associated with the Common Stock.
 
3.5 Brokers’ Fees.  The Seller does not have any Liability to pay any fees or
commissions to any broker, finder or similar agent with respect to this
Agreement, the Ancillary Agreements or the transactions contemplated by hereby
or thereby.
 
3.6 U.S. Status of Seller.  The Seller is not a “foreign person” within the
meaning of Section 1445 of the Code and is not a Person whose separate existence
from a “foreign person” within the meaning of Section 1445 of the Code is
disregarded for U.S. federal income tax purposes.
 
ARTICLE IV 
REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY
 
The Seller represents and warrants to the Purchaser as of the date hereof and as
of the Closing as follows:
 
4.1 Organization and Good Standing.  The Company is duly organized and validly
existing under the Laws of the State of Indiana, has all requisite power and
authority to own, lease and operate its properties and assets and to carry on
its business as now being conducted and as proposed to be conducted.  The
Company is duly licensed or qualified to do business as a foreign corporation
and is in good standing in each jurisdiction in which it owns or leases property
or assets or the nature of its activities require such licensing or
qualification, except where the failure to be so licensed or qualified would not
have a Material Adverse Effect on the Company.  Section 4.1 of the Seller’s
Disclosure Schedule sets forth the jurisdiction of incorporation of the Company
and each jurisdiction in which the Company is licensed or qualified to do
business.  The Seller has made available to the Purchaser a complete and
accurate copy of the Organizational Documents for the Company.  The Company is
not and has not been in breach or violation of or default under any provision of
its Organizational Documents.
 
4.2 Capitalization.
 
(a) Except for the Common Stock, no other Equity Interests in the Company are
authorized, issued or outstanding.  All of the shares of Common Stock are duly
authorized, validly issued, fully paid and nonassessable and were issued in
compliance with all applicable Laws.  None of the shares of Common Stock were
issued in violation of (i) any Contract to which the Seller or the Company is or
was a party or by which the Seller or the Company or their respective properties
or assets is or was subject or (ii) of any preemptive or similar rights of any
Person.  Except as set forth on Section 4.2(a) of the Seller’s Disclosure
Schedule, there are no outstanding options, warrants or other Equity Interests
or subscription, preemptive or other rights convertible into or exchangeable or
exercisable for any shares of capital stock or other Equity Interests of the
Company and there are no “phantom stock” rights, stock appreciation rights or
other similar rights with respect to the Company.  There are no Contracts to
which the Company is a party or by which the Company is subject, obligating the
Company to issue, deliver, grant or sell, or cause to be issued, delivered,
granted or sold, additional shares of capital stock of, or other Equity
Interests in, or options, warrants or other securities or subscription,
preemptive or other rights convertible into, or exchangeable or exercisable for,
any such shares of the Company, or any “phantom stock” right, stock appreciation
right or other similar right with respect to the Company, or obligating the
Company to enter into any such Contract.  There are no Contracts, contingent or
otherwise, obligating the Company to repurchase, redeem or otherwise acquire or
dispose of any shares of capital stock of, or other Equity Interests in, the
Company.  There are no voting agreements, voting trusts, registration rights
agreements, member agreements, stockholder agreements or other similar
arrangements with respect to the capital stock of the Company.  There are no
rights plans affecting the Company.
 
(b) Except as set forth on Section 4.2(b) of the Seller’s Disclosure Schedule,
the Company does not own or hold the right to acquire any stock, partnership
interest or joint venture interest or other Equity Interest in any other
corporation, organization or entity.  Except as set forth on Section 4.2(b) of
the Seller’s Disclosure Schedule, the Company owns, directly or indirectly, of
record and beneficially, all capital stock and other Equity Interests in each of
its Subsidiaries, and all such capital stock and other equity interests are
validly issued, fully paid and non-assessable (to the extent such concept is
applicable to such equity interests).  Each of the Company’s Subsidiaries is
duly formed or organized and validly existing under the applicable Laws of its
jurisdiction of formation or organization, and each of the Company’s
Subsidiaries has all requisite power and authority to own and operate its
properties and to carry on its businesses as now conducted.  Each of the
Company’s Subsidiaries is duly licensed or qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which it owns or
leases property or assets or the nature of its activities require such licensing
or qualification, except where the failure to be so licensed or qualified would
not have a Material Adverse Effect on such Subsidiary.  Section 4.2(b) of the
Seller’s Disclosure Schedule sets forth the jurisdiction of organization of each
of the Company’s Subsidiaries and each jurisdiction in which each of the
Company’s Subsidiaries is licensed or qualified to do business.  The Seller has
made available to the Purchaser a complete and accurate copy of the
Organizational Documents for each of the Company’s Subsidiaries.  No Company
Subsidiary is or has been in breach or violation of or default under any
provision of its Organizational Documents
 
(c) Except as set forth on Section 4.2(c) of the Seller’s Disclosure Schedule,
neither the Company nor its Subsidiaries has any Indebtedness.
 
4.3 No Conflicts; Consents.
 
(a) Except as set forth on Section 4.3(a) of the Seller’s Disclosure Schedule,
the execution and delivery of this Agreement and the Ancillary Agreements to
which the Company is a party does not, and the performance by the Company of any
of its obligations hereunder and thereunder and the consummation of the
transactions contemplated hereby and thereby (in each case with or without the
giving of notice or lapse of time, or both) will not, directly or indirectly,
(i) violate or conflict with or result in the breach of the provisions of any of
the Organizational Documents of the Company, (ii) violate, breach, conflict with
or constitute a default or an event creating any additional rights (including
rights of amendment, impairment, modification, suspension, revocation,
acceleration, termination or cancellation), impose additional obligations or
result in a loss of any rights, or require a consent or the delivery of notice,
under any Company Contract, Law or Permit applicable to the Company or to which
the Company is a party or otherwise subject, or (iii) result in the creation of
any Liens upon any asset owned or used by the Company.
 
(b) Except as set forth on Section 4.3(b) of the Seller’s Disclosure Schedule,
the Company is not required to give any notice to, make any filing with or
obtain any authorization, consent or approval of any Governmental Entity in
order for the parties to consummate the transactions contemplated hereby and by
the Ancillary Agreements.
 
4.4 Financial Statements; No Undisclosed Liabilities; Accounts Receivable.
 
(a) Section 4.4(a) of the Seller’s Disclosure Schedule sets forth true and
complete copies of the audited consolidated balance sheet of the Company as at
December 31, 2013 (the “Balance Sheet”) December 31, 2012, and the related
audited consolidated statements of income, changes in shareholders’ equity and
cash flows of the Company, together with all related notes and schedules
thereto, accompanied by the reports thereon of the Company’s independent
auditors (collectively referred to as the “Financial Statements”), the unaudited
consolidated balance sheet of the Company as at May 31, 2014, and the related
consolidated statements of income, changes in shareholders’ equity and cash
flows of the Company, together with all related notes and schedules thereto
(collectively referred to as the “Interim Financial Statements”), and a pro
forma balance sheet of the Company as at May 31, 2014 reflecting the
transactions contemplated hereby (the “Purchased Balance Sheet”).  Each of the
Financial Statements, the Interim Financial Statements and the Purchased Balance
Sheet (i) has been prepared based on the Books and Records of the Company and
its Subsidiaries, (ii) has been prepared in accordance with United States
generally accepted accounting principles (“GAAP”) applied on a consistent basis
throughout the periods indicated and (iii) fairly presents, in all material
respects, the financial position, results of operations and cash flows of the
Company and its Subsidiaries as at the respective dates thereof and for the
respective periods indicated therein, subject, in the case of the Interim
Financial Statements and Purchased Balance Sheet, to normal recurring year-end
audit adjustments and the absence of notes, in each case the effect of which,
individually or in the aggregate, would not reasonably be expected to be
material to the Company.  The Company maintains a standard system of accounting
and internal controls established and administered in accordance with GAAP.
 
(b) Except as set forth on Section 4.4(b) of the Seller’s Disclosure Schedule,
neither the Company nor any of its Subsidiaries has any Liabilities except those
which (i) are adequately reflected or reserved against in the Balance Sheet,
(ii) have been incurred in the ordinary course of business consistent with past
practice since December 31, 2013 and (iii) are not, individually or in the
aggregate, material in amount.
 
4.5 Taxes.
 
(a) All Income Tax Returns and other material Tax Returns required to have been
filed by or with respect to the Company or any of its Subsidiaries have been
duly and timely filed (or, if due between the date hereof and the Closing Date,
will be duly and timely filed), and each such Tax Return in all material
respects reflects Liabilities for Taxes and all other information required to be
reported thereon.  All material Taxes owed by the Company or any of its
Subsidiaries (whether or not shown on any Tax Return) have been timely paid (or,
if due between the date hereof and the Closing Date, will be duly and timely
paid).  The Company and each of its Subsidiaries has adequately provided for, in
its books of account and related records, Liabilities for all unpaid Taxes (that
are current Taxes not yet due and payable) in accordance with GAAP.
 
 
(b) Except as set forth on Section 4.5(b) of the Seller’s Disclosure Schedule,
(i) there is no action or audit currently proposed, threatened or pending
respect to the Company or any of its Subsidiaries in respect of any material
Taxes; and (ii) neither the Company nor any of its Subsidiaries is the
beneficiary of any extension of time within which to file any Tax Return, nor
has the Company or any of its Subsidiaries made (or had made on its behalf) any
requests for such extensions.  No written claim (or, to the Knowledge of Seller,
no other claim) has ever been made by an authority in a jurisdiction where the
Company and its Subsidiaries do not file Tax Returns that as a result of their
activities, the Company or any of its Subsidiaries is or may be subject to
taxation by that jurisdiction or that as a result of its activities, the Company
or any of its Subsidiaries must file Tax Returns in such jurisdiction.  There
are no Liens on any of the stock, assets or properties of the Company or its
Subsidiaries with respect to Taxes, except for Permitted Liens.
 
(c) The Company and each of its Subsidiaries has withheld and timely paid all
material Taxes required to have been withheld or paid and has complied with all
information reporting and backup withholding requirements, including maintenance
of required records with respect thereto.
 
(d) There is no pending dispute or claim concerning any material Liabilities for
Taxes with respect to the Company or any of its Subsidiaries for which notice
has been provided or which is asserted or threatened.  No issues have been
raised in any examination with respect to the Company or any of its Subsidiaries
which, by application of similar principles, could be expected to result in
material Liabilities for Taxes for the Company or any of its Subsidiaries for
any other period not so examined.  Section 4.5(d) of the Seller’s Disclosure
Schedule (i) lists all federal, state and local Income Tax Returns filed with
respect to the Company or any of its Subsidiaries for taxable periods ended on
or after January 1, 2008, (ii) indicates those Income Tax Returns that have been
audited and (iii) indicates those Income Tax Returns that currently are the
subject of audit.  The Seller has made available to the Purchaser copies of all
proforma federal Income Tax Returns, examination reports and statements of
deficiencies assessed against or agreed to by the Company or any of its
Subsidiaries since January 1, 2008.  Neither the Company nor any of its
Subsidiaries has waived (or is subject to a waiver of) any statute of
limitations in respect of Taxes or has agreed to (or is subject to) any
extension of time with respect to a Tax assessment or deficiency.
 
(e) None of the assets or properties of the Company or its Subsidiaries
constitutes tax exempt bond financed property or tax exempt use property within
the meaning of Section 168 of the Code.  Neither the Company nor any of its
Subsidiaries is a party or is subject to any “safe harbor lease” within the
meaning of Section 168(f)(8) of the Code, as in effect prior to amendment by the
Tax Equity and Fiscal Responsibility Act of 1982, or to any “long term contract”
within the meaning of Section 460 of the Code.  Neither the Company nor any of
its Subsidiaries has made any payments, is obligated to make any payments, is a
party or subject to any Contract that under certain circumstances could obligate
it to make payments that would result in a nondeductible expense under Section
280G of the Code or an excise Tax to the recipient of such payments pursuant to
Section 4999 of the Code.  Neither the Company nor any of its Subsidiaries has
participated in or cooperated with an international boycott as defined in
Section 999 of the Code.
 
(f) Neither the Company nor any of its Subsidiaries has received (or is subject
to) any ruling from any Taxing Authority or has entered into (or is subject to)
any Contract with a Taxing Authority.  The Company and each of its Subsidiaries
has disclosed on its federal income Tax Returns all positions taken therein that
could give rise to a substantial understatement of federal income Tax within the
meaning of Section 6662 of the Code.
 
(g) Neither the Company nor any of its Subsidiaries has agreed to or is required
to make by reason of a change in accounting method or otherwise, or could be
required to make by reason of a proposed or threatened change in accounting
method or otherwise, any adjustment under Section 481(a) of the Code.   Neither
the Company nor any of its Subsidiaries has been the “distributing corporation”
(within the meaning of Section 355 of the Code) with respect to a transaction
described in Section 355 of the Code within the two-year period ending as of the
date of this Agreement.
 
(h) Neither the Company nor any of its Subsidiaries is a party to, a beneficiary
of or subject to, any Tax allocation or sharing agreement with the Seller or
Seller Parent (or any of their Affiliates) that will be in existence at
Closing.  Neither the Company nor any of its Subsidiaries has any Liabilities
for the Taxes of any Person (i) as a transferee or successor, (ii) by Contract
(other than commercial contracts the principal purpose of which is not Tax
related), or (iii) except with respect to Seller Parent as the parent of the
U.S. consolidated group of which the Company and its Subsidiaries are members
under Section 1.1502-6 of the Treasury regulations (or any similar provision of
state, local or foreign Law).  Neither the Company nor any of its Subsidiaries
is a party to, a beneficiary of or subject to, any joint venture, partnership or
other arrangement that is treated as a partnership for federal income Tax
purposes.
 
(i) Neither the Company nor any of its Subsidiaries will be required to include
any item of income in, or exclude any item of deduction from, taxable income for
any taxable period (or portion thereof) ending after the Closing Date as a
result of any (i) intercompany transactions or excess loss accounts described in
Treasury regulations under Section 1502 of the Code (or any similar provision of
state, local or foreign Tax Law), (ii) installment sale or open transaction
disposition made on or prior to the Closing Date, (iii) prepaid amount received
on or prior to the Closing Date, or (iv) cancellation of Indebtedness income
arising on or prior to the Closing Date.
 
(j) Neither the Company nor any of its Subsidiaries has been a party to, nor has
engaged, in any transaction that, as of the date hereof, is a “listed
transaction” or “substantially similar” transaction under Section 1.6011-4(b)(2)
of the Treasury Regulations.
 
(k) The Seller and/or Seller Parent is eligible to join with Purchaser in making
the Section 338(h)(10) Election with respect to the purchase of all the Common
Stock of the Company contemplated by this Agreement.
 
(l) Notwithstanding anything elsewhere in this Agreement to the contrary, the
representations and warranties in this Section 4.5 are the sole and exclusive
representations and warranties in this Agreement concerning Taxes.
 
4.6 Compliance with Law; Permits.
 
(a) Except as indicated on Sections 4.6(a)(i) and 4.6(c) of the Seller’s
Disclosure Schedule and except for violations that have been fully cleared or
resolved with the relevant Governmental Entity: (i) each of the Company and its
Subsidiaries (A) has since January 1, 2008 conducted, and are presently
conducting, their respective businesses in compliance with all applicable Laws
in all material respects, and (B) has prior to January 1, 2008 conducted their
respective businesses in compliance with all applicable Laws other than such
non-compliance which would not reasonably be expected to result in a Material
Adverse Effect, and (ii) each of the Contractors has (A) since January 1, 2008
conducted, and are presently conducting, the Mining Operations in compliance
with all applicable Laws in all material respects, and (B) has prior to January
1, 2008 conducted the Mining Operations in compliance with all applicable Laws
other than such non-compliance which would not reasonably be expected to result
in a Material Adverse Effect.  Except as indicated on Section 4.6(a)(ii) of the
Seller’s Disclosure Schedule, to the Knowledge of the Seller, no event has
occurred and no circumstances exist that (with or without the passage of time or
the giving of notice) would be reasonably expected to result in a violation of,
conflict with or failure on the part of the Company or any of its Subsidiaries
to conduct its business, or on the part of the Contractors to conduct the Mining
Operations, in compliance with, any applicable Law in all material
respects.  Except as indicated on Sections 4.6(a) and 4.6(c) of the Seller’s
Disclosure Schedule, neither the Company nor any of its Subsidiaries has
received notice regarding any material violation of, conflict with, or failure
to conduct its business or the Mining Operations in compliance with, any
applicable Law, excluding any notice of any such violation, conflict or failure
on the part of the Contractors that has been fully resolved with the relevant
Governmental Entity.  The Mining Operations have not been designated as being
subject to a pattern of violations by the Mine Safety and Health Administration,
and neither the Company nor its Subsidiaries, nor to the Knowledge of the
Seller, the Contractors, have received any written or oral communications from
the Mine Safety and Health Administration indicating such a designation.
 
(b) Each of the Company and its Subsidiaries has obtained, owns, holds or
lawfully uses directly or through the Contractors, all Permits which are
material for the conduct of its business or the Mining Operations, and each
Permit is held free and clear of all Liens.  Each such Permit is valid and in
full force and effect and is listed on Section 4.6(b)(i) of the Seller’s
Disclosure Schedule (with all Mining Permits being so
designated).  Section 4.6(b)(ii) of the Seller’s Disclosure Schedule sets forth
each Order entered, issued or rendered by any Governmental Entity to which the
Company or one of its Subsidiaries or its or their business, properties or
assets is subject that could reasonably be expected to materially restrict the
Mining Operations or result in Liability to the Company or its Subsidiaries that
has not been fully resolved.  Except as noted on Section 4.6(b)(iii) of the
Seller’s Disclosure Schedule and except for violations that have been fully
resolved with the relevant Governmental Entity, each of the Company and its
Subsidiaries and the Contractors is and has been in compliance in all material
respects with the Permits, and, to the Knowledge of the Seller, no event has
occurred and no circumstances exist that (with or without the passage of time or
the giving of notice) would be reasonably expected to result in a material
violation of, conflict with, failure on the part of the Company or one its
Subsidiaries or the Contractors to comply with the terms of, or the revocation,
withdrawal, termination, cancellation, suspension or modification of any Permit.
 
(c) Section 4.6(c) of the Seller’s Disclosure Schedule sets forth a complete
list of each violation of, conflict with or failure to comply with the Mining
Regulations in connection with the Mining Operations that is open or has not
been fully resolved with the relevant Governmental Entity.
 
(d) Section 4.6(d) of the Seller’s Disclosure Schedule sets forth, as of the
date of this Agreement, a complete list of all current plans, including mine
plans, roof control plans, ventilation plans, corrective action programs, and
any amendments, modifications, updates or material correspondence related
thereto, for each of the Mining Operations that have been submitted to
applicable Governmental Entities pursuant to the Mining Regulations, each of
which has been made available to the Purchaser.
 
(e) None of the representations and warranties contained in this Section 4.6
shall be deemed to relate to tax matters (which are governed by Section 4.5),
labor and employment matters (which are governed by Section 4.14) or
environmental matters (which are governed by Section 4.15). Notwithstanding the
foregoing, the representations and warranties contained in this Section 4.6
shall be deemed to relate to the Mining Regulations.
 
4.7 Personal Property.
 
(a) Except as set forth in Section 4.7(a) of the Seller’s Disclosure Schedule,
each of the Company and its Subsidiaries has good and marketable title to the
personal property (i.e. tangible property other than Real Property) it purports
to own, and a valid leasehold interest in the personal property it leases, in
each case free and clear of all Liens other than Permitted Liens, lease terms
and purchase money liens.  The material personal properties and assets that will
be owned or leased and available for use by the Company or its Subsidiaries
after the consummation of the transactions contemplated hereby (including the
termination of Contracts pursuant to Section 6.5) (a) are in good operating
condition and repair, subject to ordinary wear and tear, are usable in the
ordinary course of the Mining Operations, and are suitable for the purposes for
which they are currently being used, and (b) are sufficient for the conduct of
the Mining Operations.
 
(b) Section 4.7(b) of the Seller’s Disclosure Schedule sets forth a complete and
accurate list of the equipment owned or leased by the Company or its
Subsidiaries and used in the Mining Operations as of the date hereof with a net
book value equal to or greater than $10,000 organized by coal mine, and with
respect to equipment with a net book value equal to or greater than $50,000,
also organized by production unit.  All of such equipment will be located at
such coal mines for use by the Purchaser as of the Closing.
 
4.8 Real Property.
 
(a) Section 4.8(a) of the Seller’s Disclosure Schedule contains a list of
(i) the Owned Real Property Interests, (ii) the Leased Real Property Interests,
and (iii) the Rights of Way, and, together with the Owned Real Property
Interests and Leased Real Property Interests, the “Real Property”); provided
that the omission of any Owned Real Property Interests, Leased Real Property
Interests or Right of Way by inadvertence which is not, individually or in the
aggregate, material to the Company or its Subsidiaries or the Mining Operations
from Section 4.8(a) of the Seller’s Disclosure Schedule shall not constitute a
breach of this Section 4.8(a).
 
(b) With respect to each Owned Real Property Interest:
 
(i) Either the Company or one of its Subsidiaries has good and marketable title
to each such Owned Real Property Interest free and clear of all Liens, except
Permitted Liens.
 
(ii) No structures, facilities or other improvements on any parcel adjacent to
an Owned Real Property Parcel encroach onto any portion of the Owned Real
Property Parcel in a manner that materially impairs the use of such property in
the manner it is currently used by the Company.
 
(iii) The Seller has made available to the Purchaser copies of the deeds and
other instruments (as recorded) by which the Company or its Subsidiaries
acquired the Owned Real Property Interests, and copies of all title insurance
policies, opinions, abstracts and surveys in the possession of the Company or
its Subsidiaries with respect to such Owned Real Property Interests.
 
(iv) Except as set forth on Section 4.8(b)(iv) of the Seller’s Disclosure
Schedule, there are no outstanding put rights or options or rights of first
refusal or rights of first offer in Third Parties to purchase any of the Owned
Real Property Interests.
 
(c) With respect to Leased Real Property Interests, and except as set forth on
Section 4.8(c) of the Seller’s Disclosure Schedule:
 
(i) The Seller has made available to the Purchaser a true and complete copy of
each Lease, and there are no oral or other agreements, amendments or
modifications affecting such Lease, provided that a failure by inadvertence to
make available to Purchaser any Lease or amendment which is not, individually or
in the aggregate, material to the Company or its Subsidiaries or the Mining
Operations shall not constitute a breach of this Section 4.8(c).    
 
(ii) Each Lease is a valid and binding Contract of the Company or its
Subsidiaries, and is in full force and effect and is binding on and enforceable
against the Company or its Subsidiaries, and, to the Knowledge of the Seller,
binding upon and enforceable against the counterparties thereto (except as may
be limited by bankruptcy, insolvency, moratorium, reorganization or similar Laws
affecting the rights of creditors generally and subject to general principles of
equity), and is free and clear of any Liens other than Permitted Liens.  Neither
the Company nor any of its Subsidiaries, nor to Knowledge of the Seller, any
other party to a Lease is in violation or breach of or default thereof that
would constitute a material default thereof or otherwise entitle the lessor to
terminate or modify any such Lease.  No event has occurred which (whether with
notice or lapse of time, or both) would constitute a material default thereof or
otherwise entitle the lessor to terminate or modify any such Lease.  Neither the
Company nor any of its Subsidiaries has received any written notice alleging any
violation, breach or default under any such Lease.
 
(iii)  Neither the Company nor any of its Subsidiaries owes or will owe any
material brokerage commissions or finder’s fees with respect to any Lease or any
renewal or extension thereof or the exercise of any right or option thereunder.
 
(d) The Company or one of its Subsidiaries owns, has rights to use or possesses
all material Rights of Way.
 
(e) To the Knowledge of the Seller, no Governmental Entity or other Third Party
having the power of eminent domain over the Real Property has commenced or
intends to exercise the power of eminent domain or a similar power with respect
to all or any part of such Real Property.  There are no pending or, to the
Knowledge of the Seller, threatened condemnation, fire, health, safety,
building, zoning or other land use regulatory proceedings, lawsuits or
administrative actions relating to any portion of the Real Property or any other
matters which do or may adversely affect the current use, occupancy or value
thereof.  Neither the Company nor any of its Subsidiaries has received notice of
any pending or threatened special assessment proceedings affecting any portion
of such Real Property.
 
(f) The Real Property and all present uses and operations of the Real Property
by the Company, its Subsidiaries or the Contractors comply with all zoning or
other land use Laws affecting the Real Property in all material respects.
 
(g) Except as set forth in Section 4.8(g) of the Seller’s Disclosure Schedule,
no Person other than the Company or its Subsidiaries is in possession of any
material Real Property or any portion thereof, and to the Knowledge of the
Seller, there are no leases, subleases, licenses, concessions or other
agreements, written or oral, granting to any Person other than the Company or
its Subsidiaries the right of use or occupancy of such Real Property or any
portion thereof.
 
4.9 Intellectual Property.
 
(a) Section 4.9(a)(i) of the Seller’s Disclosure Schedule contains a complete
and accurate list of all Intellectual Property that is material to or necessary
for the conduct of the Company’s and its Subsidiaries’ businesses or the Mining
Operations (the “Company Intellectual Property”), and except as set forth on
Section 4.9(a)(ii) of the Seller’s Disclosure Schedule, as of the Closing the
Company or its Subsidiaries will own or have the right to use all such Company
Intellectual Property.
 
(b) Except as set forth on Section 4.9(b) of the Seller’s Disclosure Schedule,
to the Knowledge of the Seller: (i) the Company Intellectual Property as
currently licensed or used by the Company or its Subsidiaries, and the Company’s
and its Subsidiaries’ conduct of their businesses as currently conducted, do not
infringe, violate or misappropriate the Intellectual Property of any Person; and
(ii) no Person is infringing, violating or misappropriating any Company
Intellectual Property.
 
4.10 Absence of Certain Changes or Events.
 
(a) As of the date hereof, except as set forth in Section 4.10(a) of the
Seller’s Disclosure Schedule, since the date of the Balance Sheet, no Material
Adverse Effect has occurred and is continuing.
 
(b) Without limiting the generality of Section 4.10(a), except as set forth on
Section 4.10(b) of the Seller’s Disclosure Schedule, since the date of the
Balance Sheet, each of the Company and its Subsidiaries has conducted its
business in the ordinary course, consistent with past practice, and neither the
Company nor any of its Subsidiaries has:
 
(i) made any change in its accounting principles or practices or the methods by
which such principles or practices are applied for financial reporting purposes
(except as required by GAAP), changed, or made, any material Tax election,
changed any Tax accounting method or settled any material claim for Taxes or
written down or written up (or failed to write down or write up in accordance
with GAAP consistent with past practice) the value of any Accounts Receivable or
revalued any of their respective assets other than in the ordinary course of
business consistent with past practice and in accordance with GAAP;
 
(ii) suffered any material damage, destruction or Loss with respect to any of
its properties or assets, whether or not covered by insurance;
 
(iii)   other than in the ordinary course of business consistent with past
practice, acquired, sold, transferred, conveyed, leased, subleased or otherwise
disposed of any businesses or any material properties or assets (whether by
merger, consolidation or otherwise); or
 
(iv)   authorized, committed or agreed to do any of the foregoing.
 
4.11 Contracts.
 
(a) Section 4.11(a) of the Seller’s Disclosure Schedule sets forth a complete
and accurate list of all of the following Contracts to which the Company or any
of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries or any of its or their assets are subject:
 
(i) Contracts for the purchase or lease of materials, supplies, goods, services,
equipment or other assets requiring aggregate payments in excess of $100,000;
 
(ii) Contracts for the sale by the Company or any of its Subsidiaries of
materials, supplies, goods, services, equipment or other assets (other than
coal) having a value in excess of $50,000;
 
(iii)   Contracts requiring the Company or any of its Subsidiaries to purchase
its total requirements of any product or service from a Third Party or that
contain “take or pay” or other minimum purchase requirements provisions;
 
(iv)   Contracts for the purchase, sale or transport of coal (collectively, the
“Coal Supply Agreements”);
 
(v) Contracts with coal brokers for the sale of coal;
 
(vi)   Contracts to supply or provide contract mining services and any other
Contracts with coal mine operators or their Affiliates, directors, managers,
officers, stockholders or partners;
 
(vii) partnership, joint venture or similar Contracts;
 
(viii) employment, severance, stay, bonus, termination, change in control,
consulting or similar Contracts;
 
(ix)   Contracts containing covenants not to compete or other covenants
restricting or purporting to restrict the right of the Company or any of its
Subsidiaries or Affiliates to engage in any line of business, acquire any
property, develop or distribute any product, provide any service (including
geographic restrictions) or to compete with any Person, or granting any
exclusive distribution rights, in any market, field or territory;
 
(x) Contracts with the Seller or any Affiliate of the Seller, the Company or any
of its Subsidiaries, other than Coal Supply Agreements;
 
(xi)   Notes, debentures, bonds, equipment trusts, letters of credit, loans or
other Contracts for or evidencing Indebtedness or the lending of money including
Bonds;
 
(xii) Contracts (including keepwell agreements) under which (A) any Person has
directly or indirectly guaranteed Indebtedness or other Liabilities of the
Company or any of its Subsidiaries or (B) the Company or any of its Subsidiaries
has directly or indirectly guaranteed Indebtedness or other Liabilities of any
Third Party (in each case other than endorsements for the purpose of collection
in the ordinary course of business consistent with past practice);
 
(xiii) Contracts under which the Company or any of its Subsidiaries has,
directly or indirectly, made any advance, loan, extension of credit or capital
contribution to, or other investment in, any Third Party;
 
(xiv) Contracts under which there is a continuing obligation to pay any “earn
out” payment or deferred or contingent purchase price or any similar payment
respecting the purchase of any business or assets;
 
(xv) Contracts that are material to the conduct of the business of the Company
or its Subsidiaries as currently conducted (i) under which any Company
Intellectual Property is licensed to any Third Party, or (ii) that constitute
Intellectual Property licensed by the Company or its Subsidiaries (excluding
generally-commercially-available off-the-shelf software programs that in each
case has incurred license fees of less than $2,500), identifying in each case
whether such license is exclusive or non-exclusive;
 
(xvi) Contracts with any Governmental Entity with a value in excess of $50,000,
other than Permits;
 
(xvii) Contracts other than the Leases, the Contractor Mining Agreements or the
Lafayette Agreements which require payment by the Company or its Subsidiaries of
any royalties; and
 
(xviii) Contracts that are otherwise material to the Mining Operations and not
previously disclosed pursuant to this Section 4.11.
 
The Contracts required to be listed on Section 4.11(a) of the Seller’s
Disclosure Schedule are collectively referred to herein as the “Company
Contracts.” The Seller has made available complete and accurate copies of each
Company Contract (including all material amendments, modifications, extensions
and renewals thereof and related notices relating thereto) to the Purchaser.
 
(b) Except as set forth on Section 4.11(b) of the Seller’s Disclosure Schedule,
(i) each Company Contract is in full force and effect and valid and enforceable
in accordance with its terms, (ii) each of the Company and its Subsidiaries and,
to the Knowledge of the Seller, all other parties thereto have complied with and
are in compliance with the provisions of each Company Contract in all material
respects, (iii) neither the Company nor any of its Subsidiaries is, nor to the
Knowledge of the Seller, any other party thereto is, in material default in the
performance, observance or fulfillment of any obligation, covenant, condition or
other term contained in any Company Contract, and neither the Company nor any of
its Subsidiaries has given or received notice to or from any Person relating to
any such alleged or potential default that has not been cured, and (iv) the
Company Contracts are all of the Contracts that are material to or necessary for
the conduct of the Company’s and its Subsidiaries’ businesses or the Mining
Operations.
 
(c) Except as disclosed in Section 4.11(c) of the Seller’s Disclosure Schedule:
 
(i) neither the Company nor any of its Subsidiaries has received written notice
from any party to a Coal Supply Agreement threatening to suspend shipments under
such Coal Supply Agreement due to an alleged breach by the Company or any of its
Subsidiaries of such Coal Supply Agreement;
 
(ii) there have been no whole or partial assignments or other transfers of any
of the Coal Supply Agreements or of any interest therein by the Company or any
of its Subsidiaries;
 
(iii)  none of the parties to any of the Coal Supply Agreements has made any
written claim to the Company or any of its Subsidiaries, either by
contractually-required notice or otherwise, of the existence of any force
majeure events, which materially affect or could materially affect future
deliveries under such Coal Supply Agreement;
 
(iv) no written claims have been made or, to the Knowledge of the Seller,
threatened under any economic hardship or similar provisions of any of the Coal
Supply Agreements;
 
(v) there have been no written demands by any of the parties to any of the Coal
Supply Agreements for adequate assurance of performance, whether made pursuant
to the terms of the Coal Supply Agreements or pursuant to statutory or common
law;
 
(vi) there are no pending or, to the Knowledge of the Seller, threatened
material pricing disputes under the Coal Supply Agreements;
 
(vii) no party to any of the Coal Supply Agreements has currently suspended or,
to the Knowledge of the Seller, threatened to suspend its performance of the
terms and conditions of the applicable Coal Supply Agreement either under the
terms of such Coal Supply Agreement or otherwise;
 
(viii) none of the customers or sellers under any of the Coal Supply Agreements
has sought to renegotiate, alter or terminate any of the terms of the Coal
Supply Agreements by any means, including, but not limited to, litigation,
arbitration, renegotiation under the terms of the Coal Supply Agreements or
renegotiation outside of the terms of the Coal Supply Agreements; and
 
(ix) neither the Company nor any of its Subsidiaries is obligated to deliver any
quantities of coal under any Coal Supply Agreement, the consideration for which
has been pre-paid.
 
4.12 Litigation.  Except as set forth on Section 4.12 of the Seller’s Disclosure
Schedule, (a) there are no material actions, suits, proceedings, claims,
arbitrations, litigations or investigations (each, an “Action” and collectively
“Actions”), (i) pending or, to the Knowledge of the Seller, threatened against
or affecting the Company or any of its Subsidiaries or its or their business,
properties or assets or (ii) that challenges or seeks to prevent, enjoin or
otherwise delay the transactions contemplated by this Agreement or the Ancillary
Agreements; (b) no event has occurred or circumstances exist that does or could
reasonably be expected to result in or serve as a basis for any such material
Action; and (c) there is no material unsatisfied judgment, penalty or award
against the Company or any of its Subsidiaries or affecting its or their assets
or properties.
 
4.13 Intentionally omitted.
 
4.14 Labor and Employment Matters.
 
(a) Set forth on Section 4.14(a) of the Seller’s Disclosure Schedule is a
complete and accurate list of any employees of the Company and its Subsidiaries
(the “Employees”), and contractors and consultants who are individuals that
provide services to the Company and its Subsidiaries as of the date hereof.
 
(b) Neither the Company nor any of its Subsidiaries is a party or subject to any
collective bargaining agreement, union contract, letter, side letter or other
Contract involving any union, labor organization or other employee
association.  No union, labor organization or other employee association
represents or purports to represent any Employee, contractor or consultant
employed or retained by the Company or any of its Subsidiaries; there is not
pending any effort or campaign to organize Employees into any union, labor
organization or other employee association; and neither the Company nor any of
its Subsidiaries has any obligation to recognize or bargain with any union,
labor organization or other employee association.  There have not been, and
there are not pending or, to the Knowledge of the Seller, threatened, any labor
disputes, strikes, work stoppages, lockouts, requests for representation,
pickets, or work slowdowns that involve any union, labor organization or other
employee association or Employees, contractors who are individuals or
consultants of the Company or any of its Subsidiaries.
 
(c) Except as contemplated by this Agreement, neither the Company nor any of its
Subsidiaries has effectuated or is in the process of effectuating a “plant
closing” (as defined in the WARN Act) or a “mass lay-off” (as defined in the
WARN Act), in either case affecting any site of employment or facility of the
Company or any of its Subsidiaries, except in compliance with the WARN Act.
 
(d) Since January 1, 2008, the Company and each of its Subsidiaries has complied
with and has not engaged in any action or failure to act giving rise to
liability under any Law, Contract (including but not limited to any employment
or services agreement), benefit plan or other legal requirement, restriction or
entitlement relative to any employee, contractor, consultant, labor organization
or other individual employed by or who provides services to the Company or its
Subsidiaries, or their businesses.
 
(e) Notwithstanding anything elsewhere in this agreement to the contrary, the
representations and warranties in this Section 4.14 are the sole and exclusive
representations and warranties in this Agreement concerning labor and employment
matters, subject to the last sentence of Section 4.6(e).
 
4.15 Environmental.
 
(a) Except as set forth in the corresponding subsection of Section 4.15 of the
Seller’s Disclosure Schedule, matters that have been fully satisfied and
resolved with the relevant Governmental Entity, and matters addressed in Section
4.6:  (i) except would not reasonably be expected to have a Material Adverse
Effect, the Company and each of its Subsidiaries and each of the Mining
Operations is and has been in compliance with, and neither the Company nor any
of its Subsidiaries has any Liabilities under, any and all Environmental Laws;
(ii) the Company and each of its Subsidiaries, directly or through the
Contractors possesses, has possessed and is and has been in compliance in all
material respects with all applicable Environmental Permits; (iii) there are no
Actions pending or, to the Knowledge of the Seller, threatened against either
the Company or any of its Subsidiaries or to the Knowledge of the Seller either
of the Contractors alleging that the Company or any of its Subsidiaries or any
of the Mining Operations is in violation of or has any Liability under
Environmental Laws or Environmental Permits; (iv) no Releases of Hazardous
Materials have occurred and no Person has been exposed to any Hazardous
Materials at, from, in, to, on, or under any Site and no Hazardous Materials are
present in, on, under, about or migrating to or from any Site that would
reasonably be expected to give rise to a material Liability to the Company and
its Subsidiaries under applicable Environmental Laws; (v) neither the Company
nor any of its Subsidiaries nor to the Knowledge of the Seller either of the
Contractors has transported or arranged for the treatment, storage, handling,
disposal or transportation of any Hazardous Material to any location which has
resulted or could result in a material Liability to the Company and its
Subsidiaries; (vi) there are no Phase I or Phase II environmental assessments,
environmental investigations, studies, audits, tests, reviews or other analyses
conducted by, on behalf of, or which are in the possession of the Company or any
of its Subsidiaries (or any advisors or representatives thereof) or the
Contractors with respect to any Site, other than the Environmental Site
Assessment dated March 8, 2010 by John T. Boyd Company Mining and Geological
Consultants made available to Purchaser; (vii) except for the Contract Mining
Agreements, neither the Company nor any of its Subsidiaries has, either
expressly or by operation of Law, assumed responsibility for or agreed to
indemnify or hold harmless any Person for any Liability or obligation, arising
under or relating to Environmental Laws; (viii) neither the execution of this
Agreement nor consummation of the transaction contemplated by this Agreement
will require any pre-closing notification to or consent of any Governmental
Authority (except with regard to the transfer of Permits or other ministerial
notifications or transfers) or the undertaking of any investigations or remedial
actions pursuant to Environmental Laws; (ix) other than the Permits listed on
Sections 4.6(b)(i) and 4.6(b)(ii) of the Seller’s Disclosure Schedule, neither
the Company nor any of its Subsidiaries has entered into or is subject to, any
judgment, decree, order or other similar requirement of or agreement with any
Governmental Authority under any Environmental Laws; and (x) there are no
(A) polychlorinated biphenyl containing equipment, (B) underground storage
tanks, or (C) asbestos-containing material at the Real Property.
 
(b)  Notwithstanding anything elsewhere in this agreement to the contrary, the
representations and warranties in this Section 4.15 are the sole and exclusive
representations and warranties in this Agreement concerning environmental
matters, subject to the last sentence of Section 4.6(e).
 
4.16 Insurance.  Section 4.16 of the Seller’s Disclosure Schedule sets forth
(a) a list of each material insurance policy and fidelity bond on which the
Company or any of its Subsidiaries, is the named insured or otherwise the
beneficiary of coverage (the “Policies”).  There are no material pending claims
under any of such Policies as to which coverage has been questioned, denied or
disputed by the insurer or in respect of which the insurer has reserved its
rights.  All Policies are in full force and effect and are valid and are
enforceable in accordance with their terms.  All premiums due under the Policies
have been paid in full or, with respect to premiums not yet due,
accrued.  Neither the Company nor any of its Subsidiaries has received a notice
of cancellation or termination of any Policy or of any material changes that are
required in the conduct of the Company’s and its Subsidiaries’ businesses as a
condition to the continuation of coverage under, or renewal of, any such Policy.
 
4.17 Customers and Suppliers.  Section 4.17(a) of the Seller’s Disclosure
Schedule sets forth a complete and accurate list of the current customers (other
than customers of spot sales of less than one year) of the Company and its
Subsidiaries (the “Company Customers”).  Section 4.17(b) of the Seller’s
Disclosure Schedule sets forth a complete and accurate list of each supplier
(i) that constitutes a sole or primary source of supply to the Company or any of
its Subsidiaries, (ii) to which the Company or its Subsidiaries made payments in
excess of $100,000 during the year ended December 31, 2013, or (iii) that is
otherwise material to the operation of the Company’s business (the “Company
Material Suppliers”).  The Company’s and its Subsidiaries’ relationships with
each of the Company Customers and Company Material Suppliers are good commercial
working relationships.  Section 4.17(c) of the Seller’s Disclosure Schedule sets
forth a list, to the Knowledge of the Seller, of each supplier (i) that
constitutes a sole or primary source of supply to the Contractors with respect
to the Mining Operations, (ii) to which the Contractors made payments in excess
of $100,000 during the year ended December 31, 2013 with respect to the Mining
Operations, or (iii) that is otherwise material to the Mining Operations (the
“Contractor Material Suppliers”).  Except as indicated in Section 4.17(d) of the
Seller’s Disclosure Schedule, no Company Customer or Company Material Supplier
has canceled, terminated or otherwise materially and adversely modified, or
threatened to cancel, terminate or otherwise materially and adversely modify,
its relationship with the Company or any of its Subsidiaries, and neither the
Company nor any of its Subsidiaries has received notice that any Company
Customer might take such action or limit its purchases from or sales to the
Company or any of its Subsidiaries, either as a result of the consummation of
the transactions contemplated by this Agreement and the Ancillary Agreements or
otherwise.  To the Knowledge of the Seller, the Contractors’ relationships with
each of the Contractor Material Suppliers are good commercial working
relationships. To the Knowledge of the Seller, no Contractor Material Supplier
has canceled, terminated or otherwise materially and adversely modified, or
threatened to cancel, terminate or otherwise materially and adversely modify,
its relationship with the Contractors, and neither the Company nor any of its
Subsidiaries has received notice that any Contractor Material Supplier might
take such action or limit its sales to such Contractor.
 
4.18 Affiliate Transactions.  Except as set forth on Section 4.18 of the
Seller’s Disclosure Schedule, no Affiliate of the Seller, or Affiliate or family
member of any director, current or former partner, member, manager, stockholder
or officer of the Company or any of its Subsidiaries is a party to or is subject
to, any Contract with the Company or any of its Subsidiaries or has any interest
in any of the properties or assets of the Company or any of its
Subsidiaries.  There are no services provided to the Company or any of its
Subsidiaries by any Affiliate of the Seller or by any Affiliate or family member
of any director, current or former partner, member, manager, stockholder,
officer or direct or indirect holder of equity interests of the Company or any
of its Subsidiaries (other than services provided by any such Persons as
directors, officers or employees of the Company or its Subsidiaries).  Neither
the Seller nor any Affiliate of the Seller or the Company or its Subsidiaries
owns, directly or indirectly, any interest in (except for the ownership of
marketable securities of publicly owned corporations, representing in no case
more than 5% of the outstanding shares of such class of securities) or Controls
or is a director, officer, employee, current or former partner of, participant
in, consultant or contractor to any business organization which is a competitor,
creditor, supplier, customer, landlord or tenant of the Company or any of its
Subsidiaries.
 
4.19 Bank Accounts.  Section 4.19 of the Seller’s Disclosure Schedule sets
forth the name of each bank, safe deposit company or other financial institution
in which the Company or any of its Subsidiaries has an account, lock box or safe
deposit box and the names of all Persons authorized to draw thereon or have
access thereto.
 
4.20 Coal Reserves.
 
(a) To the Knowledge of the Seller, none of the Coal Reserves are within an area
designated as unsuitable for mining activities or under study for designation as
unsuitable for mining activities under the Federal Surface Mining Control and
Reclamation Act, 30 U.S.C. Section 1201, et seq. or analogous state laws.
 
(b) The Seller has in good faith made available to the Purchaser all of the
drilling, sampling, quality analyses and other geological, geotechnical and
geophysical data in the possession of the Seller, the Company or its
Subsidiaries, related to the Real Property or the Coal Reserves.  The Seller has
no Knowledge indicating that such information is inaccurate in any material
respect.  Notwithstanding the foregoing, the Seller makes no warranty or
representation, and affirmatively disclaims any warranty or representation
regarding the existence, nature, quality or quantity of any Coal Reserves.
 
4.21 Royalties.  Except as set forth on Section 4.21 of the Seller’s Disclosure
Schedule, all advanced or earned royalties due under the Leases or any Contracts
have been timely and properly paid, and neither the Company nor any of its
Subsidiaries has received notices of default or notices of audits in connection
with the payment of such royalties.
 
4.22 Bonds.  Section 4.22 of the Seller’s Disclosure Schedule lists all Bonds,
including reclamation bonds, with respect to the Mining Operations, all of which
are currently in effect.
 
4.23 Books and Records.  The minute books and stock record books of the Company
and each of its Subsidiaries reflect all material actions taken by written
consent or resolution and meetings by their respective stockholders, members,
partners, directors, managers, committees and other applicable governing or
managing bodies, as the case may be.  The Seller has made available to the
Purchaser an accurate copy of the minute books and stock record books of the
Company and each of its Subsidiaries.  All Books and Records of the Company and
each of its Subsidiaries will be in the possession of the Company and available
to the Purchaser as of the Closing.
 
4.24 Brokers.  Neither the Company nor any of its Subsidiaries has any Liability
to pay any fees or commissions to any broker, finder or similar agent with
respect to this Agreement, the Ancillary Agreements or the transactions
contemplated by hereby or thereby.
 
4.25 No Other Representations and Warranties.  Except for the representations
and warranties contained in Article III and this Article IV (including the
related portions of the Seller’s Disclosure Schedules) or the certificates
delivered by the Seller at the Closing, none of the Seller, the Company, its
Subsidiaries or any other Person has made or makes any other express or implied
representation or warranty, either written or oral, on behalf of the Seller, the
Company or any of its Subsidiaries, including any representation or warranty as
to the accuracy or completeness of any information regarding the Company
furnished or made available to the Purchaser and its Representatives, or any
representation or warranty arising from statute or otherwise in law.
 
ARTICLE V 
 
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
 
The Purchaser represents and warrants to the Seller as of the date hereof and as
of the Closing as follows:
 
5.1 Organization and Good Standing.  The Purchaser is duly organized and validly
existing under the Laws of the State of Indiana.
 
5.2 Authority and Enforceability.  The Purchaser has the requisite power and
authority to enter into this Agreement and each of the Ancillary Agreements to
which it is a party, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby.  The execution,
delivery and performance by the Purchaser of this Agreement and each of the
Ancillary Agreements to which it is a party and the consummation by the
Purchaser of the transactions contemplated hereby and thereby have been duly
authorized by all necessary action on the part of the Purchaser and no other
action is necessary on the part of the Purchaser to authorize this Agreement or
any Ancillary Agreement to which it is a party or to consummate the transactions
contemplated hereby and thereby.  This Agreement and each of the Ancillary
Agreements to which it is a party have been duly executed and delivered by the
Purchaser.  Assuming due authorization, execution and delivery by the Seller and
each other party thereto, this Agreement and each of the Ancillary Agreements
constitutes the valid and binding obligation of the Purchaser, enforceable
against the Purchaser in accordance with its terms, except as limited by
(a) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar Laws relating to creditors’ rights generally and (b) general
principles of equity, whether such enforceability is considered in a proceeding
in equity or at Law.
 
5.3 No Conflicts; Consents.
 
(a) The execution and delivery by the Purchaser of this Agreement and the
Ancillary Agreements to which it is a party does not, and the performance by the
Purchaser of its obligations hereunder and thereunder and the consummation of
the transactions contemplated hereby and thereby (in each case, with or without
the giving of notice or lapse of time, or both) will not, directly or
indirectly, (i) violate or conflict with the provisions of any of the
Organizational Documents of the Purchaser or (ii) violate any Law, Order or
other restriction of any Governmental Entity to which the Purchaser may be
subject or (iii) violate, breach, conflict with or constitute a default, an
event of default, or an event creating any additional rights (including rights
of amendment, impairment, suspension, revocation, acceleration, termination or
cancellation), impose additional obligations or result in a loss of any rights,
result in the creation of any Lien or require a consent or the delivery of
notice, under any Contract or Permit applicable to the Purchaser or to which the
Purchaser is a party or by which the Purchaser is bound or to which its assets
are subject, except in the case of clauses (ii) and (iii) which would not
reasonably be expected to impair or delay in any material respect the ability of
the Purchaser to consummate the transactions contemplated hereby or by the
Ancillary Agreements.
 
(b) Except for the requirements of the HSR Act, the Purchaser is not required to
give any notice to, make any filing with or obtain any authorization, consent or
approval of any Governmental Entity in order for the parties to consummate the
transactions contemplated hereby and by the Ancillary Agreements, except where
the failure to do so would not reasonably be expected to impair or delay in any
material respect the ability of the Purchaser to consummate the transactions
contemplated hereby or by the Ancillary Agreements.
 
5.4 Financing.  The Purchaser has provided to the Seller a complete and correct
copy of (a) a proposal letter and term sheet dated June 24, 2014 from its
prospective financing arranger to the Purchaser (the “Highly Confident Letter”),
evaluating the feasibility of a financing of up to $375,000,000 on the terms and
conditions described therein (the “Loan Financing”) to finance the transactions
contemplated by this Agreement and expressing the view that such arranger is
“highly confident” that the financing described therein can be accomplished,
subject to the terms and conditions expressed therein; and (b) a letter dated
June 12, 2014 from a potential investor (the “Equity Financing Letter”)
expressing an intent to provide equity financing (the “Equity Financing,” and
together with the Loan Financing, the “Financing”) in connection with the
transactions contemplated by this Agreement if necessary depending on the amount
of available cash and funding the Purchaser obtains in connection with the Loan
Financing.  Subject to its terms and conditions, the Financing, if and when
funded, will provide the Purchaser with acquisition financing on the Closing
Date sufficient to pay to the Seller the Purchase Price and to pay all related
fees and expenses due upon the Closing on the terms contemplated by this
Agreement.  The Purchaser has no reason to believe that it will not be able to
complete the Financing on the terms and conditions outlined in the Highly
Confident Letter and the Equity Financing Letter, subject to the terms and
conditions expressed therein and the satisfaction of the conditions precedent to
the Purchaser’s obligation to consummate the transactions contemplated hereby as
specified in Sections 7.1 and 7.2 hereof.
 
5.5 Brokers.  The Purchaser does not have any Liability to pay any fees or
commissions to any broker, finder or similar agent with respect to this
Agreement, the Ancillary Agreements or the transactions contemplated by hereby
or thereby.
 
5.6 Purchase for Investment.  The shares of Common Stock purchased by the
Purchaser pursuant to this Agreement are being acquired for investment only and
not with a view to any public distribution thereof.  The Purchaser shall not
offer to sell or otherwise dispose of, or sell or otherwise dispose of, the
Common Stock so acquired by it in violation of any of the registration
requirements of the Securities Act of 1933.
 
5.7 Independent Investigation.  The Purchaser has conducted its own independent
investigation, review and analysis of the business, results of operations,
prospects, condition (financial or otherwise) or assets of the Company and its
Subsidiaries, and acknowledges that it has been provided adequate access to the
personnel, properties, assets, premises, books and records, and other documents
and data of the Seller and the Company and its Subsidiaries for such purpose. 
The Purchaser acknowledges and agrees that: (a) in making its decision to enter
into this Agreement and to consummate the transactions contemplated hereby, the
Purchaser has relied solely upon (i) the representations and warranties of the
Seller set forth in Article III and Article IV of this Agreement (including the
related portions of the Seller’s Disclosure Schedule) and the certificates
delivered by the Seller at the Closing, and (ii) its own investigations; and
(b) none of the Seller, the Company or any other Person has made any
representation or warranty as to the Seller, the Company or this Agreement,
except as set forth in Article III and Article IV of this Agreement (including
the related portions of the Seller’s Disclosure Schedule) or the certificates
delivered by the Seller at the Closing.
 
ARTICLE VI
COVENANTS
 
6.1 Restrictions on Equity Interest Transfers.  The Seller hereby agrees not to
transfer, assign or pledge, directly or indirectly, by operation of Law or
otherwise, any of its Equity Interests in the Company or any of its Subsidiaries
(other than the sale of the Seller’s Common Stock pursuant to this Agreement)
during the period from the date hereof through and including the earlier of
(a) the Closing; and (b) the termination of this Agreement in accordance with
its terms.  Any such attempted transfer, assignment or pledge during such period
will not be effective, and the Seller shall cause the Company or its
Subsidiaries not to record such transfer, assignment or pledge in the records of
the Company or its Subsidiaries.
 
6.2 Conduct of Business.
 
(a) Subject to such steps as the Seller may take pursuant to Section 2.3(e) and
Section 2.3(f) and except (i) as set forth on Section 6.2 of the Seller’s
Disclosure Schedule, (ii) as required by applicable Law, or (iii) with the prior
written consent of the Purchaser, during the period commencing on the date
hereof and ending at the earlier of the Closing Date and the termination of this
Agreement in accordance with its terms, the Company will, and the Seller will
cause the Company to, and the Seller and the Company will cause each of the
Company’s Subsidiaries to, carry on the  business of the Company and its
Subsidiaries in the ordinary course in a manner consistent with past practice
(including maintenance of all appropriate safety measures), to pay its debts and
Taxes when due and, to the extent consistent therewith, to use commercially
reasonable efforts to keep intact its business, keep available the services of
its current employees and preserve its relationships with customers, suppliers,
licensors, licensees, distributors and other Persons with which it has
significant business relationships.  Among other things, the Company shall
notify the Purchaser of (i) any notice of violation of the Mining Regulations in
connection with the Mining Operations that occurs following the date hereof, or
(ii) any material deviation of the Mining Operations from the plans as provided
by the Seller pursuant to Section 4.6(d) or the submission or receipt of any
amendments, modifications, updates or correspondence related to such plans.
 
(b) Without limiting the generality of Section 6.2(a), subject to such steps as
Seller may take pursuant to Section 2.3(e) and Section 2.3(f) and except (i) as
set forth on Section 6.2 of the Seller’s Disclosure Schedule, (ii) as required
by applicable Law, or (iii) with the prior written consent of the Purchaser
(which consent, with respect to entering into Contracts for sales of coal, shall
not be unreasonably withheld, conditioned or delayed), during the period
commencing on the date hereof and ending at the earlier of the Closing Date and
the termination of this Agreement in accordance with its terms, the Seller and
the Company will not, and the Seller will cause the Company not to, and the
Seller and the Company will cause each of the Company’s Subsidiaries not to,
take any action or enter into any transaction listed below:
 
(i) amend or change its Organizational Documents;
 
(ii) issue, sell or otherwise dispose of or repurchase, redeem or otherwise
acquire any of its shares of, or rights of any kind to acquire (including
options) any shares of, any of its capital stock or other Equity Interests;
 
(iii)   declare, set aside or pay any non-cash dividend or other distribution
(whether in stock or property, or any combination thereof) on any of its capital
stock or other Equity Interests;
 
(iv)   reclassify, combine, split, subdivide or issue any other securities in
respect of, in lieu of or in substitution for, directly or indirectly, any of
its capital stock or other Equity Interests;
 
(v) make any change in its accounting principles or practices or the methods by
which such principles or practices are applied for financial reporting purposes
(except as required by GAAP), changed, or make, any material Tax election,
change any Tax accounting method or settled any material claim for Taxes or
written down or written up (or fail to write down or write up in accordance with
GAAP consistent with past practice) the value of any Accounts Receivable or
revalue any of their respective assets other than in the ordinary course of
business consistent with past practice and in accordance with GAAP;
 
(vi) (A) cancel, materially modify, terminate or grant a material waiver or
release of any Company Contract or material Permit, or give any consent or
exercise any material right thereunder or (B) enter into any Contract which
would be a Company Contract if in effect on the date hereof;
 
(vii) acquire, sell, transfer, convey, lease, sublease or otherwise dispose of
any businesses or any properties or assets (whether by merger, consolidation or
otherwise);
 
(viii) (A) incur, guarantee or assume any Indebtedness, or mortgaged, pledged or
subjected to any Lien any of its properties or assets, (B) pay any principal of
or interest on any Indebtedness before the required date of such payment, cancel
any Indebtedness or waive of any claims or rights with respect to any
Indebtedness, or (C) fail to pay any creditor any amount owed to such creditor
when due;
 
(ix)   make any loan, advance or capital contribution to, or investment in, any
Person other than travel loans or advances in the ordinary course of business
consistent with past practice;
 
(x) fail to maintain in full force and effect or fail to use reasonable best
efforts to replace or renew the Policies;
 
(xi)   undergo a complete or partial liquidation, dissolution, restructuring,
recapitalization or other reorganization; or
 
(xii) authorize, commit or agree to do any of the foregoing.
 
6.3 Access to Information; Notification.
 
(a) From the date hereof until the Closing, or earlier termination of this
Agreement, Seller shall (and shall cause the Company and its Subsidiaries to)
(i) afford to the Purchaser and its officers, directors, employees, accountants,
counsel, consultants, advisors, agents and other representatives
(“Representatives”) reasonable access to and the right to inspect all of the
Real Property, properties, assets, premises, Books and Records, contracts,
agreements and other documents and data related to the Company and its
Subsidiaries; (b) furnish the Purchaser and its Representatives with such
financial, operating and other data and information related to the Company and
its Subsidiaries as the Purchaser or any of its Representatives may reasonably
request; and (c) instruct the Representatives of the Seller and the Company to
cooperate with the Purchaser in its investigation of the Company and its
Subsidiaries; provided, however, that any such investigation shall be conducted
during normal business hours upon reasonable advance notice to the Seller, under
the supervision of the Seller’s personnel and in such a manner as not to
unreasonably interfere with the normal operations of the Company.  All requests
by the Purchaser for access pursuant to this Section 6.3 shall be submitted or
directed exclusively to Randy Beck or such other individuals as the Seller may
designate in writing from time to time.  Notwithstanding anything to the
contrary in this Agreement, neither the Seller nor the Company shall be required
to disclose any information to the Purchaser if such disclosure would:
(x) jeopardize any attorney-client or other privilege; or (y) contravene any
applicable Law, fiduciary duty or binding agreement entered into prior to the
date of this Agreement.  Prior to the Closing, the Purchaser shall not contact
any suppliers to, or customers of, the Company and its Subsidiaries with respect
to the Company or its Subsidiaries or the transactions contemplated hereby
without the prior written consent of the Seller, which consent shall not be
unreasonably withheld, conditioned or delayed.  The Purchaser and the Seller
shall jointly develop and implement transition plans with respect to customers
and suppliers regarding the transactions contemplated by this Agreement and will
work together to communicate with customers and suppliers and implement those
plans in a timely manner.  Between the date of this Agreement and the Closing,
except in connection with the weekly observation visits pursuant to
Section 6.3(c), which may include underground observations, or as set forth on
Section 6.3(a) of the Purchaser’s Disclosure Schedule, the Purchaser shall have
no right to perform invasive or subsurface investigations of the Real
Property.  The Purchaser shall, and shall cause its Representatives to, abide by
the terms of the Confidentiality Agreement with respect to any access or
information provided pursuant to this Section 6.3 and comply with all applicable
Laws and work rules of the Company and its Subsidiaries, and will indemnify the
Company, its Subsidiaries and the Contractors for any Liabilities arising from
or caused by the Purchaser’s or its Representatives’ negligence or willful
misconduct while present at the Mining Operations or otherwise on the Real
Property pursuant to the exercise of the Purchaser’s rights pursuant to this
Section 6.3(a).  The Purchaser’s representation in Section 5.7 shall apply to
any information provided to the Purchaser pursuant to this Section
6.3(a).  Prior to the Closing and if the Closing does not occur, the information
provided pursuant to this Section 6.3 will be used solely for the purpose of
evaluating and effecting the transactions contemplated hereby.
 
(b) Between the date hereof and the Closing Date, each of the Seller and the
Purchaser shall provide the other parties hereto with prompt written notice
(i) in the event of the happening of (or the Seller or the Purchaser becoming
aware of) any fact, event or occurrence (taken together with all other facts,
events and occurrences) which (A) does, or would reasonably be expected to, have
a Material Adverse Effect, or cause a breach of, or any material inaccuracy in,
any of the representations and warranties set forth in Article III, Article IV
or Article V of this Agreement or breach any of the Seller’s or the Purchaser’s
covenants set forth herein or in the Ancillary Agreements if such fact, event or
occurrence existed on the date hereof or (B) creates, or could be reasonably
likely to create, a reasonable basis for the Seller or the Purchaser to believe
that it will not be able to satisfy at the Closing any condition set forth in
Article VII, (ii) of any notice or other communication from any Person alleging
that the consent of such Person is or could be required in connection with the
transactions contemplated by this Agreement and (iii) of any notice or other
communication from any Governmental Entity in connection with the transactions
contemplated by this Agreement; provided, that the delivery of any notice
pursuant to this Section 6.3(b) shall not (x) modify, diminish or in any other
way affect the Seller’s or the Purchaser’s remedies hereunder (including their
respective rights to indemnification), (y) cure any inaccuracies in or breaches
of representations or warranties, or breaches of covenants made by the Seller or
the Purchaser in this Agreement or (z) be deemed to amend, modify or supplement
the Seller’s Disclosure Schedule or the Purchaser’s Disclosure Schedule.
 
(c) Without otherwise limiting the Purchaser’s rights hereunder, between the
date hereof and the Closing Date, the Seller shall cause the Company and its
Subsidiaries to allow up to two Representatives of the Purchaser to visit on a
weekly basis at each of the Company’s or its Subsidiaries’ operating mines to
observe the Mining Operations; provided that such Representatives of the
Purchaser shall comply with the safety and security rules then in effect at such
operating mines. The parties shall work in good faith to schedule such visits in
advance at times and for durations that are not disruptive to the Mining
Operations.
 
(d) Within 15 days following the end of each month prior to the Closing Date,
the Seller shall deliver to the Purchaser unaudited consolidated balance sheets
of the Company as of the last day of such month, and related unaudited
consolidated statements of income, changes in shareholders’ equity and cash flow
for the month then ended.  The Company covenants that such monthly and quarterly
statements shall (i) be prepared by consistent with the manner in which the
Financial Statements were prepared and be in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby and present fairly, in
all material respects, the financial position of the Company and its
Subsidiaries as of the applicable date; and (ii) be prepared from the Books and
Records of the Company and its Subsidiaries.  In addition, as soon as reasonably
practicable following the date hereof, the Seller shall (i) deliver to the
Purchaser an update to Section 4.7(b) of the Seller’s Disclosure Schedule to
include the net book value of each item of equipment on such schedule, and (ii)
cause the Company to write off the value of its parts inventory determined to be
obsolete in such amount as mutually agreed by the parties hereto.
 
(e) Following the date hereof until the Closing Date, the Purchaser shall have
the right to place its own security personnel on-site at each of the Company’s
or its Subsidiaries’ operating mines to monitor activity with respect to
equipment and materials leaving the mine site, provided that such personnel do
not unreasonably interfere with the Mining Operations.  During the week prior to
the anticipated Closing Date, the Purchaser shall have the right to inspect the
equipment located at each of the Company’s or its Subsidiaries’ operating mines
(both underground and at the surface).  The Seller shall, and shall cause the
Company and its Subsidiaries and the Contractors to provide reasonable
assistance to the Purchaser during such inspections, including accompanying the
Purchaser’s personnel during such inspections and assisting in locating the
relevant equipment.  The parties shall work in good faith to coordinate the
Purchaser’s inspection and security procedures in order to minimize any
disruption to the Mining Operations.
 
(f) Prior to the Closing, the Seller shall be entitled, at its own expense, to
make copies of the Books and Records and to retain such copies following the
Closing, which copies shall remain subject to the confidentiality obligations of
Section 6.6(a).
 
6.4 Resignations.  At the Closing, the Seller shall (and shall cause the Company
and its Subsidiaries to) deliver to the Purchaser duly signed resignations
(including releases of claims) in form and substance reasonably satisfactory to
the Purchaser, effective as of the Closing, of (a) all directors or managers of
the Company and its Subsidiaries of their positions as directors or managers, as
applicable, and (b) prior to the Closing, any officers of the Company and its
Subsidiaries of their positions as officers.
 
6.5 Termination or Transfer of Certain Obligations.
 
(a) Prior to the Closing, the Seller shall, and shall cause the Company and its
Subsidiaries to, (i) repay and extinguish all Indebtedness of the Company and
its Subsidiaries, other than Purchaser Paid Indebtedness; and (ii) secure the
release of all Liens, other than Permitted Liens (except for Liens of the type
set forth in clause (e) of the definition of Permitted Lien, all of which shall
be released or for which the Seller shall indemnify the Purchaser), in and upon
any of the properties and assets of the Company and its Subsidiaries, other than
the release of Liens associated with such Purchaser Paid Indebtedness.
 
(b) The Seller shall be solely responsible for the payment of any amounts
payable under the severance, management, employment, stay, bonus, phantom stock,
deferred compensation, termination or similar Plans or Contracts of the Company
or its Subsidiaries as a result of the consummation of the transactions
contemplated hereby and by the Ancillary Agreements.
 
(c) Prior to the Closing, the Seller shall (and shall cause the Company and its
Subsidiaries to) (i) terminate any Contracts (other than the Contracts set forth
on Section 6.5(c) to the Seller’s Disclosure Schedule) between the Company or
any of its Subsidiaries, on the one hand, and the Seller or any Affiliate of the
Seller, on the other hand, and (ii) settle any unpaid intercompany amounts or
obligations between the Company or any of its Subsidiaries, on the one hand, and
the Seller or any Affiliate of the Seller, on the other hand.
 
(d) Prior to the Closing, the Seller shall (and shall cause the Company and its
Subsidiaries to) terminate any Contracts between the Company or any of its
Subsidiaries, on the one hand, and the Contractors or any other mine operators,
on the other hand, without any further obligation or liability to the Company,
any of its Subsidiaries or the Purchaser following the Closing other than the
Contractor Termination Royalties, pursuant to termination agreements in
substantially the form attached hereto as Exhibits C-1 and C-2 (the “Contractor
Termination Agreements”).
 
(e) As of the date hereof, the Seller has provided or shall (and shall cause the
Company and its Subsidiaries to) provide notices to terminate the Lafayette
Agreements, in accordance with the terms of those agreements, substantially in
the form attached hereto as Exhibits D-1 and D-2 (the “Lafayette Termination
Notices”).
 
(i) Following the date hereof and prior to the Closing, the parties shall
cooperate in good faith to obtain a settlement and release from Lafayette Energy
Company with respect to the termination of the Lafayette Agreements; provided
that (A) the form and substance of any such settlement and release shall be
subject to the approval of the Purchaser in its sole discretion provided that
such settlement and release shall not impose any liability on the Seller, and
(B) any amounts to be paid to Lafayette Energy Company in respect of such
settlement and release in excess of the Lafayette Pre-Closing Payments shall be
paid by the Purchaser on behalf of the Company at the Closing, and will be
included in an upward adjustment to the Closing Date Purchase Price.
 
(ii) The parties acknowledge and agree that in the event a settlement and
release is not reached with Lafayette Energy Company, (A) the Seller shall be
responsible (to the extent not reflected in the Final Balance Sheet and the
Purchase Price as adjusted pursuant to Section 2.4) for all Lafayette
Pre-Closing Payments, and (B) from and after the Closing, the Company shall be
responsible for all liabilities and other obligations under the Lafayette
Agreements, whether arising before or after the Closing (excluding the Lafayette
Pre-Closing Payments for which the Seller is responsible as described in
subclause (A) above), including all such liabilities arising in connection with
the termination of the Lafayette Agreements as contemplated by the Lafayette
Termination Notices and attributable to the period commencing on the Closing
Date and continuing thereafter.
 
(f) Prior to the Closing, the Seller shall (and shall cause the Company and its
Subsidiaries to) terminate or assign to the Seller or one of its Affiliates the
Contracts set forth on Section 6.5(f) of the Seller’s Disclosure Schedule,
without any further obligation or liability to the Company, any of its
Subsidiaries or the Purchaser following the Closing.
 
6.6 Confidentiality.
 
(a) From and after the Closing, the Seller shall, and shall cause its Affiliates
to, and shall use its reasonable best efforts to cause its and their respective
officers, directors, employees, accountants, counsel, consultants, advisors,
agents and other representatives to, hold in confidence any and all information,
whether written or oral, concerning the Company or any of its Subsidiaries,
except to the extent that such Person can show that such information (i) is in
the public domain through no fault of the Seller or any Affiliate thereof or
(ii) is lawfully acquired by them after the Closing from sources which are not
prohibited from disclosing such information by a legal, contractual or fiduciary
obligation.  If the Seller or any Affiliate thereof is compelled to disclose any
such information by judicial or administrative process or by other requirements
of Law, such Person shall promptly notify the Purchaser in writing and shall
disclose only that portion of such information which such Person is advised by
its counsel in writing is legally required to be disclosed, provided that such
Person shall exercise its reasonable best efforts to obtain an appropriate
protective order or other reasonable assurance that confidential treatment will
be accorded such information.  Without prejudice to the rights and remedies
otherwise available in this Agreement, the parties each acknowledge that money
damages would not be an adequate remedy for any breach of this Section 6.6, and
that the Purchaser will be entitled to specific performance and other equitable
relief by way of injunction in respect of a breach or threatened breach of any
this Section 6.6.
 
(b) From and after the Closing, the Purchaser shall, and shall cause its
Affiliates to, and shall use its reasonable best efforts to cause its and their
respective officers, directors, employees, accountants, counsel, consultants,
advisors, agents and other representatives to, hold in confidence any and all
information, whether written or oral, concerning the Seller, except to the
extent that such Person can show that such information (i) is in the public
domain through no fault of the Purchaser or any Affiliate thereof or (ii) is
lawfully acquired by them after the Closing from sources which are not
prohibited from disclosing such information by a legal, contractual or fiduciary
obligation.  If the Purchaser or any Affiliate thereof is compelled to disclose
any such information by judicial or administrative process or by other
requirements of Law, such Person shall promptly notify the Seller in writing and
shall disclose only that portion of such information which such Person is
advised by its counsel in writing is legally required to be disclosed, provided
that such Person shall exercise its reasonable best efforts to obtain an
appropriate protective order or other reasonable assurance that confidential
treatment will be accorded such information.  Without prejudice to the rights
and remedies otherwise available in this Agreement, the parties each acknowledge
that money damages would not be an adequate remedy for any breach of this
Section 6.6, and that the Seller will be entitled to specific performance and
other equitable relief by way of injunction in respect of a breach or threatened
breach of any this Section 6.6.
 
6.7 Public Announcements.  No party hereto shall issue any press release or make
any public statement relating to the subject matter of this Agreement without
the prior written approval of all parties, except that the parties or their
Affiliates may make any public disclosure it believes in good faith it is
required to make by applicable Law or pursuant to any listing agreement with any
national securities exchange or stock market (in which case the party required
to make the disclosure shall consult with the other parties and allow the other
parties reasonable time to comment thereon prior to issuance or release).
 
6.8 Employee Matters.  Nothing contained in this Section 6.8 or elsewhere in
this Agreement, express or implied, shall confer upon any Employee or legal
representative or beneficiary thereof, any rights or remedies of any nature or
kind whatsoever under or by reason of this Agreement, including any right to
employment or continued employment for any specified period, or level of
compensation or benefits.  Nothing contained in this Section 6.8 or elsewhere in
this Agreement, express or implied, shall (i) impose an obligation on the
Purchaser or its Affiliates to offer employment to any Employee or contractor or
consultant of the Company or any of its Subsidiaries, (ii) limit the right of
the Purchaser or its Affiliates to terminate the employment or services of, or
to reassign or otherwise alter the status of, any Employee or contractor or
consultant of the Company or any of its Subsidiaries after the Closing or to
change in any manner the terms and conditions of his or her employment or other
service to or engagement by the Company or any of its Subsidiaries, (iii) be
construed to prevent, and no action by the Company or any of its Subsidiaries
prior to the Closing Date shall limit the ability of, the Purchaser or its
Affiliates from terminating or modifying to any extent or in any respect any
Plan that the Purchaser or its Affiliates may establish or maintain, or (iv) be
construed as amending any Benefit Plan as in effect immediately prior to the
Closing.
 
6.9 Tax Matters.
 
(a) Preparation and Filing of Pre-Closing and Post-Closing Period Tax Returns.
 
(i) Income Tax Returns for Pre-Closing Periods.  The Seller or Seller Parent
shall prepare and file, or cause to be prepared and filed, in a manner
consistent with past practice (except as otherwise required by Law), all Income
Tax Returns relating to the Company or its Subsidiaries for taxable periods
ending on or prior to the Closing Date.  The Seller or Seller Parent shall
provide to the Purchaser a copy of any such Income Tax Return, or in the case of
Income Tax Returns filed on a consolidated, combined or unitary basis, a pro
forma Income Tax Return for the Company and its Subsidiaries, once filed.
 
(ii) Tax Periods Ending on or Before the Closing Date.  The Purchaser shall
prepare, or cause to be prepared, and file, or cause to be filed, all other Tax
Returns of the Company and its Subsidiaries for all periods ending on or prior
to the Closing Date which are filed after the Closing Date, taking into account
valid extensions of time within which to file.  The Purchaser shall permit the
Seller to review and comment upon such Tax Returns at least 15 days prior to the
filing due date,, the Purchaser shall take into account in good faith any
comments provided by the Seller and the Purchaser shall not file such Tax
Returns without the consent of the Seller, which consent shall not be
unreasonably withheld or delayed.  The Seller shall be obligated to pay to the
Purchaser the amount of Taxes with respect to such Tax Returns within 5 days
following any demand by the Seller for such payment, but no earlier than 2
Business Days prior to the applicable due date (taking into account valid
extensions of time within which to file), except to the extent that such Taxes
were taken into account as a current liability that actually reduced Final Net
Working Capital.
 
(iii) Tax Periods Beginning Before and Ending After the Closing Date.  The
Purchaser shall prepare, or cause to be prepared, consistent with past practice
to the extent consistent with existing law, and file, or cause to be filed, all
Tax Returns of the Company and its Subsidiaries for Tax periods which begin on
or before the Closing Date and end after the Closing Date (each a “Straddle
Period”).  With respect to any such Tax Returns, the Seller shall be obligated
to pay to the Purchaser, within 5 days following any demand by the Purchaser,
but no earlier than 2 Business Days prior to the applicable due date (taking
into account valid extensions of time within which to file), an amount equal to
the portion of such Taxes which relates to the Pre-Closing Period portion of
each such Straddle Period (as determined pursuant to Section 6.9(c)), except to
the extent that such portion of such Taxes was taken into account as a current
liability that actually reduced Final Net Working Capital.  The Purchaser shall
permit the Seller to review and comment upon such Tax Returns at least 15 days
prior to the filing due date, the Purchaser shall take into account in good
faith any comments provided by the Seller and the Purchaser shall not file such
Tax Returns without the consent of the Seller, which consent shall not be
unreasonably withheld or delayed it being understood that failure to raise
objection to such Tax Returns within 10 days of receipt of the applicable Tax
Return shall be deemed consent.
 
(b) Cooperation in Filing Tax Returns.  The Purchaser, the Seller and Seller
Parent shall, and shall cause each of their Affiliates to, fully cooperate with
and provide each other with all reasonably requested information in connection
with preparing, reviewing and filing of any Tax Return, amended Tax Return or
claim for refund, determining Liabilities for Taxes or a right to refund of
Taxes, or in conducting any audit or other Action with respect to Taxes.  Such
cooperation and information shall include providing copies of all relevant
portions of relevant Tax Returns, together with relevant accompanying schedules
and relevant work papers, relevant documents relating to rulings and other
determinations by Governmental Entities relating to Taxes, and relevant records
concerning the ownership and Tax basis of property, which any such party may
possess.  Each party will retain all Tax Returns, schedules, work papers, and
all material records and other documents relating to Tax matters of the Company
and its Subsidiaries for the Tax period first ending after the Closing Date and
for all prior Tax periods until the later of either (i) the expiration of the
applicable statute of limitations (and, to the extent notice is provided with
respect thereto, any extensions thereof) for the Tax periods to which the Tax
Returns and other documents relate or (ii) eight years following the due date
(without extension) for such Tax Returns.  Thereafter, the party holding such
Tax Returns or other documents may dispose of them provided that such party
shall give to the other party 30 days written notice of such disposal and
providing the other party with the opportunity to copy (at such other party’s
cost) such Tax Returns or other documents.  Each party shall make its employees
reasonably available on a mutually-convenient basis at its cost to provide
explanation of any documents or information so provided.
 
(c) Allocation of Certain Taxes and Tax Refunds.
 
(i) If the Company or any of its Subsidiaries is permitted but not required
under applicable state, local or foreign income Tax Laws to treat the Closing
Date as the last day of a taxable period, then the parties shall treat that day
as the last day of a taxable period.
 
(ii) In the case of Taxes arising in a Straddle Period, except as provided in
Section 6.9(c)(iii), the allocation of such Taxes between the Pre-Closing Period
and the Post-Closing Period shall be made on the basis of an interim closing of
the books as of the end of the Closing Date.
 
(iii)   In the case of any real property, personal property or similar ad
valorem Taxes that are payable for a Straddle Period, the portion of such Taxes
which relates to the Pre-Closing Period portion of such Straddle Period shall be
deemed to be the amount of such Tax for the entire Straddle Period multiplied by
a fraction, the numerator of which is the number of days in the Pre-Closing
Period portion of the Straddle Period and the denominator of which is the number
of days in the entire Straddle Period; provided, however, any such Taxes
attributable to any property that was owned by the Company at some point in the
Pre-Closing Period, but is not owned as of the Closing Date, shall be allocated
entirely to the Pre-Closing Period.
 
(iv)   The Seller shall be entitled to all Tax refunds and overpayments taken as
a credit that relate to Pre-Closing Periods of Company and its Subsidiaries, and
if any such refunds or overpayments are received by the Purchaser or any of its
Affiliates (including, after the Closing, the Company or any of its
Subsidiaries), the Purchaser promptly shall pay or cause to be paid to the
Seller the amount so received, except to the extent that such refunds or
overpayments were taken into account as a current asset that actually increased
Final Working Capital.
 
(d) Payment of Transfer Taxes and Fees.  The Seller and Purchaser shall each pay
one-half of any Transfer Taxes arising out of or in connection with the
transactions effected pursuant to this Agreement (other than Section 6.20
hereof, which Transfer Taxes shall be solely for the account of the
Purchaser).  The Seller shall file all necessary documentation and Tax Returns
with respect to such Transfer Taxes and Purchaser shall provide such cooperation
in connection with the preparation and filing of such documentation and Tax
Returns as may be reasonably requested by the Seller.
 
(e) Termination of Tax Sharing Agreements.  The Seller shall ensure that any and
all Tax allocation agreements, Tax sharing agreements or similar agreements or
arrangements between the Company or any of its Subsidiaries, on the one hand,
and the Seller or any of its Affiliates (other than the Company and its
Subsidiaries), on the other hand, shall be terminated with respect to the
Company and its Subsidiaries as of the day before the Closing Date, and from and
after the Closing Date, the Company and its Subsidiaries shall have no
obligation to make any payments in respect thereof to any Person for any period.
 
(f) Section 338 Elections; Election Allocations.
 
(i) At the Purchaser’s request, the Seller and/or Seller Parent will join with
the Purchaser in making an election under Section 338(h)(10) of the Code (and
any corresponding elections under state or local Law) with respect to the
Company and any of its Subsidiaries classified as U.S. corporations for federal
income tax purposes (collectively, the “Section 338(h)(10) Election”).  The
Seller will pay any Taxes resulting from the making of the Section 338(h)(10)
Election.  The Purchaser will not make any Section 338(g) election with respect
to this transaction.
 
(ii) At the Closing, the Seller will deliver to the Purchaser a fully executed
IRS Form 8023 reflecting the Section 338(h)(10) Election, and any similar form
provided for under state or local Law (collectively, the “Section 338(h)(10)
Election Form”).  As requested from time to time by the Purchaser (whether
before, at or after the Closing), the Seller and Seller Parent shall assist the
Purchaser in, and shall provide the necessary information to the Purchaser, in
connection with the preparation of any form or document required to effect a
valid and timely Section 338(h)(10) Election, including IRS Form 8883, any
similar form under state, local or other Law and any schedules or attachments
thereto (collectively, “Section 338 Forms”).  The Seller, Seller Parent and the
Purchaser shall cooperate fully, and in good faith, with each other in making
the Section 338(h)(10) Election.  Each of the Purchaser, the Seller and/or
Seller Parent shall timely file such IRS Forms 8023 by the prescribed due date
under applicable Law.
 
(iii) The parties agree that the Purchase Price and the liabilities of the
Company and its Subsidiaries (plus other relevant items) will be allocated to
the assets of the Company and its Subsidiaries for Tax and financial accounting
purposes in the manner described in Treasury regulation section 1.338-6.  After
determination of the Final Balance Sheet pursuant to Section 2.4 but in no event
later than 30 days prior to the latest date for the filing of each applicable
Section 338 Form, the Purchaser shall prepare and submit to the Seller for the
Seller’s review, comment and approval (such approval not to be unreasonably
withheld or delayed and it being understood that failure to raise objection to
within 10 Business Days of receipt of such submission shall be deemed consent),
the Purchaser’s proposed allocation of the aggregate deemed sales price at which
the Company and its Subsidiaries are deemed to have sold their assets for Tax
purposes as a result of the Section 338(h)10 Election among the assets of the
Company and its Subsidiaries as applicable and related Section 338 Forms
(collectively, the “Election Allocations”) together with any materials
supporting its Election Allocations (such as third party appraisals).  The
Purchaser and the Seller shall seek in good faith to resolve any differences
that they may have with respect to the proposed Section 338 Allocation
Schedule.  In the event that the Purchaser and the Seller are unable to reach
agreement on the Election Allocations within 20 Business Days of delivery
thereof to the Seller, then the Reviewing Party shall resolve any issue in
dispute under this Section 6.9(f) as promptly as possible and the determination
of the Reviewing Party shall be final.  The Purchaser and the Seller shall
equally share the fees of the Reviewing Party in performing its obligations
under this Section 6.9(f).  Each of the Purchaser and the Seller agrees that
promptly upon agreeing on the Election Allocations (or the determination of the
Reviewing Party) it shall return an executed copy thereof to the other party
hereto.  The Purchaser, the Seller and Seller Parent shall, and shall cause
their respective Affiliates to, file all Tax Returns in accordance with the
Election Allocations and not to take any action inconsistent therewith unless
otherwise required by a Taxing Authority.
 
(g) Next Day Rule.  The Purchaser, the Seller and Seller Parent agree to apply
the Next Day Rule described in Treas. Reg. 1.1502-76(b)(ii)(B) and/or Treas.
Reg. 1.338-1(d) to any applicable transaction that is not in the ordinary course
of business that occurs on the Closing Date but after the Closing.
 
6.10 Regulatory Approvals.
 
(a) Each of the Purchaser and the Seller shall promptly apply for, and take all
reasonably necessary actions to obtain or make all declarations and filings
with, and notices to, any Governmental Entity or other Person required to be
obtained or made by it for the consummation of the transactions contemplated by
this Agreement, including the transfer of all Permits.  Each party shall
cooperate with and promptly furnish information to the other party necessary in
connection with any requirements imposed upon such other party in connection
with the consummation of the transactions contemplated by this Agreement.
Without limiting the generality of the foregoing, the Seller and the Purchaser,
or an Affiliate thereof, shall, as promptly as practicable, but in no event
later than 15 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 (“DOJ”), the notification and report
form required for the transactions contemplated by this Agreement and any
supplemental information requested in connection therewith pursuant to the HSR
Act.  Each of the Seller and the Purchaser shall furnish to each other’s counsel
such necessary information and reasonable assistance as the other may request in
connection with its preparation of any filing or submission that may be
necessary under the HSR Act.  The Purchaser and the Seller shall be equally
responsible for all filing and other similar fees payable in connection with
such filings, and for any local counsel fees.
 
(b) Each of the Purchaser and the Seller shall use its commercially reasonable
efforts to obtain the expiration of any applicable waiting period under the HSR
Act required for the consummation of the transactions contemplated hereby.  Each
of the Purchaser and the Seller shall keep the other apprised of the status of
any substantive communications with, and any inquiries or requests for
additional information from, the FTC and the DOJ and shall comply promptly with
any such inquiry or request.  Notwithstanding the foregoing, the Purchaser shall
not be required to (i) consent to the divestiture, license or other disposition
or holding separate (through the establishment of a trust or otherwise) of any
of its or its Affiliates’ assets or any assets of the Company or its
Subsidiaries, (ii) consent to any other structural or conduct remedy or enter
into any settlement or agree to any Order regarding antitrust matters respecting
the transactions contemplated by this Agreement, or (iii) litigate.  Each of the
Purchaser and the Seller shall both promptly respond to the DOJ or the FTC to
any request for additional information.
 
(c) The Purchaser and the Seller shall instruct their respective counsel to
cooperate with each other and use commercially reasonable efforts to facilitate
and expedite the identification and resolution of any issues arising under the
HSR Act at the earliest practicable dates.  Such commercially reasonable efforts
and cooperation include, but are not limited to, counsel’s undertaking (i) to
keep each other appropriately informed of communications from and to personnel
of the reviewing Governmental Entity, and (ii) to confer with each other
regarding appropriate contacts with and response to personnel of such
Governmental Entity.    Prior to the submission of any substantive written
communication to any Governmental Entity, each such party shall provide the
other party with a reasonable opportunity to review and comment on such
communication, to the extent practicable.  Unless prohibited by the Governmental
Entity or any applicable Law, no party shall participate in any meeting, or
engage in any material substantive conversation, with any Governmental Entity
without giving the other party prior notice of the meeting or conversation and
the opportunity to attend or participate in such meeting or conversation.
 
(d) Until the Closing, none of the Purchaser, the Seller, Seller Guarantor,
Seller Parent, or the Company or its Subsidiaries, directly or indirectly,
through one or more of their respective Affiliates, shall acquire or make any
investment in any corporation, partnership, limited liability company or other
business organization or any division or assets thereof, or merge with or into
any other entity, or enter into any agreement or commitment to do any of the
foregoing, that in any case would reasonably be expected to cause any material
delay in the satisfaction of the conditions contained in Article VII or the
consummation of the transactions contemplated hereby.
 
(e) Following the Closing the Purchaser will promptly make all necessary filings
to transfer or cause the re-issuance of, as applicable, all Permits, including
without limitation all Mining Permits, mine licenses and MSHA identification
numbers, and the Purchaser will diligently pursue such transfer or reissuance to
the end that all Permits be transferred or reissued to the Purchaser as soon as
is reasonably practicable.  Prior to the Closing the parties will cooperate with
each other to facilitate the transfer process.
 
6.11 Access to Books and Records.  Each of Seller and Purchaser shall preserve
until the sixth anniversary of the Closing Date all records possessed or to be
possessed by it relating to the Company or its Subsidiaries.  After the Closing
Date, each such party shall provide the other party with reasonable access to
such records, upon prior written request specifying the need therefor, during
regular business hours, and the requesting party shall have the right to make
copies of such Books and Records at its sole cost.
 
6.12 Further Assurances.  Except as otherwise provided herein, the Purchaser and
the Seller shall (and the Seller shall cause the Company and its Subsidiaries
to) use reasonable best efforts to take, or cause to be taken, all actions
necessary or appropriate to consummate and make effective the transactions
contemplated by this Agreement.  If at any time (whether before or after the
Closing) any further action is necessary or appropriate to carry out the
purposes of this Agreement, the parties shall use commercially reasonable
efforts to take, or cause to be taken, that action, including the transfer of
all Permits from the Contractors to the Purchaser, the Company or its
Subsidiaries.
 
6.13 Release.
 
(a) Effective upon the Closing, the Seller hereby irrevocable waives, releases
and discharges the Company and its Subsidiaries, the Purchaser and each of their
respective Affiliates and Representatives of and from any and all Liabilities
and obligations to the Seller of any kind or nature whatsoever (including in
respect of any rights of contribution or indemnification), whether arising under
any Contract or otherwise at Law or in equity, and whether or not then known
(other than Liabilities that arise under this Agreement and the Ancillary
Agreements), other than pursuant to the Contracts set forth on Section 6.5(c) of
the Seller’s Disclosure Schedule, and the Seller agrees that it will not seek to
recover any amounts in connection therewith or thereunder from the Company, its
Subsidiaries, the Purchaser or any of their respective Affiliates or
Representatives.
 
(b) Effective upon the Closing, Purchaser, (on behalf of the Company and the
Company’s Subsidiaries) and the Company hereby irrevocably waives, releases and
discharges the Seller and each of its Affiliates and Representatives of and from
any and all Liabilities and obligations to the Purchaser of any kind or nature
whatsoever (including in respect of any rights of contribution or
indemnification), whether arising under any Contract or otherwise at Law or in
equity, and whether or not then known (other than Liabilities that arise under
this Agreement and the Ancillary Agreements), other than pursuant to the
Contracts set forth on Section 6.5(c) of the Seller’s Disclosure Schedule, and
the Purchaser agrees that it will not seek to recover any amounts in connection
therewith or thereunder from the Seller or any of its respective Affiliates or
Representatives.
 
6.14 Exclusivity.  During the term of this Agreement, and except with respect to
this Agreement and the transactions contemplated hereby, the Seller agrees that
it will not, and will cause the Company, its Subsidiaries and its and their
respective directors, officers, managers, employees, Affiliates and other agents
and representatives not to:  (a) encourage, initiate, solicit, seek or respond
to, directly or indirectly, any inquiries or the making or implementation of any
proposal or offer with respect to a merger, acquisition, consolidation,
recapitalization, business combination, liquidation, dissolution, equity
investment or similar transaction involving, or any purchase of all or any
substantial portion of the assets or any equity or equity-linked securities of,
the Company or its Subsidiaries, which could impair, prevent or delay or dilute
the benefits to the Purchaser of the transactions contemplated by this Agreement
and the Ancillary Agreements (any such proposal or offer being hereinafter
referred to as a “Proposal”); (b) continue, engage in, initiate or otherwise
participate in, any negotiations concerning, or provide any information or data
to, or have any substantive discussions with, any Person relating to a Proposal;
(c) otherwise facilitate or cooperate in any effort or attempt to make,
implement or accept a Proposal; or (d) enter into Contract with any Person
relating to a Proposal.
 
6.15 Restrictive Covenants.
 
(a) The Seller covenants that, commencing on the Closing Date and ending on the
fifth anniversary of the Closing Date (the “Restricted Period”), the Seller
shall not, and shall cause its Affiliates not to, directly or indirectly engage
in the mining, marketing or sale of coal (other than sales of excess coal by the
Seller’s regulated utility Affiliates), or the acquisition of any fee or
leasehold interests in any mineral rights to coal (other than coal bed methane
or acquisitions of fee interests or leasehold interests in real property where
the acquisition of rights to coal is incidental to the primary acquisition), in
the State of Indiana.  Neither the Seller nor its Affiliates will be precluded
or restrained from engaging in (i) the purchase or development or any other
activities related to oil or gas (including coal bed methane), or other minerals
(other than coal), or (ii) entering into any merger or acquisition with a Third
Party that is directly or indirectly engaged in the mining, marketing or sale of
coal in the State of Indiana, provided that the primary business of such Third
Party and its Affiliates is a business other than the mining, marketing or sale
of coal, and provided further, that nothing in this provision shall preclude any
transaction involving a change of control of Seller Parent.
 
(b) The Seller covenants that for two years following the Closing, it shall not
(and shall cause its Affiliates not to), solicit the employment of any Person
who is during such two year period an Employee of the Purchaser, the Company or
any of its Subsidiaries, hire any such Person, or persuade, induce or attempt to
persuade or induce any such Person to leave his, her or its employment to the
Company, its Subsidiaries, the Purchaser or its Affiliates; provided that
nothing in this Section 6.15(b) shall prohibit the Seller or its Affiliates from
hiring (i) any individual listed on Section 6.15(b) of the Seller’s Disclosure
Schedule, (ii) any Employee of the Company or its Subsidiaries as a result of
any general solicitation for employment not specifically directed at persons who
are employed by the Company or its Subsidiaries or presented to the Seller by a
recruiting or search firm so long as such recruiting or search firm is not
specifically directed to solicit persons who are employed by the Company or its
Subsidiaries, (iii) any former employee of the Company or its Subsidiaries, or
(iv) any employee of the Company or its Subsidiaries that initiates contact with
Seller regarding potential employment on his or her own initiative without any
direct or indirect solicitation by the Seller or its Affiliates or its or their
Representatives.
 
(c) The Seller covenants that for two years following the Closing, it shall not
(and shall cause its Affiliates not to) solicit or induce, or in any manner
attempt to solicit or induce, or cause or authorize any other Person to solicit
or induce any Person to cease, diminish or not commence doing business with the
Company, its Subsidiaries, the Purchaser or its Affiliates; provided that
nothing in this Section 6.15(c) shall prohibit the Seller or its Affiliates from
exercising or enforcing in any manner any of their rights under contracts that
the Seller or its affiliates may have with the Company or its Subsidiaries
following the Closing.
 
(d) From and after the Closing Date, the Seller shall not (and shall cause its
Affiliates not to) disparage the Company, its Subsidiaries, the Purchaser or its
Affiliates to any Person.  From and after the Closing Date, the Purchaser shall
not (and shall cause its Affiliates not to) disparage the Seller or its
Affiliates to any Person.
 
(e) The Seller acknowledges that the restrictions contained in this Section 6.15
are reasonable and necessary to protect the legitimate interests of the
Purchaser and constitute a material inducement to the Purchaser to enter into
this Agreement and consummate the transactions contemplated by this Agreement,
and that a violation of this Section 6.15 by the Seller will result in
irreparable injury to the Purchaser and agrees that the Purchaser shall be
entitled to seek preliminary and permanent injunctive relief, as well as such
other equitable remedies as may be available to the Purchaser, which remedies
shall be cumulative and in addition to any other rights or remedies to which the
Purchaser may be entitled.
 
(f) In the event that any covenant contained in this Section 6.15 should ever be
adjudicated to exceed the time, geographic, product or service or other
limitations permitted by applicable Law in any jurisdiction, then any court is
expressly empowered to reform such covenant, and such covenant shall be deemed
reformed, in such jurisdiction to the maximum time, geographic, product or
service or other limitations permitted by applicable Law.  The covenants
contained in this Section 6.15 and each provision thereof are severable and
distinct covenants and provisions.  The invalidity or unenforceability of any
such covenant or provision as written shall not invalidate or render
unenforceable the remaining covenants or provisions hereof, and any such
invalidity or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such covenant or provision in any other jurisdiction.
 
6.16 Financing.
 
(a) The Purchaser shall use its reasonable best efforts to take, or cause to be
taken, all actions, and to cause, or cause to be done, all things, in each case
reasonably necessary, proper or advisable to obtain and consummate the Financing
as described in the Highly Confident Letter and, if applicable, the Equity
Financing Letter, including using its reasonable best efforts to (i) negotiate
in good faith and enter into definitive agreements with respect to the Loan
Financing as soon as reasonably practicable and (A) on the terms and subject to
the conditions reflected in the Highly Confident Letter, or (B) on such other
terms that are acceptable in good faith to the Purchaser; (ii) if required to
obtain sufficient funds to complete the transactions contemplated hereby, to
negotiate in good faith and enter into one or more equity commitment agreements
with respect to the Equity Financing on terms acceptable in good faith to the
Purchaser; (iii) satisfy on a timely basis all conditions in the definitive
agreements relating to the Loan Financing and, if applicable the Equity
Financing (the “Financing Definitive Agreements”) and comply with the
obligations thereunder applicable to the Purchaser and within its control;
(iv) obtain such Third-Party consents as may be reasonably required to be
obtained by the Purchaser in connection with the Financing, subject to the
Seller’s compliance with Section 6.16(b) where applicable; and (v) upon the
satisfaction or waiver of the conditions in the Financing Definitive Agreements,
consummate the Financing on or prior to the Closing; provided, however, that,
notwithstanding anything to the contrary contained herein, (1) the Purchaser
shall have the right to substitute other debt or equity financing for all or any
portion of the Financing from the same or alternative financing sources on terms
and conditions reasonably acceptable to the Purchaser in good faith; and (2) the
Purchaser shall not be required to, and the Purchaser shall not be required to
cause any other Person to, commence, participate in, pursue or defend any Action
against or involving any of the Purchaser’s lenders or investors or other
Persons that have or may have agreed to provide any portion of, or otherwise
with respect to, the Financing.  The Purchaser shall provide the Seller with
information on a current basis with respect to (i) the status of its
negotiations with respect to definitive agreements relating to the Financing,
(ii) satisfaction of all conditions in the definitive agreements relating to the
Financing and (iii) such other matters as the Seller may reasonably request
relating to the status of the Financing.  The Purchaser shall provide the Seller
with an executed copy of each definitive credit agreement or equity commitment
agreement relating to the Financing promptly following execution thereof in the
forms as will be publicly disclosed, together with any other documents or
attachments thereto to the extent they contain any material terms or conditions
to the Financing not otherwise reflected in the definitive agreement.
 
(b) During the period beginning on the date hereof and ending on the Closing
Date, upon the request of the Purchaser, the Seller shall, and shall cause its
Affiliates and Representatives to, cooperate reasonably with the Purchaser in
connection with the Purchaser’s financing of the transactions contemplated
hereby, including by (i) providing customary information reasonably requested by
the Purchaser relating to such financing; and (ii) making commercially
reasonable efforts to obtain consents from Third Parties as reasonably necessary
and taking such other actions as may reasonably be requested to facilitate the
granting of a security interest to the Purchaser’s lenders in the collateral as
contemplated by the Loan Financing on the Closing Date; provided that (i)
nothing herein shall require such cooperation from the Seller or any of its
Subsidiaries to the extent that it would unreasonably interfere with the ongoing
operations of the Seller and its Subsidiaries, and (ii) neither the Seller nor
any of its Subsidiaries shall be required to expend any funds (other than
incidental amounts) or make any payment to any Third Party in connection with
its compliance with this Section 6.16(b).
 
(c) Purchaser shall, promptly upon request of the Seller, reimburse the Seller
(and its Affiliates and Representatives, including the Company and its
Subsidiaries) for all reasonable out-of-pocket costs incurred by the Seller, and
its Affiliates and Representatives in connection with such cooperation. The
Purchaser shall indemnify and hold harmless the Seller and its Affiliates and
Representatives for and against any and all Losses suffered or incurred by them
in connection with the arrangement of the Financing except to the extent such
Losses arise from any breach or noncompliance by the Seller, the Company or its
Subsidiaries of any covenant or agreement in this Agreement, or the gross
negligence or willful misconduct of the Seller or of the Company or its
Subsidiaries prior to the Closing.
 
(d) Any information provided to the Purchaser or its Representatives in
accordance with this Section 6.16 or otherwise pursuant to this Agreement shall
be held by the Purchaser and its Representatives in accordance with, shall be
deemed provided under, and shall be subject to the terms of, the Confidentiality
Agreement.
 
6.17 Support Obligations.  With respect to each guaranty, letter of credit,
performance or surety bond or similar credit support arrangement issued by or
for the account of the Company or any of its Subsidiaries shown on Section 6.17
of the Seller’s Disclosure Schedule (collectively, the “Support Obligations”),
the Purchaser shall obtain, prior to or as of the Closing, substitute credit
support arrangements in replacement for the Support Obligations, and shall
procure that each of the Seller and its Affiliates, and, where applicable, their
sureties or letter of credit issuers, be fully released from their respective
obligations under the Support Obligations as of the Closing Date, in form and
substance reasonably satisfactory to the Seller.  The Seller will cooperate
reasonably with the Purchaser with respect to the foregoing.
 
6.18 WARN Notice.  As promptly as practicable following the date hereof, the
Company shall (and shall cause its Subsidiaries to) cause the Contractors to
issue to its employees the notice required under the WARN Act or any other
applicable Law in connection with the termination of the Contract Mining
Agreements pursuant to Section 6.5(d).
 
6.19 Other Funds.  From and after the Closing, (i) if the Seller or its
Affiliates receives or collects any cash, checks or other property which are the
property of the Purchaser, the Company or its Subsidiaries, the Seller shall
remit any such amounts to the Purchaser as promptly as practicable but no later
than ten Business Days after the Seller receives such sum, and (ii) if the
Purchaser, the Company or its Subsidiaries receives or collects any cash, checks
or other property which are the property of the Seller, the Purchaser shall
remit any such amounts to the Seller as promptly as practicable but no later
than ten Business Days after the Purchaser receives such sum.
 
6.20 Like-Kind Exchange.  The Seller acknowledges that the Purchaser is
contemplating acquiring a portion of the assets of the Company and its
Subsidiaries through a like-kind exchange pursuant to Section 1031 of the Code,
and agrees to cooperate with the Purchaser in effecting such transaction,
including by causing the Company and its Subsidiaries to sell certain of their
assets to be identified by the Purchaser to an Affiliate of the Purchaser, or to
a Qualified Intermediary as defined by Reg. Section 1.1031(k)(1)(g)(4) or an
Exchange Accommodation Titleholder as defined in Rev. Proc. 2000-37, immediately
prior to the Closing on terms reasonably acceptable to the Seller.  The
Purchaser shall indemnify the Seller for any additional Taxes incurred by the
Seller solely as a result of the transactions contemplated by this Section 6.20,
and shall reimburse the Seller for any reasonable out-of-pocket costs (other
than attorney’s fees) incurred by the Seller or the Company or any of its
Subsidiaries in connection with their cooperation hereunder.
 
6.21 Use of Name.  From and after the Closing Date, the Purchaser shall promptly
cease all use of the trademarks, trade names, corporate names, domain names and
logos containing the name “Vectren”, and shall, on or promptly after the Closing
Date, take all steps necessary to change the name of the Company, including by
making filings with the applicable Secretary(ies) of State and other applicable
Governmental Entities.   Notwithstanding the foregoing, the Purchaser may
continue to use the name “Vectren” after the Closing Date solely to the extent
necessary to prepare any Tax or other filings to be made with any Governmental
Entity, provided that any such use is on a non-public basis.
 
ARTICLE VII                                
 
CONDITIONS TO CLOSING
 
7.1 Conditions to Obligations of the Purchaser and the Seller.  The obligations
of the Purchaser and the Seller to consummate the transactions contemplated by
this Agreement are subject to the satisfaction of the following conditions:
 
(a) No temporary restraining Order, preliminary or permanent injunction or other
Order shall be in effect enjoining, prohibiting or otherwise preventing the
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements;
 
(b) No Law shall have been enacted or shall be deemed applicable to the
transactions contemplated by this Agreement which makes the consummation of such
transactions illegal;
 
(c) Any applicable waiting period under the HSR Act shall have expired or been
terminated;
 
(d) The notice period required under the WARN Act in connection with the notice
issued pursuant to Section 6.18 shall have lapsed; and
 
(e) The Closing Date Purchase Price shall not be more than $325,000,000.
 
7.2 Conditions to Obligations of the Purchaser.  The obligation of the Purchaser
to consummate the transactions contemplated by this Agreement is subject to the
satisfaction (or waiver in writing by the Purchaser in its sole discretion) of
the following further conditions:
 
(a) Each of the Seller’s Fundamental Representations shall be true and correct
in all material respects, and each other representation and warranty of the
Seller made in Article III and Article IV shall be true and correct in all
respects as of the Closing Date as if made at and as of the Closing Date, except
in each case to the extent that such representation and warranty refers
specifically to an earlier date, in which case such representation and warranty
shall have been true and correct as of such earlier date, except in the case of
representations and warranties other than the Seller’s Fundamental
Representations where the failure of such representations and warranties to be
true and correct would not reasonably be expected to result in a Material
Adverse Effect;
 
(b) The 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 it at or prior to the Closing;
 
(c) During the period from the date of this Agreement until the Closing, no
event shall have occurred that has had, or would reasonably be expected to have,
a Material Adverse Effect;
 
(d) The Company and its Subsidiaries shall own no less than the Minimum Coal
Inventory Amount and no less than $8,000,000 of parts inventory;
 
(e) All of the Employees of the Company and its Subsidiaries shall have been
terminated;
 
(f) The Purchaser shall have received certificates dated as of the Closing Date
and signed by the Seller to the effect that the conditions set forth in
Sections 7.2(a), 7.2(b) and 7.2(c) shall have been satisfied;
 
(g) The consents and approvals listed on Section 7.2(g) of the Seller’s
Disclosure Schedule shall have been obtained, and the notices listed on Section
7.2(g) of the Seller’s Disclosure Schedule shall have been given, and each such
consent, approval and notice shall be in form and substance reasonably
satisfactory to the Purchaser, in full force and effect and not subject to the
satisfaction of any condition that has not been satisfied;
 
(h) The Purchaser shall have received the funds sufficient to pay the Closing
Date Purchase Price from the Financing or otherwise;
 
(i) The condition identified on Section 7.2(i) of the Purchaser’s Disclosure
Schedule shall be satisfied; and
 
(j) The Seller shall have executed and delivered (or caused to be executed and
delivered) to the Purchaser all agreements and other documents required to be
executed and delivered to the Purchaser pursuant to this Agreement at or prior
to the Closing (including all certificates, documents and instruments required
to be delivered to the Purchaser at the Closing pursuant to Section 2.5(a)).
 
7.3 Conditions to Obligations of the Seller.  The obligation of the Seller to
consummate the transactions contemplated by this Agreement is subject to the
satisfaction (or waiver in writing by the Seller in its sole discretion) of the
following further conditions:
 
(a) Each of Purchaser’s Fundamental Representations shall be true and correct in
all material respects, and each other representation and warranty of Purchase
made in Article V shall be true and correct in all respects as of the Closing
Date as if made at and as of the Closing Date, except in each case to the extent
that such representation and warranty refers specifically to an earlier date, in
which case such representation and warranty shall have been true and correct as
of such earlier date, except in the case of representations and warranties other
than the Purchaser’s Fundamental Representations where the failure of such
representations and warranties to be true and correct would not reasonably be
expected to result in a material adverse effect on the Purchaser’s ability to
consummate the transactions contemplated hereby;
 
(b) The Purchaser 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 it at or prior to the Closing Date;
 
(c) The Seller shall have received a certificate dated as of the Closing Date
and signed by the Purchaser to the effect that the conditions set forth in
Sections 7.3(a) and 7.3(b) have been satisfied;
 
(d) The Purchaser shall have made payment of the Closing Date Purchase Price, it
being understood that such payment shall be made simultaneously with the other
actions to be taken by the parties as of the Closing and shall be subject to
satisfaction or waiver by the Purchaser of the conditions to the Purchaser’s
obligations set forth in Sections 7.1 and 7.2; and
 
(e) The Purchaser shall have executed and delivered to the Seller all agreements
and other documents required to be executed and delivered to the Seller pursuant
to this Agreement at or prior to the Closing (including all certificates,
documents and instruments required to be delivered to the Seller the Closing
pursuant to Section 2.5(b)).
 
ARTICLE VIII
TERMINATION
8.1 Termination.
 
(a) This Agreement may be terminated and the transactions contemplated hereby
may be abandoned at any time prior to the Closing:
 
(i) by mutual written consent of the Purchaser and the Seller;
 
(ii) by the Purchaser or the Seller if the Closing does not occur on or before
the Outside Date; provided that the right to terminate this Agreement under this
Section 8.1(a)(ii) shall not be available (A) to any party whose breach of a
representation, warranty, covenant or agreement under this Agreement has been
the cause of, or resulted in the failure of, the Closing to occur on or before
such date, or (B) to the Purchaser in the event this Agreement is also
terminable at such time by the Seller pursuant to Section 8.1(a)(vii);
 
(iii)  by the Purchaser if (A) the Seller shall have breached any of the
covenants or agreements contained in this Agreement such that the closing
condition set forth in Section 7.2(b) would not be satisfied, (B) there exists a
breach of any representation or warranty of the Seller contained in this
Agreement such that the closing condition set forth in Section 7.2(a) would not
be satisfied, (C) following the date hereof an event has occurred (and cannot be
cured prior to the Outside Date) that has had, or would reasonably be expected
to have, a Material Adverse Effect; provided, (1) in the case of the immediately
preceding clauses (A) and (B), that such breach is not cured by the Seller
within 20 Business Days following notice thereof, and (2) the Purchaser shall
not be entitled to terminate this Agreement pursuant to the immediately
preceding clause (A) or (B) if, at the time of such termination, the Purchaser
is in breach of any representation, warranty, covenant or other agreement
contained herein in a manner that the conditions to Closing set forth in
Section 7.3(a) or 7.3(b), as applicable, would not be satisfied;
 
(iv) by the Seller if (A) the Purchaser shall have breached any of the covenants
or agreements contained in this Agreement such that the closing condition set
forth in Section 7.3(b) would not be satisfied or (B) there exists a breach of
any representation or warranty of the Purchaser contained in this Agreement such
that the closing condition set forth in Section 7.3(a) would not be satisfied;
provided, (1) in the case of the immediately preceding clauses (A) and (B), that
such breach is not cured by the Purchaser within 20 Business Days following
notice thereof, and (2) the Seller shall not be entitled to terminate this
Agreement pursuant to this Section 8.1(a)(iv) if, at the time of such
termination, the Seller is in breach of any representation, warranty, covenant
or other agreement contained herein in a manner that the conditions to Closing
set forth in Section 7.2(a) or 7.2(b), as applicable, would not be satisfied;
 
(v) by the Purchaser or the Seller if a Governmental Entity shall have issued an
Order or taken any other Action, in any case having the effect of restraining,
enjoining or otherwise prohibiting, the transactions contemplated by this
Agreement and such Order or other Action is final and non-appealable;
 
(vi) by the Seller if the Federal Office of Surface Mining or any agency of the
State of Indiana administering SMCRA (or any comparable state Law) determines
that Purchaser 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” and the Purchaser is unable to
resolve such designation or investigation within 20 Business Days following
notice thereof; or
 
(vii) by the Seller, if all of the conditions set forth in Sections 7.1 and 7.2
have been satisfied (other than those conditions set forth in Section 7.2(h) or
that by their terms are to be satisfied at the Closing) and the Seller stands
ready and willing to consummate such transactions, and the condition set forth
in Section 7.2(h) shall not have been satisfied by the Outside Date.
 
(b) The party desiring to terminate this Agreement pursuant to
Sections 8.1(a)(ii), 8.1(a)(iii), 8.1(a)(iv),  8.1(a)(v), 8.1(a)(vi) or
8.1(a)(vii) shall give written notice of such termination to the other parties
hereto.
 
8.2 Purchaser Termination Fee.  If this Agreement is validly terminated by the
Seller pursuant to Section 8.1(a)(vii), then the Purchaser shall pay to the
Seller by wire transfer of immediately available funds an amount equal to
$20,000,000 (the “Purchaser Termination Fee”), such payment to be made within 5
Business Days after written notice of such termination.  It is the intent of the
Seller and the Purchaser, and the Seller and the Purchaser hereby acknowledge
and agree, that notwithstanding anything to the contrary in this Agreement, upon
the termination of this Agreement pursuant to Section 8.1(a)(vii), the Seller’s
receipt of the Purchaser Termination Fee shall be the sole and exclusive right
and remedy of the Seller, the Company and their Affiliates, and the sole and
exclusive obligation of the Purchaser and its Affiliates, with respect to all
matters arising under or relating to this Agreement, and that upon payment of
the Purchaser Termination Fee, the Purchaser shall not have any further
liability or obligation relating to or arising out of this Agreement, and all
rights and claims, whether at Law or in equity, in contract, tort or otherwise,
of the Seller, the Company and its Affiliates shall be deemed waived, against
the Purchaser or any of its Affiliates, lenders or investors for any and all
Losses suffered in connection with this Agreement or the transactions
contemplated hereby (other than with respect to obligations arising under the
Confidentiality Agreement, and any expense reimbursement and indemnity
obligations of the Purchaser contained in Sections 6.3(a) and 6.16 and any
interest and expenses payable pursuant to the following sentence of this Section
8.2).  In the event that the Purchaser fails to timely pay the Purchaser
Termination Fee when due and payable pursuant to this Section 8.2, and, in order
to obtain such payment the Seller commences an Action, and Purchaser ultimately
pays such Purchaser Termination Fee, the Purchaser shall pay the Seller its
reasonable costs and expenses (including reasonable attorney’s fees) incurred in
connection with such Action along with the Purchaser Termination Fee, together
with interest on the Purchaser Termination Fee and such costs or expenses at the
“prime rate” as published in The Wall Street Journal, Eastern Edition on such
date, from the date on which the Purchaser Termination Fee was due and payable
hereunder (or such costs and expenses were expended by Seller) until the date on
which such payment is received by the Seller.
 
8.3 Effect of Termination.  In the event of termination of this Agreement in
accordance with Section 8.1, this Agreement will forthwith become void and have
no effect, without any Liability (other than, subject to Section 8.2, with
respect to any claim for any intentional pre-termination breach of any
representation, warranty, covenant or agreement set forth in this Agreement);
provided, that the provisions of Sections 6.6, 6.7, 8.2 and 8.3, Article IX and
Article X will survive any termination hereof pursuant to Section 8.1.
 
ARTICLE IX
INDEMNIFICATION
 
9.1 Survival.
 
(a) All representations and warranties of the parties hereto contained in this
Agreement, any Ancillary Agreement and any certificate or other document
provided hereunder will survive the Closing and the consummation and performance
of the transactions contemplated hereby.  None of the covenants and other
obligations of the parties contained in this Agreement shall survive the Closing
Date except for those that by their terms contemplate performance after the
Closing Date, and each such surviving covenant and agreement shall survive the
Closing for the period contemplated by its terms.  If the Closing occurs, the
Seller shall have liability with respect to a breach of any representation or
warranty only if the Purchaser delivers a Notice of Claim with respect to such
breach on or before the date that is twelve (12) months following the Closing
Date; provided, however, that (a) the Seller shall have liability (i) with
respect to the representations and warranties contained in Article III (except
Sections 3.3 and 3.6) and Sections 4.1, 4.2 and 4.24 (such representations and
warranties being referred to as the “Seller’s Fundamental Representations”) if
the Purchaser delivers a Notice of Claim at any time, and (ii) with respect to
the representations and warranties contained in Sections 4.5 and 4.15 if the
Purchaser delivers a Notice of Claim on or before the date that is 60 days
following the expiration of the applicable statute of limitations, as extended,
and (b) the Purchaser shall have liability with respect to the representations
and warranties contained in Sections 5.1, 5.2 and 5.5 (such representations and
warranties being referred to as the “Purchaser’s Fundamental Representations”)
if the Seller delivers a Notice of Claim at any time.  
 
(b) In the event a Notice of Claim for indemnification under Section 9.2 or 9.3
is given within the applicable survival period set forth in Section 9.1(a), the
representation or warranty, covenant or agreement that is the subject of such
indemnification claim (whether or not formal legal Action shall have been
commenced based upon such claim) shall survive with respect to such claim until
such claim is finally resolved.  The Indemnitor shall indemnify the Indemnitee
for all Losses (subject to the limitations set forth herein, if applicable) that
the Indemnitee may incur in respect of such claim, regardless of when incurred.
 
9.2 Indemnification by the Seller.  If the Closing occurs and subject to the
limitations set forth herein, the Seller shall indemnify and defend the
Purchaser and its Affiliates (including the Company and its Subsidiaries) and
their respective stockholders, members, managers, officers, directors,
employees, agents, successors and assigns (the “Purchaser Indemnitees”) against,
and shall hold them harmless from, any and all losses, damages, claims, charges,
Liabilities, Actions, interest, penalties, Taxes, costs and expenses, including
legal, consultant, accounting and other professional fees, and fees and costs
actually incurred (collectively, “Losses”) resulting from, arising out of or
incurred by any Purchaser Indemnitee in connection with, or otherwise with
respect to:  (a) any inaccuracy or breach of any representation or warranty made
by the Seller in this Agreement, any of the Ancillary Agreements or any
certificate or other document furnished or to be furnished to the Purchaser in
connection with the transactions contemplated by this Agreement; (b) any breach
by the Seller of any covenant or agreement contained in this Agreement or any of
the Ancillary Agreements; (c) except to the extent that the Seller has already
made payments in respect of such amounts pursuant to Section 6.9(a) or to the
extent that such amounts were taken into account as a current liability that
actually reduced Final Net Working Capital, (i) any Tax imposed on or relating
to the Company or its Subsidiaries with respect to any Pre-Closing Period;
(ii) any Liabilities of the Company or its Subsidiaries for the Taxes of another
Person (such as the Seller or Seller Parent) as a transferee or successor, by
Contract (other than a commercial Contract the principal purpose of which is not
Tax related) or by operation of law, where the Company or any of its
Subsidiaries became a transferee or successor, entered into such Contract or the
relationship or connection giving rise to such Liabilities arose prior to the
Closing; (d) Cypress Creek Mine, LLC, an Indiana limited liability company, or
any of its assets, properties, rights, liabilities and obligations, or any other
assets, properties, rights, liabilities and obligations related to the former
Cypress Creek surface mine; (e) any Indebtedness or Transaction Expenses to the
extent not satisfied prior to the Closing or included in any Purchase Price
adjustment pursuant to Section 2.4; (f) any notice from a Governmental Entity of
a violation of the Mining Regulations in connection with the Mining Operations
that has not been fully resolved prior to the Closing; (g) any items set forth
on Section 4.12 of the Seller’s Disclosure Schedule; (h) any determination that
any individual who provided services to the Mining Operations was improperly
classified as an independent contractor or other non-employee status, or that
the Company or any of its Subsidiaries was a joint employer or single employer
or co-employer with any other entity associated with the Mining Operations,
including (i) under any Plan, (ii) for taxation or Tax Reporting, and
(iii) under the Fair Labor Standards Act or any similar state statute; (i) any
Liens of the type set forth in clause (e) of the definition of Permitted Liens
which have not been released prior to the Closing (which ultimately result in a
Loss to the Company or its Subsidiaries following the Closing); (j) the Contract
Mining Agreements (other than with respect to the Contractor Termination
Royalties); (k) to the extent set forth in Section 6.5(e)(ii), the Lafayette
Pre-Closing Payments; and (l) any Benefit Plans.
 
9.3 Indemnification by the Purchaser.  If the Closing occurs and subject to the
limitations set forth herein, the Purchaser shall indemnify and defend the
Seller and its Affiliates, and their respective stockholders, members, managers,
officers, directors, employees, agents, successors and assigns (the “Seller
Indemnitees”) against, and shall hold them harmless from, any and all Losses
resulting from, arising out of, or incurred by any Seller Indemnitee in
connection with, or otherwise with respect to:  (a) any inaccuracy or breach of
any representation or warranty made by the Purchaser in this Agreement or any of
the Ancillary Agreements or any certificate or other document furnished or to be
furnished to the Seller in connection with the transactions contemplated by this
Agreement; (b) any breach by the Purchaser of any covenant or agreement
contained in this Agreement or any of the Ancillary Agreements; (c) the
ownership or operation of the Company and its Subsidiaries by the Purchaser or
its Affiliates (or any subsequent transferee of any such party, if such transfer
is made within three years of the Closing Date) on and after the Closing Date
(except for (i) any claims with respect to which the Seller is obligated to
indemnify the Purchaser Indemnitees pursuant to Section 9.2, and (ii) any claims
the Purchaser or the Company and its Subsidiaries may have against the Seller or
its Affiliates) (d) any Taxes of the Company or its Subsidiaries attributable to
a Post-Closing Period and indemnification for which is not provided to the
Purchaser in Section 9.2; (e) any additional Taxes or out-of-pocket costs
relating to the Section 1031 like-kind exchange as set forth in Section 6.20;
(f) any Support Obligation, to the extent the Losses relating to such Support
Obligations arise or are incurred after Closing; and (g) subject to Section
9.2(k), the Lafayette Agreements.
 
9.4 Indemnification Procedure for Third Party Claims.
 
(a) In the event that an Indemnitee becomes aware of the possibility of any
claim or the commencement of any Action by a third party in respect of which
indemnity may be sought under the provisions of Section 6.3(a), Section 6.16(c),
Section 6.20 or this Article IX (a “Third Party Claim”), the Indemnitee shall
notify the Indemnitor in writing of such Third Party Claim (such notice, a
“Notice of Claim”); provided that the failure or delay in notifying the
Indemnitor of such Third Party Claim will not relieve the Indemnitor of any
Liability it may have to the Indemnitee except to the extent that such failure
or delay causes actual harm to the Indemnitor with respect to such Third Party
Claim. Any Notice of Claim shall describe the Third Party Claim in reasonable
detail, shall include copies of all written material written evidence thereof
and shall indicate the estimated amount, if reasonably practicable, of the Loss
that has been or may be sustained by the Indemnified Party.
 
(b) The Indemnitor will have 30 days from the date on which the Indemnitor
received the Notice of Claim (the “Indemnitor Defense Review Period”) to notify
the Indemnitee that the Indemnitor desires to assume the defense or prosecution
of such Third Party Claim and any litigation resulting therefrom with counsel
reasonably acceptable to the Indemnitee and at the sole cost and expense of the
Indemnitor (a “Third Party Defense”).  At any time prior to the Indemnitor’s
assumption of the Third Party Defense in accordance herewith, the Indemnitee may
file any motion, answer or other pleading or take any other action that the
Indemnitee in good faith believes to be necessary to protect its interests.  If
the Indemnitor assumes the Third Party Defense in accordance herewith:  (i) the
Indemnitee may, at its own expense, retain separate co-counsel and participate
in the defense of the Third Party Claim, but the Indemnitor shall control the
investigation, defense and settlement thereof; (ii) the Indemnitor will not
consent to the entry of any judgment or enter into any settlement with respect
to the Third Party Claim without the prior written consent of the Indemnitee
which consent shall not be unreasonably delayed, conditioned or withheld;
(iii) the Indemnitor shall conduct the Third Party Defense actively and
diligently and keep the Indemnitee reasonably informed about developments in
connection with the Third Party Defense; (iv) the Indemnitor will not take any
action, or omit to take any action, without the consent of the Indemnitee (which
consent shall not be unreasonably withheld, conditioned or delayed), that would
cause any Contracts, correspondence or other documents of the Indemnitee or its
Affiliates to be disclosed to a third party; and (v) the Indemnitee will provide
reasonable cooperation in the Third Party Defense.  Notwithstanding the
foregoing, if counsel for the Indemnitee reasonably determines that there is a
conflict between the positions of the Indemnitor and the Indemnitee in
conducting the defense of such Action or that there are legal defenses available
to such Indemnitee different from or in addition to those available to the
Indemnitor, then counsel for the Indemnitee shall be entitled, if the Indemnitee
so elects, to conduct the defense to the extent reasonably determined by such
counsel to protect the interests of the Indemnitee, at the expense of the
Indemnitor but only with respect to issues with respect to which such conflict
exists.
 
(c) If the Indemnitor does not assume the Third Party Defense prior to the end
of the Indemnitor Defense Review Period, the Indemnitee shall have the right to
assume the Third Party Defense with counsel reasonably acceptable to the
Indemnitor, at the expense of the Indemnitor; provided, however, that the
Indemnitor shall have the right, at its expense, to participate in such Third
Party Defense but the Indemnitee shall control the investigation, defense and
settlement thereof.  The Indemnitee shall conduct the Third Party Defense
actively and diligently, and the Indemnitor will provide reasonable cooperation
in the Third Party Defense.  The Indemnitee shall have the right to consent to
the entry of any judgment or enter into any settlement with respect to the Third
Party Claim in any manner and on such terms as it may deem appropriate without
the consent of the Indemnitor; provided, however, that the amount of any
settlement made or entry of any judgment consented to by the Indemnitee without
the consent of the Indemnitor (not to be unreasonably withheld or delayed) shall
not be determinative of the validity of the claim.
 
(d) Notwithstanding anything herein to the contrary, without the written consent
of the Purchaser, which will not be unreasonably withheld, conditioned or
delayed, the Seller shall not be entitled to assume any Third Party
Defense:  (i) to the extent that any such Third Party Claim seeks, in addition
to or in lieu of monetary damages, any injunctive or other equitable relief
against the Purchaser, the Company, any of its Subsidiaries or any of their
respective Affiliates; (ii) if such Third Party Claim relates to or arises in
connection with any criminal proceeding, Action, indictment, allegation or
investigation against the Purchaser, the Company, any of its Subsidiaries or any
of their respective Affiliates; or (iii) if the Seller has failed or is failing
to vigorously prosecute or defend such Third Party Claim.
 
(e) The Seller and the Purchaser shall cooperate with the each other in all
reasonable aspects in connection with the defense of any Third Party Claim,
including (i) making available (subject to the provisions of Section 6.11)
records relating to such Third Party Claim and furnishing, without expense
(other than reimbursement of actual out-of-pocket expenses), to the defending
party, management employees of the non-defending party as may reasonably be
necessary for the preparation of the defense of such Third Party Claim, and
(ii) making available the benefits of the Policies in effect prior to or after
the Closing to the extent available to satisfy any such Third Party Claim.
 
9.5 Indemnification Procedures for Non-Third Party Claims.  In the event that an
Indemnitee becomes aware of the possibility of a claim that does not involve a
Third Party Claim in respect of which indemnity may be sought under the
provisions of Section 6.3(a), Section 6.16(c), Section 6.20 or this Article IX,
the Indemnitee shall send a Notice of Claim to the Indemnitor.  The Indemnitor
will have 30 days from receipt of such notice of claim to dispute the claim and
will reasonably cooperate and assist the Indemnitee in determining the validity
of the claim for indemnity.  If the Indemnitor does not give notice to the
Indemnitee that it disputes such claim within 30 days after its receipt of the
notice of claim, the claim specified in such notice of claim will be presumed to
be a Loss subject to indemnification hereunder, provided that the Indemnitor
shall not be precluded from subsequently challenging its obligation to indemnify
the Indemnitee for such Loss except to the extent that such delay has prejudiced
the Indemnified Party’s defense against such claim.
 
9.6 Other Matters Relating to Indemnification.
 
(a) Limitations on Liability for Seller.  Except for claims with respect to the
Seller’s Fundamental Representations, the Seller shall not be required to
indemnify any Purchaser Indemnittee for any Loss, or any series of related
Losses, (i) pursuant to Section 9.2(a) that do not exceed $50,000 (the “De
Minimis Claim Amount”); provided, however, that, to the extent any such Loss, or
series of related Losses, exceeds the De Minimis Claim Amount with respect to
any Loss, or series of related Losses, the full amount of such Loss shall be
applied to the Deductible, and (ii) except to the extent that the aggregate
amount of such Losses exceeds $5,000,000 (the “Deductible”), and then only to
the extent that the aggregate of such Losses exceeds the Deductible.
 
(b) Cap on Liability for Seller.  (i) The Seller’s aggregate liability for all
claims made pursuant to Section 9.2(a) other than claims with respect to the
Seller’s Fundamental Representations shall not exceed $30,000,000, and (ii) the
Seller’s aggregate liability for all claims made with respect to the Seller’s
Fundamental Representations or pursuant to Sections 9.2(b) through (k) shall not
exceed the Base Purchase Price.
 
(c) Qualifications.  For purposes of this Article IX, all qualifications as to
materiality or Material Adverse Effect contained in any representation,
warranty, covenant or agreement contained herein will be disregarded for
purposes of determining the amount of any Loss, but not for purposes of
determining whether a Loss has occurred.
 
(d) Exclusive Remedy.  The indemnification rights of the parties under this
Article IX are the sole and exclusive remedy after the Closing for claims
seeking monetary damages available to the Purchaser Indemnitees and the Seller
Indemnitees, as applicable, for breaches of any of the representations,
warranties, covenants and agreements contained in this Agreement.
 
(e) Tax Treatment of Indemnification Payments. Except as otherwise required by
applicable Law, the parties shall treat any indemnification payment made
hereunder as an adjustment to the consideration payable under this Agreement.
 
(f) Interest on Losses.  Any and all Losses hereunder shall bear interest from
the date actual expenditure is made by the Indemnified Party until paid by the
Indemnitor at the “prime rate” as published in The Wall Street Journal, Eastern
Edition on the date such expenditure was made by the Indemnitee.
 
(g) Insurance.  Payments by an Indemnitor in respect of any Loss shall be
reduced by the amount of any insurance proceeds and any indemnity, contribution
or other similar payment received by the Indemnitee in respect of any such
claim.  The Indemnitee shall reasonably cooperate with the Indemnitor and use
its commercially reasonable efforts to recover or assist the Indemnitor to
recover under any applicable insurance policies or applicable indemnity,
contribution or other similar agreements for any Losses; provided that the
foregoing shall not be deemed or construed to require the Indemnitee to resolve
any claims for recovery prior to submitting a claim for indemnification to the
Indemnitor.
 
(h) Tax Benefits.  Payments by an Indemnitor in respect of any Loss shall be
reduced by an amount equal to the cash value Tax benefit (if any) (i) actually
recognized by the Indemnitee incurring the Loss as a current deduction in the
taxable year such Loss was incurred, or (ii) reasonably expected to be realized
in the next taxable year following the year such Loss was incurred.
 
(i) No Duplication; Subsequent Payments.  No Indemnitee shall be entitled to
recover any Loss to the extent (i) indemnification of such amount would
constitute a duplicative payment for the same Loss, whether because it
constitutes a breach of more than one representation, warranty, covenant or
agreement or being addressed by more than one clause under Section 9.2 or
Section 9.3 or otherwise or (ii) such amount has had the effect of reducing the
Purchase Price pursuant to Sections 2.3 or 2.4.  If any Indemnitee receives
payment or reimbursement from any source for any amount for which such
Indemnitee has previously received payment from an Indemnitor pursuant to either
Section 9.2 or 9.3, such Indemnitee shall promptly pay the full amount of such
payment or reimbursement to such Indemnitor.
 
(j) Mitigation.  In the event of any breach giving rise to an indemnification
obligation under this Article IX, each Indemnitee shall take, or cause its
Affiliates to take, reasonable steps to mitigate the Losses arising from such
breach.
 
ARTICLE X
MISCELLANEOUS
 
10.1 Notices.  All notices, requests and other communications hereunder must be
in writing and will be deemed to have been duly given only if (a) delivered
personally against written receipt, (b) sent by facsimile or e-mail
transmission, (c) mailed by registered or certified mail, postage prepaid,
return receipt requested, or (d) mailed by reputable international overnight
courier, fee prepaid, to the parties hereto at the following addresses or
facsimile numbers:
 
If to the Seller:
 
Vectren Utility Services, Inc.
One Vectren Square
211 N.W. Riverside Drive
Evansville, IN  47708
Attention:  Ronald E. Christian
Facsimile No.:  (812) 491-4169
Email:  rchristian@vectren.com

with copies to:
 
Baker Botts LLP
30 Rockefeller Plaza
New York, NY 10112
Attention:  William S. Lamb
Facsimile No.:  (212) 259-2557
Email: bill.lamb@bakerbotts.com
 
Wyatt, Tarrant & Combs, LLP
250 West Main Street, Suite 1600
Lexington, KY  40507-1746
Attention: Karen Greenwell
Facsimile No.:  (859) 259-0649
Email:  kgreenwell@wyattfirm.com
 
If to the Purchaser:
 
Sunrise Coal, LLC
1183 East Canvasback Dr.
Terre Haute, IN 47802
Attention:  Brent Bilsland
Facsimile No.:  (812) 299-2810
Email: bbilsland@sunrisecoal.com
 
with a copy to:
 
Morgan, Lewis & Bockius LLP
300 S. Grand Avenue, Twenty-Second Floor
Los Angeles, CA  90017
Attention:  Ingrid A. Myers
Facsimile No.:  (213) 612-2501
Email:  imyers@morganlewis.com
 
All such notices, requests and other communications will be deemed given, (w) if
delivered personally as provided in this Section 10.1, upon delivery, (x) if
delivered by facsimile or email transmission as provided in this Section 10.1,
upon confirmed receipt, (y) if delivered by mail as provided in this
Section 10.1, upon the earlier of the fifth Business Day following mailing and
receipt, and (z) if delivered by overnight courier as provided in this
Section 10.1, upon the earlier of the second Business Day following the date
sent by such overnight courier and receipt (in each case regardless of whether
such notice, request or other communication is received by any other Person to
whom a copy of such notice is to be delivered pursuant to this
Section 10.1).  Any party hereto may change the address to which notices,
requests and other communications hereunder are to be delivered by giving the
other parties hereto notice in the manner set forth herein.
 
10.2 Amendments and Waivers.  No amendment of this Agreement will be effective
unless it is in writing and signed by the parties hereto.  No waiver of any
provision of this Agreement will be effective unless it is in writing and duly
signed by the party granting the waiver, and no such waiver will constitute a
waiver of satisfaction of any other provision of this Agreement.  No failure or
delay by any party in exercising any right or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise thereof preclude
any other or further exercise thereof of the exercise of any other right, power
or privilege.
 
10.3 Expenses.  Each of the parties hereto shall pay their own fees and expenses
incurred in connection with negotiating and preparing this Agreement, the
Ancillary Agreements and consummating the transactions contemplated hereby,
including fees and disbursements of their respective attorneys, accountants,
brokers, finders and investment bankers. If the transaction is consummated,
except as otherwise provided in this Agreement, all fees and expenses, including
legal, accounting, investment banking, broker’s and finder’s fees and expenses
incurred by the Seller, the Company or its Subsidiaries in connection with this
transaction shall be deemed expenses of the Seller and shall be borne by the
Seller (the “Transaction Expenses”).
 
10.4 Assignment and Delegation.  No party may assign any part of its rights, or
delegate any of its obligations, under this Agreement, except that the Purchaser
may assign or delegate its rights and obligations under this Agreement, in whole
or in part, (a) to one or more of its Affiliates (provided that no such
assignment or delegation prior to the Closing shall relieve the Purchaser of its
obligations hereunder), (b) to any subsequent purchaser of the Company or its
Subsidiaries or all or any significant portion of the assets of the Company or
its Subsidiaries or (c) to its lenders as collateral security for its
obligations under any of its secured debt financing arrangements.
 
10.5 Successors and Assigns.  This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.  If a permitted assignment of rights occurs (a) the
non-assigning party will be deemed to have agreed to perform in favor of the
assignee, (b) a contemporaneous delegation will be deemed to have occurred, and
(c) the assignee will be deemed to have assumed the assignor’s performance
obligations in favor of the non-assigning party, except in each case where
evidence exists to the contrary.
 
10.6 Governing Law.  All matters relating to or arising out of this Agreement,
any Ancillary Agreement or the transactions contemplated hereby or thereby
(whether sounding in contract, tort or otherwise) will be governed by and
construed in accordance with the laws of the State of Indiana, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of Indiana or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Indiana.
 
10.7 Consent to Jurisdiction.  Each party hereto irrevocably submits to the
exclusive jurisdiction of any state or federal court located in Vigo County in
the State of Indiana for the purposes of any Action arising out of this
Agreement or the Ancillary Agreements or any transaction contemplated hereby or
thereby, and agrees to commence any such Action only in such courts.  Each party
further agrees that service of any process, summons, notice or document by U.S.
registered mail to such party’s respective address set forth herein shall be
effective service of process for any such Action.  Each party irrevocably and
unconditionally waives any objection to the laying of venue of any Action
arising out of this Agreement, Ancillary Agreements or the transactions
contemplated hereby or thereby in such courts, and hereby irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such Action brought in any such court has been brought in an inconvenient
forum.  EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE ANCILLARY
AGREEMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY OR THE ACTIONS
OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT
HEREOF AND THEREOF.
 
10.8 Specific Performance: Limitation on Damages.
 
(a) The parties agree that irreparable damage would occur if any provision of
this Agreement were not performed in accordance with the terms hereof and that
the parties shall be entitled to specific performance of the terms hereof, in
addition to any other remedy to which they are entitled at law or in equity.
 
(b) In no event shall any Party to this Agreement be liable to any other Party
for any punitive, incidental, consequential, special or indirect damages,
including loss of future revenue or income, damages for loss of business
reputation or opportunity relating to the breach or alleged breach of this
Agreement, or diminution of value, or any damages based on any type of multiple
(except to the extent such damages are claimed against or recovered from an
Indemnitee in connection with a Third Party Claim).
 
10.9 “As Is” Sale; No Reliance.  EXCEPT FOR THOSE REPRESENTATIONS AND WARRANTIES
CONTAINED IN ARTICLE III AND ARTICLE IV (INCLUDING THE RELATED PORTIONS OF THE
SELLER’S DISCLOSURE SCHEDULE) AND THE CERTIFICATES DELIVERED BY THE SELLER AT
THE CLOSING, (a) THE COMPANY AND ITS SUBSIDIARIES ARE BEING TRANSFERRED “AS IS,
WHERE IS, WITH ALL FAULTS,” AND (b) THE PURCHASER ACKNOWLEDGES THAT IT HAS NOT
RELIED ON, AND THE SELLER EXPRESSLY DISCLAIMS, ANY OTHER REPRESENTATIONS OR
WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, AS TO THE CONDITION, VALUE
OR QUALITY OF THE COMPANY OR ITS SUBSIDIARIES OR THE INTERESTS OR THE PROSPECTS
(FINANCIAL OR OTHERWISE), RISKS AND OTHER INCIDENTS OF THE COMPANY AND ITS
SUBSIDIARIES, INCLUDING WITH RESPECT TO THE EXISTENCE, NATURE, QUALITY OR
QUANTITY OF ANY COAL RESERVES.
 
10.10 Certain Limitations.  Notwithstanding anything in this Agreement to the
contrary, this Agreement may only be enforced against, and any claim, action,
suit or other legal proceeding based upon, arising out of, or related to this
Agreement, or the negotiation, execution or performance of this Agreement, may
only be brought against the entities that are expressly named as parties hereto
or their successors and permitted assigns, except pursuant to the Seller
Guaranty.  No past, present or future director, officer, employee, incorporator,
manager, member, partner, stockholder, Affiliate, agent, attorney or other
Representative of any party hereto or of any Affiliate of any party hereto, or
any of their successors or permitted assigns, shall have any liability for any
obligations or liabilities of any party hereto under this Agreement or for any
claim or Action based on, in respect of or by reason of the transactions
contemplated hereby, except pursuant to the Seller Guaranty.
 
10.11 Counterparts.  The parties may sign this Agreement in several
counterparts, each of which will be deemed an original but all of which together
will constitute one instrument.  Execution and delivery of this Agreement may be
effected by means of an exchange of facsimile or other electronic copies.
 
10.12 Third Party Beneficiaries.  This Agreement does not and is not intended to
confer any rights or remedies upon any Person, including any employee, any
beneficiary or dependents thereof, or any collective bargaining representative
thereof, other than the parties to this Agreement; provided, however, that in
the case of Article IX, the other Indemnitees and their respective heirs,
executors, administrators, legal representatives, successors and assigns are
intended third party beneficiaries of the provisions contained in such Article.
 
10.13 Entire Agreement.  This Agreement, the Ancillary Agreements, the Exhibits,
the Schedules and the other documents, instruments and other agreements
specifically referred to in this Agreement or those documents or delivered under
this Agreement or those documents constitute the final and entire agreement
between the parties on the subject matter of this Agreement.  This Agreement
supersedes all prior oral or written agreements or policies relating to this
Agreement, except for the Confidentiality Agreement, which will continue in full
force and effect in accordance with its terms, subject to Section 6.6.
 
10.14 Captions.  All captions contained in this Agreement are for convenience of
reference only, do not form a part of this Agreement and shall not affect in any
way the meaning or interpretation of this Agreement.
 
10.15 Severability.  If any provision of this Agreement is held invalid, illegal
or unenforceable in any jurisdiction, the remainder of this Agreement, or
application of that provision to any Persons or circumstances, or in any
jurisdiction, other than those as to which it is held unenforceable, will not be
affected by that unenforceability and will be enforceable to the fullest extent
permitted by Law.
 
10.16 Interpretation; Disclosure Schedules.  The parties hereto have
participated jointly in the negotiation and drafting of this Agreement, and any
rule of construction or interpretation otherwise requiring this Agreement to be
construed or interpreted against any party by virtue of the authorship of this
Agreement shall not apply to the construction and interpretation hereof.  The
Disclosure Schedules have been arranged for purposes of convenience in
separately titled sections corresponding to sections of this Agreement;
provided, however, that each section of the Disclosure Schedules shall be deemed
to incorporate by reference all information disclosed in any other section of
the Disclosure Schedules to the extent such disclosure and the applicability of
such information is readily apparent on its face.  Capitalized terms used in the
Disclosure Schedules and not otherwise defined therein have the meanings given
to them in this Agreement.  The information contained in this Agreement and in
the Disclosure Schedules and Exhibits hereto is disclosed solely for purposes of
this Agreement, and no information contained herein or therein shall be deemed
to be an admission by any party hereto to any third party of any matter
whatsoever (including any violation of law or breach of contract).
 
[Signature page follows.]
 

 
 
 
 
 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first written above.
 
 
SUNRISE COAL, LLC

 
 
By:  /s/ Brent Bilsland
Name:  Brent Bilsland
Title:    President
 
 
VECTREN UTILITY SERVICES, INC.
 

 
By:  /s/ Ronald E. Christian
Name:  Ronald E. Christian
Title:    Vice President, Secretary and
Assistant Treasurer
 
 
VECTREN FUELS, INC.
 
 
By:  /s/ Randy L. Beck
Name:  Randy L. Beck
Title:    President
 

[SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]
 
 

 
 

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Annex I
 
Coal Inventory Methodology
 
Stockpile Surveying Methodology
 
The methods currently being utilized at the Seller’s Mining Operations to
measure and calculate stockpile volumes, as described below, shall be used to
determine stockpile volumes.  Representatives of the Purchaser’s engineering
staff must be present before and during the surveying of the stockpiles at the
Mining Operations, to make certain that both parties are in agreement that the
agreed procedures were followed.  The parties shall cooperate and work together
in good faith to negate any problems that may arise during the surveying of the
stockpiles.
 
Oaktown
 
Vectren Fuels, Inc.’s Oaktown operation consists of a coal preparation and
handling system that keeps the individual mine stockpiles, both on the clean and
raw side, separate for each mine – Oaktown 1 & Oaktown 2.  There are two
separate clean stockpiles and two separate raw stockpiles – 4 piles
total.  There is also one small clean stockpile of purchased coal, mixed,
stacked near the rail.
 
The separated stockpiles are graded and shaped with dozers upon leaving the
stacking tubes.  Each dozer is equipped with a GPS tracking device that provides
real-time feedback as the dozer passes over the stockpile to aid in measuring
stockpile volumes.  Each of the stockpiles at Oaktown 1 & Oaktown 2 must be
properly graded and shaped prior to surveying, to allow for accurate measurement
of the piles by dozer passes.
 
In addition to the data gathered by the dozer/GPS units, measurements of the
base of each stockpile and areas of each stockpile outside the influence of
reclaim feeders are directly measured by mobile/hand-held surveying units.  The
raw data from the dozer/GPS units and the mobile/hand-held surveying units are
combined for each stockpile, input into CAD-based software, and used to generate
stockpile volumes.
 
Prosperity
 
There is only one slope at Vectren Fuels Inc.’s Prosperity mine, so there are
only two stockpiles - one raw stockpile and one clean stockpile at this mine.
 
Stockpiles at the Prosperity mine are measured using direct surveying methods,
consisting of a total station and/or mobile/hand-held laser device.  Areas of
the stockpiles that can be safely and directly traversed, the base of each
stockpile and those outside the influence of reclaim feeders, are measured
directly with GPS units.  Areas of the stockpiles outside these safe areas are
measured with a hand-held laser.
 
General
 
Once the pile volumes are established, assumptions of both recovery and density
must be made to establish tonnage in both the raw and clean stockpiles.
 
Densities & Recoveries
 
Clean
 
The clean coal stockpiles at the Oaktown and Prosperity mine locations will be
assumed to have a clean coal loose density of 55 lb/ft3.  Recovery for clean
coal stockpiles will be assumed to be 100% (i.e., a value of 1.0 will be used in
the calculation of stockpile tonnage).
 
Raw
 
The raw coal stockpiles at the Oaktown and Prosperity mine locations will be
assumed to have a raw coal loose density of 80.0 lb/ft3.
 
Recovery for raw coal stockpiles will be determined for each of the Oaktown 1,
Oaktown 2 and Prosperity mines, based on plant recovery data from such mine
during the 120 day period ending on the day prior to the date on which the coal
inventory is determined pursuant to the Agreement.  The average recovery for the
raw coal stockpiles for each mine (i.e., Oaktown 1, Oaktown 2 and Prosperity),
over the 120-day period, will be the recovery used in the calculation of tonnage
for that mine.
 
Calculation of Stockpile Tonnages
 
Clean:
 
Tonnages for each clean coal stockpile will be calculated based on the surveyed
volume for that stockpile, and applying a loose coal density of 55 lb/ft3 and a
100% recovery.
 
For example, assume a volume of one thousand loose cubic yards (1,000
c.y.).  Utilizing the density and recovery stated above, the clean tons would
be:
 
(1,000 c.y.)x(27 ft3/1c.y)x(55 lb/ft3)x(1 ton/2000 lb)x(1.0) = 742.5 tons of
clean coal
 
Note:  There are 27 cubic feet in a cubic yard.  There are 2,000 pounds in a
ton.
 
Raw:
 
Tonnages for each raw coal stockpile will be calculated based on the surveyed
volume for that stockpile, and applying a loose coal density of 80.0 lb/ft3 and
the average recovery for the applicable mine (i.e., Oaktown 1, Oaktown 2 and
Prosperity) over the 120 day period as described above.  Thus, each raw coal
stockpile may have a different recovery based on each mine’s individual
properties
 
For example, assume a volume of one thousand loose cubic yards (1,000
c.y.).  Utilizing the density stated above and assuming a recovery of 60%, the
clean tons would be:
 
(1,000 c.y.)x(27 ft3/1c.y)x(80.0 lb/ft3)x(1 ton/2000 lb)x(0.6) = 648 tons of
clean coal
 
Note:  There are 27 cubic feet in a cubic yard.  There are 2,000 pounds in a
ton.
 

 
 
 
 
 

--------------------------------------------------------------------------------

 

 
Annex II
 
Working Capital Methodology
 

 

                   
Target Net Working Capital
     
Net Working Capital Adjustment
     
Dec-13
 
May-13
 
Methodology
 
Current Assets:
             
Cash 1
 
 $                           -
 
$                          -
     
Accounts Receivable - Trade
 
1,358,597
 
11,944,070
     
Advance Royalties 2
 
2,760,819
 
2,337,309
     
Coal Inventory
 
26,172,398
 
39,301,479
     
Prepaid Expenses
 
437,306
 
1,621,075
     
Parts Inventory 3
 
13,299,584
 
13,378,468
     
Total Current Assets
 
54,028,704
 
68,582,401
                     
Less:
                             
Current Liabilities:
             
Accounts Payable
 
13,475,718
 
9,905,313
     
Accrued Liabilities
 
7,256,429
 
4,391,588
     
Accrued Property and Sales Tax 4
 
1,230,559
 
1,088,620
     
Mine and Rail Reclamation Obligations 5
 
11,814,287
 
12,089,156
     
Total Current Liabilities
 
 $         33,776,993
 
 $        27,474,677
                     
Net Working Capital
 
 $         20,251,711
 
  $       41,107,724
 
$     20,856,013
  6
               
1
Cash is excluded from purchased balance sheet, however, the nest working capital
will be adjusted at closing to cover cash necessary for uncleared or undeposited
checks and drafts
2
Includes both current and long-term Advanced Royalties assets
3
Parts Inventory is classified as Materials and Supplies Inventory on the audited
and interim balance sheets
4
Accrued Property and Sales Tax is classified as Accrued Taxes and Liabilities on
the interim balance sheet
5
Mine and Rail Reclamation Obligations are classified as "Long-Term Liabilities"
on the interim balance sheet
6
Illustrative net working capital adjustment using a 5/31/13 closing date

 

 

 
 
 
 

--------------------------------------------------------------------------------

 
 

 Annex III
 
Net Plant Value Methodology
 

 

   
Target
     
Net Plant
   
Net Plan
     
Adjustment
Net Plant:
 
Dec-13
 
May-13
 
Methodology
Property and Equipment
 
153,752,764
 
155,118,651
   
Mining Property
 
2,638,358
 
2,629,578
   
Mine Development Costs
 
133,935,423
 
133,196,787
   
Asset Retirement Obligation Assets
 
7,662,111
 
7,460,311
   
Total Net Plant
 
$297,988,656
 
$298,405,327
 
$416,671

 

 

 
 
 
 
 

--------------------------------------------------------------------------------

 

 Annex IV
 
Example Purchase Price Calculation
 

 

   
Purchase
       
Price
       
Methodology
             
Base Purchase Price
 
$296,000,000
 
From Section 2.1
Plus:  Net Working Capital Adjustment
 
20,856,013
 
From Annex II
Plus:  Net Plant Adjustment
 
416,671
 
From Axxex III
Less Indebtedness Amount
    -  
From Schedule 2.3 ( c )
Purchase Price
 
$317,272,684
 
For Illustrative Purposes Only

 
 
 
 
 

--------------------------------------------------------------------------------

 

 
Exhibit A
 
Seller Guaranty
 
This GUARANTY, dated as of the ____ day of _________, 2014, is entered into by
Vectren Enterprises, Inc. an Indiana corporation (“Enterprises”), to and for the
benefit of Sunrise Coal, LLC, an Indiana limited liability company (the
“Purchaser”).
 
WITNESSETH:
 
WHEREAS, VECTREN UTILITY SERVICES, INC., an Indiana corporation (“VUSI”), is a
wholly owned subsidiary of Enterprises;
 
WHEREAS, pursuant to that certain Stock Purchase Agreement, dated as of June 30,
2014 (the “Purchase Agreement”), by and among the Purchaser, VUSI and VUSI’s
wholly owned subsidiary, VECTREN FUELS, INC., an Indiana corporation (“Fuels”),
VUSI has agreed to sell to the Purchaser, and the Purchaser has agreed to
purchase from VUSI, all of the capital stock of Fuels, subject to and in
accordance with the terms and conditions of the Purchase Agreement; and
 
WHEREAS, as a condition precedent to the Purchaser consummating that
transactions contemplated by the Purchase Agreement and performing its
obligations thereunder, and as an inducement to the Purchaser entering into the
Purchase Agreement, Enterprises  has agreed to execute and deliver this Guaranty
for the benefit of the Purchaser;
 
NOW, THEREFORE, in consideration of the foregoing premises and the following
covenants and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Enterprises covenants with the Purchaser as
follows:
 
1.           Guaranty. For value received and in consideration of the direct and
indirect benefits to be derived by Enterprises in connection with the
transactions contemplated by the Purchase Agreement, with effect from the date
of this Guaranty, Enterprises hereby guarantees VUSI’s full and prompt payment
as and when due of all amounts owed by VUSI under Article IX of the Purchase
Agreement, subject in all respects to all of the conditions, limitations, and
qualifications set forth in the Purchase Agreement (the “Obligations). This is a
continuing Guaranty of payment and not merely of collection. Subject to the
provisions of Section 4, this Guaranty shall terminate upon the earlier of the
termination of the Obligations or the date which is three (3) years from the
date of this Guaranty; provided, however, that this Guaranty and Enterprise’s
liability hereunder shall survive any such termination with respect to any
claims made by the Purchaser under the Purchase Agreement if such claims are
made prior to such termination.
 
2.           Waiver. Enterprises hereby expressly waives notice from the
Purchaser of its acceptance of and reliance upon this Guaranty.  Enterprises
consents to any extensions of time for the payment of the Obligations and to any
changes in the terms of the Purchase Agreement, and waives any notices thereof.
Enterprises also waives promptness, diligence, presentment to or demand of
payment from anyone liable upon the Obligations, and presentment, notice of
dishonor, protest and all other notices whatsoever. No waiver, amendment,
release or modification of this Guaranty shall be established by conduct, custom
or course of dealing, but solely by an instrument in writing duly executed by
Enterprises and the Purchaser. The Purchaser’s failure or delay in exercising
any right, remedy or power hereunder shall not operate as a waiver thereof, nor
shall any single or partial exercise by the Purchaser of any right, remedy or
power hereunder preclude the Purchaser from any other or future exercise of any
right, remedy or power. Each and every right, remedy and power granted to the
Purchaser hereunder or allowed to it by law or other agreement shall be
cumulative with and not exclusive of any other.
 
3.           Waiver of Defenses. The liability of Enterprises under this
Guaranty, and Enterprises’ obligations under this Guaranty shall not be impaired
or released as a result of (a) any change of the time, manner or terms of
payment of any of the Obligations; (b) any renewal or increase of any of the
Obligations; (c) any release or partial release of any other guarantor or other
obligor in respect of any of the Obligations; (d) any modification, amendment,
waiver or renewal of, or consent to departure from, any agreement or instrument
relating to any of the Obligations; (e) the Purchaser’s exercise or failure to
exercise any rights against VUSI, Enterprises  or others or any other action or
inaction by the Purchaser in respect of any of the Obligations; (f) with respect
to any of the foregoing, the lack of notice to or consent by Enterprises; or
(g) any other circumstance which might otherwise constitute a defense available
to, or discharge of, a surety or a guarantor excepting payment. Nothing herein
is intended to deny Enterprises, and Enterprises shall have and may assert any
and all of the defenses, set-offs, counterclaims and other rights which VUSI is
or may be entitled to assert that arise from or out of the Purchase Agreement,
except for defenses arising out of the bankruptcy, insolvency, dissolution or
liquidation of VUSI. The obligations of Enterprises hereunder are several from
VUSI or any other person, and are primary obligations concerning which
Enterprises is the principal obligor. There are no conditions precedent to the
enforcement of this Guaranty, except as expressly contained herein.
 
4.           Reinstatement Provision. If the Purchaser receives any payment or
payments on account of the Obligations, which payment or payments of any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside and/or required to be repaid to a trustee, receiver, or any other
party under any bankruptcy act or code, state or federal law, common law or
equitable doctrine, then to the extent of any sum not finally retained by the
Purchaser, Enterprises’ obligations to the Purchaser hereunder shall be
reinstated and this Guaranty, shall remain in full force and effect (or be
reinstated) until payment of the Obligations shall have been made to the
Purchaser, which payment shall be due on demand.
 
5.           Assignment. This Guaranty shall be binding upon Enterprises and
upon its successors and assigns and shall be for the benefit of the Purchaser
and its successors and assigns. Enterprises may not assign this Guaranty or the
obligations hereunder without the express written consent of the Purchaser and
such assignment will not be unreasonably withheld. Any purported assignment in
violation of this Section 5 shall be void and without effect.

6.           Applicable Law. This Guaranty shall be governed by and construed in
accordance with the laws of the State of Indiana, without giving effect to laws
of such state that would require the application of the laws of any other state.
 
7.           Severability. In case any clause, provision or section of this
Guaranty, or any application thereof, is for any reason held to be illegal,
invalid, or inoperable, Enterprises and the Purchaser shall negotiate an
equitable adjustment to such affected provisions of this guaranty with a view
towards effecting the purpose and intent of the Guaranty, and subject to such
adjustment such illegality, invalidity or inoperability shall not affect the
remainder thereof or any other clause, provision or section, and each such
clause, provision or section shall be deemed to be effective and operative in
the manner and to the fullest extent permitted by law.
 
8.           Only Agreement. This Guaranty is the entire and only agreement
between Enterprises and the Purchaser with respect to the guaranty of the
Obligations of VUSI by Enterprises.
 
9.           Representations and Warranties. Enterprises represents and warrants
to the Purchaser that: (a) it is a corporation duly incorporated and validly
existing under the laws of the State of Indiana; (b) it has all requisite power
and authority to execute and to deliver and to perform all of its obligations
under this Guaranty; (c) the execution, delivery and performance of this
Guaranty by Enterprises are within its corporate powers and have been duly
authorized by all necessary corporate actions; (d) this Guaranty constitutes a
legally valid and binding agreement of Enterprises, subject only to insolvency,
bankruptcy, moratorium, reorganization, fraudulent conveyance or similar laws
affecting creditors’ rights generally and by general principles of equity;
(e) the execution, delivery and performance of this Guaranty will not violate
any provision of any requirement of law or contractual obligation of Enterprises
(except to the extent that any such violation would not reasonably be expected
to have a material adverse effect on Enterprises’ ability to perform this
Guaranty); (f) no consent or authorization of, filing with, or other act by or
in respect of, any arbitrator or governmental authority and no consent of any
other person (including, without limitation, any stockholder or creditor of
Enterprises) is required in connection with the execution, delivery,
performance, validity or enforceability of this Guaranty, other than any which
have been obtained or made prior to the date hereof and remain in full force and
effect; and (g) no litigation, investigation or proceeding of or before any
arbitrator or governmental authority is pending or, to the knowledge of
Enterprises, threatened by or against Enterprises relating to this Guaranty or
that would have a material adverse effect on Enterprises’ ability to perform
this Guaranty.
 
10.           Collection Expenses.  If the Purchaser is required to pursue any
remedy against Enterprises hereunder, Enterprises shall pay to the Purchaser
upon demand, all reasonable attorneys’ fees and expenses and all other
reasonable costs, expenses and fees incurred by the Purchaser in successfully
enforcing this Guaranty.
 
11.           Notices. Any notices given or required to be given hereunder shall
be given to Enterprises and the Purchaser, as applicable, by being either:
(a) delivered personally against written receipt, (b) sent by facsimile or
e-mail transmission, (c) mailed by registered or certified mail, postage
prepaid, return receipt requested, or (d) mailed by reputable international
overnight courier, fee prepaid, to Enterprises or the Purchaser, as applicable,
at the following addresses or facsimile numbers:
 
If to Enterprises:      Vectren Enterprises, Inc.
            Attention:  Office of the Treasurer
One Vectren Square
Evansville Indiana  47708
Phone: (812) 491-4080
Fax No.: (812) 491-4346
E-mail: rgoocher@vectren.com
 
With an additional notice to:Vectren Corporation
Attention:  Ronald E. Christian
One Vectren Square
Evansville, Indiana  47708
Phone: (812) 491-4202
Fax No.: (812) 491-4238
E-mail: rchristian@vectren.com
 
If to the Purchaser:           Sunrise Coal, LLC
Attention:  Brent Bilsland
1183 East Canvasback Dr.
Phone: (812) 298-3702
Fax No.: (812) 299-2810
E-mail: bbilsland@sunrisecoal.com
 
All such notices, requests and other communications will be deemed given, (w) if
delivered personally as provided in this Section 11, upon delivery, (x) if
delivered by facsimile or email transmission as provided in this Section 11,
upon confirmed receipt, (y) if delivered by mail as provided in this Section 11,
upon the earlier of the fifth business day following mailing and receipt, and
(z) if delivered by overnight courier as provided in this Section 11, upon the
earlier of the second business day following the date sent by such overnight
courier and receipt (in each case regardless of whether such notice, request or
other communication is received by any other Person to whom a copy of such
notice is to be delivered pursuant to this Section 11).  Enterprises or the
Purchaser may change the address to which notices to it are to be sent upon
written notice to the Purchaser or Enterprises, respectively.
 
12.           Modification. This Guaranty may not be amended or modified unless
the changes are in writing and signed by both Enterprises and the Purchaser.
 
13.           JURY TRIAL
WAIVER.                                                      ENTERPRISES  HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY.
 
 [signature page follows]
 

 
 
 
 
 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, Enterprises has executed and delivered this Guaranty
effective as of the day and year first above written.
 

Vectren Enterprises, Inc.

By:                                                                
Name :                                                                
Title:                                                                

Accepted:

Sunrise Coal, LLC

By:                                                                
Name:                                                                           
Title:                                                                

 
 
 
 
 

--------------------------------------------------------------------------------

 

Exhibit B-1
 
Interim Services Agreement (Oaktown #1)
 
See attached.

 
 
 
 
 

--------------------------------------------------------------------------------

 

Exhibit B-2
 
Interim Services Agreement (Oaktown #2)
 
See attached.

 
 
 
 

--------------------------------------------------------------------------------

 

Exhibit B-3
 
Interim Services Agreement (Prosperity)
 
See attached.

 
 
 
 
 

--------------------------------------------------------------------------------

 

Exhibit C-1
 
Contractor Termination Agreement (Oaktown)
 
See attached.

 
 
 
 
 

--------------------------------------------------------------------------------

 

Exhibit C-2
 
Contractor Termination Agreement (Prosperity)
 
See attached.
 

 
 

--------------------------------------------------------------------------------

 
 
Exhibit D-1
 
Lafayette Termination Notice (Oaktown)
 
See attached.

 
 
 
 
 

--------------------------------------------------------------------------------

 

Exhibit D-2
 
Lafayette Termination Notice (Prosperity)
 
See attached.
 

 
 
 
 
 

--------------------------------------------------------------------------------

 

B-1
INTERIM OPERATING AGREEMENT
 
THIS INTERIM OPERATING AGREEMENT (this “Agreement”), dated as of the 28th day of
June, 2014, is made and entered into by and between Black Panther Mining, LLC,
an Indiana limited liability company (“BPM”), and Oaktown Fuels No. 1 Mine, LLC,
an Indiana  limited liability company (“Owner”).
 
RECITALS
 
BPM and Owner are parties to the Contract Mining Agreement dated January 14,
2000 (as amended, the “CMA”) whereby BPM operates the Oaktown Mine for Owner.
 
Pursuant to the CMA, the permits for or relating to the operation of the Oaktown
Mine, including the permits listed on Exhibit A attached hereto, have been
issued in the name of BPM (collective, the “Permits”).
 
BPM,  Owner, Vectren Fuels, Inc., SFI Coal Sales, LLC, and Vectren Utility
Services, Inc. have entered into an agreement whereby the CMA will be terminated
(the “Termination Agreement”) effective as of the date of the closing (the
“Closing Date”) of the transaction contemplated by the Stock Purchase Agreement
dated as of June [30], 2014 between Vectren Utility Services, Inc. (Owner’s
remote parent) and Sunrise Coal, LLC .
 
Pursuant to the Termination Agreement, BPM, Owner and the other parties thereto
have agreed to cooperate to effect the transfer of the Permits to Owner or its
designees, which transfer may occur subsequent to the Closing Date.
 
As a condition to the Termination Agreement, and in order to effect the
transition from operation of the Oaktown Mine by BPM to operation by Owner or
its designee, BPM has agreed to enter into this Interim Operating Agreement.
 
In consideration of the premises and mutual covenants set forth herein and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
 
AGREEMENT
 
INTERIM OPERATIONS.  Subject to any required consent or approval by the
governmental authority that issues or administrates a Permit, BPM hereby grants
Owner and its designees  the right to operate the Oaktown Mine under and
pursuant to the Permits, subject to the terms and conditions of this Agreement,
during the period from and after the Closing Date and continuing until the date
on which such Permits are transferred to Owner or its designee.  Owner and each
of its designees shall operate solely as an independent contractor and not as an
agent, employee or servant of BPM.  BPM shall have no right or obligation in any
way to direct, supervise or control the mining and reclamation activities of
Owner.  Except as otherwise provided in this Agreement, as between BPM and
Owner, all of Owner’s operations shall be at the sole cost and expense of Owner,
and any benefit gained from such operations shall likewise be for the sole
account and benefit of Owner.  To the extent that the process of transferring
the Permits has not been commenced prior to the Closing Date, BPM agrees that
Owner shall have the right (at its sole cost and expense) to prepare, submit and
obtain approval of any necessary applications for the transfer or re-issuance of
the Permits; provided that BPM shall have an opportunity to review any such
filing in advance.  BPM and Owner or its designee shall reasonably cooperate and
coordinate with each other as necessary for Owner or such designee to submit and
obtain approvals for the transfer or re-issuance of the Permits.  None of Owner
or its designees shall receive any compensation from BPM, and BPM shall receive
no compensation from Owner in connection with the operations of the Oaktown Mine
or the transfer or re-issuance of the Permits as contemplated herein.
 
NOTICES.
 
If BPM or Owner receives a notice of violation, a cessation order or any other
correspondence, order, citation or communication of any kind under any of the
Permits following the Closing Date but before the transfer or re-issuance of a
Permit, BPM shall give Owner, or Owner shall give BPM, as applicable, prompt
written notice thereof.  Any notice or other communication given under this
Agreement shall be in writing and shall be:  (i) delivered personally; (ii) sent
by documented overnight delivery service; (iii) sent by facsimile transmission,
provided that a confirmation copy thereof is sent no later than the Business Day
following the day of such transmission by documented overnight delivery service
or first class mail, postage prepaid (certified or registered mail, return
receipt requested); or (iv) sent by first class mail, postage prepaid (certified
or registered mail, return receipt requested).  Such notice shall be deemed to
have been duly given: (w) on the date of the delivery, if delivered personally;
(x) on the Business Day after dispatch by documented overnight delivery service,
if sent in such manner; (y) on the date of facsimile transmission, if so
transmitted; or (z) on the fifth Business Day after sent by first class mail,
postage prepaid, if sent in such manner.  Notices or other communications shall
be directed to the following addresses:
 
Notices to BPM

Black Panther Mining, LLC
11700 Water Tank Road
Cynthiana, IN 47612

Notices to Owner:

Oaktown Fuels Mine No. 2, LLC
1183 Canvasback Dr.
Terre haute, IN 47802
Attention:  President

with copies to:

________________________
________________________
________________________
________________________

 
Any party may at any time change its address for service from time to time by
giving notice to the other party in accordance with this Section 3.
 
3.           VIOLATIONS, ABATEMENT AND INSPECTION.  (a) During the term of this
Agreement, the Owner shall be responsible for compliance with all obligations of
the terms of the Permits and all laws and regulations applicable to the Permits
and the operations performed pursuant thereto (the “Permit Obligations”).  If
BPM or Owner receives a notice of violation, cessation order or other notice
relating to a failure to comply with the Permit Obligations (a “Violation”),
Owner  will promptly take action to abate or otherwise resolve the
Violation.  Owner will give BPM notice when the Violation has been abated. (b)
If Owner fails to timely abate a Violation, BPM shall notify Owner of its
intention to undertake abatement activities. If after such notice, Owner does
not undertake remedial action, BPM shall be entitled to undertake remedial
actions on its own behalf.  (c) During term of this Agreement, BPM, its agents,
engineers or other related persons on its behalf, shall have the right, but not
the obligation, to enter onto the Oaktown Mine premises (the “Property”), for
the purpose of ascertaining the condition of the operations located on the
Property, and the status of Owner’s compliance with the Permits, provided that
BPM shall not in any event interfere with the operation at the Oaktown Mine or
on the Property, and that BPM shall, and shall cause its representatives to,
comply with all of Owner’s (or its designee’s) safety and security policies in
effect at such time.  BPM shall give Owner reasonable prior notice of its intent
to make inspections or enter the Property and shall provide Owner (or its
designee)  with an opportunity to have Owner’s representative accompany the
representatives of BPM while they are on the Property.  Operator shall cooperate
in good faith to facilitate BPM’s exercise its rights under this Section 3.
 
4.           COVENANTS OF OWNER.  Owner covenants to BPM that Owner will operate
the Oaktown Mine and conduct coal mining and processing operations any other
activity conducted under the Permits in substantial compliance with the Permits
and any applicable laws, and Owner will not materially deviate from any methods
of operation established as a condition of the Permits (as they may be amended)
at any time following the execution of this Agreement and prior to receipt of
written approval of such deviation from the relevant governmental authority or
the transfer or reissuance of the relevant Permit.  Notwithstanding anything to
the contrary herein, none of Owner or its designees shall be under any
obligation, nor shall this Interim Operating Agreement be construed to impose
any obligation on Owner or any of its designees, to conduct coal mining or
processing operations on the Property.
 
5.           INDEMNITY OBLIGATIONS OF OWNER.
 
Owner will indemnify, defend and hold harmless BPM and its, assigns and
successors in interest, and each of their respective stockholders, members,
partners, directors, officers, employees, agents, attorneys and representatives
(the “BPM Indemnified Persons”), from and against any actions, suits,
proceedings, demands, claims, investigations, penalties, assessments, judgments,
costs, liabilities or expenses, including reasonable attorneys’ fees and court
costs, incurred by any BPM Indemnified Person resulting from any failure by
Owner or its designee to comply with applicable law with respect to the Oaktown
Mine, including any surface operations related thereto after the Closing Date
and prior to the date on which the last of the Permits is transferred or
re-issued to Owner or its designees, or to operate the Oaktown Mine after the
Closing Date in accordance with a Permit, including any citation, notice of
violation or penalty assessed as a result of or in connection with such failure,
that occurs after the Closing Date and prior to the date on which such Permit is
transferred or re-issued to Owner or its designee, in each case except to the
extent directly resulting from the negligence or intentional misconduct of any
of the BPM Indemnified Persons (any of the foregoing, a “BPM Indemnified Loss”).
 
Promptly after the receipt by any BPM Indemnified Person of notice of the
commencement or assertion of any action, suit, proceeding, demand, claim or
investigation by a third party (an “Asserted Liability”) that may result in a
BPM Indemnified Loss, such BPM Indemnified Person will give written notice
thereof (the “Claims Notice”) to Owner.  The failure to give such Claims Notice
shall not relieve Owner from any obligation hereunder, except to the extent that
such failure causes actual harm to BPM.  Owner shall have the right to assume
the control of the defense of such Asserted Liability, at Owner’s expense and
with counsel of its choice reasonably satisfactory to such BPM Indemnified
Person; provided, that Owner shall so notify such BPM Indemnified Person that it
will defend such Asserted Liability within fifteen (15) days after receipt of
such Claims Notice.
 
    6.    DURATION.  The term of this Agreement shall commence on the Closing
Date and shall automatically terminate without any action of the Parties as of
the date on which Owner or its designee obtains the consent or approval of the
relevant governmental authority to the transfer, assignment or re-issuance to
Owner or its designee of the last of the Permits, and shall thereafter be of no
further force or effect.  Notwithstanding anything to the contrary in the
foregoing, the provisions of Section 5 of this Agreement and the rights and
obligations of the Parties thereunder arising during or relating to the period
between the Closing Date and the termination of this Agreement, shall survive
the termination of this Agreement.
 
7.         ASSIGNMENT.  This Agreement may not be assigned by either party
without the prior written consent of the other party hereto.  Any assignment
permitted to be made by either Owner or BPM to any person or entity pursuant to
this Section 6 shall not relieve the assigning party from any of its obligations
hereunder.  Notwithstanding anything to the contrary in the foregoing, Owner may
assign a security interest in this Agreement to its lenders and BPM hereby
consents to such assignment.  Nothing in this Agreement shall be deemed or
construed to restrict or prohibit Owner from designating the rights granted
pursuant to Section 1 of this Agreement or subcontracting for the performance of
any or all of its activities or operations in connection with the Oaktown Mine.
 
    8.           MODIFICATION.  No term or provision of this Agreement may be
changed, waived, discharged or terminated orally, except by an instrument in
writing signed by the party against which enforcement of such change, waiver,
discharge or termination is sought.  No course of dealing between the parties
shall be effective to amend or waive any provision of this Agreement.
 
    9.   GOVERNING LAW.  This Agreement will be construed in accordance with and
governed by the internal laws of the State of Indiana (without reference to its
rules as to conflicts of law).
   
    10.   SEVERABILITY.  If any term or other provision of this Agreement is
invalid, illegal, or incapable of being enforced under applicable Law, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated herein are not affected in any manner adverse to any party.  Upon
such determination that any term or other provision is invalid, illegal, or
incapable of being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in a mutually acceptable manner in order that the
transactions contemplated herein are consummated as originally contemplated to
the fullest extent possible.
 
    11.        WAIVER.  The failure of any party hereto to insist on the strict
performance of any provision of this Agreement or to exercise any right, power
or remedy upon breach hereof shall not limit such party’s right thereafter to
enforce any provision or exercise any right.
 
    12.        EXPENSES.  Except as otherwise expressly provided in this
Agreement, all costs and expenses incurred by the parties hereto in connection
with the consummation of the transactions contemplated hereby shall be borne
solely and entirely by the party that has incurred such expenses.  In the event
of a dispute between or among the parties in connection with this Agreement and
the transactions contemplated hereby, each of the parties hereto agrees that the
prevailing party shall be entitled to reimbursement by the other party or
parties of reasonable expenses, including reasonable legal expenses, incurred in
connection with any related action or proceeding.
 
     13.  WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HEREBY WAIVES TRIAL BY JURY
IN ANY CLAIM, ACTION, SUIT, ARBITRATION, INQUIRY, PROCEEDING OR INVESTIGATION TO
WHICH SUCH PARTY IS A PARTY INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY
WAY ARISING OUT OF, RELATED TO OR IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED IN THIS AGREEMENT.
 
    14.  COUNTERPARTS.  This Agreement may be executed and delivered (including
by facsimile transmission) in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
 
      15.  DUE AUTHORIZATION.  BPM and Owner each represent and warrant to the
other that (i) it has the power and authority to enter into, execute, deliver
and carry out this Agreement, and (ii) the execution, delivery and performance
of this Agreement has been, and the individual that executes this Agreement on
behalf of BPM or Owner, respectively, has been, duly authorized by all proper
and necessary corporate or limited liability company action.
 
    16.    PARTIES IN INTEREST.  This Agreement shall be binding upon and inure
solely to the benefit of each party hereto and their successors and permitted
assigns, and except for the rights of the BPM Indemnified Persons as set forth
in Section 5, nothing in this Agreement, express or implied, is intended to
confer upon any other person or entity any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
 
[End of Text; Signature Page Follows]

 
 
 
 

--------------------------------------------------------------------------------

 
 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
 
BPM:
 
By:/s/ Donald Blankenberger_____________

Name: Donald Blankenberger_____________

Title: President_________________________

 

OWNER:

OAKTOWN FUELS MINE NO. 1, LLC

By:_/s/Randy L. Beck__________________
Name:  Randy L. Beck__________________
Its:_President_________________________

STATE OF __________
)
   
)
:SS
COUNTY OF __________
)
 

The foregoing instrument was acknowledged before me this the ___ day of
______________, 2014, by ______________, as ___________of
_______________________________, on behalf of the corporation.
 
My commission expires:  ___________________________________.
 
____________________________________
NOTARY PUBLIC

 

 
STATE OF _________
)
   
)
:SS
COUNTY OF __________
)
 

The foregoing instrument was acknowledged before me this the ___ day of
____________, 2014, by ______________, as _____________ of
______________________________, on behalf of the company.
 
My commission expires:  ___________________________________.
 

   

NOTARY PUBLIC
 

 
PREPARED BY:
 

 
_____________________________
 

 

 

 

 
61181302.1
 
 
 

--------------------------------------------------------------------------------

 

B-2
INTERIM OPERATING AGREEMENT
 
THIS INTERIM OPERATING AGREEMENT (this “Agreement”), dated as of the 28th day of
June, 2014, is made and entered into by and between Black Panther Mining, LLC,
an Indiana limited liability company (“BPM”), and Oaktown Fuels No. 2 Mine, LLC,
an Indiana  limited liability company (“Owner”).
 
RECITALS
 
BPM and Owner are parties to the Contract Mining Agreement dated January 14,
2000 (as amended, the “CMA”) whereby BPM operates the Oaktown Mine for Owner.
 
Pursuant to the CMA, the permits for or relating to the operation of the Oaktown
Mine, including the permits listed on Exhibit A attached hereto, have been
issued in the name of BPM (collective, the “Permits”).
 
BPM,  Owner, Vectren Fuels, Inc., SFI Coal Sales, LLC, and Vectren Utility
Services, Inc. have entered into an agreement whereby the CMA will be terminated
(the “Termination Agreement”) effective as of the date of the closing (the
“Closing Date”) of the transaction contemplated by the Stock Purchase Agreement
dated as of June [30], 2014 between Vectren Utility Services, Inc. (Owner’s
remote parent) and Sunrise Coal, LLC .
 
Pursuant to the Termination Agreement, BPM, Owner and the other parties thereto
have agreed to cooperate to effect the transfer of the Permits to Owner or its
designees, which transfer may occur subsequent to the Closing Date.
 
As a condition to the Termination Agreement, and in order to effect the
transition from operation of the Oaktown Mine by BPM to operation by Owner or
its designee, BPM has agreed to enter into this Interim Operating Agreement.
 
In consideration of the premises and mutual covenants set forth herein and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
 
AGREEMENT
 
INTERIM OPERATIONS.  Subject to any required consent or approval by the
governmental authority that issues or administrates a Permit, BPM hereby grants
Owner and its designees  the right to operate the Oaktown Mine under and
pursuant to the Permits, subject to the terms and conditions of this Agreement,
during the period from and after the Closing Date and continuing until the date
on which such Permits are transferred to Owner or its designee.  Owner and each
of its designees shall operate solely as an independent contractor and not as an
agent, employee or servant of BPM.  BPM shall have no right or obligation in any
way to direct, supervise or control the mining and reclamation activities of
Owner.  Except as otherwise provided in this Agreement, as between BPM and
Owner, all of Owner’s operations shall be at the sole cost and expense of Owner,
and any benefit gained from such operations shall likewise be for the sole
account and benefit of Owner.  To the extent that the process of transferring
the Permits has not been commenced prior to the Closing Date, BPM agrees that
Owner shall have the right (at its sole cost and expense) to prepare, submit and
obtain approval of any necessary applications for the transfer or re-issuance of
the Permits; provided that BPM shall have an opportunity to review any such
filing in advance.  BPM and Owner or its designee shall reasonably cooperate and
coordinate with each other as necessary for Owner or such designee to submit and
obtain approvals for the transfer or re-issuance of the Permits.  None of Owner
or its designees shall receive any compensation from BPM, and BPM shall receive
no compensation from Owner in connection with the operations of the Oaktown Mine
or the transfer or re-issuance of the Permits as contemplated herein.
 
NOTICES.
 
If BPM or Owner receives a notice of violation, a cessation order or any other
correspondence, order, citation or communication of any kind under any of the
Permits following the Closing Date but before the transfer or re-issuance of a
Permit, BPM shall give Owner, or Owner shall give BPM, as applicable, prompt
written notice thereof.  Any notice or other communication given under this
Agreement shall be in writing and shall be:  (i) delivered personally; (ii) sent
by documented overnight delivery service; (iii) sent by facsimile transmission,
provided that a confirmation copy thereof is sent no later than the Business Day
following the day of such transmission by documented overnight delivery service
or first class mail, postage prepaid (certified or registered mail, return
receipt requested); or (iv) sent by first class mail, postage prepaid (certified
or registered mail, return receipt requested).  Such notice shall be deemed to
have been duly given: (w) on the date of the delivery, if delivered personally;
(x) on the Business Day after dispatch by documented overnight delivery service,
if sent in such manner; (y) on the date of facsimile transmission, if so
transmitted; or (z) on the fifth Business Day after sent by first class mail,
postage prepaid, if sent in such manner.  Notices or other communications shall
be directed to the following addresses:
 
Notices to BPM

Black Panther Mining, LLC
11700 Water Tank Road
Cynthiana  IN 47612
Attn: President

Notices to Owner:

Oaktown Fuels No. 1 Mine, LLC
1183 East Canvasback Dr.
Terre Haute, IN 47802
Attention: President

 
Any party may at any time change its address for service from time to time by
giving notice to the other party in accordance with this Section 3.
 
3.           VIOLATIONS, ABATEMENT AND INSPECTION.  (a) During the term of this
Agreement, the Owner shall be responsible for compliance with all obligations of
the terms of the Permits and all laws and regulations applicable to the Permits
and the operations performed pursuant thereto (the “Permit Obligations”).  If
BPM or Owner receives a notice of violation, cessation order or other notice
relating to a failure to comply with the Permit Obligations (a “Violation”),
Owner  will promptly take action to abate or otherwise resolve the
Violation.  Owner will give BPM notice when the Violation has been abated. (b)
If Owner fails to timely abate a Violation, BPM shall notify Owner of its
intention to undertake abatement activities. If after such notice, Owner does
not undertake remedial action, BPM shall be entitled to undertake remedial
actions on its own behalf.  (c) During the term of this Agreement, BPM, its
agents, engineers or other related persons on its behalf, shall have the right,
but not the obligation, to enter onto the Oaktown Mine premises (the
“Property”), for the purpose of ascertaining the condition of the operations
located on the Property, and the status of Operator’s compliance with the
Permits, provided that BPM shall not in any event interfere with the operation
at the Oaktown Mine or on the Property, and that BPM shall, and shall cause its
representatives to, comply with all of Owner’s (or its designee’s) safety and
security policies in effect at such time.  BPM shall give Owner reasonable prior
notice of its intent to make inspections or enter the Property and shall provide
Owner (or its designee) with an opportunity to have Owner’s representative
accompany the representatives of BPM while they are on the Property.  Operator
shall cooperate in good faith to facilitate BPM’s exercise its rights under this
Section 3.
 
4.           COVENANTS OF OWNER.  Owner covenants to BPM that Owner will operate
the Oaktown Mine and conduct coal mining and processing operations any other
activity conducted under the Permits in substantial compliance with the Permits
and any applicable laws, and Owner will not materially deviate from any methods
of operation established as a condition of the Permits (as they may be amended)
at any time following the execution of this Agreement and prior to receipt of
written approval of such deviation from the relevant governmental authority or
the transfer or reissuance of the relevant Permit.  Notwithstanding anything to
the contrary herein, none of Owner or its designees shall be under any
obligation, nor shall this Interim Operating Agreement be construed to impose
any obligation on Owner or any of its designees, to conduct coal mining or
processing operations on the Property.
 
    5.           INDEMNITY OBLIGATIONS OF OWNER.
   
Owner will indemnify, defend and hold harmless BPM and its, assigns and
successors in interest, and each of their respective stockholders, members,
partners, directors, officers, employees, agents, attorneys and representatives
(the “BPM Indemnified Persons”), from and against any actions, suits,
proceedings, demands, claims, investigations, penalties, assessments, judgments,
costs, liabilities or expenses, including reasonable attorneys’ fees and court
costs, incurred by any BPM Indemnified Person resulting from any failure by
Owner or its designee to comply with applicable law with respect to the Oaktown
Mine, including any surface operations related thereto after the Closing Date
and prior to the date on which the last of the Permits is transferred or
re-issued to Owner or its designees, or to operate the Oaktown Mine after the
Closing Date in accordance with a Permit, including any citation, notice of
violation or penalty assessed as a result of or in connection with such failure,
that occurs after the Closing Date and prior to the date on which such Permit is
transferred or re-issued to Owner or its designee, in each case except to the
extent directly resulting from the negligence or intentional misconduct of any
of the BPM Indemnified Persons (any of the foregoing, a “BPM Indemnified Loss”).
 
Promptly after the receipt by any BPM Indemnified Person of notice of the
commencement or assertion of any action, suit, proceeding, demand, claim or
investigation by a third party (an “Asserted Liability”) that may result in a
BPM Indemnified Loss, such BPM Indemnified Person will give written notice
thereof (the “Claims Notice”) to Owner.  The failure to give such Claims Notice
shall not relieve Owner from any obligation hereunder, except to the extent that
such failure causes actual harm to BPM.  Owner shall have the right to assume
the control of the defense of such Asserted Liability, at Owner’s expense and
with counsel of its choice reasonably satisfactory to such BPM Indemnified
Person; provided, that Owner shall so notify such BPM Indemnified Person that it
will defend such Asserted Liability within fifteen (15) days after receipt of
such Claims Notice.
 
    6.     DURATION.  The term of this Agreement shall commence on the Closing
Date and shall automatically terminate without any action of the Parties as of
the date on which Owner or its designee obtains the consent or approval of the
relevant governmental authority to the transfer, assignment or re-issuance to
Owner or its designee of the last of the Permits, and shall thereafter be of no
further force or effect.  Notwithstanding anything to the contrary in the
foregoing, the provisions of Sections 5 of this Agreement and the rights and
obligations of the Parties thereunder arising during or relating to the period
between the Closing Date and the termination of this Agreement, shall survive
the termination of this Agreement.
 
7.           ASSIGNMENT.  This Agreement may not be assigned by either party
without the prior written consent of the other party hereto.  Any assignment
permitted to be made by either Owner or BPM to any person or entity pursuant to
this Section 6 shall not relieve the assigning party from any of its obligations
hereunder.  Notwithstanding anything to the contrary in the foregoing, Owner may
assign a security interest in this Agreement to its lenders and BPM hereby
consents to such assignment.  Nothing in this Agreement shall be deemed or
construed to restrict or prohibit Owner from designating the rights granted
pursuant to Section 1 of this Agreement or subcontracting for the performance of
any or all of its activities or operations in connection with the Oaktown Mine.
 
    8.           MODIFICATION.  No term or provision of this Agreement may be
changed, waived, discharged or terminated orally, except by an instrument in
writing signed by the party against which enforcement of such change, waiver,
discharge or termination is sought.  No course of dealing between the parties
shall be effective to amend or waive any provision of this Agreement.
 
    9.           GOVERNING LAW.  This Agreement will be construed in accordance
with and governed by the internal laws of the State of Indiana (without
reference to its rules as to conflicts of law).
 
    10.        SEVERABILITY.  If any term or other provision of this Agreement
is invalid, illegal, or incapable of being enforced under applicable Law, all
other conditions and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated herein are not affected in any manner adverse to any
party.  Upon such determination that any term or other provision is invalid,
illegal, or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that the
transactions contemplated herein are consummated as originally contemplated to
the fullest extent possible.
 
    11.          WAIVER.  The failure of any party hereto to insist on the
strict performance of any provision of this Agreement or to exercise any right,
power or remedy upon breach hereof shall not limit such party’s right thereafter
to enforce any provision or exercise any right.
 
    12.          EXPENSES.  Except as otherwise expressly provided in this
Agreement, all costs and expenses incurred by the parties hereto in connection
with the consummation of the transactions contemplated hereby shall be borne
solely and entirely by the party that has incurred such expenses.  In the event
of a dispute between or among the parties in connection with this Agreement and
the transactions contemplated hereby, each of the parties hereto agrees that the
prevailing party shall be entitled to reimbursement by the other party or
parties of reasonable expenses, including reasonable legal expenses, incurred in
connection with any related action or proceeding.
 
    13.          WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HEREBY WAIVES TRIAL
BY JURY IN ANY CLAIM, ACTION, SUIT, ARBITRATION, INQUIRY, PROCEEDING OR
INVESTIGATION TO WHICH SUCH PARTY IS A PARTY INVOLVING, DIRECTLY OR INDIRECTLY,
ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO OR IN CONNECTION WITH THE
TRANSACTIONS CONTEMPLATED IN THIS AGREEMENT.
 
    14.          COUNTERPARTS.  This Agreement may be executed and delivered
(including by facsimile transmission) in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
 
    15.    DUE AUTHORIZATION.  BPM and Owner each represent and warrant to the
other that (i) it has the power and authority to enter into, execute, deliver
and carry out this Agreement, and (ii) the execution, delivery and performance
of this Agreement has been, and the individual that executes this Agreement on
behalf of BPM or Owner, respectively, has been, duly authorized by all proper
and necessary corporate or limited liability company action.
 
    16.    PARTIES IN INTEREST.  This Agreement shall be binding upon and inure
solely to the benefit of each party hereto and their successors and permitted
assigns, and except for the rights of the BPM Indemnified Persons as set forth
in Section 5, nothing in this Agreement, express or implied, is intended to
confer upon any other person or entity any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
 
[End of Text; Signature Page Follows]

 
 
 
 
 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
 
BPM:
 
By:/s/ Donald Blankenberger_____________

Name: Donald Blankenberger_____________

Title: President_________________________

OWNER:

OAKTOWN FUELS MINE NO. 2, LLC

By:_/s/Randy L. Beck__________________
 
Name:  Randy L. Beck_________________
 
Its:_President_________________________

STATE OF __________
)
   
)
:SS
COUNTY OF __________
)
 

The foregoing instrument was acknowledged before me this the ___ day of
______________, 2014, by ______________, as ___________of
_______________________________, on behalf of the corporation.
 
My commission expires:  ___________________________________.
 
____________________________________
NOTARY PUBLIC

 

 
STATE OF _________
)
   
)
:SS
COUNTY OF __________
)
 

The foregoing instrument was acknowledged before me this the ___ day of
____________, 2014, by ______________, as _____________ of
______________________________, on behalf of the company.
 
My commission expires:  ___________________________________.
 

   

NOTARY PUBLIC
 

 
PREPARED BY:
 

 
_____________________________
 
 
 

 
61181302.1
 
 
 
 

--------------------------------------------------------------------------------

 

B-3
INTERIM OPERATING AGREEMENT
 
THIS INTERIM OPERATING AGREEMENT (this “Agreement”), dated as of the 28th_day of
June, 2014, is made and entered into by and between Five Star Mining, LLC, an
Indiana limited liability company (“Five Star”), and Prosperity Mine, LLC, an
Indiana  limited liability company (“Owner”).
 
RECITALS
 
Five Star and Owner are parties to the Contract Mining Agreement dated January
14, 2000 (as amended, the “CMA”) whereby Five Star operates the Prosperity Mine
for Owner.
 
Pursuant to the CMA, the permits for or relating to the operation of the
Prosperity Mine, including the permits listed on Exhibit A attached hereto, have
been issued in the name of Five Star (collective, the “Permits”).
 
Five Star, Owner, Vectren Fuels, Inc., SFI Coal Sales, LLC, and Vectren Utility
Services, Inc. have entered into an agreement whereby the CMA will be terminated
(the “Termination Agreement”) effective as of the date of the closing (the
“Closing Date”) of the transaction contemplated by the Stock Purchase Agreement
dated as of June [30], 2014 between Vectren Utility Services, Inc. (Owner’s
remote parent) and Sunrise Coal, LLC .
 
Pursuant to the Termination Agreement, Five Star, Owner and the other parties
thereto have agreed to cooperate to effect the transfer of the Permits to Owner
or its designees, which transfer may occur subsequent to the Closing Date.
 
As a condition to the Termination Agreement, and in order to effect the
transition from operation of the Prosperity Mine by Five Star to operation by
Owner or its designee, Five Star has agreed to enter into this Interim Operating
Agreement.
 
In consideration of the premises and mutual covenants set forth herein and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
 
AGREEMENT
 
INTERIM OPERATIONS.  Subject to any required consent or approval by the
governmental authority that issues or administrates a Permit, Five Star hereby
grants Owner and its designees  the right to operate the Prosperity Mine under
and pursuant to the Permits, subject to the terms and conditions of this
Agreement, during the period from and after the Closing Date and continuing
until the date on which such Permits are transferred to Owner or its
designee.  Owner and each of its designees shall operate solely as an
independent contractor and not as an agent, employee or servant of Five
Star.  Five Star shall have no right or obligation in any way to direct,
supervise or control the mining and reclamation activities of Owner.  Except as
otherwise provided in this Agreement, as between Five Star and Owner, all of
Owner’s operations shall be at the sole cost and expense of Owner, and any
benefit gained from such operations shall likewise be for the sole account and
benefit of Owner.  To the extent that the process of transferring the Permits
has not been commenced prior to the Closing Date, Five Star agrees that Owner
shall have the right (at its sole cost and expense) to prepare, submit and
obtain approval of any necessary applications for the transfer or re-issuance of
the Permits; provided that Five Star shall have an opportunity to review any
such filing in advance.  Five Star and Owner or its designee shall reasonably
cooperate and coordinate with each other as necessary for Owner or such designee
to submit and obtain approvals for the transfer or re-issuance of the
Permits.  None of Owner or its designees shall receive any compensation from
Five Star, and Five Star shall receive no compensation from Owner in connection
with the operations of the Prosperity Mine or the transfer or re-issuance of the
Permits as contemplated herein.
 
NOTICES.
 
If Five Star or Owner receives a notice of violation, a cessation order or any
other correspondence, order, citation or communication of any kind under any of
the Permits following the Closing Date but before the transfer or re-issuance of
a Permit, Five Star shall give Owner, or Owner shall give Five Star, as
applicable, prompt written notice thereof.  Any notice or other communication
given under this Agreement shall be in writing and shall be:  (i) delivered
personally; (ii) sent by documented overnight delivery service; (iii) sent by
facsimile transmission, provided that a confirmation copy thereof is sent no
later than the Business Day following the day of such transmission by documented
overnight delivery service or first class mail, postage prepaid (certified or
registered mail, return receipt requested); or (iv) sent by first class mail,
postage prepaid (certified or registered mail, return receipt requested).  Such
notice shall be deemed to have been duly given: (w) on the date of the delivery,
if delivered personally; (x) on the Business Day after dispatch by documented
overnight delivery service, if sent in such manner; (y) on the date of facsimile
transmission, if so transmitted; or (z) on the fifth Business Day after sent by
first class mail, postage prepaid, if sent in such manner.  Notices or other
communications shall be directed to the following addresses:
 
Notices to Five Star

Five Star Mining, LLC
11700 Water Tank Road
Cynthiana, IN 47612
Attn: President

Notices to Owner:
 
Prosperity Mine, LLC
1183 East Canvasback Dr.
Terre Haute, IN47802
Attention:  President
 
with copies to:

 
Any party may at any time change its address for service from time to time by
giving notice to the other party in accordance with this Section 3.
 
3.           VIOLATIONS, ABATEMENT AND INSPECTION.  (a) During the term of this
Agreement, the Owner shall be responsible for compliance with all obligations of
the terms of the Permits and all laws and regulations applicable to the Permits
and the operations performed pursuant thereto (the “Permit Obligations”).  If
Five Star or Owner receives a notice of violation, cessation order or other
notice relating to a failure to comply with the Permit Obligations (a
“Violation”), Owner  will promptly take action to abate or otherwise resolve the
Violation.  Owner will give Five Star notice when the Violation has been abated.
(b) If Owner fails to timely abate a Violation, Five Star shall notify Owner of
its intention to undertake abatement activities. If after such notice, Owner
does not undertake remedial action, Five Star shall be entitled to undertake
remedial actions on its own behalf.  (c) During the term of this Agreement, Five
Star, its agents, engineers or other related persons on its behalf, shall have
the right, but not the obligation, to enter onto the Prosperity Mine premises
(the “Property”), for the purpose of ascertaining the condition of the
operations located on the Property, and the status of Operator’s compliance with
the Permits, provided that Five Star shall not in any event interfere with the
operation at the Prosperity Mine or on the Property, and that BPM shall, and
shall cause its representatives to, comply with all of Owner’s (or its
designee’s) safety and security policies in effect at such time.  BPM shall give
Owner reasonable prior notice of its intent to make inspections or enter the
Property and shall provide Owner (or its designee) with an opportunity to have
Owner’s representative accompany the representatives of BPM while they are on
the Property.  Operator shall cooperate in good faith to facilitate BPM’s
exercise its rights under this Section 3.
 
  Five Star shall give Operator reasonable prior notice of its intent to make
inspections or enter the Property and shall provide Operator with an opportunity
to have Operator’s agent or engineer accompany the representatives of Five
Star.  Operator shall cooperate in good faith to facilitate Five Star’s exercise
its rights under this Agreement.
 
4.           COVENANTS OF OWNER.  Owner covenants to Five Star that Owner will
operate the Prosperity Mine and conduct coal mining and processing operations
any other activity conducted under the Permits in substantial compliance with
the Permits and any applicable laws, and Owner will not materially deviate from
any methods of operation established as a condition of the Permits (as they may
be amended) at any time following the execution of this Agreement and prior to
receipt of written approval of such deviation from the relevant governmental
authority or the transfer or reissuance of the relevant Permit.  Notwithstanding
anything to the contrary herein, none of Owner or its designees shall be under
any obligation, nor shall this Interim Operating Agreement be construed to
impose any obligation on Owner or any of its designees, to conduct coal mining
or processing operations on the Property.
 
5.           INDEMNITY OBLIGATIONS OF OWNER.
 
Owner will indemnify, defend and hold harmless Five Star and its, assigns and
successors in interest, and each of their respective stockholders, members,
partners, directors, officers, employees, agents, attorneys and representatives
(the “Five Star Indemnified Persons”), from and against any actions, suits,
proceedings, demands, claims, investigations, penalties, assessments, judgments,
costs, liabilities or expenses, including reasonable attorneys’ fees and court
costs, incurred by any Five Star Indemnified Person resulting from any failure
by Owner or its designee to comply with applicable law with respect to the
Prosperity Mine, including any surface operations related thereto after the
Closing Date and prior to the date on which the last of the Permits is
transferred or re-issued to Owner or its designees, or to operate the Prosperity
Mine after the Closing Date in accordance with a Permit, including any citation,
notice of violation or penalty assessed as a result of or in connection with
such failure, that occurs after the Closing Date and prior to the date on which
such Permit is transferred or re-issued to Owner or its designee, in each case
except to the extent directly resulting from the negligence or intentional
misconduct of any of the Five Star Indemnified Persons (any of the foregoing, a
“Five Star Indemnified Loss”).
 
Promptly after the receipt by any Five Star Indemnified Person of notice of the
commencement or assertion of any action, suit, proceeding, demand, claim or
investigation by a third party (an “Asserted Liability”) that may result in a
Five Star Indemnified Loss, such Five Star Indemnified Person will give written
notice thereof (the “Claims Notice”) to Owner.  The failure to give such Claims
Notice shall not relieve Owner from any obligation hereunder, except to the
extent that such failure causes actual harm to Five Star.  Owner shall have the
right to assume the control of the defense of such Asserted Liability, at
Owner’s expense and with counsel of its choice reasonably satisfactory to such
Five Star Indemnified Person; provided, that Owner shall so notify such Five
Star Indemnified Person that it will defend such Asserted Liability within
fifteen (15) days after receipt of such Claims Notice.
 
6. DURATION.  The term of this Agreement shall commence on the Closing Date and
shall automatically terminate without any action of the Parties as of the date
on which Owner or its designee obtains the consent or approval of the relevant
governmental authority to the transfer, assignment or re-issuance to Owner or
its designee of the last of the Permits, and shall thereafter be of no further
force or effect.  Notwithstanding anything to the contrary in the foregoing, the
provisions of Section 5 of this Agreement and the rights and obligations of the
Parties thereunder arising during or relating to the period between the Closing
Date and the termination of this Agreement, shall survive the termination of
this Agreement.
 
7.           ASSIGNMENT.  This Agreement may not be assigned by either party
without the prior written consent of the other party hereto.  Any assignment
permitted to be made by either Owner or Five Star to any person or entity
pursuant to this Section 6 shall not relieve the assigning party from any of its
obligations hereunder.  Notwithstanding anything to the contrary in the
foregoing, Owner may assign a security interest in this Agreement to its lenders
and Five Star hereby consents to such assignment.  Nothing in this Agreement
shall be deemed or construed to restrict or prohibit Owner from designating the
rights granted pursuant to Section 1 of this Agreement or subcontracting for the
performance of any or all of its activities or operations in connection with the
Prosperity Mine.
 
8.           MODIFICATION.  No term or provision of this Agreement may be
changed, waived, discharged or terminated orally, except by an instrument in
writing signed by the party against which enforcement of such change, waiver,
discharge or termination is sought.  No course of dealing between the parties
shall be effective to amend or waive any provision of this Agreement.
 
9.           GOVERNING LAW.  This Agreement will be construed in accordance with
and governed by the internal laws of the State of Indiana (without reference to
its rules as to conflicts of law).
 
10.           SEVERABILITY.  If any term or other provision of this Agreement is
invalid, illegal, or incapable of being enforced under applicable Law, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated herein are not affected in any manner adverse to any party.  Upon
such determination that any term or other provision is invalid, illegal, or
incapable of being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in a mutually acceptable manner in order that the
transactions contemplated herein are consummated as originally contemplated to
the fullest extent possible.
 
11.           WAIVER.  The failure of any party hereto to insist on the strict
performance of any provision of this Agreement or to exercise any right, power
or remedy upon breach hereof shall not limit such party’s right thereafter to
enforce any provision or exercise any right.
 
12.           EXPENSES.  Except as otherwise expressly provided in this
Agreement, all costs and expenses incurred by the parties hereto in connection
with the consummation of the transactions contemplated hereby shall be borne
solely and entirely by the party that has incurred such expenses.  In the event
of a dispute between or among the parties in connection with this Agreement and
the transactions contemplated hereby, each of the parties hereto agrees that the
prevailing party shall be entitled to reimbursement by the other party or
parties of reasonable expenses, including reasonable legal expenses, incurred in
connection with any related action or proceeding.
 
13.           WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HEREBY WAIVES TRIAL BY
JURY IN ANY CLAIM, ACTION, SUIT, ARBITRATION, INQUIRY, PROCEEDING OR
INVESTIGATION TO WHICH SUCH PARTY IS A PARTY INVOLVING, DIRECTLY OR INDIRECTLY,
ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO OR IN CONNECTION WITH THE
TRANSACTIONS CONTEMPLATED IN THIS AGREEMENT.
 
14.           COUNTERPARTS.  This Agreement may be executed and delivered
(including by facsimile transmission) in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
 
15.DUE AUTHORIZATION.  Five Star and Owner each represent and warrant to the
other that (i) it has the power and authority to enter into, execute, deliver
and carry out this Agreement, and (ii) the execution, delivery and performance
of this Agreement has been, and the individual that executes this Agreement on
behalf of Five Star or Owner, respectively, has been, duly authorized by all
proper and necessary corporate or limited liability company action.
 
16.          PARTIES IN INTEREST.  This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and their successors and
permitted assigns, and except for the rights of the Five Star Indemnified
Persons as set forth in Section 5, nothing in this Agreement, express or
implied, is intended to confer upon any other person or entity any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
 
[End of Text; Signature Page Follows]

 
 
 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
 
                            FIVE STAR:
 
                            By:/s/ Donald Blankenberger_____________

                            Name: Donald Blankenberger_____________

                            Title: President_________________________

                            OWNER:

                            PROSPERITY MINE, LLC

                            By:_/s/Randy L. Beck__________________
 
                 Name:  Randy L. Beck__________________
 
                 Its:_President_________________________

STATE OF __________
)
   
)
:SS
COUNTY OF __________
)
 

The foregoing instrument was acknowledged before me this the ___ day of
______________, 2014, by ______________, as ___________of
_______________________________, on behalf of the corporation.
 
My commission expires:  ___________________________________.
 
____________________________________
NOTARY PUBLIC

 
 
[Missing Graphic Reference]
 

 
STATE OF _________
)
   
)
:SS
COUNTY OF __________
)
 

The foregoing instrument was acknowledged before me this the ___ day of
____________, 2014, by ______________, as _____________ of
______________________________, on behalf of the company.
 
My commission expires:  ___________________________________.
 

   

NOTARY PUBLIC
 

 
PREPARED BY:
 

 
_____________________________
 

 

 

 

 
61181302.1
 
 

--------------------------------------------------------------------------------

 

C-1
AGREEMENT

THIS AGREEMENT is entered into this 28th day of June, 2014 among OAKTOWN FUELS
MINE NO. 1, LLC, an Indiana limited liability company (“Oaktown 1”); OAKTOWN
FUELS MINE NO. 2, LLC, an Indiana limited liability company (“Oaktown 2”);
VECTREN FUELS, INC., an Indiana corporation (“VFI”); SFI COAL SALES, LLC, an
Indiana limited liability company (“SFI”); VECTREN UTILITY SERVICES, INC., an
Indiana corporation (“VUS”); and BLACK PANTHER MINING, LLC, an Indiana limited
liability company (“BPM”).

WHEREAS, Oaktown 1 and BPM entered into a Contract Mining Agreement dated
November 23, 2009 but effective as of January 1, 2008 (as amended, the “CMA”),
pursuant to which BPM agreed to provide certain services to Oaktown 1 in
connection with the operation of the Oaktown No. 1 mine (with all related
facilities, “Mine 1”); and

WHEREAS, that contract has subsequently been amended, inter alia, to make it
applicable to Oaktown 2 and to the operation of the Oaktown No. 2 mine (with all
related facilities, “Mine 2”); and

WHEREAS, VFI owns all of the outstanding ownership interests of SFI, which owns
all of the outstanding interests of each of Oaktown 1 and Oaktown 2; and

WHEREAS, VUS owns, or will own as of the Closing (as defined below), all of the
stock of VFI; and

WHEREAS, VUS is negotiating an agreement to sell the stock of VFI to Sunrise
Coal, LLC with the effect that VFI, Oaktown 1, and Oaktown 2 will become direct
and indirect subsidiaries of Sunrise Coal, LLC (the “Sale”); and

WHEREAS, the parties desire that upon the closing of the Sale (the “Closing”)
the CMA will terminate and that the terms of this Agreement will be substituted
therefore.

NOW THEREFORE, for in and consideration of One-Hundred Dollars ($100.00), the
covenants, agreements and releases contained herein, the payments to be made
hereunder, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE 1:
  DEFINITIONS

“Books and Records” means minute books; books of account; manuals; general,
financial, warranty and shipping records; invoices; customer and supplier lists;
correspondence; engineering, maintenance and operating records and data; mine
operations and inspection records; credit records of customers; computer files,
permits and permit applications and all other documents, records and files, but
not including any employee or personnel files.
“BPM Releasing Parties” has the meaning set forth in Section 13.1.
“Claims” has the meaning set forth in Section 13.1.
“Direct Labor and Associated Costs” means the wages of all hourly Mine 1
Employees and Mine 2 Employees, as applicable, including non-miners, and the
salaries of all salaried personnel employed by BPM for Mine 1 or Mine 2, as
applicable, including a mine superintendent, on-site managers and supervisors,
payments to consultants for Mine 1 or Mine 2, as applicable, if such consultants
were approved in writing in advance by Oaktown 1 or Oaktown 2, as applicable,
and all bonuses paid to, and the costs of all incentive, pension and retirement
programs for, such workers and employees, and all payroll burdens, including but
not limited to all costs associated with worker compensation such as premiums,
deductibles and self-insurance amounts associated therewith, other insurance and
benefit costs, in each case, to the extent directly allocable to the performance
by BPM of its obligations under the CMA for the operation of  Mine 1 or Mine 2,
as applicable, and the production and delivery of coal from such mine.
“Excluded Costs” means (i) any local, state or federal gross, adjusted gross or
net income taxes; (ii) any fines, penalties, damage or assessments resulting
from a violation of mining laws or regulations, as the same may be in effect
from time-to-time, where such violation is flagrant, willful or intentional, or
results from “high negligence” or “reckless disregard,” as such terms are
defined in applicable MSHA rules, regulations, orders or releases in effect from
time-to-time; (iii) deductibles applicable to any of the insurance coverages
required to be maintained pursuant to the CMA to the extent the loss arises out
of any grossly negligent, willful or reckless act or failure to act by BPM or
its employees, contractors or agents; (iv) any indemnity obligation arising out
of the CMA or this Agreement; or (v) any liability arising from a breach of the
CMA or this Agreement by BPM.
“Good Mining Practices” means such practices, acts or methods of operating a
coal mine and ancillary facilities as are generally accepted as reasonable, safe
and appropriate in the industry and in conformity with the requirements of all
applicable laws, regulations and permit requirements.
“Mine Contracts” has the meaning set forth in Section 4.1.
 “Mine  Employees” has the meaning set forth in Section 3.2.
 “Mine 1 and Prep Plant MSHA Citations” has the meaning set forth in Section
7.1.
“Mine 2 MSHA Citations” has the meaning set forth in Section 8.1.
“Mine 1 Permits” has the meaning set forth in Section 5.1.
“Mine 2 Permits” has the meaning set forth in Section 6.1.
“Mine 1 Permit Citations” has the meaning set forth in Section 5.3.
“Mine 2 Permit Citations” has the meaning set forth in Section 6.3.
 “MSHA” has the meaning set forth in Section 7.1.
“Oaktown 1 Books and Records” has the meaning set forth in Section 10.1.
“Oaktown 2 Books and Records” has the meaning set forth in Section 10.1.
“Oaktown 1 Equipment” has the meaning set forth in Section 11.1.
 “Oaktown IP” has the meaning set forth in Section 9.
 “Oaktown 1 Released Parties” has the meaning set forth in Section 13.1.
“Oaktown 2 Released Parties” has the meaning set forth in Section 13.2.
“Termination Fee” has the meaning set forth in Section 12.1.
 “Vendors” has the meaning set forth in Section 4.1.
“VFI Released Parties” has the meaning set forth in Section 13.3.
“VUS  Representative” has the meaning set forth in Section 3.7.
 “WARN Act” has the meaning set forth in Section 3.3.
“Worker Claims” has the meaning set forth in Section 3.5.
ARTICLE 2:
  EFFECTIVENESS

2.1EFFECTIVENESS OF AGREEMENT PROVISIONS.  This Agreement will be effective as
of the date first written above.  Notwithstanding that this Agreement is binding
and effective upon its execution, the parties acknowledge that many of the
obligations and the releases contained herein will not be effective unless and
until the Closing of the Sale occurs, as indicated herein.  Until the Closing,
the CMA will otherwise remain in full force and effect in accordance with its
terms, except to the extent it is expressly modified by this Agreement as to
pre-Closing periods and obligations.

2.2TERMINATION OF AGREEMENT.  At any time prior to the Closing, VUS may give
notice to BPM that the Closing will not occur.  In such case, and upon such
notice from VUS, this Agreement will terminate, and the CMA will remain in full
force and effect except as expressly modified herein as to pre-Closing periods
and obligations.

ARTICLE 3:
  EMPLOYEES

3.1BPM AS EMPLOYER. The parties acknowledge that all of the workers who have
been directly involved in the operations at Mine 1 and Mine 2 (collectively the
“Mines”) are and have been employees of BPM.  The parties further acknowledge
that following the Closing, none of those employees will be needed by BPM for
the operations at the Mines.

3.2IDENTIFICATION AND TERMINATION OF EMPLOYEES.  Attached hereto as Exhibit 1 is
a true and complete list of all of the employees of BPM involved in the
operations at Mines or who are otherwise associated with the business of Oaktown
1 or Oaktown 2 (the “Mine Employees”). BPM agrees that it will, as of the
Closing, terminate the employment of the Mine Employees.

3.3WARN NOTICE.  At the request of Oaktown 1and Oaktown 2, and within one (1)
day of its receipt of such request, BPM will provide the notification to the
Mine Employees required under the Worker Adjustment and Retraining Notification
Act (the “WARN Act”) regarding the termination of the Mine Employees in form and
substance satisfactory to Oaktown 1 and Oaktown 2.  Oaktown 1 and Oaktown 2 will
provide a form of notice for BPM to use and will advise BPM as to the process
for serving the WARN Act notices.  It is anticipated that the WARN Act notice
will be given on or about July 1, 2014.  It is further anticipated that the
Closing of the Sale will occur, if at all, on or after sixty-one (61) days
following BPM’s giving of the WARN Act notification.  The costs of giving such
notice will considered “Mining Costs” under the CMA and will be treated
accordingly.

3.4BPM CONTINUING EMPLOYMENT OBLIGATIONS.  Until the employment of each of the
Mine Employees is terminated, BPM will continue to be the employer of such
Employee for all purposes (subject to BPM’s absolute discretion as to the
continued employment of such employee), including without limitation providing
any employee benefits and being responsible for providing workers’ compensation
coverage and administering and resolving workers compensation claims, in
accordance with the terms of the CMA and the current practice of the parties in
the performance of the CMA.  BPM represents that it has fully and properly paid
all wages and other benefits to all Employees, and BPM will ensure that all
wages and other employee benefits have been properly and fully paid to all Mine
Employees as of the Closing.

3.5WORKER CLAIMS.  Following the Closing and the termination of the CMA, BPM
will promptly notify VUS regarding any workers compensation claims or other
claims brought by or related to the Mine Employees (whether existing at the time
of Closing or subsequently filed “Worker Claims”) and the litigation and/or
resolution of same.  Attached hereto as Exhibit 2 is a true and complete list of
all Worker Claims associated with Mine 1 as of the date of this
Agreement.  Attached hereto as Exhibit 3 is a true and complete list of all
Worker Claims associated with Mine 2.  BPM will supplement Exhibits 2 and 3 as
of the date of Closing.
3.6EMPLOYEE CERTIFICATE. At the Closing, BPM will provide a certification in the
form set forth on Exhibit 4 hereto that all Mine Employees have been fully paid
and provided with all applicable termination and other benefits, or if that is
not the case, it will provide a detailed list of unpaid wages and benefits.

3.7RESOLUTION OF WORKER CLAIMS. Following the Closing and the termination of the
CMA (a) VUS will identify a representative to receive notices from BPM regarding
any Worker Claims or any other matters for which VUS may have any liability
hereunder (the “VUS Representative”); (b) BPM will promptly notify the VUS
Representative of any claim, demand or right of action asserted or any action,
suit or proceeding threatened or instituted with regard to any Employee or any
Worker Claim; (c) prior to the commencement of any negotiations or litigation,
and during the course of such negotiations or litigation,  with respect to any
Employee or any Worker Claim, BPM will consult with VUS to obtain its
recommendations and direction with respect to the conduct thereof; (d) at VUS’s
option, VUS may assume (as BPM’s agent,  designee or otherwise), the management
of any or all Claims relating to Employees or Worker Claims; (e) all
negotiations and litigation with respect to any Employee  or any Worker
Claim  will be conducted by or at the direction of VUS; (f) BPM will cooperate
with VUS in the handling of any Employee or Worker Claims and in the
verification of all costs and expenses associated therewith; (g) BPM will not
settle or consent to the entry of any award or judgment with regard to any
Employee or any Worker Claim without the consent of VUS.

3.8PAYMENT OF WORKER CLAIMS.  Following the Closing and subject to BPM’s
compliance with the terms and provisions of Section 3.7, VUS will indemnify and
hold harmless BPM for any out-of pocket costs (including any workers’
compensation payments that are not covered by insurance) associated with the
litigation or resolution of any Worker Claims, provided that such costs are
reasonable, verified and approved by VUS, in its reasonable discretion, incurred
in accordance with this Agreement and are not Excluded Costs.

3.9PAYMENT OF LABOR COSTS.  VUS will reimburse BPM for any Direct Labor and
Associated Costs for Mine Employees which are incurred by BPM prior to Closing
but which are not paid at or prior to the Closing and for which BPM had not
previously received funds in payment thereof, provided such costs have been
verified and approved by VUS in its reasonable discretion.

ARTICLE 4:
  VENDORS

 
             4.1MINE CONTRACTS AND VENDORS.  Exhibit 5 hereto is a true and
complete list of all of the material contracts (the “Mine Contracts”) between
BPM and all vendors for materials, supplies, or services in connection with the
operation of the Mines and the business activities of Oaktown 1 and Oaktown 2
(the “Vendors”).

4.2TRANSFER OF CONTRACTS.  BPM agrees that, at the request of Oaktown 1 and
Oaktown 2, whether before or after the Closing, it will transfer to Oaktown 1 or
Oaktown 2 or their designees such of the Mine Contracts as they may request, so
that the contractual relationship with the Mine Vendors will be directly with
Oaktown 1 or Oaktown 2, as applicable.  BPM will cooperate with Oaktown 1 and
Oaktown 2 in transferring the contracts and in establishing a relationship
between Oaktown 1 or Oaktown 2 or their designees and the
Vendors.  Notwithstanding the transfer of the Mine Contracts, until the Closing,
BPM will be responsible for fulfilling all of the of the obligations under the
Mine  Contracts consistent with past practices and will continue to communicate
with the Vendors on behalf of Oaktown 1 and Oaktown 2 as it has in the
past.  BPM will terminate all unassumed Mine Contracts as of the Closing, and to
the greatest extent reasonably possible will do so in such a manner as to avoid
any expense or liability to BPM, Oaktown 1 or Oaktown 2.  Any liability or
expenses incurred by BPM as a result of such termination that have been verified
and approved by VUS in its reasonable discretion will constitute a Mining Cost
under the CMA and will be treated accordingly, except to the extent they are
Excluded Costs.

4.3PAYMENT OF VENDORS.  BPM will use its reasonable best efforts to cause all
claims for payment asserted by the Vendors for goods or services provided by
them in connection with the Mines prior to the Closing (“Vendor Claims”) to be
paid prior to, or as soon as possible after, the Closing.  After the Closing,
BPM will continue to pay Vendor Claims, subject to VUS’ verification and
approval of same in its reasonable discretion and to the extent that BPM had not
previously received funds for the payment thereof.  BPM will cooperate with VUS
and will provide VUS with all the information necessary to (a) verify the
correctness of any unpaid pre-Closing Mine 1 Vendor charges and (b) to contest
any such charges that VUS deems unjustified or unreasonable.

4.4CERTIFICATE OF PAYMENT AND LIEN RELEASES.  At the Closing BPM will provide
Oaktown 1, Oaktown 2 and VUS with a certificate in the form attached hereto as
Exhibit 6 regarding the Vendor charges.  At the Closing, and thereafter with
respect to the Vendors that have not been paid in full as of the Closing, BPM
will also provide Oaktown 1, Oaktown 2  and VUS with such lien waivers from the
Vendors as they may request.

ARTICLE 5:
  PERMITS - OAKTOWN 1

5.1MINE 1 AND MINE 2 PERMITS.  Attached hereto as Exhibit 7 is a true and
complete list of all permits and licenses of any kind which relate to or could
affect the operations of Mine 1 or the business of Oaktown 1 and Mine 2 and the
business of Oaktown 2 (the “Oaktown Permits”).

5.2TRANSFER OF PERMITS.  BPM agrees that it will execute to be effective as of
the Closing, the Interim Operating Agreement for Mine 1 attached hereto as
Exhibit 8.  Further, BPM agrees that at the Closing it will transfer, and
execute such documents as may be necessary to facilitate such transfer of, the
Mine Permits to Oaktown 1 or Oaktown 2 or their designees free and clear of all
liens and encumbrances arising by or through BPM. To the extent the permits are
encumbered by liens to support a line of credit, BPM covenants that it will not
draw on that line of credit prior to the release of any such liens.
Notwithstanding the foregoing, no transfer of permits will be completed unless
or until any bond or other financial surety affecting BPM has been
replaced.  BPM hereby releases any claim it may have to any accrual by Oaktown
1or Oaktown 2 or any of their affiliates for reclamation obligations.

5.3MINE 1 VIOLATIONS.  Attached hereto as Exhibit 9 is a true and complete list
of all unabated notices of violation, cessation orders, or other open regulatory
matters relating to the operations at Mine 1 other than the MSHA citations which
are addressed below (with any other such violations that may be issued before or
after the Closing with regard to Mine 1, the “Mine 1 Permit Citations”).  BPM
will update Exhibit 9 at the Closing.

5.4PAYMENT OF MINE 1 VIOLATIONS.  Following the Closing, VUS will reimburse,
indemnify and hold harmless BPM from and against all out-of-pocket expenses
associated with the litigation and/or resolution of the Mine 1 Permit Citations,
provided that such expenses, are reasonable, were and are incurred in accordance
with the terms of this Agreement and the CMA, have been verified and approved by
VUS in its reasonable discretion and are not Excluded Costs.

5.5RESOLUTION OF MINE 1 VIOLATIONS.  Following the Closing, BPM will promptly
notify VUS of any claim, demand or right of action asserted or any action, suit
or proceeding threatened or instituted against BPM with regard to any Mine 1
Permit Citations.  After the Closing, before it commences any negotiations or
litigation with respect to any Mine 1 Permit Citation, and during the pendency
of same, BPM will consult with VUS to obtain its recommendations and direction
with respect to the conduct thereof.  All negotiations and litigation with
respect to any Mine 1 Permit Citation will be conducted by or at the direction
of VUS, and BPM will not settle or pay any Mine 1 Permit Citation without the
prior consent of the VUS Representative.  At the option of VUS, it may assume
(as BPM’s agent, designee or otherwise) the management of any or all Mine 1
Permit Citations.  BPM will cooperate with VUS in the handling of any Mine 1
Permit Citations and in the verification of  any costs or expenses related
thereto.

ARTICLE 6:
  OAKTOWN 2

6.1TRANSFER OF PERMITS.  BPM agrees that it will execute to be effective as of
the Closing, the Interim Operating Agreement for Mine 2 attached hereto as
Exhibit 10.

6.2MINE 2 VIOLATIONS.   Attached hereto as Exhibit 11 is a true and complete
list of all unabated notices of violation, cessation orders, or other open
regulatory matters relating to the operations at Mine 2 other than the MSHA
citations which are addressed below (with any other such violations that may be
issued before or after the Closing with regard to Mine 2, the “Mine 2 Permit
Citations”).  BPM will update Exhibit 11 at the Closing.

6.3PAYMENT OF MINE 2 VIOLATIONS.  Following the Closing, VUS will reimburse,
indemnify and hold harmless BPM from and against all out-of-pocket expenses
associated with the litigation and/or resolution of the Mine 2 Permit Citations,
provided that such expenses were and are incurred in accordance with the terms
of this Agreement and the CMA, have been verified and approved by VUS in its
reasonable discretion and are not “Excluded Costs.”

6.4RESOLUTION OF MINE 2 VIOLATIONS. Following the Closing, BPM will promptly
notify VUS of any claim, demand or right of action asserted or any action, suit
or proceeding threatened or instituted against BPM with regard to any Mine 2
Permit Citations.  After the Closing, before it commences any negotiations or
litigation with respect to any Mine 2 Permit Citation, and during the pendency
of same, BPM will consult with VUS to obtain its recommendations and direction
with respect to the conduct thereof.  All negotiations and litigation with
respect to any Mine 2 Permit Citation will be conducted by or at the direction
of VUS, and  BPM will not settle or pay any Mine 2 Permit Citation without the
prior consent of the VUS Representative. At the option of VUS, it may assume (as
BPM’s agent, designee or otherwise) the management of any or all Mine 2 Permit
Citations.  BPM will cooperate with VUS in the handling of any Mine 2 Permit
Citations and in the verification of  any costs or expenses related thereto.

ARTICLE 7:
  MSHA VIOLATIONS – MINE 1

7.1MINE 1 AND OAKTOWN PREP PLANT MSHA CITATIONS.  Attached hereto as Exhibits 12
and Exhibit 13 are true and complete lists of all unabated notices of violation,
cessation orders, or other open matters relating to the Mine 1 and Oaktown Prep
Plant operations issued by the Mine Safety and Health Administration (“MSHA”)
(with any such citations that may be issued before or after the Closing with
regard to the pre-Closing activities of BPM, the “Mine 1 and Prep Plaint MSHA
Citations”).    BPM will update Exhibit 12 and Exhibit 13 at the Closing.

7.2PAYMENT OF MINE 1 AND PREP PLAINT MSHA CITATIONS.  Following the Closing, VUS
will reimburse, indemnify and hold harmless BPM from and against all
out-of-pocket expenses associated with the litigation and/or resolution of the
Mine 1 and Prep Plant MSHA Citations, provided that such expenses are
reasonable, were and are incurred in accordance with the terms of the CMA and
this Agreement, have been verified and approved by VUS in its reasonable
discretion and are not Excluded Costs.
 
    7.3RESOLUTION OF MINE 1 AND PREP PLAINT MSHA CITATIONS. Following Closing:
(a) BPM will promptly notify the VUS Representative of any claim, demand or
right of action asserted or any action, suit or proceeding threatened or
instituted with regard to any Mine 1 or Prep Plant MSHA Citation (b) prior to
the commencement of any negotiations or litigation, and during the course of
such negotiations or litigation, with respect to any Mine 1 or Prep Plant MSHA
Citation, BPM will consult with VUS to obtain its recommendations and direction
with respect to the conduct thereof; (c) at VUS’s option, VUS may assume (as
BPM’s agent, designee or otherwise) the management of any or all Mine 1 or Prep
Plant MSHA Citations; (d) all negotiations and litigation with respect to any
Mine 1 or Prep Plant MSHA Citation will be conducted by or at the direction of
VUS; (e) BPM will cooperate with VUS in the handling of any Mine 1 or Prep Plant
MSHA Citation and in the verification of any costs associated therewith, and (f)
BPM will not settle or consent to the entry of any award or judgment with regard
to any Mine 1 or Prep Plant MSHA Citation without the consent of VUS.

ARTICLE 8:
  MSHA VIOLATIONS – MINE 2

8.1MINE 2 MSHA CITATIONS.  Attached hereto as Exhibit 14 is a true and complete
list of all unabated notices of violation, cessation orders, or other open
matters relating to the Mine 2 operations issued by MSHA(with any such citations
that may be issued before or after the Closing with regard to the pre-Closing
activities of BPM, the “Mine 2 MSHA Citations”).    BPM will update Exhibit 14
at the Closing.

8.2PAYMENT OF MINE 2 MSHA CITATIONS.  Following the Closing, VUS will reimburse,
indemnify and hold harmless BPM from and against all out-of-pocket expenses
associated with the litigation and/or resolution of the Mine 2 MSHA Citations,
provided that such costs are reasonable, were and are incurred in accordance
with the terms of the CMA and this Agreement, have been verified and approved by
VUS in its reasonable discretion and are not Excluded Costs.

6.5RESOLUTION OF MINE 2 MSHA CITATIONS.  Following Closing: (a) BPM will
promptly notify the VUS Representative of any claim, demand or right of action
asserted or any action, suit or proceeding threatened or instituted with regard
to any Mine 2 2 MSHA Citation (b) prior to the commencement of any negotiations
or litigation, and during the course of such negotiations or litigation, with
respect to any Mine 2 MSHA Citation, BPM will consult with VUS to obtain its
recommendations and direction with respect to the conduct thereof; (c) at VUS’s
option, VUS may assume (as BPM’s agent, designee or otherwise) the management of
any or all Mine 2 MSHA Citations; (d) all negotiations and litigation with
respect to any Mine 2 MSHA Citation will be conducted by or at the direction of
VUS; (e) BPM will cooperate with VUS in the handling of any Mine 2 MSHA
Citation  and the verification of any costs associated therewith, and (f) BPM
will not settle or consent to the entry of any award or judgment with regard to
any Mine 2 MSHA Citation without the consent of VUS.

ARTICLE 9:
INTELLECTUAL PROPERTY

Attached hereto as Exhibit 15 is a list of all software programs and other
intellectual property used in the business of Oaktown 1 and Oaktown 2 (the
“Oaktown IP”).  Exhibit 15 further identifies any consent needed for the
transfer of any item of Oaktown 1 IP.  BPM will obtain any necessary consents to
transfer any Oaktown IP to Oaktown 1, Oaktown 2 or their designees, and at their
request, BPM will transfer all Oaktown IP to Oaktown 1, Oaktown 2 or their
designee prior to the Closing.

ARTICLE 10:
  BOOKS AND RECORDS

10.1CONTROL OF BOOKS AND RECORDS.  (a) The parties acknowledge and agree that
all of the Books and Records relating to the operations of Mine 1 and the
business of Oaktown 1 (the “Oaktown 1 Books and Records”) are the property of
Oaktown 1, and following the Closing, the Oaktown 1 Books and Records will
remain in the ownership, custody and control of Oaktown 1.  (b) The parties
agree and acknowledge and agree that all of the Books and Records relating to
the operations of Mine 2 and the business of Oaktown 2 (the “Oaktown 2 Books and
Records”) are the property of Oaktown 2, and following the Closing, the Oaktown
2 Books and Records will remain in the ownership, custody and control of Oaktown
2.

10.2ACCESS TO BOOKS AND RECORDS.  (a) BPM will cooperate with Oaktown 1 in
securing the Oaktown 1 Books and Records prior to the Closing, and all Oaktown 1
Books and Records will be at Mine 1 at the Closing.  Following the Closing, BPM
will provide Oaktown 1 such assistance as may be reasonably necessary for
Oaktown 1 to access the Oaktown 1 Books and Records, including providing
passwords, software assistance and other support.  (b) BPM will cooperate with
Oaktown 2 in securing the Oaktown 2 Books and Records prior to the Closing, and
all Oaktown 2 Books and Records will be at Mine 2 at the Closing.  Following the
Closing, BPM will provide Oaktown 2 such assistance as may be reasonably
necessary for Oaktown 2 to access the Oaktown 2 Books and Records, including
providing passwords, software assistance and other support.

 
10.3POST-CLOSING ACCESS AND COOPERATION.  Notwithstanding the foregoing, Oaktown
1 and Oaktown 2 will provide BPM and VUS with full access to, and will permit
BPM and VUS to make copies (at their expense) of, the Oaktown 1 Books and
Records and the Oaktown 2 Books and Records upon prior request and during
regular business hours, as may be reasonably necessary or convenient for the
resolution of any Mine 1 or Mine 2 Employee Claims, Permit Citations or MSHA
Citations, or any other post-Closing matters for which BPM or VUS bears any
responsibility or obligation.    BPM and VUS will cooperate in good faith to
facilitate the performance of all obligations and activities contemplated by
this Agreement.

ARTICLE 11:
  EQUIPMENT AND OTHER PERSONAL PROPERTY; LEASES AND EASEMENTS

11.1OAKTOWN EQUIPMENT.  The parties acknowledge that all of the equipment, tools
and inventory, including without limitation spare parts and materials used or
obtained for use in connection with the operations of the Mines and the business
of Oaktown 1 and Oaktown 2  (the “Oaktown Equipment”) has been purchased,
directly or indirectly, by Oaktown 1 and/or Oaktown 2 and that such purchases
were and are for the benefit of Oaktown 1 and/or Oaktown 2.

11.2TRANSFER OF OAKTOWN  EQUIPMENT.  To formalize that ownership, and for
avoidance of doubt, BPM will simultaneously with the execution of this
Agreement, execute the bill of sale attached hereto as Exhibit 16 transferring
all of the Oaktown Equipment to Oaktown 1 and Oaktown 2.

 
11.3CONTROL OF OAKTOWN EQUIPMENT.  From the date of this Agreement, BPM will
maintain and operate the Oaktown  Equipment in accordance with the CMA and will
use its best efforts to insure that none of the Oaktown Equipment is lost,
stolen or otherwise dissipated.  At the Closing date, all of the Oaktown
Equipment will be physically on the premises of the Mines except for items that
are off site for repair.  BPM will provide Oaktown 1 and Oaktown 2 with a list
of such items at the Closing.

11.4 OAKTOWN LEASES AND EASEMENTS.  BPM agrees that as soon as practicable after
the execution of this Agreement it will transfer to Oaktown 1 or Oaktown 2 or
their respective designees, as they each may direct, and by assignments in form
and substance reasonably satisfactory to Oaktown 1 or Oaktown 2 as applicable,
any and all leases, easements, rights-of-way, surface use agreements and any and
all other real property interests of any kind that relate to, affect or have any
connection with (a) the present or future operations of Mine 1 or Mine 2, (b)
the present or future business of Oaktown 1 or Oaktown 2, or (c) the real
property used in connection with those operations or businesses, including
without limitation those listed on the attached Exhibit 17.

ARTICLE 12:
  TERMINATION PAYMENTS

12.1LUMP-SUM TERMINATION FEE.  At Closing, VUS will make a lump-sum payment to
BPM which will be calculated based on the spreadsheet and formulas contained in
Exhibit 18 to obtain the present value of the “Termination Fee” provided for in
Section X.E of the CMA (the “Termination Fee”).  The Termination Fee will be
calculated at the Closing based on 111,438,256 tons as of December 31, 2013 and
adjusted for the actual tons mined between that date and the date of
Closing.  Payment of the Termination Fee will be in full satisfaction of the
obligations of Oaktown 1 and Oaktown 2 for any Termination Fee pursuant to the
CMA.

12.2WAIVER OF ADDITIONAL NOTICE.  Section X.B of the CMA requires Oaktown 1 and
Oaktown 2 to give BPM sixty (60) days’ notice of a voluntary termination of the
CMA.  BPM agrees that this Agreement serves as such notice, and that no further
notice will be required except for notice to BPM of the occurrence of the
Closing.

 
12.3MANAGEMENT FEE.    Within sixty (60) days following the Closing, VUS will
pay to BPM an amount equal to One Dollar and Fifty Cents ($1.50) multiplied
times the tons of: (a) coal contained in the clean coal stockpiles at Mine 1 and
Mine 2 and (b) the clean coal equivalent contained in the raw coal stockpiles at
Mine 1 and Mine 2 (determined based on the monthly mine production reports
prepared in the ordinary course of business and in accordance with past
practice), in each case for which BPM has not already been paid its Management
Fee provided for in the CMA (the “Termination Management Fee”).

ARTICLE 13:
  RELEASES AND TRANSFER OF CLAIMS

13.1BPM RELEASE OF OAKTOWN 1.  Effective as of the Closing, and except as
expressly provided below, BPM and its officers, members, partners, managers and
directors (individually and on behalf of any heirs, executors, administrators,
and successors and assigns, as applicable) (together, the “BPM Releasing
Parties”) do fully, finally, unconditionally, irrevocably and forever release,
acquit, completely discharge and hold harmless Oaktown 1 and its parent,
subsidiary and affiliated entities, and its and their  current and former
members, shareholders, agents, employees, insurers, attorneys, officers,
directors, managers, board members, representatives, consultants, advisors,
parents, affiliates, subsidiaries, contractors, associates, personal
representatives, heirs, executors, trustees, beneficiaries, administrators,
insurance agents, persons or entities exercising subrogation rights, and the
successors, and assigns of each of them (together, the “Oaktown 1 Released
Parties”)  from and against any and all manner of action and actions, cause and
causes of action, claims, demands, warranties, covenants, contracts, agreements,
promises, controversies, damages, variances, judgments, executions, costs,
losses, claims for court costs and attorneys’ fees, liabilities and obligations
of any kind or nature whatsoever, and rights, matured or unmatured, liquidated
or unliquidated, whether accrued or yet to accrue, known or unknown, asserted or
unasserted, contingent or absolute, suspected or unsuspected, direct or
derivative, in law, in equity or otherwise, that it has, or may have, for, on,
or by reason of any matter, cause or things whatsoever from the beginning of the
world to this day, including, but not limited to any and all claims, complaints,
liabilities, disputes, obligations, promises, agreements, controversies,
damages, actions, causes of action, rights, demands, costs, losses, and claims
for court costs and attorneys’ fees of any kind whatsoever (known or unknown)
(collectively, “Claims”) arising from, in connection with, or related to the CMA
and any other event, origin or agreement occurring or entered into prior to the
Closing, other than the obligations of VUS under this Agreement and the
obligations of Oaktown 1 under the Interim Operating Agreement for Mine 1.

13.1BPM RELEASE OF OAKTOWN 2.  Effective as of the Closing, and except as
expressly provided below, BPM Releasing Parties do fully, finally,
unconditionally, irrevocably and forever release, acquit, completely discharge
and hold harmless Oaktown 2 and its parent, subsidiary and affiliated entities,
and its and their current and former members, shareholders, agents, employees,
insurers, attorneys, officers, directors, managers, board members,
representatives, consultants, advisors, parents, affiliates, subsidiaries,
contractors, associates, personal representatives, heirs, executors, trustees,
beneficiaries, administrators, insurance agents, persons or entities exercising
subrogation rights, and the successors, and assigns of each of them (together,
the “Oaktown 2 Released Parties”) from and against any and all Claims arising
from, in connection with, or related to the CMA and any other event, origin or
agreement occurring or entered into prior to the Closing, other than any
obligation of VUS under this Agreement and the obligations of Oaktown 2 under
the Interim Operating Agreement for Mine 2.

13.1BPM RELEASE OF VFI AND SFI.  Effective as of Closing, and except as
expressly provided below, BPM Releasing Parties do fully, finally,
unconditionally, irrevocably and forever release, acquit, completely discharge
and hold harmless VFI and SFI, and its and their parent, subsidiary and
affiliated entities and its and  their current and former members, shareholders,
agents, employees, insurers, attorneys, officers, directors, manager ,board
members, representatives, consultants, advisors, parents, affiliates,
subsidiaries, contractors, associates, personal representatives, heirs,
executors, trustees, beneficiaries, administrators, insurance agents, persons or
entities exercising subrogation rights, and the successors, and assigns of each
of them (together, the “VFI Released Parties”) from and against any and all
Claims arising from, in connection with, or related to the CMA and any other
event, origin or agreement occurring or entered into prior to the Closing, other
than any obligation of VUS under this Agreement.

13.1TRANSFER OF OAKTOWN 1 CLAIMS TO VUS.  Effective as of the Closing, and
except as otherwise provided herein, Oaktown 1 hereby conveys to VUS any and all
manner of action and actions, cause and causes of action, claims, demands,
controversies, damages, variances, costs, losses, claims for court costs and
attorneys’ fees, liabilities and obligations of any kind or nature whatsoever,
and rights, matured or unmatured, liquidated or unliquidated, whether accrued or
yet to accrue, known or unknown, asserted or unasserted contingent or absolute,
suspected or unsuspected, direct or derivative, in law, in equity or otherwise,
that it has, or may have against BPM for, on, or by reason of the CMA, any
indemnity thereunder or the performance or any other aspect thereof and any
other contract or matter existing at the time of this Agreement, other than the
Interim Operating Agreement.

13.1TRANSFER OF OAKTOWN 2 CLAIMS TO VUS.  Effective as of the Closing, and
except as otherwise provided herein, Oaktown 2 hereby conveys to VUS any and all
manner of action and actions, cause and causes of action, claims, demands,
controversies, damages, variances, costs, losses, claims for court costs and
attorneys’ fees, liabilities and obligations of any kind or nature whatsoever,
and rights, matured or unmatured, liquidated or unliquidated, whether accrued or
yet to accrue, known or unknown, asserted or unasserted, contingent or absolute,
suspected or unsuspected, direct or derivative, in law, in equity or otherwise,
that it has, or may have against BPM for, on, or by reason of the CMA, any
indemnity thereunder or the performance or any other aspect thereof and any
other contract or matter existing at the time of this Agreement, other than the
Interim Operating Agreement.

    13.1TRANSFER OF VFI AND SFI CLAIMS TO VUS.  Effective as of the Closing, and
except as otherwise provided herein, VFI and SFI each hereby conveys to VUS any
and all manner of action and actions, cause and causes of action, claims,
demands, controversies, damages, variances, costs, losses, claims for court
costs and attorneys’ fees, liabilities and obligations of any kind or nature
whatsoever, and rights, matured or unmatured, liquidated or unliquidated,
whether accrued or yet to accrue, known or unknown, asserted or unasserted,
contingent or absolute, suspected or unsuspected, direct or derivative, in law,
in equity or otherwise, that it has, or may have against BPM for, on, or by
reason of the CMA or the performance or any other aspect thereof and any other
contract or matter existing at the time of this Agreement.

ARTICLE 14:
  INDEMNITY

14.1VUS INDEMNITY.  Following the Closing, VUS will and hereby does assume all
of the remaining obligations of Oaktown 1 and Oaktown 2 to BPM under the
CMA.  The obligations thus assumed by VUS will be subject to all defenses,
offsets or other limitations provided for in the CMA and/or that would otherwise
be available to Oaktown 1 or Oaktown 2.  In addition to the extent they are not
Excluded Costs and subject to the other provisions of this Agreement, VUS will
indemnify BPM for any Claims and expenses incurred by BPM as a result of: (a)
the Interim Operating Agreements for Mine 1 and Mine 2 (to the extent that such
Claims are not paid by Oaktown 1 or Oaktown 2); (b) Mine 1 Worker Claims; (c)
Mine 2 Worker Claims; (d) Vendor Claims; (e) the notice given by BPM under the
WARN Act; and (f) expenses incurred in connection with the performance of this
Agreement.  With regard to any claims of BPM pursuant to item (a) of this
Section 14.1, BPM will timely present all such Claims to Oaktown 1 and Oaktown
2, as applicable, and will make reasonable efforts to obtain payment of same
from those entities, provided however, BPM need not institute litigation to
recover payment of those Claims, and if payment has not been received by BPM
within 90 days, BPM may submit the charge to VUS, and VUS will pay BPM within 10
days thereafter.  If VUS pays any Claim of BPM made pursuant to item (a) of this
Section 14.1, BPM will assign the Claim under the relevant Interim Operating
Agreement to VUS.

14.2BPM INDEMNITY.  Following the Closing, BPM will indemnify and hold harmless
VUS from and against any and all Claims arising directly or indirectly from (i)
any breach of the CMA or this Agreement by BPM; (ii) any failure by BPM to use
Good Mining Practices at Mine 1 or Mine 2; (iii) any material inaccuracy or
breach of any representation or warranty by BPM contained in this Agreement or
in the CMA; (iv) any failure to abate any citation under any permit if the
citation was received prior to Closing, except to the extent such citation
cannot be fully abated prior to Closing despite BPM’s best efforts to do so; or
(v) any act or failure to act by BPM that is reckless or willful, or grossly
negligent.

ARTICLE 15:
  CONFIDENTIALITY

Following the Closing and/or the termination of the CMA, BPM will hold in
confidence and will not make public or divulge to a third party any information
obtained as a result or in the cause of the performance of the CMA except for
disclosures to its attorneys, auditors, valuation experts or accountants or as
compelled by law or regulation, or as may be required by any state or federal
regulatory agency, or pursuant to a confidentiality and non-disclosure agreement
duly executed by the recipient of the information and pursuant to which the
recipient covenants to take reasonable efforts to maintain such information in
confidence.  If BPM is or could be legally compelled to disclose such
information, it will notify the other parties prior to making the disclosure.

ARTICLE 16:
  REPRESENTATION AND WARRANTIES OF BPM

BPM hereby represents and warrants that the following are true as of the date
hereof and will be true as of the date of the Closing:

16.1ORGANIZATION.  BPM is a limited liability company validly organized and
existing under the laws of the State of Indiana and has corporate power and
authority to execute and deliver this Agreement and to carry on its business.

16.2PERFORMANCE OF OBLIGATIONS.  BPM has performed and will perform all of its
obligations in connection with Mine 1 and Mine 2 in accordance with Good Mining
Practices and all other requirements of the CMA.

16.3PAYMENT OF EMPLOYEE OBLIGATIONS.   BPM has paid and/or provided to all of
the Mine 1 Employees and the Mine 2 Employees all of the wages, benefits and
other payments to which they are entitled, and in connection with such wages,
benefits and payments, BPM has properly withheld and paid over to the relevant
taxing authority all amounts required to be so withheld and paid over.

16.4PAYMENT OF VENDORS. All accounts of Mine1Vendors and Mine 2 Vendors are
current, and no mechanic’s, carriers’, workmen’s, repairmen’s or other like
liens are or could be asserted against real or personal property of Oaktown 1 or
Oaktown 2.

ARTICLE 17:
  ACCOUNTING

17.1ACCOUNTING FOR PRE-CLOSING FUNDS.  At the date of Closing, BPM will provide
VUS with a statement of the  funds provided by Oaktown 1 or Oaktown 2 or any of
their affiliates to BPM pursuant to the CMA which remain in the bank accounts or
otherwise in the possession of BPM.

17.2POST-CLOSING ACCOUNTING.  On or before 60 days following the Closing, BPM
and VUS will account to each other for all funds paid and received pursuant to
the CMA following the Closing, and will continue to account to each other
thereafter as necessary to insure that all amounts paid and received are
properly accounted for.

ARTICLE 18:
  MISCELLANEOUS

18.1CHOICE OF LAW.  The laws of the state of Indiana shall govern the validity,
interpretation, and performance of this Agreement.

18.2DISPUTE RESOLUTION.  As a condition precedent to the initiation of
litigation, the President, Chief Executive Officer or Chief Operating Officer of
the ultimate parent corporation of each of VUS and BPM shall be given notice of
the dispute and shall meet in person on at least one (1) occasion in an attempt
to resolve the dispute.  If the dispute is not resolved or such meeting does not
occur within ten (10) days of the date such meeting was requested, then any
party may pursue its legal or equitable remedies.

18.3NOTICES.  Any Notice, request or other communication permitted or required
by this Agreement to be given to any Party shall be in writing and shall be
given to such Party at its address set forth below or such other address or as
such Party may hereafter specify for the purpose by notice to the other
Party.  Each such notice, request or other communication shall be effective if
given by overnight courier, when delivered at the address specified below (or
such other address as hereafter may be specified).

TO:    OAKTOWN 1                                        
Oaktown Fuels Mine No. 1, LLC
211 NW Riverside Drive
One Vectren Square
Evansville, IN 47708
Attn: Randy Beck
Attn: Ronald E. Christian
 
TO:   OAKTOWN 2
Pre-Closing
Oaktown Fuels Mine No. 2, LLC
211 NW Riverside Drive
One Vectren Square
Evansville, IN 47708
Attn: President
Attn: Secretary
 
TO BPM:
Black Panther Mining, LLC
11700 Water Tank Road
Cynthiana, IN 47612
Attn: President

With a copy to:

Terry G. Farmer
Bamberger, Foreman, Oswald & Hahn, LLP
7th Floor Hulman Building
20 N.W. 4th St.
Evansville, IN 47704-0657

TO VUS:
Vectren Utility Services, Inc.
211 NW Riverside Drive
One Vectren Square
Evansville, IN 47708
Attn: Ronald E. Christian

TO VFI:
Vectren Fuels, Inc.
211 NW Riverside Drive
One Vectren Square
Evansville, IN 47708
Attn: Randy Beck
Attn: Ronald E. Christian

To: SFI
SFI Coal Sales, LLC
211 NW Riverside Drive
One Vectren Square
Evansville, IN 47708
Attn: Ronald E. Christian
 
19.4 ENTIRE AGREEMENT; AMENDMENT.  This Agreement contains the entire
understanding of the Parties and supersedes all previous communications,
representations or agreements, either oral or written, among the Parties with
respect to the subject matter hereof.  No amendment to this Agreement shall be
effective unless approved and executed in writing by each party hereto.

19.5 STATUS OF PARTIES; NO THIRD PARTY BENEFICIARIES.  This Agreement does not
create the relationship of joint venture, partnership, association, legal
representative or principal and agent between or among the parties.  Except as
expressly provided in Article 16, there are no third party beneficiaries to this
Agreement.

19.6 SEVERABILITY.  If any of the terms, covenants or conditions of this
Agreement or the application of any such term, covenant or condition shall be
held invalid as to any person or circumstances by any court having jurisdiction
in the premises, the remainder of this Agreement and the application of its
terms, covenants or conditions to such persons or circumstances shall not be
affected thereby but shall remain in force and effect.

19.7 NO WAIVER.  Any waiver at any time by any party of its rights with respect
to any default or any other matter arising in connection with this Agreement
shall not be deemed a waiver with respect to any subsequent default or matter.

19.8 REMEDIES CUMULATIVE.  The remedies provided by this Agreement shall be
cumulative and in addition to other remedies provided at law or in equity.

19.9 BINDING EFFECT.  All of the respective covenants, undertakings and
obligations of each of the parties set forth in this Agreement (i) shall apply
to and bind all other persons, claiming by, through or under any of the parties
and their permitted successors or assigns; and (ii) shall be for the benefit of
the parties and their respective successors and assigns.  All such covenants and
obligations shall be binding upon any Person which acquires any of the rights,
titles and interests of any party in, to and under this Agreement.  Upon any
assignment of this Agreement not prohibited by the terms hereof and after
compliance with all requirements, concerning assignments contained in this
Agreement, the parties hereto shall look solely to the assignee to perform all
obligations assumed by the assignee and accruing from and after the assignment,
and the original party hereto assigning such obligations shall have no liability
hereunder with respect thereto.
 [End of Text.  Signature Page Follows.]
 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the Effective Date.

 
OAKTOWN FUELS MINE NO. 1, LLC

 
By:_/s/Randy L. Beck__________________
Its:_President_________________________
 

 
OAKTOWN FUELS MINE NO. 2, LLC
 
 
By:_/s/Randy L. Beck__________________
Its:_President_________________________
 

 
VECTREN FUELS, INC.
 

 
By:_/s/Randy L. Beck__________________
Its:_President_________________________
 

 
SFI COAL SALES, LLC

 
By:_/s/ Randy L. Beck_________________
Its:_President________________________

VECTREN UTILITY SERVICES, INC.

 
By:__/s/ Ronald E. Christian___
Its:_Vice President____________
 

 
BLACK PANTHER MINING, LLC

By:__/s/ Donald Blankenberger__
Its:__ President_______________

61181004.8

61181004.12
 
 

--------------------------------------------------------------------------------

 

C-2
AGREEMENT

THIS AGREEMENT is entered into this 28th day of June 2014 among PROSPERITY MINE,
LLC, an Indiana limited liability company (“Prosperity”); VECTREN FUELS, INC.,
an Indiana corporation (“VFI”); SFI COAL SALES, LLC, an Indiana limited
liability company (“SFI”); VECTREN UTILITY SERVICES, INC., an Indiana
corporation (“VUS”); and FIVE STAR MINING, INC., an Indiana corporation (“Five
Star”).

WHEREAS, Prosperity and Five Star entered into a Contract Mining Agreement dated
November 23, 2009 but effective as of January 1, 2008 (as amended, the “CMA”),
pursuant to which Five Star agreed to provide certain services to Prosperity in
connection with the operation of the Prosperity mine (with all related
facilities,  the “Mine”); and

WHEREAS, VFI owns all of the outstanding ownership interests of SFI which owns
all of the outstanding interests of Prosperity; and

WHEREAS, VUS owns, or will own as of the Closing (as defined below), all of the
stock of VFI; and
WHEREAS, VUS is negotiating an agreement to sell the stock of VFI to Sunrise
Coal, LLC with the effect that VFI, SFI and Prosperity will become direct and
indirect subsidiaries of Sunrise Coal, LLC (the “Sale”); and

WHEREAS, the parties desire that upon the closing of the Sale (the “Closing”)
the CMA will terminate and that the terms of this Agreement will be substituted
therefore.

NOW THEREFORE, for in and consideration of One-Hundred Dollars ($100.00), the
covenants, agreements and releases contained herein, the payments to be made
hereunder, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE 3:
  DEFINITIONS

 
“Books and Records” minute books; books of account; manuals; general, financial,
warranty and shipping records; invoices; customer and supplier lists;
correspondence; engineering, maintenance and operating records and data; mine
operations and inspection records; credit records of customers; computer files,
permits and permit applications and all other documents, records and files, but
not including any employee or personnel files.

“Claims” has the meaning set forth in Section 11.1.
 “Contracts” has the meaning set forth in Section 4.1.
“Deficiency Period” has the meaning set forth in Section 10.5.
“Direct Labor and Associated Costs” means the wages of all hourly
the  Employees,  including non-miners, and the salaries of all salaried
personnel employed by Five Star for the Mine, including a mine superintendent,
on-site managers and supervisors, payments to consultants for the Mine, if such
consultants were approved in writing in advance by Prosperity, and all bonuses
paid to, and the costs of all incentive, pension and retirement programs for,
such workers and employees, and all payroll burdens, including but not limited
to all costs associated with worker compensation such as premiums, deductibles
and self-insurance amounts associated therewith, other insurance and benefit
costs, in each case, to the extent directly allocable to the performance by Five
Star of its obligations under the CMA for the operation of  the Mine, and the
production and delivery of coal from such mine.
  “Employees” has the meaning set forth in Section 3.2.
“Excluded Costs” means (i) any local, state or federal gross, adjusted gross or
net income taxes; (ii) any fines, penalties, damage or assessments resulting
from a violation of mining laws or regulations, as the same may be in effect
from time-to-time, where such violation is flagrant, willful or intentional, or
results from “high negligence” or “reckless disregard,” as such terms are
defined in applicable MSHA rules, regulations, orders or releases in effect from
time-to-time; (iii) deductibles applicable to any of the insurance coverages
required to be maintained pursuant to the CMA to the extent the loss arises out
of any grossly negligent, willful or reckless act or failure to act by Five Star
or its employees, contractors or agents; (iv) any indemnity obligation arising
out of the CMA; or (v) any liability arising from a breach of the CMA by Five
Star.
 “Five Star Releasing Parties” has the meaning set forth in Section 11.1.
“Good Mining Practices” means such practices, acts or methods of operating a
coal mine and ancillary facilities as are generally accepted as reasonable, safe
and appropriate in the industry and in conformity with the requirements of all
applicable laws, regulations and permit requirements.

“MSHA” has the meaning set forth in Section 6.1.
“MSHA Citations” has the meaning set forth in Section 6.1.
“Permits” has the meaning set forth in Section 5.1.
“Permit Citations” has the meaning set forth in Section 5.3.
“Prosperity Books and Records” has the meaning set forth in Section 8.1.
“Prosperity Equipment” has the meaning set forth in Section 9.1.
“Prosperity IP” has the meaning set forth in Article 7.
“Prosperity Released Parties” has the meaning set forth in Section 11.1.
“Termination Fee” has the meaning set forth in Section 10.2.
“Termination Management Fee” has the meaning set forth in Section 10.5.
“Vendors” has the meaning set forth in Section 4.1.
“VFI Released Parties” has the meaning set forth in Section 11.2.
“VUS Representative” has the meaning set forth in Section 3.6.
“WARN Act” has the meaning set forth in Section 3.3.
“Worker Claims” has the meaning set forth in Section 3.5.
ARTICLE 4:
  EFFECTIVENESS

4.3EFFECTIVENESS OF AGREEMENT PROVISIONS.  This Agreement will be effective as
of the date first written above.  Notwithstanding that this Agreement is binding
and effective upon its execution, the parties acknowledge that many of the
obligations and the releases contained herein will not be effective unless and
until the Closing of the Sale occurs, as indicated herein.  Until the Closing,
the CMA will otherwise remain in full force and effect in accordance with its
terms, except to the extent it is expressly modified by this Agreement as to
pre-Closing periods and obligations.

4.4TERMINATION OF AGREEMENT.  At any time prior to the Closing, VUS may give
notice to Five Star that the Closing will not occur.  In such case, and upon
such notice from VUS, this Agreement will terminate, and the CMA will remain in
full force and effect except as expressly modified herein as to pre-Closing
periods and obligations.

ARTICLE 7:
  EMPLOYEES

7.1FIVE STAR AS EMPLOYER. The parties acknowledge that all of the workers who
have been directly involved in the operations at the Mine are and have been
employees of Five Star.  The parties further acknowledge that following the
Closing, none of those employees will be needed by Five Star for the operations
at the Mine.

7.2IDENTIFICATION AND TERMINATION OF EMPLOYEES.  Attached hereto as Exhibit 1 is
a true and complete list of all of the employees of Five Star involved in the
operations at the Mine or who are otherwise associated with the business of
Prosperity (“the Employees”).  Five Star agrees that it will, as of the Closing,
terminate the employment of the Employees.

7.3WARN NOTICE.  At the request of Prosperity, and within one (1) day of its
receipt of such request, Five Star will provide the notification to
the  Employees required under the Worker Adjustment and Retraining Notification
Act (the “WARN Act”) regarding the termination of the  Employees, in form and
substance reasonably acceptable to Prosperity.  Prosperity will provide a form
of notice for Prosperity to use and will advise Five Star as to the process for
serving the WARN Act notices.  It is anticipated that the WARN Act notice will
be given on or about July 1, 2014.  It is further anticipated that the Closing
of the Sale will occur, if at all, on or after sixty-one (61) days following
Five Star’s giving of the WARN Act notification.  The costs of giving such
notice will considered “Mining Costs” under the CMA and will be treated
accordingly.

7.4FIVE STAR CONTINUING EMPLOYMENT OBLIGATIONS.  Until the employment of each of
the  Employees is terminated, Five Star will continue to be the employer of such
Employee for all purposes (subject to Five Star’s absolute discretion as to the
continued employment of such employee), including without limitation providing
any employee benefits and being responsible for providing workers’ compensation
coverage and administering and resolving workers’ compensation claims, in
accordance with the terms of the CMA and the current practice of the parties in
the performance of the CMA.  Five Star represents that it has fully and properly
paid all wages and other benefits to all of the Employees, and Five Star will
ensure that all wages and other employee benefits have been properly and fully
paid to all the Employees as of the Closing.

7.5 WORKER CLAIMS.  Following the Closing and the termination of the CMA, Five
Star will promptly notify VUS regarding any workers compensation claims or other
claims brought by or related to the Employees (whether existing at the time of
Closing or subsequently filed “Worker Claims”) and the litigation and/or
resolution of same.  Attached hereto as Exhibit 2 is a true and complete list of
all the Worker Claims as of the date of this Agreement.  Five Star will
supplement Exhibit 2 as of the date of Closing.

 
7.6EMPLOYEE CERTIFICATE. At the Closing Five Star will provide a certification
in the form set forth in Exhibit 3 hereto that all the Employees have been fully
paid and provided with all applicable termination and other benefits to which
they are entitled, or if that is not the case, it will provide a detailed list
of unpaid wages and benefits.

7.7RESOLUTION OF WORKER CLAIMS. Following the Closing and the termination of the
CMA, (a) VUS will identify a representative to receive notices from Five Star
regarding any  Worker Claims or any other matters for which VUS may have any
liability hereunder (the “VUS Representative”); (b) Five Star will promptly
notify the VUS  Representative of any claim, demand or right of action asserted
or any action, suit or proceeding threatened or instituted with regard to
any  Employee or any Worker Claim; (c) prior to the commencement of any
negotiations or litigation, and during the course thereof, with respect to any
Employee or Worker Claim, Five Star will consult with VUS to obtain its
recommendations and direction with respect to the conduct thereof; (d) at VUS’s
option, VUS may assume (as Five Star’s agent, designee or otherwise) the
management of any or all Claims relating to Employees or Worker Claims; (e) all
negotiations and litigation with respect to any  Employee or any Worker Claim
will be conducted by or at the direction of VUS;  (f) Five Star will cooperate
with VUS in the handling of any Worker Claim or the verification of the expenses
associated therewith; (g) Five Star will not settle or consent to the entry of
any award or judgment with regard to a  Employee or a  Worker Claim without the
consent of VUS.

7.8PAYMENT OF WORKER CLAIMS.  Following the Closing, and subject to Five Star’s
compliance with the terms and provisions of Section 3.7, VUS will indemnify and
hold harmless Five Star for any out-of pocket costs (including any workers’
compensation payments that are not covered by insurance) associated with the
litigation or resolution of any Worker Claims, provided that such costs are
reasonable, verified and approved by VUS in its reasonable discretion, incurred
in accordance with this Agreement and are not Excluded Costs.

7.9PAYMENT OF LABOR COSTS.  VUS will reimburse Five Star for any Direct Labor
and Associated Costs for the Employees which are properly incurred by Five Star
prior to Closing but which are not paid at or prior to the Closing and for which
Five Star had not previously received funds in payment thereof, provided such
costs have been verified and approved by VUS in its reasonable discretion.

ARTICLE 8:
  VENDORS

8.1 CONTRACTS AND VENDORS. Exhibit 4 hereto is a true and complete list of all
of the material contracts (the “ Contracts”) between Five Star and all vendors
for materials, supplies, or services in connection with the operation of the
Mine and the business activities of Prosperity (the “Vendors”).

8.2TRANSFER OF CONTRACTS.  Five Star agrees that, at the request of Prosperity,
whether before or after the Closing, it will transfer to Prosperity or its
designee such of the Contracts as Prosperity may request, so that the
contractual relationship with the  Vendors will be directly with Prosperity or
its designee.  Five Star will cooperate with Prosperity in transferring the
contracts and in establishing a relationship between Prosperity and the
Vendors.  Notwithstanding the transfer of the Contracts, until the Closing, Five
Star will be responsible for fulfilling all of the obligations under the
Contracts and will continue to communicate with the Vendors on behalf of
Prosperity as it has in the past.  Five Star will terminate all unassumed
Contracts as of the Closing, and to the greatest extent reasonably possible will
do so in such a manner as to avoid any expense or liability to Five Star or
Prosperity.  Any liability or expenses incurred by Five Star as a result of such
termination that have been verified and approved by VUS in its reasonable
discretion will constitute a Mining Cost under the CMA and will be treated
accordingly.

8.3PAYMENT OF VENDORS.  Five Star will use its reasonable best efforts to cause
all claims for payment asserted by the Vendors for goods or services provided by
them in connection with the Mine prior to the Closing (“Vendor Claims”) to be
paid prior to, or as soon as possible after the Closing.  After the Closing,
Five Star will continue to pay Vendor Claims, subject to VUS’ verification and
approval of same in its reasonable discretion and to the extent that Five Star
had not previously received funds for the payment thereof.  Five Star will
cooperate with VUS and will provide VUS with all the information necessary to
(a) verify the correctness of any unpaid pre-Closing the Vendor charges and (b)
to contest any such charges that VUS deems unjustified or unreasonable.

8.4CERTIFICATE OF PAYMENT AND LIEN RELEASES.  At the Closing, Five Star will
provide Prosperity and VUS with a certificate in the form attached hereto as
Exhibit 5 regarding the Vendor charges. At the Closing, and thereafter with
respect to the Vendors that have not been paid in full as of the Closing, Five
Star will also provide Prosperity and VUS with such lien waivers from the
Vendors as they may request.

ARTICLE 9:
  PERMITS

9.1 PERMITS.  Attached hereto as Exhibit 6 is a true and complete list of all
permits and licenses of any kind which relate to or could affect the operations
of the Mine or the business of Prosperity (the “Permits”).

9.2TRANSFER OF PERMITS.  Five Star agrees that it will execute to be effective
as of the Closing, the Interim Operating Agreement for the Mine attached hereto
as Exhibit 7.  Further, Five Star agrees that at the Closing it will transfer,
and execute such documents as may be necessary to facilitate such transfer of,
the  Permits to Prosperity or its designee free and clear of all liens and
encumbrances arising by or through Five Star. To the extent the permits are
encumbered by liens to support a line of credit, Five Star covenants that it
will not draw on that line of credit prior to the release of any such liens.  No
transfer of the permits will be completed unless and until any bond or other
financial surety affecting Five Star has been replaced.  Five Star hereby
releases any claim it has or may have to any accrual by Prosperity or any of its
affiliates for reclamation obligations.

9.3 VIOLATIONS.  Attached hereto as Exhibit 8 is a true and complete list of all
unabated notices of violation, cessation orders, or other open regulatory
matters relating to the operations at the Mine, other than the MSHA citations
which are addressed below (with any other such violations issued before or after
the Closing with regard to the Mine, the “Permit Citations”).  Five Star will
update Exhibit 8 at the Closing.

9.4PAYMENT OF THE VIOLATIONS.  Following the Closing, VUS will reimburse,
indemnify and hold harmless Five Star from and against all out-of-pocket
expenses associated with the litigation and/or resolution of the Permit
Citations, provided that such expenses are reasonable, were and are incurred in
accordance with the terms of this Agreement and the CMA, have been verified and
approved by VUS in its reasonable discretion and are not Excluded Costs.

9.5RESOLUTION OF THE VIOLATIONS.  Following the Closing, Five Star will promptly
notify VUS of any claim, demand or right of action asserted or any action, suit
or proceeding threatened or instituted against Five Star with regard to any
Permit Citations.  After the Closing, before it commences any negotiations or
litigation with respect to any Permit Citation, Five Star will consult with VUS
to obtain its recommendations and direction with respect to the conduct
thereof.  All negotiations and litigation with respect to any the Permit
Citation will be conducted by or at the direction of VUS, and Five Star will not
settle or pay any the Permit Citation without the prior consent of the VUS
Representative.  At the option of VUS, it may assume (as Five Star’s agent,
designee or otherwise) the management of any or all Permit Citation.  Five Star
will cooperate with VUS in the handling of any Permit Citation and in the
verification of any costs or expenses related thereto.

ARTICLE 6:
  MSHA VIOLATIONS

6.1MSHA CITATIONS.  Attached hereto as Exhibit 9 is a true and complete list of
all unabated notices of violation, cessation orders, or other open matters
relating to the Mine operations issued by the Mine Safety and Health
Administration (“MSHA”) (with any such citations that may be issued before or
after the Closing with regard to the pre-Closing activities of Five Star, the
“MSHA Citations”).  Five Star will update Exhibit 9 at the Closing.

6.2PAYMENT OF MSHA CITATIONS.  Following the Closing, VUS will reimburse,
indemnify and hold harmless Five Star from and against all out-of-pocket
expenses associated with the litigation and/or resolution of the MSHA Citations,
provided that such costs are reasonable, were and are incurred in accordance
with the terms of the CMA and this Agreement, have been verified and approved by
VUS in its reasonable discretion and are not Excluded Costs.

6.3 RESOLUTION OF THE MSHA CITATIONS. Following the Closing: (a) Five Star will
promptly notify the VUS Representative of any claim, demand or right of action
asserted or any action, suit or proceeding threatened or instituted with regard
to any MSHA Citations; (b) prior to the commencement of any negotiations or
litigation with respect to any  MSHA Citation following the Closing, and during
the pendency thereof, Five Star will consult with VUS to obtain its
recommendations and direction with respect to the conduct thereof; (c) at VUS’s
option, VUS may assume (as Five Star’s agent, designee or otherwise) the
management of any or all MSHA Citations; (d) all negotiations and litigation
with respect to any MSHA Citation will be conducted by or at the direction of
VUS; (e)  Five Star will cooperate with VUS in the handling of any MSHA
Citations and in the verification of any costs associated therewith; and (f)
Five Star will not settle or pay any  MSHA Citation without the prior consent of
the VUS Representative.

ARTICLE 7:
  INTELLECTUAL PROPERTY

PROSPERITY IP.  Attached hereto as Exhibit 10 is a list of all software programs
and other intellectual property used in the business of Prosperity (the
“Prosperity IP”).  Exhibit 10 further identifies any consent needed for the
transfer of any item of Prosperity IP.  Five Star will obtain any necessary
consents to transfer any Prosperity IP to Prosperity or its designee, and at
Prosperity’s request, Five Star will transfer all Prosperity IP to Prosperity or
its designee prior to the Closing.

ARTICLE 8:
  BOOKS AND RECORDS

8.1CONTROL OF BOOKS AND RECORDS.  The parties acknowledge that all of the Books
and Records relating to the operations of the Mine and the business of
Prosperity (the “Prosperity Books and Records”) are the property of Prosperity,
and following the Closing, the Prosperity Books and Records will remain in the
ownership, custody and control of Prosperity.

8.2ACCESS TO BOOKS AND RECORDS.  Five Star will cooperate with Prosperity in
securing the Prosperity Books and Records prior to the Closing and all
Prosperity Books and Records will be at the Mine at the Closing.  Following the
Closing, Five Star will provide Prosperity such assistance as may be necessary
for Prosperity to access the Prosperity Books and Records, including providing
passwords, software assistance and other support.

8.3POST-CLOSING ACCESS AND COOPERATION.  Notwithstanding the foregoing,
Prosperity will provide Five Star and VUS with full access to, will permit Five
Star and VUS to make copies (at their expense) of, the Prosperity Books and
Records, upon prior written notice and during regular business hours, as may be
reasonably necessary or convenient for the resolution of any Employee Claims,
Vendor Claims, Permit Citations or MSHA Citations, or any other post-Closing
matters for which Five Star or VUS bears any responsibility or obligation.  Five
Star and VUS will cooperate in good faith to facilitate the performance of all
obligations and activities contemplated by this Agreement.

ARTICLE 9:
 EQUIPMENT AND OTHER
PERSONAL PROPERTY;LEASES AND EASEMENTS
 

9.1PROSPERITY EQUIPMENT.  The parties acknowledge that all of the equipment,
tools and inventory, including without limitation, spare parts and materials,
used or obtained for use in connection with the operations of the Mine and the
business of Prosperity (the “Prosperity Equipment”) has been purchased, directly
or indirectly, by Prosperity and that such purchases were and are for the
benefit of Prosperity.

9.2TRANSFER OF PROSPERITY EQUIPMENT.  To formalize that ownership, and for
avoidance of doubt, Five Star will simultaneously with the execution of this
Agreement, execute the bill of sale attached hereto as Exhibit 11 transferring
all of the Prosperity Equipment to Prosperity.

9.3CONTROL OF PROSPERITY EQUIPMENT.  From the date of this Agreement, Five Star
will maintain and operate the Prosperity Equipment in accordance with the CMA
and will use its best efforts to insure that none of the Prosperity Equipment is
lost, stolen or otherwise dissipated.  At the Closing date, all of the
Prosperity Equipment will be physically on the Mine premises except for items
that are off site for repair.  Five Star will provide Prosperity with a list of
such items at the Closing.

9.4        PROSPERITY LEASES AND EASEMENTS. As soon as is practicable after the
execution of this Agreement, Five Star will transfer to Prosperity or its
designee and by assignments in form and substance reasonably satisfactory to
Prosperity any and all leases, easements, rights-of-way, surface use agreements
and any and all other real property interests of any kind that relate to, affect
of have any connection with (a) the present or future operation of the Mine; (b)
the present or future business of Prosperity; or (c) the real property used in
connection with those operations or that business, including without limitation
those listed on the attached Exhibit 12.

ARTICLE 10:
  TERMINATION FEE

10.1  NO LUMP-SUM PAYMENT. The parties acknowledge and agree that more than
30,000,000 tons of coal have been mined from the reserves associated with the
Mine.  Consequently, no lump-sum Termination Fee payment will be due to Five
Star pursuant to Section I.A.8 of the CMA on the termination of the CMA.

10.2 TERMINATION FEE. Following the Closing and the termination of the CMA, in
full satisfaction of the Termination Fee required by Section I.A.8 of the CMA,
Prosperity will pay to Five Star an amount equal to $.30 for each ton of clean
coal mined and sold after the Closing date from the reserves which are currently
part of the Mine plan, as and when such coal is mined, processed and sold (the
“Termination Fee”).  For avoidance of doubt, the parties agree that as of the
date of this Agreement, the area constituting the Mine plan (the “Mine Plan
Area”) is indicated on the map attached hereto as Exhibit 13.  Any reserve areas
or mineral interests added to the Mine Plan Area will not be subject to the
Termination Fee.

10.3 PAYMENT TERMS.  Following the Closing and the termination of the CMA,
Prosperity will pay Five Star the Termination Fee for each ton of clean coal
mined and sold from the Mine Plan Area after the Closing date.  The payment will
be made by Prosperity on or before the twentieth (20th) day of the calendar
month following the month during which such coal was sold.  The payment will be
made by check to Five Star at the address set forth in Section 16.3, below, as
it may be amended in accordance with that Section.  Five Star will have
reasonable access, on at least 72 hours’ notice and during business hours, for
itself and its representatives to such records of Prosperity as may be
reasonably necessary for Five Star to confirm the accuracy of the Termination
Fee payments made to it.

10.4WAIVER OF TERMINATION NOTICE.  Section X.B of the CMA requires Prosperity to
give Five Star six (6) months’ notice of a voluntary termination of the
CMA.  Five Star agrees that this Agreement serves as such notice, and that no
further notice will be required except for notice to Five Star of the occurrence
of the Closing.

 
10.5TERMINATION MANAGEMENT FEE.  Within sixty (60) days following the Closing,
VUS will pay to FIVE STAR an amount equal to One Dollar ($1.00) multiplied times
the tons of: (a) coal contained in the clean coal stockpiles at the Mine and (b)
the clean coal equivalent contained in the raw coal stockpiles at the Mine
(determined based on the monthly mine production reports prepared in the
ordinary course of business and in accordance with past practice), in each case
for which Five Star has not already been paid its Management Fee provided for in
the CMA (the “Termination Management Fee”).

10.6DEFICIENCY MANAGEMENT FEE.  If the Closing occurs less than six (6) months
following the execution of this Agreement, the difference between the number
days following the execution of this Agreement and 180 days will be referred to
hereafter as the “Deficiency Period.”  Following the Closing, VUS will pay to
Five Star an amount equal to One Dollar and Thirty-Two and a Half Cents ($1.325)
multiplied times the applicable number of tons for each day of the Deficiency
Period, based on the attached Exhibit 14 which as of the date of this Agreement
were budgeted to be shipped during the Deficiency Period (the “Deficiency
Management Fee”).  Exhibit 15 shows budgeted tons on a monthly basis.  In
determining the number of tons to be used in calculating the Deficiency
Management Fee, the budgeted tons for each day of the Deficiency Period will be
determined by dividing the monthly tons by the number of days in the month.

10.7RELEASE OF PURCHASE OPTION. In addition to any other release contained
herein, upon the Closing and termination of the CMA, Five Star hereby releases
any claim to a right to purchase the Mine as provided in Section X.C of the
agreement, or otherwise.

ARTICLE 11:
  RELEASES AND TRANSFER OF CLAIMS

11.1FIVE STAR RELEASE OF PROSPERITY.  Effective as of the Closing, and except as
expressly provided below, Five Star and its officers, members, partners,
managers and directors (individually and on behalf of any heirs, executors,
administrators, and successors and assigns, as applicable) (together, the “Five
Star Releasing Parties”) do fully, finally, unconditionally, irrevocably and
forever release, acquit, completely discharge and hold harmless Prosperity and
its parent, subsidiary and affiliated entities, and its and their  current and
former members, shareholders, agents, employees, insurers, attorneys, officers,
directors, managers, board members, representatives, consultants, advisors,
parents, affiliates, subsidiaries, contractors, associates, personal
representatives, heirs, executors, trustees, beneficiaries, administrators,
insurance agents, persons or entities exercising subrogation rights, and the
successors, and assigns of each of them (together, the “Prosperity Released
Parties”)  from and against any and all manner of action and actions, cause and
causes of action, claims, demands, warranties, covenants, contracts, agreements,
promises, controversies, damages, variances, judgments, executions, costs,
losses, claims for court costs and attorneys’ fees, liabilities and obligations
of any kind or nature whatsoever, and rights, matured or unmatured, liquidated
or unliquidated, whether accrued or yet to accrue, known or unknown, asserted or
unasserted, contingent or absolute, suspected or unsuspected, direct or
derivative, in law, in equity or otherwise, that it has, or may have, for, on,
or by reason of any matter, cause or things whatsoever from the beginning of the
world to this day, including, but not limited to any and all claims, complaints,
liabilities, disputes, obligations, promises, agreements, controversies,
damages, actions, causes of action, rights, demands, costs, losses, and claims
for court costs and attorneys’ fees of any kind whatsoever (known or unknown)
(collectively, “Claims”) arising from, in connection with, or related to the CMA
and any other event, origin or agreement occurring or entered into prior to the
Closing, other than the obligations of VUS under this Agreement and the
obligations of Oaktown 1 under the Interim Operating Agreement.

11.2FIVE STAR RELEASE OF VFI AND SFI.  Effective as of Closing, and except as
expressly provided below, the Five Star Releasing Parties do fully, finally,
unconditionally, irrevocably and forever release, acquit, completely discharge
and hold harmless VFI, SFI and its and their parent, subsidiary and affiliated
entities and its and  their current and former members, shareholders, agents,
employees, insurers, attorneys, officers, directors, board members,
representatives, consultants, advisors, parents, affiliates, subsidiaries,
contractors, associates, personal representatives, heirs, executors, trustees,
beneficiaries, administrators, insurance agents, persons or entities exercising
subrogation rights, and the successors, and assigns of each of them (together,
the “VFI Released Parties”) from and against any and all Claims arising from, in
connection with, or related to the CMA and any other event, origin or agreement
occurring or entered into prior to the Closing, other than any obligation of VUS
under this Agreement.

11.3TRANSFER OF PROSPERITY CLAIMS TO VUS.  Effective as of the Closing, and
except as otherwise provided herein, Prosperity hereby conveys to VUS any and
all manner of action and actions, cause and causes of action, claims, demands,
controversies, damages, variances, costs, losses, claims for court costs and
attorneys’ fees, liabilities and obligations of any kind or nature whatsoever,
and rights, matured or unmatured, liquidated or unliquidated, whether accrued or
yet to accrue, known or unknown, asserted or unasserted contingent or absolute,
suspected or unsuspected, direct or derivative, in law, in equity or otherwise,
that it has, or may have against Five Star for, on, or by reason of the CMA, any
indemnity thereunder or the performance or any other aspect thereof and any
other contract or matter existing at the time of this Agreement, other than the
Interim Operating Agreement.

11.4TRANSFER OF VFI AND SFI CLAIMS TO VUS.  Effective as of the Closing, and
except as otherwise provided herein, VFI and SFI each hereby conveys to VUS any
and all manner of action and actions, cause and causes of action, claims,
demands, controversies, damages, variances, costs, losses, claims for court
costs and attorneys’ fees, liabilities and obligations of any kind or nature
whatsoever, and rights, matured or unmatured, liquidated or unliquidated,
whether accrued or yet to accrue, known or unknown, asserted or unasserted,
contingent or absolute, suspected or unsuspected, direct or derivative, in law,
in equity or otherwise, that it has, or may have against Five Star for, on, or
by reason of the CMA or the performance or any other aspect thereof and any
other contract or matter existing at the time of this Agreement, other than the
Interim Operating Agreement.

ARTICLE 12:
  INDEMNITY

12.1VUS INDEMNITY.  Following the Closing, VUS will and hereby does assume all
of the remaining obligations of Prosperity under the CMA.  The obligations thus
assumed by VUS will be subject to all defenses, offsets or other limitations
provided for in the CMA and/or that would otherwise be available to
Prosperity.  In addition, to the extent they are not Excluded Costs and subject
to the other provisions of this Agreement, VUS will indemnify Five Star for any
Claims and expenses incurred by Five Star as a result of: (a) the Interim
Operating Agreement (to the extent that such Claims are not paid by Prosperity);
(b)  Worker Claims; (c) Vendor Claims; (d) the notice given by Five Star under
the WARN Act; and (e) expenses incurred in connection with the performance of
this Agreement.  With regard to any claims of Five Star pursuant to item (a) of
this Section 12.1, Five Star will timely present all such Claims and expenses to
Prosperity and will make reasonable efforts to obtain payment of same from
Prosperity, provided however, Five Star need not institute litigation to recover
payment of those Claims, and if payment has not been received by BPM within 90
days, BPM may submit the charge to VUS, and VUS will pay BPM within 10 days
thereafter.  If VUS pays any Claim of BPM made pursuant to item (a) of this
Section 14.1, BPM will assign the Claim under the relevant Interim Operating
Agreement to VUS.  If VUS pays any Claim of Five Star made pursuant to item (a)
of this Section 12.1, Five Star will assign the Claim under the Interim
Operating Agreement to VUS.

12.2FIVE STAR INDEMNITY.  Following the Closing, Five Star will indemnify and
hold harmless VUS from and against any and all Claims arising directly or
indirectly from  (i) any material inaccuracy or breach of the CMA or this
Agreement; (ii) any failure by Five Star to use Good Mining Practices at the
Mine; (iii) any material inaccuracy or breach of any representation or warranty
contained in this Agreement or in the CMA by Five Star; (iv) any failure to
abate any citation under any permit if the citation was received prior to
Closing except to the extent such citation cannot be fully abated prior to
Closing despite Five Star’s best efforts to do so; or (v) any act or failure to
act by or on behalf of Five Star that is willful or reckless, or grossly
negligent.

ARTICLE 19:
  CONFIDENTIALITY

Following the Closing and/or the termination of the CMA, Five Star will hold in
confidence and will not make public or divulge to a third party any information
obtained as a result or in the cause of the performance of the CMA except for
disclosures to its attorneys, auditors, valuation experts or accountants or as
compelled by law or regulation, or as may be required by any state or federal
regulatory agency, or pursuant to a confidentiality and non-disclosure agreement
duly executed by the recipient of the information and pursuant to which the
recipient covenants to take reasonable efforts to maintain such information in
confidence.  If Five Star is or could be legally compelled to disclose such
information, it will notify the other parties prior to making the disclosure.

ARTICLE 20:
  REPRESENTATION AND WARRANTIES OF FIVE STAR

Five Star hereby represents and warrants that the following are true as of the
date hereof and will be true as of the date of the Closing:

20.1ORGANIZATION.  Five Star is a limited liability company validly organized
and existing under the laws of the State of Indiana and has corporate power and
authority to execute and deliver this Agreement and to carry on its business.

20.2PERFORMANCE OF OBLIGATIONS.  Five Star has performed and will perform all of
its obligations in connection with the Mine and in accordance with Good Mining
Practices and all other requirements of the CMA.

 
20.3PAYMENT OF EMPLOYEE OBLIGATIONS.   Five Star has paid and/or provided to all
of the  Employees all of the wages, benefits and other payments to which they
are entitled, and in connection with such wages, benefits and payments, Five
Star has properly withheld and paid over to the relevant taxing authority all
amounts required to be so withheld and paid over.

20.4PAYMENT OF VENDORS. All accounts of Vendors are current, and no mechanic’s,
carriers’, workmen’s, repairmen’s or other like liens are or could be asserted
against the real or personal property of Prosperity.

ARTICLE 21:
  ACCOUNTING

21.1ACCOUNTING FOR PRE-CLOSING FUNDS.  At the date of Closing, Five Star will
provide VUS with a statement of all funds provided by Prosperity to Five Star
pursuant to the CMA which remain in the bank accounts of or are otherwise in the
possession of Five Star.

21.2POST-CLOSING ACCOUNTING.  On or before 60 days following the Closing, Five
Star and VUS will account to each other for all funds paid and received pursuant
to the CMA following the Closing, and will continue to account to each other
thereafter as necessary to ensure that all amounts paid and received are
properly accounted for.

ARTICLE 22:
  MISCELLANEOUS

22.1CHOICE OF LAW.  The laws of the state of Indiana shall govern the validity,
interpretation, and performance of this Mining Agreement.

22.2DISPUTE RESOLUTION.  As a condition precedent to the initiation of
litigation, the President, Chief Executive Officer or Chief Operating Officer of
the ultimate parent corporation of each of VUS and Five Star shall be given
notice of the dispute and shall meet in person on at least one (1) occasion in
an attempt to resolve the dispute.  If the dispute is not resolved or such
meeting does not occur within ten (10) days of the date such meeting was
requested, then any party may pursue its legal or equitable remedies.

22.3NOTICES.  Any Notice, request or other communication permitted or required
by this Agreement to be given to any Party shall be in writing and shall be
given to such Party at its address set forth below or such other address or as
such Party may hereafter specify for the purpose by notice to the other
Party.  Each such notice, request or other communication shall be effective if
given by overnight courier, when delivered at the address specified below (or
such other address as hereafter may be specified).

TO:  PROSPERITY
Fuels Mine No. 1, LLC
211 NW Riverside Drive
One Vectren Square
Evansville, IN 47708
Attn: Randy Beck
Attn: Ronald E. Christian

TO:   FIVE STAR

Five Star Mining
11700 Water Tank Rd
Cynthania, IN 47612
Attn: President

With a copy to:

Terry G. Farmer
Bamberger, Foreman, Oswald & Hahn, LLP
7th Floor Hulman Building
20 N.W. 4th St.
Evansville, IN 47704-0657
 
TO:    VUS
Vectren Utility Services, Inc.
211 NW Riverside Drive
One Vectren Square
Evansville, IN 47708
Attn: Ronald E. Christian
 
TO:   VFI
Vectren Fuels, Inc.
211 NW Riverside Drive
One Vectren Square
Evansville, IN 47708
Attn: Ronald E. Christian

To: SFI
SFI Coal Sales, LLC
211 NW Riverside Drive
One Vectren Square
Evansville, IN 47708
Attn: Ronald E. Christian

16.4 ENTIRE AGREEMENT; AMENDMENT.  This Agreement contains the entire
understanding of the Parties and supersedes all previous communications,
representations or agreements, either oral or written, among the Parties with
respect to the subject matter hereof.  No amendment to this Agreement shall be
effective unless approved and executed in writing by each party hereto.

16.5 STATUS OF PARTIES; NO THIRD PARTY BENEFICIARIES.  This Agreement does not
create the relationship of joint venture, partnership, association, legal
representative or principal and agent between or among the parties.  Except as
expressly provided in Article 11, there are no third party beneficiaries to this
Agreement.

      16.6 SEVERABILITY.  In the event that any of the terms, covenants or
conditions of this Agreement or the application of any such term, covenant or
condition shall be held invalid as to any person or circumstances by any court
having jurisdiction in the premises, the remainder of this Agreement and the
application of its terms, covenants or conditions to such persons or
circumstances shall not be affected thereby but shall remain in force and
effect.

16.7 NO WAIVER.  Any waiver at any time by any party of its rights with respect
to any default or any other matter arising in connection with this Agreement
shall not be deemed a waiver with respect to any subsequent default or matter.

16.8 REMEDIES CUMULATIVE.  The remedies provided by this Agreement shall be
cumulative and in addition to other remedies provided at law or in equity.

16.9 BINDING EFFECT.  All of the respective covenants, undertakings and
obligations of each of the parties set forth in this Agreement (i) shall apply
to and bind all other persons, claiming by, through or under any of the parties
and their permitted successors or assigns; and (ii) shall be for the benefit of
the parties and their respective successors and assigns.  All such covenants and
obligations shall be binding upon any Person which acquires any of the rights,
titles and interests of any party in, to and under this Agreement.  Upon any
assignment of this Agreement not prohibited by the terms hereof and after
compliance with all requirements, concerning assignments contained in this
Agreement, the parties hereto shall look solely to the assignee to perform all
obligations assumed by the assignee and accruing from and after the assignment,
and the original party hereto assigning such obligations shall have no liability
hereunder with respect thereto.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the Effective Date.

PROSPERITY MINE, LLC
 

By:/s/ Randy L. Beck______________
Its:_President____________________

VECTREN FUELS, INC.
 

By: /s/ Randy L. Beck______________
Its:_President ____________________
 

SFI COAL SALES, LLC
 

By:_/s/ Randy L. Beck_____________
Its:_President ____________________

VECTREN UTILITY SERVICES, INC.
 
 
By: /s/ Ronald E. Christian _________
Its:_Vice President________________

 
FIVE STAR MINING, INC.

By:/s/ Donald Blankenberger___________
Its:_President_______________________

61181004.3

61182033.11
 

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D-1
July 1, 2014
 
John A. Brandt
Lafayette Energy Company
200 Frontage Road, Suite 300
Burr Ridge, IL 60527

Re:
Oaktown Sales Marketing Agreement Dated May 25, 2010

 
Dear John:
 
As you may know, today Vectren publicly announced it has entered into an
agreement to sell Vectren Fuels, Inc. (“VFI”), which will include its
subsidiaries Oaktown Fuels Mine No. 1, LLC and Oaktown Fuels Mine No. 2,
LLC.  As we discussed, this letter serves as notice to you that, upon closing of
the sale (the “Closing”), the above-referenced Sales Marketing Agreement (the
“Agreement”) will be terminated. We do not expect the Closing to occur prior to
September 1, 2014, and it could close as late as the end of November.
 
We have appreciated your work in performing the agreement, and we value our
relationship with you.  If the sale should not close, we will need Lafayette to
continue its good work for VFI, and we would not want the Agreement to
terminate. We recognize that Section 7 of the Agreement requires that we give
Lafayette 30 days’ notice of termination.  Consequently, we are sending you this
conditional notice of termination that the Agreement will terminate at the
Closing (which will be more than 30 days after the date of this letter), if a
Closing occurs.  However, if the sale should not close, this notice will be
ineffective, and the Agreement will continue in effect uninterrupted.
 
If the Closing occurs and the Agreement terminates, VFI (under new ownership)
will perform its post-termination obligations to Lafayette by paying the
contract commissions on firm sales of coal as and when the payments for such
sales are received, in accordance with past practice.  The attached schedule
shows the contracts or sales to which those post-termination commissions may be
applicable.
 
As we also discussed, we want to meet with you in the next few days to discuss
our current and future coal supply and sales situation and to discuss
Lafayette’s activities under the Agreement between now and the Closing, if it
occurs.
 

 
 
Very Truly Yours,

/s/ Randy Beck

Randy Beck, President
Oaktown Fuels Mine No. 1, LLC
Oaktown Fuels Mine No. 2, LLC
Vectren Fuels, Inc.

61191319.3

 
 
 
 

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D-2
July 1, 2014
 
John A. Brandt
Lafayette Energy Company
200 Frontage Road, Suite 300
Burr Ridge, IL 60527

Re:
Sales Marketing Agreement Dated May 24, 2000

 
Dear John:
 
As you may know, today Vectren publicly announced it has entered into an
agreement to sell Vectren Fuels, Inc. (“VFI”), which will include its subsidiary
Prosperity Mine, LLC.  As we discussed, this letter serves as notice to you
that, at or following the closing of the sale (the “Closing”), the
above-referenced Sales Marketing Agreement (the “Agreement”) will be terminated.
We do not expect the Closing to occur prior to September 1, 2014, and it could
close as late as the end of November.
 
We have appreciated your work in performing the agreement, and we value our
relationship with you.  If the sale should not close, we will need Lafayette to
continue its good work for VFI, and we would not want the Agreement to
terminate. We recognize that Section 8 of the Agreement requires that we give
Lafayette 90 days’ notice of termination.  Consequently, we are sending you this
conditional notice of termination that the Agreement will terminate at the
Closing (if it is more than 90 days after the date of this letter), or 90 days
after the date of this letter (if the Closing occurs sooner).  However, if the
sale should not close, this notice will be ineffective, and the Agreement will
continue in effect uninterrupted.
 
If the Closing occurs and the Agreement terminates, VFI (under new ownership)
will perform its post-termination obligations to Lafayette by paying the
contract commissions on firm sales of coal as and when the payments for such
sales are received, in accordance with past practice.  The attached schedule
shows the contracts or sales to which those post-termination commissions may be
applicable.
 
As we also discussed, we want to meet with you in the next few days to discuss
our current and future coal supply and sales situation and to discuss
Lafayette’s activities under the Agreement between now and the Closing, if it
occurs.
 
Very Truly Yours,

/s/ Randy Beck

Randy Beck, President
Vectren Fuels, Inc.
Prosperity Mine, LLC

61191320.3
 
 

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