EXHIBIT 10.1
 
 
 
 
 
 
 
PURCHASE AGREEMENT
 
BY AND BETWEEN
 
 
 
LIGHTFOOT CAPITAL PARTNERS, LP
 
INTERNATIONAL INDUSTRIES, INC.
 
INTERNATIONAL RESOURCE PARTNERS GP LLC
 
KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY
 
AND
 
TORTOISE CAPITAL RESOURCES CORPORATION
 
 
AND
 
 
JAMES RIVER COAL COMPANY
 
AND
 
INTERNATIONAL RESOURCE PARTNERS GP LLC
 
AS AGENT
 
 
 
 
 
 
 

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TABLE OF CONTENTS
 

ARTICLE I. DEFINITIONS 2      1.1   Certain Defined Terms 2   1.2   Other
Interpretive Provisions 13       ARTICLE II. PURCHASE AND SALE 14   2.1
          Purchase Price 14   2.2   The Closing 15   2.3   Deliveries at the
Closing 15   2.4   Estimated Closing Adjustments 16   2.5   Closing Adjustments
17   2.6   Payment of the Indebtedness 18   2.7   Escrow Amount and Escrow Fund
19   2.8   Escrow Release 19       ARTICLE III. REPRESENTATIONS AND WARRANTIES
OF   IRP GP AND RESOURCE PARTNERS RELATED TO THE   ACQUIRED COMPANIES 22   3.1  
Organization 22   3.2   Authorization; Enforceability 22   3.3   Interests 22  
3.4   Financial Statements 23   3.5   Absence of Undisclosed Liabilities 23  
3.6   No Conflicts or Approvals 24   3.7   Governmental Authorization 24   3.8  
Compliance; Permits; Seller Bonds 24   3.9   Proceedings; Governmental Orders 26
  3.10   Absence of Certain Changes 27   3.11   Tax Matters 28   3.12   Employee
Benefits 30   3.13   Employees; Labor and Employee Relations 31   3.14  
Intellectual Property 33   3.15   Contracts 33   3.16   Environmental Matters 35
  3.17   Insurance 37   3.18   Personal Property Assets 37   3.19   Real
Property 38   3.20   No Brokers’ or Other Fees 41   3.21   Affiliate
Transactions 41   3.22   Customers and Suppliers 41   3.23   Absence of Certain
Business Practices 41   3.24   Full Disclosure 42

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ARTICLE IIIA. REPRESENTATIONS AND WARRANTIES OF SELLERS 42   3A.1   Organization
42   3A.2   Authorization; Enforceability 42   3A.3   No Conflicts or Approvals
42      3A.4   Interests 42       ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF
BUYER 43   4.1           Organization 43   4.2   Authorization; Enforceability
43   4.3   No Conflicts or Approvals 43   4.4   Governmental Authorization 43  
4.5   No Brokers’ or Other Fees 44   4.6   Permit Blocking 44       ARTICLE V.
EXCLUSIVE REPRESENTATIONS AND WARRANTIES 44   5.1   WARRANTIES EXCLUSIVE 44    
  ARTICLE VI. COVENANTS AND AGREEMENTS 45   6.1   Conduct of Business Prior to
the Closing 45   6.2   Redemption 47   6.3   Access and Investigation 47   6.4  
Required Approvals; Consents 47   6.5   Further Actions 48   6.6   Financing 48
  6.7   Further Assurances 51   6.8   Purchase Price Deductions; Special
Indemnity 51   6.9   Guarantees; Seller Bonds 52   6.10   Permits 53   6.11  
Confidentiality 54   6.12   Tax Matters 54   6.13   Employee Plans 56   6.14  
Antitrust Notification 56   6.15   WARN Act 57   6.16   Schedules 58   6.17  
Release 58   6.18   Employees 59       ARTICLE VII. CONDITIONS PRECEDENT TO
SELLERS’   OBLIGATIONS TO CLOSE 59   7.1   Representations and Warranties 59  
7.2   Performance 60   7.3   Officer’s Certificates 60   7.4   Governmental
Approvals 60   7.5   HSR Act 60   7.6   AVS List 60   7.7   Seller Guarantees
and Seller Bonds Arrangements 60

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      7.8   Injunctions 60   7.9   Closing Deliveries 60     ARTICLE VIII.
CONDITIONS PRECEDENT TO BUYER’S   OBLIGATIONS TO CLOSE 61   8.1  
Representations and Warranties 61   8.2           Performance 61   8.3  
Officer’s Certificate 61   8.4   Governmental Approvals 61   8.5   Other
Approvals 61   8.6   Injunctions 61   8.7   Closing Deliveries 61   8.8  
Material Adverse Effect 61   8.9   Permits 62   8.10   Repayment of Indebtedness
62   8.11   Redemption 62   8.12   Environmental Reports 62   8.13   Shared
Services Agreement 62     ARTICLE IX. TERMINATION 62   9.1   Termination 62  
9.2   Procedure and Effect of Termination 63       ARTICLE X. INDEMNIFICATION 63
  10.1   Indemnification 63   10.2   Treatment of Indemnification Payments 67  
    ARTICLE XI. MISCELLANEOUS 67   11.1   Agent 67   11.2   Fees and Expenses 68
  11.3   Governing Law 68   11.4   Amendment 68   11.5   Assignment 68   11.6  
Waiver 68   11.7   Notices 69   11.8   Complete Agreement 69   11.9  
Counterparts 69   11.10   Publicity 69   11.11   Headings 70   11.12  
Severability 70   11.13   Third Parties 70   11.14   Jurisdiction; Service of
Process 70   11.15   Further Assurances 70   11.16   Time of the Essence 70  
11.17   Construction 70   11.18   Specific Performance 71

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     11.19           WAIVER OF JURY TRIAL 71   11.20   Consent of Limited
Partners 71             Exhibit A Escrow Agreement A-1

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PURCHASE AGREEMENT
 
    This PURCHASE AGREEMENT, dated as of March 6, 2011, is entered into by and
between LIGHTFOOT CAPITAL PARTNERS, LP, a Delaware limited partnership
(“Lightfoot”), INTERNATIONAL INDUSTRIES, INC., a West Virginia corporation
(“International Industries”), INTERNATIONAL RESOURCE PARTNERS GP LLC, a Delaware
limited liability company (“IRP GP”), KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY,
a Maryland limited partnership (“KED”), and TORTOISE CAPITAL RESOURCES
CORPORATION, a Maryland corporation, (“Tortoise”, and Lightfoot, International
Industries, IRP GP and KED each, a “Seller” and collectively “Sellers”), JAMES
RIVER COAL COMPANY, a Virginia corporation (“Buyer”), and IRP GP, solely to
accept the duties herein as “Agent,” and in its individual capacity as a Seller.
 
       WHEREAS, Lightfoot, International, IRP GP, KED and Tortoise own all the
outstanding limited partnership units and general partnership units of
International Resource Partners LP, a Delaware limited partnership (“Resource
Partners”) as set forth on Schedule 3.3;
 
       WHEREAS, certain individuals own limited partnership units of Resource
Partners as set forth on Schedule 3.3;
 
       WHEREAS, on or before the Closing Date, Sellers will own all of the
outstanding limited partnership units and general partnership units of Resource
Partners;
 
       WHEREAS, Resource Partners owns all of the issued and outstanding
membership interests of International Resources Holdings I LLC, a Delaware
limited liability company (“Holdings I”) through itself and IRP WV Corp., a
Delaware corporation (“IRP WV”);
 
       WHEREAS, Holdings I owns all of the issued and outstanding membership
interests of International Resources Holdings II LLC, a Delaware limited
liability company (“Holdings II”);
 
       WHEREAS, Holdings II owns all of the issued and outstanding membership
interests of International Resources, LLC, a West Virginia limited liability
company (“Resources”), and Resources in turn owns all of the issued and
outstanding membership interests in Hampden Coal Company, LLC, a West Virginia
limited liability company (“Hampden”), Rockhouse Creek Development, LLC, a West
Virginia limited liability company (“Rockhouse”), Chafin Branch Coal Company,
LLC, a West Virginia limited liability company (“Chafin”), Snap Creek Mining,
LLC, a West Virginia limited liability company (“Snap Creek”), Logan & Kanawha
Coal Co., LLC, a West Virginia limited liability company (“L&K”), and IRP
Kentucky LLC, a Kentucky limited liability company (“IRP Kentucky”) and IRP
Kentucky in turn owns all of the issued and outstanding membership interests in
each of Laurel Mountain Resources LLC, a Kentucky limited liability company
(“LMR”) and Buck Branch Resources LLC, a Kentucky limited liability company
(“Buck Branch”; Buck Branch together with Hampden, Rockhouse, Chafin, Snap
Creek, L&K, IRP Kentucky, and LMR, collectively, the “Companies”; and the
Companies together with Resource Partners, IRP WV, Holdings I, Holdings II and
Resources, collectively, the “Acquired Companies”);
 
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       WHEREAS, Resource Partners through the Acquired Companies, owns certain
coal mining assets including permits, coal leases, fee mineral properties,
equipment, buildings, preparation facilities, mine areas and complexes, fixtures
and other assets related to the business of coal mining (“Mining Assets”); and
 
       WHEREAS, Sellers desire to sell and Buyer desires to purchase all of the
Partnership Interests, as defined herein.
 
       NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements herein contained and intending to be
legally bound hereby, the parties hereto hereby agree as follows:
 
ARTICLE I
 
DEFINITIONS
 
       1.1 Certain Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:
 
       “Acquired Companies” has the meaning set forth in the recitals to this
Agreement.
 
       “Accounting Principles” has the meaning set forth in Section 2.4(a).
 
       “Additional Reserves” has the meaning set forth in Section 2.8(b)(i).
 
       “Adjustment Payment” has the meaning set forth in Section 2.5(f).
 
       “Affiliate” means, with respect to any specified Person, any other Person
that directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified Person.
 
       “Affiliated Group” means any affiliated group within the meaning of
Section 1504(a) of the Code or any similar group defined under a similar
provision of state, local or foreign tax law.
 
       “Agent” has the meaning set forth in Section 11.1
 
       “Agreement” means this Purchase Agreement (including the Exhibits and
Schedules), as amended, modified or supplemented from time to time.
 
       “Alternative Financing” has the meaning set forth in Section 6.6(d).
 
       “Antitrust Authority” has the meaning set forth in Section 6.14(a).
 
       “Antitrust Laws” has the meaning set forth in Section 6.14(a).
 
       “Applicable Rate” has the meaning set forth in Section 2.5(f).
 
       “Applications” has the meaning set forth in Section 3.8(c).
 
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       “Auditor” means Deloitte LLP, or such other accounting firm as the
parties shall mutually agree to select.
 
       “Audited Financials” has the meaning set forth in Section 3.4(a).
 
       “Benefit Plan” has the meaning set forth in Section 3.12(a).
 
       “Bonuses” has the meaning set forth in Section 6.8(b).
 
       “Buck Branch” has the meaning set forth in the recitals to this
Agreement.
 
       “Business Day” means any day that is not a Saturday, a Sunday or other
day on which banks are required or authorized by Law to be closed in the City of
Charleston, West Virginia and the City of New York, New York.
 
       “Buyer” has the meaning set forth in the first sentence of this
Agreement.
 
       “Buyer Indemnified Taxes” means any and all Taxes together with any
costs, expenses or damages (including court and administrative costs and
reasonable legal fees and expenses incurred in investigating and preparing for
any audit, examination, litigation or other judicial or administrative
proceeding) arising out of, in connection with or incident to the determination,
assessment or collection of such Taxes (a) imposed on any Acquired Company, or
for which it may otherwise be liable, with respect to (i) any Tax period ending
on or prior to the Closing Date or (ii) the portion of any Straddle Period
(determined in accordance with Section 6.12(a)) ending on the Closing Date, (b)
arising out of, in connection with, or related to, a breach of any
representation or warranty set forth in Section 3.11 or covenants set forth in
Section 6.12, (c) of any member of an affiliated, consolidated, combined or
unitary group of which any Acquired Company (or any predecessor thereof) is or
was a member on or prior to the Closing Date by reason of Treasury Regulation
Section 1.1502-6(a) or any analogous or similar state or local law or (d) of any
other Person for which any Acquired Company is or has been liable as a
transferee or successor, by contract or otherwise; provided, however, that any
such Tax shall not be a Buyer Indemnified Tax to the extent such Tax was
included as a liability in the calculation of the Closing Date Net Working
Capital.
 
       “Buyer Indemnitees” has the meaning set forth in Section 10.1(a).
 
       “Buyer Objection Notice” has the meaning set forth in Section 2.5(b).
 
       “Buyer Released Parties” has the meaning set forth in Section 6.17(a).
 
       “Buyer Review Period” has the meaning set forth in Section 2.5(b).
 
       “Buyer’s Advisors” has the meaning set forth in Section 6.3.
 
       “Cash” has the meaning set forth in Section 2.1(a).
 
       “Cash Portion of Purchase Price” has the meaning set forth in Section
2.1(a).
 
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       “Chafin” has the meaning set forth in the recitals to this Agreement.
 
       “Change of Control Payments” has the meaning set forth in 6.8(b).
 
       “Claim Amount” has the meaning set forth in Section 2.8(a) below.
 
       “Claim Notice” has the meaning set forth in Section 2.8(a) below.
 
       “Closing” has the meaning set forth in Section 2.2.
 
       “Closing Cash Consideration” has the meaning set forth in Section 2.1(a).
 
       “Closing Date” has the meaning set forth in Section 2.2.
 
       “Closing Date Net Working Capital” has the meaning set forth in Section
2.5(a).
 
       “Closing Date Net Working Capital Statement” has the meaning set forth in
Section 2.5(a).
 
       “Closing Statement” has the meaning set forth in Section 2.5(a).
 
       “COBRA” has the meaning set forth in Section 3.12(d).
 
       “Code” means the Internal Revenue Code of 1986, as amended.
 
       “Commitment Letter” has the meaning set forth in Section 6.6(a).
 
       “Companies” has the meaning set forth in the recitals to this Agreement.
 
       “Company Employees” has the meaning set forth in Section 3.12(a).
 
       “Confidentiality Agreement” has the meaning set forth in Section 6.11.
 
       “Consent” means any consent, approval, waiver or other authorization of,
with or to any Person, or the expiration or termination of the waiting period
under any Law that is designed or intended to prohibit, restrict or regulate
antitrust, monopolization, restraint of trade or competition, in each case
required to permit the consummation of any of the Contemplated Transactions.
 
       “Consent Fees” has the meaning set forth in Section 6.8(b)
 
       “Contemplated Transactions” means all transactions contemplated by this
Agreement.
 
       “Contingency Obligations” has the meaning set forth in Section 6.2.
 
       “Continuing Employees” has the meaning set forth in Section 6.13.
 
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       “Control” (including the terms “controlled by” and “under common control
with”), with respect to the relationship between or among two or more Persons,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the affairs or management of a Person, whether through the
ownership of voting securities, by contract or otherwise, including the
ownership, directly or indirectly, of securities having the power to elect a
majority of the board of directors or similar body governing the affairs of such
Person.
 
       “Current Assets” has the meaning set forth in Section 2.4(d).
 
       “Current Liabilities” has the meaning set forth in Section 2.4(e).
 
       “Drop Dead Date” has the meaning set forth in Section 9.1(d).
 
       “Encumbrance” means any security interest, pledge, mortgage, lien,
charge, lease, conditional sales agreement, claim, restriction, covenant,
easement, right of way, encroachment, servitude, right of first option, right of
first refusal, hypothecation, adverse claim of or restriction on ownership,
voting, transfer, receipt of income or use, or other encumbrance of any kind.
 
       “Environmental Claim” means any written notice or Proceeding by any
Person alleging Liability or potential Liability (including Liability or
potential Liability for investigatory costs, cleanup costs, governmental
response costs, natural resource damages, fines or penalties) relating to any
Environmental Losses or in respect of any Environmental Laws.
 
       “Environmental Law” means any applicable Law relating to remediation,
restoration or protection of the environment or natural resources, the storage,
treatment, management, generation, transportation, or disposal of any toxic
materials or waste material, whether hazardous or not, the conservation of
natural resources and resource allocation (including any Law relating to
development or exploitation of any natural resource) or exposure of persons or
property to Hazardous Materials, including applicable Governmental Approvals
pursuant to Environmental Laws and including the Clean Air Act, 42 U.S.C.
Section 7401 et seq., the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601 et seq. (“CERCLA”), the Endangered Species
Act, 16 U.S.C. Section 1531 et seq., the Federal Land Policy and Management Act,
43 U.S.C. Section 1701 et seq., the Federal Water Pollution Control Act, 33
U.S.C. Section 1251 et seq., the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901 et seq., the Surface Mining Control and Reclamation Act, 30
U.S.C. Section 1201 et seq. (“SMCRA”), and the Toxic Substances Control Act, 15
U.S.C. Section 2601 et seq., each as amended, and any similar state Law.
 
       “Environmental Losses” means Losses arising from a Release of Hazardous
Materials or noncompliance with any Environmental Law or Permits required
pursuant to any Environmental Law.
 
       “Equipment Leases” has the meaning set forth in Section 3.18(c).
 
       “ERISA” has the meaning set forth in Section 3.12(a).
 
       “ERISA Affiliate” has the meaning set forth in Section 3.12(a).
 
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       “Escrow Agreement” has the meaning set forth in Section 2.7 below.
 
       “Escrow Amount” has the meaning set forth in Section 2.7.
 
       “Escrow Fund” has the meaning set forth in Section 2.7 below.
 
       “Escrow Release Date” has the meaning set forth in Section 2.8(a) below.
 
       “Estimated Adjustment Amount” has the meaning set forth in Section
2.4(f).
 
       “Estimated Net Working Capital has the meaning set forth in Section
2.4(a).
 
       “Estimated Net Working Capital Statement” has the meaning set forth in
Section 2.4(a).
 
       “Final Purchase Price” has the meaning set forth in Section 2.5(e).
 
       “Financing” has the meaning set forth in Section 6.6(a).
 
       “FMLA” has the meaning set forth in Section 3.12(d).
 
       “GAAP” means United States generally accepted accounting principles as in
effect from time to time.
 
       “General Escrow Amount” has the meaning set forth in Section 2.7(i).
 
       “Governmental Approval” means any Consent of, with or to any Governmental
Authority.
 
       “Governmental Authority” means any United States or other federal, state
or local government or other political subdivision thereof, any entity,
authority, tribunal, agency or body exercising executive, legislative, judicial,
regulatory, fiscal or administrative functions of any such government or
political subdivision, and any supranational organization of sovereign states
exercising such functions for such sovereign states.
 
       “Governmental Authorization” means permits, licenses, approvals or other
authorizations issued, granted, given or otherwise made available by a
Governmental Authority.
 
       “Governmental Order” means, with respect to any Person, any judgment,
order, writ, injunction, decree, stipulation, agreement, determination or award
entered or issued by or with any Governmental Authority and binding on such
Person.
 
       “Hampden” has the meaning set forth in the recitals to this Agreement.
 
       “Hazardous Materials” means any material or substance defined as a
“hazardous substance,” “toxic substance,” “hazardous waste,” “solid waste,”
“pollutant,” “hazardous” or “contaminant” or any other term of similar import
under any Environmental Law or any other materials which are regulated or give
rise to Liability under Environmental Laws.
 
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       “Holdings I” has the meaning set forth in the first sentence of this
Agreement.
 
       “Holdings II” has the meaning set forth in the first sentence of this
Agreement
 
       “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and any
successor to such statute, rules or regulation.
 
       “Income Tax” means any Tax based upon, measured by, or calculated with
respect to net income or profits (including, but not limited to, any capital
gains or similar Tax).
 
       “Income Tax Return” means any Tax Return relating to Income Taxes,
including any Schedule or attachment thereto, and including any amendment
thereof.
 
       “Indebtedness” means all “indebtedness” for borrowed money of the
Acquired Companies, including any notes payable, revolving credit lines,
obligations in respect of letters of credit, capital lease obligations,
indebtedness of another Person which is guaranteed and any other debt (other
than trade accounts payable that are Current Liabilities of the Acquired
Companies arising in the ordinary course of business consistent with past
practices, except to the extent that such amounts have not been paid when due),
including all interest accrued thereon.
 
       “Indemnity Termination Date” has the meaning set forth in Section
10.1(c).
 
       “Industry” shall mean the steel or coal industry.
 
       “Intellectual Property” means all (i) patents, (ii) inventions,
discoveries, processes, formulae, designs, models, industrial designs, know-how,
confidential information, proprietary information and trade secrets, whether or
not patented or patentable, (iii) trademarks, service marks, trade names, brand
names, trade dress, slogans, logos and internet domain names, (iv) copyrights
and other copyrightable works and works in progress, databases and software, (v)
all other intellectual property rights and foreign equivalent or counterpart
rights and forms of protection of a similar or analogous nature or having
similar effect in any jurisdiction throughout the world, (vi) any renewals,
extensions, continuations, divisionals, reexaminations or reissues or equivalent
or counterpart of any of the foregoing in any jurisdiction throughout the world,
and (vii) all registrations and applications for registration of any of the
foregoing.
 
       “International Industries” has the meaning set forth in the recitals to
this Agreement.
 
       “International Resource Partners” has the meaning set forth in the
recitals to this Agreement.
 
       “IRP Administrative” has the meaning set forth in Section 6.18.
 
       “IRP GP” has the meaning set forth in the recitals to this Agreement.
 
       “IRP Kentucky” has the meaning set forth in the recitals to this
Agreement.
 
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       “IRP WV” has the meaning set forth in the recitals to this Agreement.
 
       “KED” has the meaning set forth in the recitals to this Agreement.
 
       “Knowledge” means facts or matters that such Person is actually aware of,
provided such Person shall have made reasonable inquiry of those Persons who
would ordinarily be expected to have knowledge of the matters represented.
 
       “Knowledge of Buyer” means facts or matters that any of the Persons
listed on Schedule 1.1(a) are actually aware of, provided that such Persons
shall have made reasonable inquiry of those Persons who would ordinarily be
expected to have knowledge of the matters represented.
 
       “Knowledge of IRP GP and Resource Partners” means facts or matters that
any of the Persons listed on Schedule 1.1(b) are actually aware of, provided
that such Persons shall have made reasonable inquiry of those Persons who would
ordinarily be expected to have knowledge of the matters represented.
 
       “Latest Balance Sheet” has the meaning set forth in Section 3.4.
 
       “Law” means any applicable Governmental Order or any applicable provision
of any constitution, law (including principles of the common law), legally
binding directive, treaty, statute, rule, regulation or order of any
Governmental Authority.
 
       “Leased Real Property” has the meaning set forth in Section 3.19(a).
 
       “Lenders” has the meaning set forth in Section 6.6(a).
 
       “Liabilities” means any and all debts, claims, commitments, loss
contingencies, liabilities and obligations of every kind and description
whatsoever, whether direct or indirect, known or unknown, disclosed or
undisclosed, matured or unmatured, accrued or unaccrued, absolute or
conditional, asserted or unasserted, contingent or otherwise.
 
       “Lightfoot” has the meaning set forth in the recitals to this Agreement.
 
       “L&K” has the meaning set forth in the recitals to this Agreement.
 
       “LMR” has the meaning set forth in the recitals to this Agreement.
 
       “Losses” means any and all claims, losses, damages, fines, penalties and
costs (in each case including reasonable out-of-pocket expenses (including
reasonable attorneys’, accountants’, technical consultants’, engineers’ and
experts’ fees and expenses)).
 
       “Marshall Miller” means Marshall Miller and Associates, Inc.
 
       “Marshall Miller Report” means the February 17, 2011, Evaluation of
Properties Controlled by International Resource Partners LP as of December 31,
2010, by Marshall Miller.
 
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       “Material Adverse Effect” or “Material Adverse Change” means, in the case
of the definition of Permitted Encumbrances, Article III and Article VIII, any
effect or change that, individually or together with any other effect or change,
is or would reasonably be expected to be materially adverse to the business
operations, properties, assets, liabilities, results of operations, or the
condition (financial or otherwise) of the Acquired Companies, taken as a whole;
provided that none of the following shall be deemed to constitute, and none of
the following shall be taken into account in determining whether there has been,
a Material Adverse Effect or Material Adverse Change: (a) any adverse change,
event, development, or effect arising from or relating to (1) general business
or economic conditions; (2) the Industry generally, including, without
limitation, a decline in prices or demand for coal or steel, increases in costs
of transportation and raw materials, and labor shortages; (3) national or
international political or social conditions, including the engagement by the
United States in hostilities, whether or not pursuant to the declaration of a
national emergency or war, or the occurrence of any military or terrorist attack
upon the United States, or any of its territories, possessions, or diplomatic or
consular offices or upon any military installation, equipment or personnel of
the United States; (4) financial, banking, or securities markets (including any
disruption thereof and any decline in the price of any security or any market
index); (5) changes in United States generally accepted accounting principles;
(6) changes in Laws, orders or other binding directives issued by any
Governmental Authority, including, without limitation, changes in Environmental
Laws or Occupational Health and Safety Laws (in each of (1) through (6), only to
the extent that such factor does not materially disproportionately affect any of
the Acquired Companies relative to their competitors in the Industry); or (7)
the taking of any action contemplated by this Agreement and the other
Transaction Documents; (b) any existing event, occurrence or circumstances with
respect to which Buyer has been provided information or knew or should have
known; and (c) any adverse change in or effect on the business of the Acquired
Companies that is cured before the earlier of (i) the Closing Date and (ii) the
date on which this Agreement is terminated pursuant to Section 9.1 hereof;
provided that any failure to meet any financial or other projection or forecast
for any period shall not, in and of itself, constitute a Material Adverse Effect
or Material Adverse Change. “Material Adverse Effect” or “Material Adverse
Change” in the case of Article IV and Article VII means any effect or change
that would prevent Buyer from consummating in a timely manner the Contemplated
Transactions.
 
       “Material Contracts” has the meaning set forth in Section 3.15(a).
 
       “Material Personal Property” has the meaning set forth in Section
3.18(a).
 
       “Membership Interests” means all of the issued and outstanding membership
interests of Holdings I, Holdings II, IRP WV, Resources, Hampden, Snap Creek,
Chafin, L&K, Rockhouse, IRP Kentucky, LMR and Buck Branch.
 
       “Mining Assets” has the meaning set forth in the recitals to this
Agreement.
 
       “MSHA” means the U.S. Mine Health and Safety Administration.
 
       “Net Working Capital” has the meaning set forth in Section 2.4(c).
 
       “New Commitment Letter” has the meaning set forth in Section 6.6(c).
 
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       “Occupational Health and Safety Law” means any Law designed to provide
safe and healthful working conditions and to reduce occupational safety and
health hazards, and any program, whether governmental or private (including
those promulgated or sponsored by industry associations and insurance
companies), designed to provide safe and healthful working conditions, including
the Federal Mine Safety and Health Act of 1977, the Mine Improvement and New
Emergency Response Act of 2006, the Supplemental Mine Improvement and New
Emergency Response Act, the Black Lung Benefits Revenue Act of 1977, the Black
Lung Benefits Reform Act of 1977, and similar West Virginia state Laws, as
amended.
 
       “Ordinary Course of Business” means, the usual, regular and ordinary
course of a business consistent with the past practice thereof.
 
       “Organizational Document” means, as to any Person, its constitution,
certificate articles of incorporation or articles of organization, its
regulations, by-laws or operating agreement or any equivalent documents under
the Law of such Person’s jurisdiction of incorporation or organization.
 
       “Owned Real Property” has the meaning set forth in Section 3.19(b).
 
       “Partnership Interests” means all of the issued and outstanding limited
partnership units and general partnership units of Resource Partners.
 
       “PBGC” has the meaning set forth in Section 3.12(c).
 
       “Permit” means any consent, approval, permit, license, certificate,
exemption or other authorization which the Law requires any Acquired Company to
hold in order to develop and operate its respective assets and conduct its
respective business (including, without limitation, application, any
authorization or permit relating to coal mining, preparation, load out or
reclamation operations).
 
       “Permits Transfer Period” has the meaning set forth in Section 6.10(c).
 
       “Permitted Encumbrance” means (a) statutory liens securing payments not
yet due arising in the Ordinary Course of Business for amounts not yet due (b)
encroachments, such imperfections or irregularities of title, non-monetary
claims, and rights of way, easements, reservations, covenants, oil and gas
leases and other customary restrictions or non-monetary encumbrances, as would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, (c) liens for Taxes not yet due and payable or that are being
contested in good faith by appropriate proceedings, (d) any other non-monetary
liens that would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect, (e) mechanics’, materialmen’s or other like
liens arising or incurred in the Ordinary Course of Business or by operation of
Law but only to the extent that such lien has not been filed of record or, to
the Knowledge of Sellers, been threatened to be filed (f) pledges and deposits
to secure the performance of bids, trade contracts, leases, surety and appeal
bonds, performance bonds and other obligations of a similar nature, in each case
in the Ordinary Course of Business of any Acquired Company, (g) liens associated
with the Indebtedness, and (h) the terms, covenants, conditions and reservations
contained in (1) each deed conveying the Owned Real Property to the applicable
Acquired Company, and (2) each Real Property Lease; provided that none of such
Encumbrances will individually or in the aggregate prevent or materially
interfere with the operation of any Acquired Company’s business in the Ordinary
Course of Business.
 
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       “Person” means any individual, partnership, firm, corporation,
association, trust, unincorporated organization, joint venture, limited
liability company, Governmental Authority or other entity.
 
       “Post-Signing Event Update” has the meaning set forth in Section 6.16.
 
       “Pre-Signing Event Update” has the meaning set forth in Section 6.16.
 
       “Pre-Transaction Notification Rules” has the meaning set forth in Section
6.14(a).
 
       “Proceeding” means any action, claim, demand, suit, proceeding,
arbitration, citation, summons, subpoena, inquiry or investigation of any
nature, civil, criminal, regulatory or otherwise, in law or in equity, by or
before any Governmental Authority.
 
       “Purchase Price” has the meaning set forth in Section 2.1(a).
 
       “Purchase Price Deductions” has the meaning set forth in Section 6.8(a).
 
       “Real Property” has the meaning set forth in Section 3.19(b).
 
       “Real Property Leases” has the meaning set forth in Section 3.19(a).
 
       “Redeemed Partners” has the meaning set forth in Section 6.2.
 
       “Redemption” has the meaning set forth in Section 6.2.
 
       “Reference Net Working Capital” has the meaning set forth in Section
2.4(b).
 
       “Related Person” means, with respect to a specific Person, any officer,
director, employee, agent, shareholder, representative, successor or assign of
such Person.
 
       “Release” means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing of
Hazardous Materials into or upon the environment, including, surface water,
ground water, a drinking water supply, land surface or subsurface strata or
ambient air (including the abandonment or discarding of barrels, containers, and
other closed receptacles containing any Hazardous Material).
 
       “Reserve Dispute” has the meaning set forth in Section 2.8(b)(iii).
 
       “Resource Partners” has the meaning set forth in the recitals to this
Agreement.
 
       “Resources” has the meaning set forth in the recitals to this Agreement.
 
       “Rockhouse” has the meaning set forth in the recitals to this Agreement.
      
       “SEC” means the Securities and Exchange Commission.
 
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       “Securities Act” means the Securities Act of 1933, as amended.
 
       “Seller” has the meaning set forth in the first sentence of this
Agreement.
 
       “Sellers” has the meaning set forth in the first sentence of this
Agreement.
 
       “Seller Bonds” means those deposits, letters of credit, trust funds, bid
bonds, performance bonds, reclamation bonds and surety bonds (and all such
similar undertakings) set forth on Schedule 1.1(c).
 
       “Seller Guarantees” means those guarantees, indemnities, letters of
credit, letters of comfort and similar credit obligations set forth on Schedule
1.1(d).
 
       “Seller Indemnitees” has the meaning set forth in Section 10.1(b).
 
       “Seller Released Claims” has the meaning set forth in Section 6.17(a).
 
       “Sellers Claims and Losses” has the meaning set forth in Section 6.17(a).
 
       “Snap Creek” has the meaning set forth in the recitals to this Agreement.
 
       “Special Escrow Amount” has the meaning set forth in Section 2.7(ii).
 
       “Special Indemnity Matters” has the meaning set forth in Section 6.8(c).
 
       “Straddle Period” means any Tax period that begins on or before the
Closing Date and ends after the Closing Date.
 
       “Subsidiaries” means any and all corporations, partnerships, limited
liability companies and other entities with respect to which a company, directly
or indirectly, owns securities having the power to elect a majority of the board
of directors or similar body governing the affairs of such entity.
 
       “Tax” or “Taxes” means (a) any taxes of any kind, including, without
limitation, those measured on, measured by or referred to as, income,
alternative or add-on minimum, gross receipts, escheat, capital, capital gains,
sales, use, ad valorem, franchise, profits, license, privilege, transfer,
withholding, payroll, employment, social security, excise, severance, stamp,
occupation, premium, value added, goods and services, property, environmental or
windfall profits taxes, customs, duties or similar fees, assessments or charges
of any kind whatsoever, including any interest, penalty or addition thereto,
whether disputed or not, and (b) any Liability for the payment of any amounts of
the type described in clause (a) of this definition as a result of being a
member of an affiliated, consolidated, combined or unitary group for any period,
as a result of any tax sharing, tax indemnity or tax allocation agreement,
arrangement or understanding, or as a result of being liable for another
Person’s taxes as a transferee or successor, by contract or otherwise.
 
       “Tax Return” means any return, report, declaration, form, election
letter, statement or other information or document required to be or prepared by
a Person, filed with any Governmental Authority with respect to Taxes,
including, but not limited to, any schedule or attachment thereto or amendment
thereof.
 
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       “Tortoise” has the meaning set forth in the recitals to this Agreement.
 
       “Transaction Documents” means, collectively, the Agreement and all
certificates and other documents executed and delivered at the Closing.
 
       “Transfer Applications” has the meaning set forth in Section 6.10(a).
 
       “Transfer Taxes” has the meaning set forth in Section 6.12(b).
 
       “Unaudited Financials” has the meaning set forth in Section 3.4(a).
 
       “Unpaid Indebtedness” has the meaning set forth in Section 2.5(a).
 
       “Unpaid Transaction Expenses” has the meaning set forth in Section
2.5(a).
 
       “Update” has the meaning set forth in Section 6.16.
 
       “WARN Act” means the federal Worker’s Adjustment and Retraining
Notification Act, as amended, and any similar state law relating to plant
closing or layoffs.
 
       “WVOMH&S” means the West Virginia Office of Mine Health and Safety.
 
       1.2 Other Interpretive Provisions.
 
          (a) The words “hereof,” “herein” and “hereunder” and words of similar
import when used in this Agreement refer to this Agreement as a whole (including
any Exhibits or Schedules hereto) and not to any particular provision of this
Agreement, and all Article, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified. Exhibits, Schedules, annexes or appendices
to any document shall be deemed incorporated by reference in such document. The
words “include,” “includes” and “including” shall be deemed to be followed by
the phrase “without limitation.” The meanings given to terms defined herein
shall be equally applicable to both the singular and plural forms of such terms.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. All references to “dollars” or “$” shall
be deemed references to the lawful money of the United States of America.
Reference to “days” shall mean calendar days, unless the term “Business Days” is
used.
 
          (b) The disclosure of any matter on a Schedule shall not be deemed to
be an admission or representation as to the materiality of the matter so
disclosed. Any matter disclosed on a Schedule pursuant to any Section of this
Agreement shall be deemed to have been disclosed for purposes of another Section
or Sections of this Agreement if the relevance or applicability of such
disclosure to the subject matter of such other Section or Sections is reasonably
apparent on the face of such disclosure.
 
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ARTICLE II
 
PURCHASE AND SALE
 
       2.1 Purchase Price.
 
          (a) On the terms and subject to the conditions set forth in this
Agreement, in exchange for the Partnership Interests, Buyer shall pay to Sellers
the aggregate purchase price (the “Purchase Price”) of (i) Four Hundred
Seventy-Five Million Dollars ($475,000,000) (the “Cash Portion of the Purchase
Price”) minus (ii) the Purchase Price Deductions. The Purchase Price shall be
subject to adjustment at and after the Closing in accordance with Section 2.4
and Section 2.5. At the Closing, Buyer shall pay to Sellers the Purchase Price
increased or decreased for any Estimated Adjustment Amount pursuant to Section
2.4(f) and an amount reflecting the Acquired Companies’ cash, in the aggregate,
on the Closing Date as reflected on the consolidated balance sheet of Resource
Partners in cash (the “Cash” and the Purchase Price, as increased or decreased
by the Estimated Adjustment Amount and the Cash, is referred to as the “Closing
Cash Consideration”). The Closing Cash Consideration shall be payable at the
Closing as follows:
 
             (i) Buyer shall deliver the Escrow Amount to the Escrow Agent
pursuant to the terms and conditions of Section 2.7; and
 
             (ii) Buyer shall pay to Sellers the balance of the Closing Cash
Consideration (being the Closing Cash Consideration less the Escrow Amount) by
wire transfer of immediately available United States funds, in the percentage
per Seller as set forth on Schedule 2.1(a)(ii), to accounts designated by Agent
for the benefit of Sellers in written instructions given to Buyer at least two
(2) Business Days prior to the Closing. Prior to the payment to Sellers of the
balance of the Closing Cash Consideration, such Closing Cash Consideration will
additionally be reduced by the amounts estimated by Resource Partners, IRP GP
and Agent necessary to pay fees and expenses of Sellers including those incurred
in connection with the transactions contemplated hereby, which amounts Agent
shall certify in writing to Buyer at least one (1) Business Day prior to the
Closing, and Buyer shall pay such amounts by wire transfer of immediately
available United States funds to accounts designated by Agent for the benefit of
Sellers.
 
          (b) As promptly as practicable following the execution and delivery of
this Agreement, and in any case prior to the Closing, Buyer and Sellers shall
use reasonable efforts to agree upon the allocation of the Purchase Price (and
all other capitalizable costs) among the assets of the Acquired Companies, which
the parties shall adjust to reflect any adjustments made to the Purchase Price
in accordance with Section 2.5(f). Any such allocation shall be intended to
comply with the allocation method required by Section 1060 of the Code. The
parties shall cooperate in complying with all requirements of Section 1060 of
the Code and the regulations thereunder, and the allocation shall be adjusted
only if and to the extent necessary to comply with such requirements. Buyer and
Sellers agree that they will not take nor will they permit any of their
Affiliates or Related Persons to take, for income Tax purposes, any position
inconsistent with any such agreed-upon allocation, if any; provided, however,
that (a) Buyer’s total cost for the assets of each Acquired Company may differ
from the total amount allocated hereunder to reflect Buyer’s transaction costs
other than the Purchase Price, and (b) the amount realized by Sellers may differ
from the total amount allocated hereunder to reflect Sellers’ transaction costs
that reduce the amount realized for income tax purposes.
 
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          Under no circumstance shall Buyer be liable to any Seller or other
Person for any action, omission or delay of the Agent or any other recipient in
dealing with or distributing any payment or any portion of the Purchase Price or
of any other payment or performance made by or on behalf of Buyer in accordance
herewith or any other Transaction Document, to or as prescribed by the Agent.
Nothing contained in Section 2.1(a)(ii) providing for allocation of the Purchase
Price hereunder in accordance with Schedule 2.1(a)(ii) shall be deemed to limit
the foregoing.
 
       2.2 The Closing. Unless this Agreement shall have been terminated
pursuant to Article IX, subject to the satisfaction or waiver of the conditions
set forth in Articles VII and VIII, the closing (the “Closing”) of the
Contemplated Transactions shall take place at the offices of Jackson Kelly PLLC,
1600 Laidley Tower, Charleston, West Virginia 25301, or at such other place as
may be agreed upon by Agent and Buyer, effective at 12:01 a.m. on the third
Business Day after all of such conditions have been satisfied or waived by the
party or parties entitled to waive the same, or at such other date and time as
may be agreed upon by Sellers and Buyer (the “Closing Date”); provided that, if
Buyer is in compliance with its obligations contained in Section 6.6 but has not
consummated financing to complete the Contemplated Transactions, then the
Closing Date may be extended beyond the time when all conditions have been
satisfied or waived but only up to and including June 1, 2011, unless mutually
extended in writing by Buyer and Agent.
 
       2.3 Deliveries at the Closing.
 
          (a) At the Closing, Agent shall deliver or cause to be delivered, as
applicable, to Buyer the following:
 
             (i) an instrument of assignment evidencing the transfer of the
Partnership Interests in a form reasonably acceptable to Buyer;
 
             (ii) copies of the resolutions of Lightfoot, International
Industries and IRP GP, authorizing and approving this Agreement, the other
Transaction Documents and the Contemplated Transactions, certified by an officer
of Sellers to be true and complete and in full force and effect and unmodified
as of the Closing Date;
 
             (iii) the officer’s certificate required by Section 8.3;
 
             (iv) a copy of the certificate of existence, as applicable, of each
Acquired Company certified as true and correct by the Secretary of State of the
State of West Virginia, the State of Delaware and the Commonwealth of Kentucky
(as the case may be);
 
             (v) resignations, effective as of the Closing, of each member of
the board of directors or board of managers, as applicable, and of each officer,
of each of the Acquired Companies;
 
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             (vi) all minute books and members’ interest or stock records of the
Acquired Companies;
 
             (vii) with respect to each Seller, an opinion regarding authority
from outside counsel for such Seller in form and substance reasonably acceptable
to Buyer; and
 
             (vii) all other documents, instruments and writings required to be
delivered by Buyer at or prior to the Closing pursuant to this Agreement or
otherwise required in connection herewith.
 
          (b) At the Closing, Buyer shall execute and deliver or cause to be
executed and delivered, as applicable, to Agent the following:
 
             (i) the Closing Cash Consideration, less the Escrow Amount, by wire
transfer of immediately available funds as specified in Section 2.1(a)(ii);
 
             (ii) copies of the resolutions of Buyer authorizing and approving
this Agreement, the Transaction Documents and the Contemplated Transactions
certified by an officer of Buyer to be true and complete and in full force and
effect and unmodified as of the Closing Date;
 
             (iii) the officer’s certificate required by Section 7.3;
 
             (iv) a certificate (dated not less than five (5) Business Days
prior to the Closing) of the Secretary of State of the State of Virginia as to
the good standing of Buyer; and
 
             (v) all other documents, instruments and writings required to be
delivered by Agent at or prior to the Closing pursuant to this Agreement or
otherwise required in connection herewith.
 
       2.4 Estimated Closing Adjustments.
 
          (a) No later than the fifth (5th) Business Day prior to the Closing
Date, Agent shall deliver to Buyer a statement (the “Estimated Net Working
Capital Statement”) setting forth Agent’s good faith estimate of Net Working
Capital of the Acquired Companies as of the Closing Date (“Estimated Net Working
Capital”) and Agent’s calculation thereof in reasonable detail, calculated in
accordance with GAAP consistently applied, except as described in Schedule
2.4(a) (the “Accounting Principles”)
 
          (b) “Reference Net Working Capital” means an amount equal to
$18,500,000.
 
          (c) “Net Working Capital” means the amount, if any, by which Current
Assets of the Acquired Companies are greater or less than Current Liabilities of
the Acquired Companies as calculated pursuant to the Accounting Principles.
 
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          (d) “Current Assets” means with respect to the Acquired Companies,
their accounts receivable, coal ready for shipment, parts and supplies
inventories, deposits, prepaid expenses and other current assets calculated on a
consolidated basis and in accordance with the Accounting Principles. Cash, cash
equivalents, returned bond deposits and debt of any kind due from Affiliates
will be excluded from Current Assets.
 
          (e) “Current Liabilities” means, with respect to the Acquired
Companies, their accounts payable, accrued expenses and other current
liabilities calculated on a consolidated basis and in accordance with the
Accounting Principles. Current Liabilities shall not include current maturities
of Indebtedness, accrued interest expense or accrued expenses related to
derivative instruments.
 
          (f) “Estimated Adjustment Amount” means the amount by which the
Estimated Net Working Capital exceeds the Reference Net Working Capital, or the
amount by which the Reference Net Working Capital exceeds the Estimated Net
Working Capital.
 
       2.5 Closing Adjustments.
 
          (a) Closing Date Net Working Capital. Within sixty (60) days after the
Closing Date, Agent shall deliver to Buyer a statement (the “Closing Date Net
Working Capital Statement”) setting forth Agent’s calculation of Net Working
Capital as of and including the Closing Date (the “Closing Date Net Working
Capital”), together with an audit report of Resource Partners’ independent
accountants certifying as to the accuracy of Agent’s calculations. The Closing
Date Net Working Capital Statement is the “Closing Statement”. The Closing
Statement shall also include a description of (i) all Indebtedness of the
Acquired Companies as of and including the Closing Date set forth on Schedule
2.6 and not paid by Sellers pursuant to Section 2.6, except to the extent
included in Current Liabilities of the Acquired Companies for purposes of
calculating Net Working Capital (“Unpaid Indebtedness”), and (ii) all fees and
expenses of Sellers and the Acquired Companies not paid by Sellers pursuant to
Section 11.2, except to the extent included in Current Liabilities of the
Acquired Companies for purposes of calculating Net Working Capital (“Unpaid
Transaction Expenses”). The Closing Statement shall be prepared and all
determinations therein made in accordance with the Accounting Principles and
shall be consistent with the manner in which the Reference Net Working Capital
Statement was prepared.
 
          (b) Review of Buyer. Buyer shall have thirty (30) days after the
delivery to Buyer of the Closing Statement (the “Buyer Review Period”) in which
to notify Agent in writing (the “Buyer Objection Notice”) of any good faith
disagreement with the Closing Statement, setting forth in reasonable detail (i)
the items or amounts with which Buyer disagrees and the basis for such
disagreement, and (ii) Buyer’s proposed corrections to the Closing Statement.
Notwithstanding the timely delivery of a Buyer Objection Notice, Buyer on the
one hand, or Agent on the other hand, as applicable, shall make any and all
payments as to amounts not in dispute in accordance with Section 2.5(f) prior to
the resolution of the Buyer Objection Notice pursuant to Section 2.5(c). If
Buyer does not deliver a Buyer Objection Notice within the Buyer Review Period,
Buyer shall be deemed to agree in all respects with the Closing Statement and
the items and amounts reflected thereon shall be final and binding upon Buyer
and Sellers for purposes of Section 2.5.
 
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          (c) Review by Auditor. If Buyer gives Agent a timely Buyer Objection
Notice to the Closing Statement, then Agent and Buyer shall use their reasonable
best efforts to resolve any such objection. If a written resolution is not
obtained within thirty (30) days after the Agent has received the Buyer
Objection Notice, the issue(s) in dispute will be submitted to the Auditor for
resolution, which resolution will be limited to determining Closing Date Net
Working Capital, Unpaid Indebtedness and Unpaid Transaction Expenses, and any
other accounting matters specifically referred to the Auditor by the mutual
agreement of the Agent and Buyer. The determination of the Auditor shall be set
forth in a written notice delivered, as promptly as practicable after the
issue(s) in dispute have been submitted to the Auditor, to the Buyer and Agent
by the Auditor and will be final, binding and conclusive on the parties. Buyer
and Sellers shall each bear fifty percent (50%) of the fees and expenses of the
Auditor for such determination. Buyer and Agent will use all reasonable efforts
to cause the Auditor to render its decision as promptly as practicable,
including without limitation by promptly complying with all reasonable requests
by the Auditor for information, books, records and similar items.
 
          (d) Cooperation. Buyer, on the one hand, and Sellers, on the other
hand, shall provide reasonable cooperation and assistance to each other and to
the Auditor in the preparation of the Closing Statement and in the conduct of
the reviews referred to in this Section 2.5, including providing reasonable
access to the books, records, work papers and personnel of the Acquired
Companies.
 
          (e) Final Purchase Price. The “Final Purchase Price” means an amount
equal to the Purchase Price, plus the amount, if any, by which Closing Date Net
Working Capital exceeds the Reference Net Working Capital, or minus the amount,
if any, by which the Reference Net Working Capital exceeds the Closing Date Net
Working Capital.
 
          (f) Adjustment Payment. Within three (3) Business Days after the
calculation of Closing Date Net Working Capital becomes final pursuant to
Section 2.5(b) or (c): (i) Buyer shall pay to Agent, for the benefit of Sellers,
by wire transfer of immediately available funds to an account designated by
Agent, an amount equal to the amount, if any, by which the Final Purchase Price
exceeds the Closing Cash Consideration, or (ii) Sellers shall pay to Buyer, by
wire transfer of immediately available funds to an account designated by Buyer,
an amount equal to the sum of (A) an amount equal to the amount, if any, by
which the Closing Cash Consideration exceeds the Final Purchase Price, plus (B)
an amount equal to the sum of the Unpaid Indebtedness, plus the Unpaid
Transaction Expenses. The amount of the payment pursuant to clause (i) or clause
(ii) of this Section 2.5(f) being referred to as the “Adjustment Payment”, in
either case, (x) together with interest on the Adjustment Payment at the
Applicable Rate from and including the Closing Date to, but excluding, the date
of such payment and (y) giving effect to any amounts paid pursuant to Section
2.4(f). As used in this Agreement, the term “Applicable Rate” means a rate per
annum equal to the “prime rate” as set forth from time to time in The Wall
Street Journal “Money Rates” column. Buyer and Sellers agree that, unless
otherwise required by Law, any payments made pursuant to this Section 2.5 shall
be treated as an adjustment to the Final Purchase Price for all Tax purposes.
 
       2.6 Payment of the Indebtedness. Prior to or at the Closing, Sellers
shall pay the Indebtedness set forth on Schedule 2.6 in full and shall deliver
to Buyer satisfactory evidence that they have done so. Prior to the Closing,
Sellers shall use their commercially reasonable efforts to cause each holder of
Indebtedness listed on Schedule 2.6 to enter into an agreement to release or
authorize the release of any Encumbrances on any of the Acquired Companies’
assets securing such Indebtedness upon payment in full of such Indebtedness and
shall cause such agreement to be delivered to Buyer.
 
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       2.7 Escrow Amount and Escrow Fund. At the Closing, Buyer shall pay to the
Escrow Agent (i) $20,000,000 (the “General Escrow Amount”), and (ii) $10,000,000
(the “Special Escrow Amount”, and collectively with the General Escrow Amount,
the “Escrow Amount”) (the “Escrow Fund”) in cash payable by wire transfer of
immediately available United States funds for deposit in an Escrow Account in
accordance with the terms and conditions of the Escrow Agreement to be entered
into by and among Buyer, Agent, on behalf of Sellers, and the Escrow Agent in
the form attached hereto as Exhibit A (the “Escrow Agreement”). The Escrow Fund
shall be held and distributed by the Escrow Agent in accordance with the terms
and conditions of this Agreement and the Escrow Agreement.
 
       2.8 Escrow Release.
 
          (a) General. Subject to the terms and provisions of this Section 2.8
and the Escrow Agreement, fourteen (14) months following the Closing (the
“Escrow Release Date”), the Escrow Agent shall disburse to Sellers a portion of
the Escrow Fund in an amount equal to the General Escrow Amount (as reduced by
any amounts previously disbursed to Sellers or Buyer pursuant to Section 2.8(b),
Section 2.8(c)(iii), Section 10.1 and the Escrow Agreement) in accordance with
the terms of the Escrow Agreement. In the event, however, that Agent has
received, on or before the Escrow Release Date, a notice (a “Claim Notice”)
submitted in good faith by Buyer that the Escrow Agent may be required to
disburse all or a portion of the Escrow Amount (such claimed amount, the “Claim
Amount”) to Buyer pursuant to Section 10.1(a) or Sections 2.7 or 2.8, then the
portion of the Escrow Amount subject to such Claim Notice shall continue to be
held by the Escrow Agent until the Claim Amount with respect thereto has been
resolved. As soon as any dispute with respect to any such Claim Amount has been
resolved in accordance with the terms of the Escrow Agreement, the Escrow Agent
shall be instructed to disburse such portion of the General Escrow Amount in the
Escrow Fund, if any, that is required to be disbursed to Buyer pursuant to
Section 10.1(a) or Sections 2.7 or 2.8 in connection with such Claim Amount, and
the Escrow Agent shall disburse the entire remaining portion of the General
Escrow Amount, if any, to Sellers.
 
          (b) Reserve Claims.
 
             (i) Since the issuance of the Marshall Miller Report, the Acquired
Companies have continued and will continue to prove metallurgical reserves not
classified in the Marshall Miller Report as proven metallurgical reserves
(“Additional Reserves”) through drilling and/or adding additional acreage.
 
             (ii) Up to $5,000,000 of the amounts remaining in the General
Escrow Amount will be released to Buyer if at least 10 Million tons of
Additional Reserves are not proven by the Escrow Release Date. The portion of
such $5,000,000 (less drilling expenses paid pursuant to Section 2.8(b)(iv)) to
be released to Buyer shall be equal to the ratio of (A) 10 Million minus the
number of tons of Additional Reserves proven prior to the Escrow Release Date,
to (B) 10 Million tons.
 
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             (iii) Coal will be classified as “metallurgical” and as “reserves”
under customary coal industry standards or otherwise to the reasonable
satisfaction of Buyer, provided that the resulting washed quality of coal must
meet such standards for metallurgical coal. Any dispute between the parties as
to whether mineral interests constitute “reserves” or “metallurgical reserves”
or “Additional Reserves” shall be finally settled by Marshall Miller. These
Additional Reserves are to be established by drilling reserves covered by
existing leases of the Acquired Companies or under new leases, agreements or
other arrangements that are in active negotiation by the Acquired Companies as
of the date of this Agreement, rather than under new leases not being pursued as
of the date of this Agreement. In the event that Agent has received, on or
before the Escrow Release Date, a notice submitted in good faith by Sellers that
there is a dispute regarding Additional Reserves (a “Reserve Dispute”), then the
portion of the General Escrow Amount subject to such Reserve Dispute shall
continue to be held by the Escrow Agent until the Reserve Dispute has been
resolved.
 
             (iv) Up to $1,000,000 of the General Escrow Amount shall also be
available to fund drilling and other reasonable out-of-pocket expenses that are
incurred by the Acquired Companies in connection with any efforts to prove such
Additional Reserves. Such funds shall be released to Buyer from the General
Escrow Amount promptly upon its delivery to Escrow Agent of reasonable
documentation that such expenses have been incurred for such purpose. In no
event shall the General Escrow Amount be paid for expenses incurred for drilling
after the date that 10 Million tons of Additional Reserves are proven. Any
dispute between the parties as to whether any expenditures qualify for
reimbursement to Buyer or the Acquired Companies pursuant to this Section
2.8(b)(iv) shall be finally settled by Marshall Miller.
 
             (v) Both parties will use their best efforts to cause such
Additional Reserves to be proven by the Acquired Companies, including
instituting an active drilling program to prove such Additional Reserves;
provided that such efforts by Buyer shall not include making any cash payments
not reimbursed out of the General Escrow Amount or entering into any agreement
or arrangement that Buyer concludes in good faith is not in the best interests
of the Acquired Companies to make or enter into. After the Closing Date, Buyer
shall provide Agent with regular updates of the status of its drilling program
with respect to the Additional Reserves, including providing any data reasonably
requested by Agent.
 
          (c) Mine 8 Related Claims.
 
             (i) All fines and legal fees of Buyer and/or the Acquired Companies
related to MSHA or WVOMH&S violations that took place at the Acquired Companies’
Rockhouse Mine 8 (“Mine 8”) prior to Closing, whether disclosed to Buyer or not
(“Prior Violations”), will be paid from the Special Escrow Amount (first dollar
out not subject to any deductible).
 
             (ii) All claims for damages suffered by Buyer and/or the Acquired
Companies that are related to the Prior Violations also will be paid from the
Special Escrow Amount (first dollar out not subject to any deductible). Damages
for these purposes shall include, but not be limited to, $20,000 per day that
Mine 8 is designated by MSHA to be on a Potential Pattern of Violation (PPOV)
list. Any other damages that can be proven by Buyer shall be in addition to the
per diem amount.
 
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             (iii) If, prior to the Escrow Release Date , Mine 8 is designated
on a Pattern of Violation (POV) list by MSHA that is attributable to the Prior
Violations, then all claims for damages suffered by Buyer and/or the Acquired
Companies that are related to the Prior Violations may at Buyer’s option be paid
out of the General Escrow Amount before proceeding against the Special Escrow
Amount. Damages for these purposes shall include, but not be limited to, $20,000
per day that Mine 8 is designated by MSHA to be on a POV list. Any other damages
that can be proven by Buyer shall be in addition to this per diem amount.
 
             (iv) In the event of a dispute regarding claims by Buyer for
damages under this Section 2.8(c), the parties shall use their reasonable best
efforts to resolve any such disputes. If a written resolution is not obtained
within thirty (30) days after either party provides written notice of a dispute,
the issue(s) in dispute will be submitted to Norwest Corporation for resolution,
which resolution shall be limited to determining such issue(s) in dispute;
provided that the $20,000 per day liquidated damages amount shall not be subject
to dispute or arbitration.. The determination of Norwest Corporation shall be
set forth in a written notice delivered, as promptly as practicable after the
issue(s) in dispute have been submitted to Norwest Corporation, to Buyer and
Agent by Norwest Corporation and will be final, binding and conclusive on the
parties. The losing party will pay all fees and expenses of such arbitration
including legal fees for the prevailing party. Buyer and Agent will use
reasonable best efforts to cause Norwest Corporation to render its decision as
promptly as practicable, including without limitation by promptly complying with
all reasonable requests by Norwest Corporation for information, books, records
and similar items.
 
             (v) The Special Escrow Amount shall remain in place and not be
released to Agent until such time as all legal proceedings and fines relating to
the Prior Violations have been finally resolved (such date being referred to as
the “Final Release Date”). Until the Final release Date, claims may continue to
be made against the Special Escrow Amount as provided hereunder. Upon the Final
Release Date, the Escrow Agent shall disburse to Sellers any remaining portion
of the Special Escrow Amount.
 
             (vi) Buyer shall provide and shall cause its outside counsel to the
Acquired Companies to provide prompt and regular updates to Agent regarding
material developments in connection with the Prior Violations, including the
status of any negotiations and proceedings.
 
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ARTICLE III
 
REPRESENTATIONS AND WARRANTIES OF IRP GP AND RESOURCE PARTNERS
RELATED TO THE ACQUIRED COMPANIES
 
       IRP GP and Resource Partners hereby jointly and severally represent and
warrant to Buyer, as of the date hereof and as of the Closing Date, other than
representations and warranties that expressly speak as of the specific date and
time (which need only be true and correct in all respects or true and correct in
all material respects as applicable, as of such date and time), as follows:
 
          3.1 Organization. Each of the Acquired Companies is duly organized and
validly existing under the Laws of its jurisdiction of organization. Each of the
Acquired Companies has the requisite organizational power and authority to own,
lease and operate its assets and to carry on its business as now being conducted
and is duly qualified or licensed to do business and is in good standing in the
jurisdictions in which the ownership of its property or the conduct of its
business requires such qualification or license, except where the failure to be
so qualified or licensed (a) would not reasonably be expected, individually or
in the aggregate, to prevent any of the Acquired Companies from consummating the
Contemplated Transactions or (b) would not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect. Resource Partners has
delivered to Buyer true and complete copies of the Organizational Documents of
each of the Acquired Companies.
 
          3.2 Authorization; Enforceability. Resource Partners has the requisite
organizational power and authority to execute and deliver this Agreement and the
other Transaction Documents and to perform its obligations hereunder and
thereunder. The execution and delivery of this Agreement and the other
Transaction Documents by Resource Partners, and the performance of its
obligations hereunder and thereunder, has been duly authorized by all necessary
action on the part of Resource Partners, and, upon such authorization, no other
proceedings or actions are necessary to authorize and consummate this Agreement,
the other Transaction Documents or the Contemplated Transactions. This Agreement
has been, and upon the Closing Date the other Transaction Documents will be,
duly executed and delivered by Resource Partners, and, assuming due
authorization, execution and delivery by Buyer, constitute the valid and binding
agreements of Resource Partners and are enforceable against Resource Partners in
accordance with their terms, except as may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
Laws relating to or affecting creditors’ rights generally and general equitable
principles (whether considered in a proceeding in equity or at law).
 
          3.3 Interests. The authorized, issued and outstanding Membership
Interests of the Acquired Companies are set forth on Schedule 3.3, together with
the identity of the members of each of the Acquired Companies, as applicable. On
the Closing Date, Resource Partners will be the record and beneficial owner and
holder of the Membership Interests, in each case free and clear of all
Encumbrances. All of the outstanding equity securities of each Acquired Company
have been duly authorized and validly issued and are fully paid and
nonassessable. Other than the Organizational Documents, there are no contracts
relating to the issuance, sale, or transfer of any equity securities or other
securities of any Acquired Company. Except as set forth on Schedule 3.3, there
are no outstanding warrants, options, agreements, convertible or exchangeable
securities or other commitments pursuant to which any Acquired Company is or may
become obligated to issue or sell any shares of equity securities or other
securities, and there are no equity securities of any Acquired Company reserved
for issuance for any purpose.
 
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         3.4 Financial Statements.
 
               (a) IRP GP has delivered to Buyer: (i) the financial statements
of Resource Partners as of December 31, 2010, 2009 and 2008, audited by
PriceWaterhouseCoopers LLP, which include true and correct information
associated with the respective balance sheets and statements of operations and
cash flows of the Acquired Companies (the “Audited Financials”), and (ii) if
available, on the date even herewith, the unaudited financial statements for the
month ended January 31, 2011, including the unaudited consolidated balance sheet
as of January 31, 2011 (the “Latest Balance Sheet”), and the related statements
of operations and cash flows for the period then ended, which includes the
respective balance sheets and statements of operations and cash flows of the
Acquired Companies (the “Unaudited Financials”, and such Audited Financials and
Unaudited Financials, collectively “Financial Statements”). The Financial
Statements fairly present in all material respects the consolidated financial
position of the Acquired Companies and the results of their operations and cash
flows as of the dates and for the periods indicated in accordance with GAAP
consistently applied; provided, however, that the Unaudited Financials are
prepared and derived from the consolidated financial statements of Resources
Partners and (i) lack footnotes and other presentation items that may apply for
a stand-alone business and (ii) are subject to certain normal year end
adjustments.
 
               (b) To the Knowledge of IRP GP and Resource Partners, there (i)
are no significant deficiencies or material weakness in the design or operation
of internal controls which are reasonably likely to adverse affect in any
material respect the ability of the Acquired Companies considered as a whole to
record, process, summarize and report financial data, (ii) is no fraud, whether
or not material, that involves management or other employees who have a
significant role in any Acquired Company’s internal controls, (iii) Resource
Partners’ transactions are executed in accordance with management’s general or
specific authorization; (iv) Resource Partners’ transactions are recorded as
necessary to permit the preparation of financial statements in conformity with
GAAP and to maintain accountability for assets; and (v) the amount recorded for
assets on the respective books and records of Resource Partners is compared with
the existing assets at reasonable intervals in connection with the preparation
of the annual audits of Resource Partners’ consolidated financial statements and
appropriate action is taken with respect to any differences.
 
               (c) Since January 1, 2008, none of the Acquired Companies nor any
of their respective Subsidiaries nor, to the Knowledge of IRP GP and Resource
Partners, any director, officer, employee, auditor, accountant or representative
of any Acquired Company or any of its respective Subsidiaries has received or
otherwise had or obtained Knowledge of any material complaint, allegation,
assertion or claim, whether written or oral, regarding the accounting or
auditing practices, procedures, or methodologies of any Acquired Company or its
respective Subsidiaries or their respective internal accounting controls,
including any material complaint, allegation, assertion, or claim that any
Acquired Company or any of its respective Subsidiaries has engaged in
questionable accounting or auditing practices.
 
          3.5 Absence of Undisclosed Liabilities. Except as reflected in the
Latest Balance Sheet or on Schedule 3.5, no Acquired Company has any Liability
of any nature whatsoever (direct or indirect, matured or unmatured, absolute,
accrued, or contingent), except as would not be material to any of the Acquired
Companies, that would be required by GAAP to be included in the Latest Balance
Sheet or reflected in footnotes to a balance sheet prepared in accordance with
GAAP as consistently applied or that would prevent Sellers or any of the
Acquired Companies from consummating the Contemplated Transactions.
 
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          3.6 No Conflicts or Approvals. Except as set forth on Schedule 3.6 or
Schedule 3.7, the execution, delivery and performance by Sellers of this
Agreement and the other Transaction Documents and the consummation by Sellers of
the Contemplated Transactions does not and will not (a) violate, conflict with
or result in a breach by Sellers or any of the Acquired Companies of their
respective Organizational Documents, (b) require any Consent or other action by
any Person, cause or permit the termination, cancellation, acceleration or other
change of any right or obligation or violate, conflict with or result in a
material breach of, or constitute a default by Sellers or any of the Acquired
Companies (with or without notice or lapse of time) under any Material Contract,
Permit or Equipment Lease to which any of the Acquired Companies or any of the
Acquired Companies’ properties or assets may be bound, (c) require any Consent
or other action by any Person, cause or permit the termination, cancellation,
acceleration or other change of any right or obligation or violate, conflict
with or result in a material breach of, or constitute a default by Sellers or
any of the Acquired Companies (with or without notice or lapse of time) under
any Real Property Lease requiring lessor’s consent for change of control of
Resource Partners to which any of the Acquired Companies or any Acquired
Companies’ properties or assets may be bound, (d) assuming compliance with
applicable requirements under the HSR Act, violate, conflict with, or result in
a material breach of any Governmental Order or Law applicable to Sellers or any
of the Acquired Companies or any of their respective properties or assets or (e)
result in the creation of any Encumbrance, other than Permitted Encumbrances,
upon any of the properties or assets of any of the Acquired Companies.
 
          3.7 Governmental Authorization. Assuming compliance with applicable
requirements under the HSR Act, the execution, delivery and performance by
Sellers and each of the Acquired Companies of this Agreement and the other
Transaction Documents and the consummation of the Contemplated Transactions,
except for the actions and filings listed on Schedule 3.7, the filings required
for the transfer of control of the Permits set forth on Schedule 3.8(b) (i)
require no action by, or in respect of, any Governmental Authority or any
Governmental Approval, and any such action or filing as to which the failure to
make or obtain would not be material to any of the Acquired Companies or prevent
Sellers or any of the Acquired Companies from consummating the Contemplated
Transactions, (ii) will not give any Governmental Authority the right to
challenge any portion of the Contemplated Transactions or exercise any remedy or
obtain any relief under any Law to which Sellers or any Acquired Company is
subject, and (iii) will not contravene, conflict with or result in a violation
of any of the terms or requirements of, or give any Governmental Authority the
right to revoke, withdraw, suspend, cancel, not renew, terminate or materially
modify, any Permit of an Acquired Company.
 
          3.8 Compliance; Permits; Seller Bonds.
 
               (a) Each of the Acquired Companies has conducted its respective
business and developed and operated its assets in compliance in all material
respects with all Permits, except as set forth on Schedule 3.8(a).
 
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               (b) Each Acquired Company possesses all material Permits
necessary to own, lease and operate its assets and lawfully conduct its business
consistent in all material respects with past practices. Schedule 3.8(b)
contains an accurate and complete list and summary description of all such
Permits, in each case setting forth the name of the grantor, the name of the
grantee, and the expiration and renewal date of, and the amount of bonding
obligation with respect to each Permit. Except as set forth on Schedule 3.8(b),
each such Permit has been validly issued and is in full force and effect and is
final and, to the Knowledge of IRP GP and Resource Partners, no event has
occurred that constitutes or, with the giving of notice, the passage of time, or
both, would constitute a material default by any Acquired Company or any other
Person under any such Permit. All fees and other payments due and owing in
connection with such Permits have been paid in full and in a timely manner so as
to prevent any lapse, revocation or material breach thereof.
 
               (c) There are no applications for permits to be issued by
Governmental Authorities to any Acquired Company other than those set forth on
Schedule 3.8(c) (the “Applications”), and an Acquired Company will, on grant of
any of such Applications, hold a legal or beneficial title to the interest in
each such application as set forth on Schedule 3.8(c). Each Application has been
made in accordance with applicable Law. No Acquired Company has received any
written communication from the applicable permitting authority with respect to
any Application that (i) indicates that such Application has been denied or (ii)
requests any Acquired Company to provide additional information with respect to
such Application.
 
               (d) The Acquired Companies have posted all deposits, letters of
credit, trust funds, bid bonds, performance bonds, reclamation bonds and surety
bonds (and all such similar undertakings) required to be posted in connection
with their operations. The Seller Bonds are sufficient to conduct the business
of the Acquired Companies consistent with past practices. Except as disclosed on
Schedule 3.8(d): (i) each of the Acquired Companies is and has been in
compliance in all material respects with all Seller Bonds applicable to it; and
(ii) the operation of each Company’s coal mining and processing operations and
the state of reclamation with respect to Seller Bonds are “current” or in
“deferred status” regarding reclamation obligations and otherwise are and have
been in compliance in all material respects with all applicable mining,
reclamation and other analogous Laws, except where noncompliance would not
interfere in any material respect with the ability of any Acquired Company to
continue to operate its assets and conduct its business as currently conducted
and would not prevent Sellers or any Acquired Company from consummating the
Contemplated Transactions.
 
               (e) Each Acquired Company is, and at all times has been since
June 12, 2007, in material compliance with all Laws that are or were applicable
to it or to the use or operation of its assets, including Occupational Health
and Safety Laws.
 
               (f) To the Knowledge of IRP GP and Resource Partners, no event
has occurred or circumstance exists that (with or without notice or lapse of
time) (i) may constitute or result in a material violation by any Acquired
Company of any Law applicable to it or its business or assets, (ii) constitute
or result directly or indirectly in a violation of or a failure to comply with
any material term or requirement of, or result directly or indirectly in the
revocation, withdrawal, suspension, cancellation, non-renewal, termination of or
modification to, or result in the imposition of any condition on, any Permit
listed or required to be listed on Schedule 3.8(b), or (iii) may give rise to
any obligation on the part of any Acquired Company to undertake, or to bear all
or any portion of the cost of, any remedial action of a material nature.
 
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               (g) All applications required to have been filed for the renewal
of the Permits listed or required to be listed on Schedule 3.8(b) have been duly
filed on a timely basis with the appropriate Governmental Authority, and all
other filings required to have been made with respect to such Permits have been
duly made on a timely basis with the appropriate Governmental Authority.
 
               (h) Except as set forth in Schedule 3.8(h), no Acquired Company
has received, at any time since June 12, 2007, any notice or other written
communication or, to the Knowledge of IRP GP and Resource Partners, any oral
communication from any Governmental Authority or any other Person regarding (i)
any actual, alleged, possible or potential violation of, or failure to comply in
any material respect with, any Law or failure to comply with any term or
requirement of any Permit, (ii) any actual, proposed, possible, or potential
revocation, withdrawal, suspension, cancellation, non-renewal, termination of,
or modification to any Permit, or (iii) any actual, alleged, possible, or
potential obligation on the part of an Acquired Company to undertake or to bear
all or any portion of the cost of, any remedial action in excess of $100,000.
 
               (i) The execution, delivery and performance by the Sellers of
this Agreement and the other Transaction Documents and the consummation of the
Contemplated Transactions does not and will not violate, conflict with or result
in a breach by the Sellers or any Acquired Company of any Permit or Application,
or result in any termination, modification or non-renewals thereof.
 
          3.9 Proceedings; Governmental Orders.
 
               (a) Except as set forth on Schedule 3.9(a), there is no pending
Proceeding:
 
                    (i) that has been commenced by or against any Acquired
Company, its properties or other assets, or otherwise relates to or may affect
an Acquired Company;
 
                    (ii) that challenges, or that may have the effect of
preventing, delaying, making illegal, or otherwise interfering with any of the
Contemplated Transactions; or
 
                    (iii) that is in respect of any Permit.
 
To the Knowledge of IRP GP and Resource Partners, other than as set forth on
Schedule 3.9(a), (1) no such Proceeding has been threatened (whether orally or
in writing), and (2) no event has occurred or circumstance exists that may give
rise to or serve as a basis for the commencement of any such Proceeding.
Resource Partners has delivered to Buyer copies of all pleadings, non-privileged
correspondence, and other non-privileged documents relating to each Proceeding
listed on Schedule 3.9(a). Except as set forth on Schedule 3.9(a), none of such
Proceedings, if adversely determined, would reasonably be expected to involve,
individually or in the aggregate, an award of damages in excess of $250,000.
 
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               (b) Except as set forth on Schedule 3.9(b):
 
                    (i) there is no Governmental Order relating to any Acquired
Company or that any Acquired Company is subject to;
 
                    (ii) no Related Person of any Acquired Company is subject to
any Governmental Order that would impair or prevent the Consummated Transaction
or that would impair or to the Knowledge of IRP GP and Resource Partners prevent
Buyer’s use, conduct or activity relating to the performance of the business of
the Acquired Companies after Closing in substantially the same manner as the
Acquired Companies have conducted such business prior to Closing;
 
                    (iii) each Acquired Company is and at all times has been in
full compliance with all of the terms and requirements of each Governmental
Order to which it has been subject, and no event or circumstance exists that may
constitute or result in (with or without notice or lapse of time) a violation of
or failure to comply with any Governmental Order to which any Acquired Company
is subject; and
 
                    (iv) no Acquired Company has received any notice or other
communication (whether oral or written) from any Governmental Authority or any
other Person regarding any actual, alleged, possible, or potential violation of,
or failure to comply with, any term or requirement of any Governmental Order to
which any Acquired Company is bound.
 
               (c) Except as set forth in Schedule 3.9(c), to the Knowledge of
IRP GP and Resource Partners, there are no existing claims by or disputes
between any Acquired Company and Persons owning, controlling or occupying lands
or reality adjourning or near any of the real property and or reserves of such
Acquired Company or regarding adverse possession, the location of boundary
lines, encroachments, miner rights, subsidence, water quality or quantity, flood
damage, blasting damage, trespass, waste, transportation of coal or other
materials, nuisances or other similar matter.
 
          3.10 Absence of Certain Changes. Except as disclosed in Schedule 3.10
or as otherwise contemplated by this Agreement, since December 31, 2010:
 
               (a) there has not been any condition, change or event specific to
the Acquired Companies which has had, or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect;
 
               (b) the business of each Acquired Company has been conducted only
in the Ordinary Course of Business;
 
               (c) the assets and properties of the Acquired Companies have been
operated and maintained in the Ordinary Course of Business and there has not
been any Material Adverse Effect;
 
               (d) there has not been any material damage, destruction or loss
(whether or not covered by insurance) affecting any material portion of the
assets or properties of the Acquired Companies;
 
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               (e) there has not been any sale, transfer, lease, abandonment, or
other disposal of any material property or equipment of the Acquired Companies,
except in the Ordinary Course of Business; and
 
               (f) none of the Sellers or the Acquired Companies has taken (or
caused or permitted any of the Acquired Companies to take) any action which, if
it had been taken by any of the Sellers or any of the Acquired Companies after
the date hereof, would have required Buyer’s approval or waiver under Section
6.1(b)(iii).
 
          3.11 Tax Matters. Except as set forth in Schedule 3.11:
 
               (a) All Tax Returns required to be filed by or on behalf of each
Acquired Company prior to the Closing Date (separately or as part of a
consolidated, combined or unitary group) have been or shall be timely filed
(subject to permitted extensions applicable to such filing), all such Tax
Returns were materially correct and complete in all respects and all Taxes due
(whether or not such Taxes are shown or required to be shown on a Tax Return)
have been or shall be paid within the prescribed period or any extension
thereof, other than Taxes that are being contested in good faith for which
adequate accruals or reserves have been established on the Balance Sheet.
 
               (b) There are no Encumbrances relating to Taxes encumbering any
of the assets of the Acquired Companies, the Partnership Interests or the
Membership Interests to be sold pursuant to this Agreement.
 
               (c) Other than in connection with routine extensions of time for
filing Tax Returns, none of the Acquired Companies have granted any extension or
waiver of the statute of limitations period applicable to any Tax or Tax Return,
or agreed to any extension of time with respect to a Tax assessment or
deficiency, which period has not yet expired.
 
               (d) No claim has ever been made by a Governmental Authority in a
jurisdiction where any of the Acquired Companies do not file Tax Returns that
any of them are or may be subject to taxation in that jurisdiction.
 
               (e) None of the Acquired Companies are a party to, are bound by
or have any obligation under, any Tax sharing agreement or similar contract or
arrangement or any indemnification agreement or any other agreement that
obligates them to make any payment computed by reference to Taxes, taxable
income or taxable losses of any other Person.
 
               (f) Since June 12, 2007, none of the Acquired Companies (i) have
been a member of an Affiliated Group filing a consolidated federal Income Tax
Return (other than the Affiliated Group of which they are currently members) or
(ii) have any Liability for the Taxes of any Person (other than the Acquired
Companies) under Treasury Regulation Section 1.1502-6 (or any similar provision
of state, local of foreign law), as transferees or successors, by contract, or
otherwise.
 
               (g) None of the Acquired Companies have distributed stock of
another Person, or have had their stock distributed by another Person, in a
transaction that was purported or intended to be governed in whole or in part by
Section 355 or 361 of the Code.
 
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               (h) Resource Partners is, and has been since its formation,
classified as a partnership, within the meaning of Treasury Regulation Section
301.7701-3 (and similar provisions of state and local Tax Law) and Resource
Partners does not own, directly or indirectly, any interest in an entity that is
not an entity disregarded from its owner within the meaning of Treasury
Regulation Section 301.7701-3 (and similar provisions of state and local Tax
Law).
 
               (i) Resource Partners has in effect a valid election under
Section 754 of the Code (and similar applicable provisions of state and local
Tax Law).
 
               (j) There is no contract or agreement, plan or arrangement by any
of the Acquired Companies covering any Person that, individually or
collectively, could give rise to the payment of any amount that would not be
deductible by any of the Acquired Companies by reason of Section 280G of the
Code.
 
               (k) Each of the Acquired Companies has timely withheld and paid
over to the appropriate taxing authority all Taxes that it is required to
withhold from amounts paid or owing to any employee, shareholder, creditor or
other Person and has properly completed and timely filed all Forms W-2 and 1099
(and similar forms) required with respect thereto.
 
               (l) No foreign, federal, state or local Tax audits or assessments
or administrative or judicial proceedings are ongoing, pending or to the
Knowledge of IRP GP, Resource Partners or James Thornburg, former Tax Manager of
International Industries and current Tax Manager of Resource Partners,
threatened with respect to the Sellers or any Acquired Company, and neither
Sellers nor any Acquired Company has received from a Governmental Authority any
request for information related to any Tax matter, and neither the Sellers nor
any Related Person (or employee responsible for Tax matters) of the Acquired
Companies expects any authority to assess any additional Taxes for or with
respect to any period for which Tax Returns have been filed.
 
               (m) Neither the Sellers nor any of the Acquired Companies is or
has been a party to any “reportable transaction,” as defined in Section
6707A(c)(1) of the Code and Treasury Regulation Section 1.6011-4(b).
 
               (n) Each of the Acquired Companies is classified as an entity
disregarded from its owner within the meaning of Treasury Regulation Section
301.7701-3 (and similar provisions of state and local Tax law) and (ii) no
Acquired Companies owns, directly or indirectly, any interest in an entity that
is not an entity disregarded from its owner within the meaning of Treasury
Regulation Section 301.7701-3 (and similar provisions of state and local Tax
Law).
 
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          3.12 Employee Benefits.
 
               (a) Schedule 3.12(a) sets forth a list of each employee benefit
plan (as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended (“ERISA”)), each employment agreement, and each other plan,
fund, agreement, or arrangement providing bonuses, incentive compensation,
profit sharing benefits, pension benefits, compensation, deferred compensation,
equity compensation, welfare benefits, fringe benefits, severance payments,
post-retirement benefits, scholarships, disability benefits, sick leave pay,
vacation pay, commissions, payroll practices, retention payments, change in
control, or other benefits, maintained or contributed to by, or with respect to
which there is or could be any Liability or obligation of, any Acquired Company
or any trade or business, whether or not incorporated (an “ERISA Affiliate”),
which together with any Acquired Company would be deemed a “single employer”
within the meaning of Section 4001(b)(1) of ERISA (each a “Benefit Plan” and
collectively, the “Benefit Plans”), for the benefit of current or former
employees, officers, directors, independent contractors and consultants of the
Acquired Companies (“Company Employees”).
 
               (b) Except as set forth in Schedule 3.12(b), with respect to each
Benefit Plan: (i) if intended to qualify under Section 401(a) of the Code, such
plan has received a current, favorable determination letter from the applicable
Governmental Authority stating that it so qualifies and that its trust is exempt
from taxation under Section 501(a) of the Code and nothing has occurred since
the date of such determination that could adversely affect such qualification or
exempt status; (ii) such plan has been administered in all material respects in
accordance with its terms and applicable Law; (iii) no disputes are pending, or,
to the Knowledge of IRP GP and Resource Partners, threatened that give rise to
or might reasonably be expected to give rise to material Liability on the part
of the Acquired Companies; (iv) no non-exempt prohibited transaction (within the
meaning of Section 406 of ERISA) has occurred that gives rise to or would
reasonably be expected to give rise to Liability on the part of the Acquired
Companies; (v) all contributions, reserves or premium payments required to be
made or accrued to or with respect to such plan as of the date hereof (taking
into account any extensions of time for the making of such contributions) have
been timely made or accrued in full and all contributions, reserves or premium
payments required to be made or accrued between the date hereof and the Closing
will be made or accrued; (vi) Resource Partners has provided or made available
to Buyer complete and correct copies of each such Benefit Plan and any related
trust or other funding agreement, any amendment, any summary plan descriptions,
the most recent annual report (Form 5500) and the most recent actuarial
valuation with respect thereto; (vii) each Benefit Plan which after Closing
covers any employee of an Acquired Company may be amended or terminated
unilaterally by an Acquired Company at any time without Liability other than for
benefits accrued or incurred prior to the date of such amendment or termination;
and (viii) each of the Benefit Plans is insured or fully funded or reserves are
established and listed therefor on the most recent Financial Statements at fair
market value, and no Benefit Plan has unfunded liabilities that as of the
Closing are not accurately and fully reflected in the Financial Statements. No
Benefit Plan has incurred an accumulated funding deficiency, as defined in
Section 302 of ERISA or Section 412 of the Code, whether or not waived.
 
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               (c) Except as set forth in Schedule 3.12(c) and except for
Liabilities for premiums due to the Pension Benefit Guaranty Corporation
(“PBGC”) in the ordinary course, no Liability has been incurred by the Acquired
Companies or any ERISA Affiliate under or pursuant to Title IV of ERISA,
relating to its or their employee benefit plans, and no event, transaction or
condition has occurred that has resulted in any such Liability to the Acquired
Companies or any ERISA Affiliate or any employee benefit plan of the Acquired
Companies or any ERISA Affiliate. No Acquired Company and no ERISA Affiliate
currently maintains, contributes to or participates in, nor at any time in the
past, has maintained, contributed to, participated in, or had any obligation to
maintain, contribute to, or otherwise participate in, any plan that is (i)
subject to the provisions of Title IV of ERISA, (ii) a “multiemployer plan”
within the meaning of Section 4001(a)(3) of ERISA, (iii) a “multiple employer”
plan within the meaning of Section 412 of the Code, or (iv) a multiple employer
welfare arrangement within the meaning of Section 3(40) of ERISA. Except as set
forth on Schedule 3.12(c) or contemplated by this Agreement, the execution of
this Agreement and the consummation of the Contemplated Transactions will not
(either alone or upon the occurrence of any additional or subsequent event) give
rise to any Liability for any employee benefits, including Liability for
severance pay, unemployment compensation, termination pay or withdrawal
Liability, or accelerate the time of payment or vesting or increase the amount
of compensation or benefits due to any Company Employee.
 
               (d) The Acquired Companies have complied with the applicable
requirements of Part 6 of Subtitle B of Title I of ERISA and Section 4980B of
the Code (“COBRA”), and will comply with all COBRA obligations arising in
connection with the Contemplated Transactions, and the Acquired Companies are
not subject to any Liability as a result of any failure to administer or operate
any “group health plan” (as defined in COBRA and/or as defined in 45 Code of
Federal Regulations Section 160.103) in compliance with COBRA and/or the
applicable requirements of the Health Insurance Portability and Accountability
Act of 1996 and the Regulations promulgated thereunder. Schedule 3.12(d)
identifies each Company Employee who has experienced a “Qualifying Event” (as
defined in COBRA) with respect to a Benefit Plan who has elected or is eligible
to elect “Continuation Coverage” (as defined in COBRA) and whose maximum period
for Continuation Coverage required by COBRA has not expired. Schedule 3.12(d)
also lists the name of each Covered Employee who is on a leave of absence
(whether or not pursuant to the Family and Medical Leave Act of 1993, as amended
(“FMLA”)) and is receiving or entitled to receive health coverage under an
Employee Benefit Plan, whether pursuant to FMLA, COBRA or otherwise.
 
               (e) No Benefit Plan provides and no promises have been made to
provide medical, surgical, hospitalization, death or similar benefits (whether
or not insured) for current or former employees, directors, officers,
consultants, independent contractors, contingent workers, or leased employees
(or any of their dependents, spouses or beneficiaries) for periods extending
beyond their retirement or other termination of service, other than continuation
coverage mandated by applicable Law and only to the extent required under such
applicable Law.
 
          3.13 Employees; Labor and Employee Relations.
 
               (a) Schedule 3.13(a) lists all current employees of each of the
Acquired Companies as of the Closing Date, and for each such employee: (i) job
position; (ii) job location; (iii) classification as full-time or part-time;
(iv) classification as exempt or non-exempt under applicable state or federal
overtime regulations; (v) hourly rate of compensation or base salary (as
applicable); (vi) total 2009 and 2010 compensation; (vii) target incentive
compensation for 2011 (including commission and/or bonus, as applicable); (viii)
any other annual compensation or allowance; (ix) vacation and paid time off
accrual rate; (x) accrued but unused vacation and paid time off; (xi) last pay
review date; (xii) hours of work per week in 2010 (for non-exempt and part-time
employees); (xiii) visa type (if any); (xiv) the commencement date of employment
and any breaks in service; and (xv) the entity by which such employee is
employed. Schedule 3.13(a) also discloses all open workers' compensation claims
against any Acquired Company. The records of each Acquired Company accurately
reflect in all material respects, the employment or service histories of its
employees, independent contractors, contingent workers and leased employees,
including their hours of service, and all such records are maintained in a
usable electronic form, and each person who is classified on such records as an
employee or independent contractor is properly so classified. All employees are
employees at-will, terminable without notice and without penalty except as
otherwise provided in the employment agreements listed on Schedule 3.12(a).
 
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               (b) Each Acquired Company has complied in all material respects
and is presently in compliance in all material respects with all statutes, laws,
ordinances, rules or regulations, or any orders, rulings, decrees, judgments or
arbitration awards of any court, arbitrator or any government agency relating to
employment, equal opportunity, nondiscrimination, immigration, wages, employee
exemption status, hours, benefits, collective bargaining, the payment of social
security and similar taxes, income tax withholding, occupational safety and
health, and/or privacy rights of employees. Each Acquired Company currently, and
for each of the prior three (3) years, has completed Form I-9s on file with
respect to each of its employees. No key employee or group of employees of any
Acquired Company has indicated any plans to terminate employment with the
Acquired Company before or after the Closing.
 
               (c) With respect to each Company Employee, the applicable
Acquired Company: (i) has withheld and reported all amounts required by law or
by agreement to be withheld and reported with respect to wages, salaries and
other payments since June 12, 2007 preceding the Closing Date, (ii) is not
liable for any arrears of wages, severance pay or any Taxes or any penalty for
failure to comply with any of the foregoing since June 12, 2007 preceding the
Closing Date, and (iii) is not liable for any payment to any trust or other fund
governed by or maintained by or on behalf of any governmental authority, with
respect to unemployment compensation benefits, social security or other benefits
or obligations for employees (other than routine payments to be made in the
normal course of business and consistent with past practice). No Acquired
Company has any Liability with respect to any misclassification of any person as
(x) an independent contractor rather than as an employee, or with respect to any
employee leased from another employer, or (y) an employee exempt from state or
federal overtime regulations.
 
               (d) Except as set forth in Schedule 3.13(d), (i) none of the
Acquired Companies are presently a party to any written collective bargaining
agreement in respect of the Company Employees, (ii) there is no unfair labor
practice charge or comparable or analogous complaint pending before any
Governmental Authority or, to the Knowledge of IRP GP and Resource Partners,
threatened against any Acquired Company, (iii) there is no, nor has there been
in the past three (3) years any, written grievance, order, dispute, arbitration
hearing, or arbitration award pending or filed or, to the Knowledge of IRP GP
and Resource Partners, threatened against any Acquired Company, (iv) none of the
Acquired Companies are in breach of any order by a Governmental Authority
relating to the Company Employees, (v) within the past three (3) years, there
has been no labor strike, slowdown, work stoppage, or lockout in effect, or, to
the Knowledge of IRP GP and Resource Partners, threatened against or otherwise
affecting any Acquired Company or the Company Employees at any of their
respective mines, (vi) none of the Acquired Companies are a party to, or
otherwise bound by, any consent decree, order, award with, or citation by, any
Governmental Authority relating to employees or employment practices, (vii)
there is no actual or, to the Knowledge of IRP GP and Resource Partners, alleged
breach of the material terms of any contractual obligations governing the
employment of the Company Employees which would reasonably be likely to lead to
the interference in any material respect with the conduct of the business of any
of the Acquired Companies as currently conducted, and (viii) as of the date
hereof, there is no formal legal proceeding (i.e. petition for certification of
representation) to organize Company Employees which is pending or, to the
Knowledge of IRP GP and Resource Partners, threatened.
 
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          3.14 Intellectual Property. Schedule 3.14 lists all patents, patent
applications, material unregistered trademarks, registered trademarks, copyright
applications and registrations, and internet domain names, owned by or
registered in the name of any Acquired Company or otherwise used in the conduct
of the business of any Acquired Company. Except (a) as set forth in Schedule
3.14, or (b) as would not interfere in any material respect with the conduct of
the business of any of the Acquired Companies as currently conducted, one or
more of the Acquired Companies legally or beneficially owns or has the right to
use, transfer and license all Intellectual Property necessary for the conduct of
the business of the Acquired Companies as it is currently conducted. To the
Knowledge of IRP GP and Resource Partners, the operation of the business of any
of the Acquired Companies does not infringe or otherwise violate any
Intellectual Property of any other Person and, to the Knowledge of IRP GP and
Resource Partners none of the Intellectual Property owned by any of the Acquired
Companies is being infringed by any other Person.
 
          3.15 Contracts.
 
               (a) Schedule 3.15(a) sets forth a complete list of each of the
following contracts to which any Acquired Company is a party or by which any of
them is bound as of the date of this Agreement (collectively, the “Material
Contracts”):
 
                    (i) any option, purchase and sale contract or lease (whether
real or personal property) providing for annual payments of $150,000 or more or
that cannot be terminated on not more than thirty (30) days’ notice without
payment by any Acquired Company of any penalty;
 
                    (ii) contracts involving the annual expenditure by any
Acquired Company of more than $150,000 in any instance for the purchase of
materials, goods, supplies, equipment or services, excluding any such contracts
that are terminable by the Acquired Companies without penalty on not more than
thirty (30) days’ notice;
 
                    (iii) contracts providing for payments to any Acquired
Company of more than $150,000 in any instance for the sale of natural gas,
materials, goods, supplies, equipment or services, excluding any such contracts
that are terminable by the Acquired Companies without penalty on not more than
thirty (30) days’ notice;
 
                    (iv) contracts involving the annual expenditure by any
Acquired Company of more than $150,000 for the purchase, sale, transportation or
storage of coal;
 
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                    (v) any agreement relating to Indebtedness for borrowed
money or the deferred purchase price of property (whether incurred, assumed,
guaranteed or secured by any asset), including indentures, mortgages, loan
agreements, security agreements, or other agreements for the incurrence of debt,
other than (A) trade accounts payable incurred in the Ordinary Course of
Business and (B) any such agreement relating to indebtedness owed to Sellers or
any of their Affiliates to be repaid on or before the Closing Date or owed to
any Acquired Company;
 
                    (vi) partnership, limited liability company, joint venture
agreements or other agreements involving a sharing of profits or expenses by any
Acquired Company;
 
                    (vii) any agreement under which (A) any Person (including
any Seller) has directly or indirectly guaranteed any liabilities or obligations
of any Acquired Company (other than any such guarantee by any other Acquired
Company) or (B) any Acquired Company has, directly or indirectly, guaranteed any
liabilities or obligations of any other Person (including any Seller but
excluding any other Acquired Company);
 
                    (viii) any agreement prohibiting or limiting the ability of
any Acquired Company to engage in any business activity or compete with any
Person or prohibiting or limiting the ability of any Person to compete with any
Acquired Company;
 
                    (ix) any agreement relating to the acquisition or
disposition of any business (whether by merger, sale of stock, sale of assets or
otherwise), including any contract under which any Acquired Company will have
Liabilities after the date of this Agreement relating to the acquisition or sale
of any business enterprise;
 
                    (x) distributor, dealer, sales agency, marketing or similar
contracts under which any Acquired Company is obligated to pay after the date of
this Agreement an amount in excess of $100,000 during any calendar year;
 
                    (xi) any other contract providing that any Acquired Company
will receive future payments aggregating more than $100,000 per annum or
$500,000 in the aggregate prior the expiration of such contract;
 
                    (xii) any contract with any current or former officer,
director or employee of any Acquired Company or any of the Sellers involving
annual consideration or payments in excess of $150,000, including offer letters
with respect to employment scheduled to begin after the date hereof;
 
                    (xiii) any consulting or similar agreement with an
independent contractor providing for (A) annual payments by any Acquired Company
in excess of $100,000 or (B) aggregate payments by any Acquired Company of
$250,000, excluding any such contracts that are terminable by the Acquired
Companies without penalty on not more than thirty (30) days notice;
 
                    (xiv) any outstanding power-of-attorney empowering any
Person not a current employee of any Acquired Company to act on behalf of any
Acquired Company;
 
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                    (xv) any employee collective bargaining agreement with any
labor union or employees covering former, current or future employees of any
Acquired Company or work done, being done or to be done in the future by any
Acquired Company;
 
                    (xvi) any contract mining agreement; and
 
                    (xvii) any material agreement, commitment, arrangement or
plan not made in the Ordinary Course of Business.
 
               (b) Each Material Contract is a valid and binding agreement of
each Acquired Company which is a party thereto and, to the Knowledge of IRP GP
and Resource Partners, each of the other parties thereto, enforceable by or
against such Acquired Company and, to the Knowledge of IRP GP and Resource
Partners, each of such other parties thereto in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
Laws relating to or affecting creditors’ rights generally and general equitable
principles (whether considered in a proceeding in equity or at law). Resource
Partners has heretofore delivered to Buyer true and complete copies of all such
written Material Contracts. Except as set forth in Schedule 3.15(b), none of the
rights of the Acquired Companies under the Material Contracts have been assigned
(including by an absolute assignment of rents or contracts) or collaterally
assigned, assigned for the purpose of granting security, or are affected by any
security interest or similar encumbrance. Except as set forth in Schedule 3.6,
none of the Material Contracts require consent to consummate the Contemplated
Transactions, whether by operation of law or otherwise.
 
               (c) Except as set forth on Schedule 3.15(c), (i) the applicable
Acquired Company is, and at all times has been, in compliance in all material
respects with all applicable terms and requirements of each Material Contract,
(ii) to the Knowledge of IRP GP and Resource Partners, each other Person that
has had any obligation or Liability under any Material Contract is, and at all
times has been, in material compliance with all applicable terms and
requirements of such Material Contract, (iii) to the Knowledge of IRP GP and
Resource Partners no event has occurred or circumstance exists that (with or
without notice or lapse of time) may contravene, conflict with, or result in a
violation or breach of, or give the Acquired Companies, or any other Person the
right to declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate, or modify, any Material
Contract, and (iv) no Acquired Company has been given or received from any
Person at any time since January 1, 2009, any written notice or other written
communication or, to the Knowledge of IRP GP and Resource Partners, oral notice
or other oral communication regarding any actual, alleged, possible, or
potential violation or breach of, or default under, any Material Contract.
 
          3.16 Environmental Matters. Except as set forth on Schedule 3.16:
 
                    (i) each of the Acquired Companies is in compliance in all
material respects with all Environmental Laws and any Permits required pursuant
to any Environmental Law and has disclosed to Buyer on Schedule 3.16 any
material non-compliance of any Acquired Company of any Environmental Laws and
Permits which has occurred since June 12, 2007;
 
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                    (ii) none of the Acquired Companies are currently subject to
any written, or to the Knowledge of IRP GP and Resource Partners oral,
Environmental Claim or written, or to the Knowledge of IRP GP and Resource
Partners oral, notice of any threatened Environmental Claim, resulting from or
arising under or pursuant to any Environmental Law, that would be material to
any Acquired Company, regarding or resulting from activities of any Acquired
Company, the business of any Acquired Company or any property or assets
currently owned, operated or used by any Acquired Company;
 
                    (iii) none of the Acquired Companies have entered into, have
agreed to, or are subject to, any Governmental Order under any Environmental Law
regarding any Acquired Company or any property or assets currently or formerly
owned, operated or used by any Acquired Company, that would interfere in any
material respect with the ability of such Acquired Company to continue to
operate its assets and conduct its business as currently conducted or would
result in any Liability to any Acquired Company;
 
                    (iv) no property currently owned or operated by any Acquired
Company (A) is listed or, to the Knowledge of IRP GP and Resource Partners,
proposed for listing on the CERCLA National Priorities List or CERCLIS list or
any similar Governmental Authority’s list of sites at which remedial action is
or may be necessary or (B) to the Knowledge of IRP GP and Resource Partners,
contains asbestos or asbestos-containing materials, or polychlorinated biphenyls
that is in a condition constituting a violation of Environmental Law, would
reasonably be expected to result in material Liability under Environmental Law
or is in a damaged or friable condition; and
 
                    (v) to the Knowledge of IRP GP and Resource Partners, there
is no block or punitive legal limitation on any Acquired Company’s ability to
apply for or obtain any Permit under any Environmental Law;
 
                    (vi) no Acquired Company has received any written citation,
directive, inquiry, notice, Governmental Order, warning or other written
communication or, to the Knowledge of IRP GP and Resource Partners, oral
citation, directive, inquiry, notice, Governmental Order, warning or other
communication that relates to Hazardous Materials or any alleged, actual, or
potential violation or failure to comply with any Environmental Law, or of any
alleged, actual, or potential obligation to undertake or bear the cost of any
Environmental Losses;
 
                    (vii) no Acquired Company has experienced any material
Environmental Losses since January 1, 2008;
 
                    (viii) since January 12, 2010, there has been no material
Release nor is there any threat of material Release at or from any equipment,
real property, leaseholds, or other interests currently or formerly owned,
leased or operated by LMR, or at any other location where any Hazardous
Materials were generated, manufactured, refined, transferred, produced,
imported, used, or processed from, by, for or to LMR;
 
                    (ix) since June 12, 2007, there has been no material Release
nor is there any threat of material Release at or from any equipment, real
property, leaseholds, or other interests currently or formerly owner, leased or
operated by any Acquired Company (other than LMR), or at any other location
where any Hazardous Materials were generated, manufactured, refined,
transferred, produced, imported, used, or processed from, by, for or to any
Acquired Company (other than LMR); and
 
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                    (x) to the Knowledge of IRP GP and Resource Partners, there
has been no environmental investigation, study, audit, test, review or other
analysis conducted since June 12, 2007, with respect to the activities conducted
by any of the Acquired Companies on Real Property required under a Permit or any
Environmental Law that has not been delivered or made available to Buyer prior
to the date hereof.
 
          3.17 Insurance. Schedule 3.17 lists all insurance policies held in the
name of any of the Acquired Companies covering the assets and operations of any
Acquired Company and any Company Employees as of the date hereof, specifying the
policies’ numbers, terms, the insurer, amount of coverage, annual premiums and
type of insurance (including, but not limited to details regarding Broad-Form
Employers Liabilities (Mandolidis) coverage and Federal Black Lung Workers
Compensation since January 1, 2000). Resource Partners has delivered to Buyer
true and complete copies of all insurance policies listed on Schedule 3.17.
Except as set forth on Schedule 3.17, all such policies are in full force and
effect, on an occurrence basis, all premiums due thereon have been paid and,
where applicable, each Acquired Company has complied in all material respects
with the provisions of such policies and have not received any notice from any
of its insurance brokers or carriers that such broker or carrier has cancelled
or terminated coverage or will not be willing or able to renew their existing
coverage or reserved rights with respect to any outstanding claim. All insurance
policies not held in the name of any Acquired Company but which cover the assets
and operations of the business of any Acquired Company and any Company Employees
are in full force and effect (subject to changes made in the Ordinary Course of
Business that will not materially reduce the coverage thereunder) and will
remain in full force and effect until the Closing, at which time, coverage
thereunder will be discontinued with respect to the Acquired Companies and the
business of the Acquired Companies. As of the date hereof, there are no claims
outstanding under any insurance policy described in this Section 3.17 and
relating to the business of any Acquired Company, and, to the Knowledge of IRP
GP and Resource Partners, no event has occurred which might give rise to any
claim in excess of $100,000. There is no claim by any Acquired Company pending
under any such insurance policies to which coverage has been questioned, denied
or disputed by the underwriters thereof or in respect of which such underwriters
have reserved their rights. To the Knowledge of IRP GP and Resource Partners,
the underwriters of such insurance policies have not threatened any termination
of, material premium increase with respect to, or material alteration of
coverage under, any such policies.
 
          3.18 Personal Property Assets.
 
               (a) Schedule 3.18 sets forth a true and complete list of all the
material items of machinery, equipment, vehicles, and other tangible personal
property now owned or leased by any Acquired Company (the “Material Personal
Property”), which list represents all such property used in connection with the
businesses of the Acquired Companies and is sufficient to operate the businesses
of the Acquired Companies consistent with past practices. Except as set forth on
Schedule 3.18, each Acquired Company has good and marketable title to, or holds
by a valid and existing lease or license for, all the Material Personal
Property, except with respect to assets disposed of in the Ordinary Course of
Business since such date, free and clear of all Encumbrances, other than
Permitted Encumbrances. Each item of the Material Personal Property is in
working order and repair (normal Industry wear and tear excepted), has been
operated and maintained in the Ordinary Course of Business and consistent with
prudent coal mining industry standards and is in suitable and adequate condition
for use consistent with past practices and prudent coal mining industry
practices.
 
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               (b) Except to the extent reserved for in the Financial
Statements, the accounts receivable of each Acquired Company (i) are valid and
genuine and (ii) have arisen solely out of bona fide sales and deliveries of
goods, performances of services and other business transactions in the Ordinary
Course of Business.
 
               (c) Schedule 3.18(c) contains a true and complete list of all of
the leases, instruments and other agreements and arrangements pursuant to which
any Acquired Company leases or rents any Material Personal Property to or from
any other Person other than between or among two (2) or more of the Acquired
Companies (collectively, the “Equipment Leases”). Resource Partners has
delivered to Buyer available true and complete copies of all of the Equipment
Leases. Each Equipment Lease is a valid and binding agreement of each Acquired
Company which is a party thereto in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar Laws relating to or
affecting creditor’s rights generally and general equitable principles (whether
considered in a Proceeding in equity or at law). Except as set forth on Schedule
3.18(c), (i) the applicable Acquired Company is, and at all times has been, in
compliance in all material respects with all terms and requirements of each
Equipment Lease; (ii) to the Knowledge of IRP GP and Resource Partners, any
other Person that has had any obligation or Liability under any Equipment Lease
is, and at all times has been, in compliance in all material respects with all
terms and requirements of such Equipment Lease, (iii) no event has occurred or
circumstance exists that (with or without notice or lapse of time) may
contravene, conflict with, or result in a violation or breach of, or give the
Acquired Companies, or any other Person the right to declare a default or
exercise any remedy under, or to accelerate the maturity or performance of, or
cancel, terminate, or modify, any Equipment Lease, and (iv) no Acquired Company
has been given or received from any Person at any time since January 1, 2009,
any written notice or other communication or, to the Knowledge of IRP GP and
Resource Partners, any oral notice or other communication regarding any actual,
alleged, possible, or potential violation or breach of, or default under, any
Equipment Lease.
 
          3.19 Real Property
 
               (a) Leased Properties. Schedule 3.19(a)(i) lists all material
real property and water rights, and other material interests in land, including
coal, mining, exploration and surface rights, easements, rights of way and
options, leased or subleased by any Acquired Company (the “Leased Real
Property”) and all of the leases and subleases related thereto (the “Real
Property Leases”). Resource Partners has delivered or made available to Buyer
true and complete copies of all Real Property Leases. With respect to each Real
Property Lease and except as otherwise specified on Schedule 3.19(a)(ii) or
where the failure of any of the following to be true and correct would not
reasonably be expected to interfere in any material respect with the respective
abilities of the Acquired Companies to continue to operate their respective
assets and conduct their respective businesses as currently conducted:
 
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                    (i) each Real Property Lease is a valid and binding
agreement of each Acquired Company that is a party thereto and, to the Knowledge
of IRP GP and Resource Partners, each of the other parties thereto, enforceable
by or against such Acquired Company and, to the Knowledge of IRP GP and Resource
Partners, each of such other parties thereto in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
Laws relating to or affecting creditors’ rights generally and general equitable
principles (whether considered in a proceeding in equity or at law);
 
                    (ii) (A) none of the Acquired Companies are in material
default under any such Real Property Lease and, to the Knowledge of IRP GP and
Resource Partners, no event has occurred which, with the passage of time or
expiration of any grace period, would constitute a default of any Acquired
Company’s obligations under such Real Property Lease, (B) to the Knowledge of
IRP GP and Resource Partners, no other party to any such Real Property Lease is
in default thereunder and (C) none of the Acquired Companies have received a
written or, to the Knowledge of IRP GP and Resource Partners, other notice of
default with respect to any such Real Property Lease;
 
                    (iii) except for Permitted Encumbrances, no such Real
Property Lease has been mortgaged, deeded in trust or subjected to an
Encumbrance;
 
                    (iv) with regard to Leased Real Property, to the Knowledge
of IRP GP and Resource Partners an Acquired Company has adequate rights of
ingress and egress to such Leased Real Property and all building structures,
facilities, fixtures and other improvements thereon;
 
                    (v) with regard to Leased Real Property, no Acquired Company
owes any brokerage or other commissions with respect to any such Real Property
Lease for which adequate reserves have not been established on the Latest
Balance Sheet; and
 
                    (vi) other than Permitted Encumbrances, there are no other
matters that, to the Knowledge of IRP GP and Resource Partners, would adversely
affect the rights of any Acquired Company to the Leased Real Property.
 
               (b) Owned Properties. Schedule 3.19(b)(i) lists all material real
property and other interests in land, including coal, mining, exploration and
surface rights, easements, rights of way and options, owned by any of the
Acquired Companies (the “Owned Real Property”, and collectively with the Leased
Real Property, the “Real Property”), and the record title owner of the Owned
Real Property. Resource Partners has delivered to Buyer true and complete copies
of all deeds, and all title insurance policies, title insurance, abstracts and
other evidence of title (if any) in the possession of any Acquired Company
relating to the Owned Real Property. With respect to each such parcel of the
Owned Real Property, except as otherwise specified on Schedule 3.19(b)(ii) or
where the failure of any of the following to be true and correct would not
reasonably be expected to be materially adverse to the use of such Owned Real
Property:
 
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                    (i) the identified owner has adequate rights of ingress and
egress with respect to, and marketable fee simple title to the parcel of the
Owned Real Property, free and clear of any Encumbrances, except for Permitted
Encumbrances;
 
                    (ii) there are no pending or, to the Knowledge of IRP GP and
Resource Partners, threatened condemnation proceedings, lawsuits, or
administrative actions or to the Knowledge of IRP GP and Resource Partners other
material matters affecting adversely the current use, occupancy, or value of the
Owned Real Property;
 
                    (iii) to the Knowledge of IRP GP and Resource Partners, no
material Owned Real Property serves any adjoining property for any purpose
inconsistent with the use of the Owned Real Property;
 
                    (iv) to the Knowledge of IRP GP and Resource Partners, there
are no leases, subleases, licenses, concessions, or other agreements, written or
oral, granting to any Person the right of use or occupancy of any portion of the
Owned Real Property;
 
                    (v) no tenant or other Person in possession of any Owned
Real Property has any right to purchase or holds any right of first refusal to
purchase any such properties; and
 
                    (vi) other than Permitted Encumbrances, there are no other
matters that would adversely affect the title of any Acquired Company.
 
               (c) All material buildings, structures and other improvements
located upon the Real Property, including all material components thereof, are
in working order and repair (normal Industry wear and tear excepted), have been
operated and maintained in the Ordinary Course of Business and are in suitable
and adequate condition for use consistent with past practices except as would
not reasonably be expected to have a Material Adverse Effect.
 
               (d) None of the Acquired Companies have received any written, or
to Knowledge of IRP GP and Resource Partners oral, notice of claims, with
respect to the Real Property, that any Acquired Company has mined any coal that
it did not have the right to mine or mined any coal in such reckless or
imprudent fashion as to give rise to any claims for waste or trespass and no
facts exist upon which such a claim could be based. Resource Partners has made
available to Buyer the most recent complete and, to the Knowledge of IRP GP and
Resource Partners, correct version of each of the following items to the extent
such items are (i) in the possession of any Acquired Company, (ii) relate to or
affect the Real Property, including the coal reserves, coal ownership, mining
conditions, mines, and mining, and (iii) material to the use or operation of any
assets of any Acquired Company: geological data, reserve data, existing mine
maps, surveys, core hole logs and associated data, coal measurements, coal
samples, lithologic data, coal reserve calculations or reports, washability
analyses or reports, mine plans, mining permit applications and supporting data,
engineering studies and all other books and records, information, maps, reports
and data.
 
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               (e) There does not exist any pending or, to the Knowledge of IRP
GP and Resource Partners, any threatened condemnation action or any other
Governmental Action undertaken to enforce any land use that would reasonably be
expected to materially affect or materially impair the present use or operation
of the Real Property and none of the Real Property has suffered any material
damage by fire or other casualty.
 
          3.20 No Brokers’ or Other Fees. Except for those Persons listed on
Schedule 3.20, whose fees and expenses will be paid by Sellers, no Person has
acted directly or indirectly as a broker, finder, investment banker or financial
advisor in connection with the Contemplated Transactions, and no Person is
entitled to any fee or commission or like payment in connection with the
Contemplated Transactions based upon any agreement, arrangement or other
understanding made by or on behalf of Sellers.
 
          3.21 Affiliate Transactions. Except as set forth on Schedule 3.21,
since January 1, 2008, there have been no transactions or agreements between any
Acquired Company, on the one hand, and any of its Related Persons (including
Sellers) or any of their Affiliates, on the other hand, including loans,
services agreements, consulting agreements, employment agreements, or business
arrangements. None of the Related Persons (including Sellers) or any of their
respective Affiliates has entered into or engaged in any transaction with any
Acquired Company other than transactions entered into in the Ordinary Course of
Business and that are on an arm’s length basis.
 
          3.22 Customers and Suppliers. Schedule 3.22 contains (a) a list of the
top ten (10) customers of the Acquired Companies on a consolidated basis
(determined on the basis of revenues) for each of the last two (2) fiscal years
and (b) a list of the top ten (10) suppliers of the Acquired Companies on a
consolidated basis (determined on the basis of cost of items purchased) for
fiscal year 2010. No customer set forth on Schedule 3.22 has ceased or
materially reduced its purchases from or use of the services of any Acquired
Company since December 31, 2010, or to the Knowledge of IRP GP and Resource
Partners, has threatened to cease or materially reduce such purchases or use
after the date hereof. No supplier set forth on Schedule 3.22 has ceased or
materially reduced its supply of materials or goods or provision of services to
any Acquired Company since December 31, 2010, or to the Knowledge of IRP GP and
Resource Partners, has threatened to cease or materially reduce such supply or
provision after the date hereof. To the Knowledge of IRP GP and Resource
Partners, no such customer or supplier is currently in, or threatened with,
bankruptcy or insolvency.
 
          3.23 Absence of Certain Business Practices. No Acquired Company, nor
any of their Related Persons, or any Person acting on behalf of any Acquired
Company has, directly or indirectly, within the past two (2) years given or
agreed to give any gift or similar benefit to any customer, supplier,
governmental employee or other Person who is or may be in a position to help or
hinder the respective business of such Acquired Company (or assist such Acquired
Company in connection with any actual or proposed transaction) that (a) might
subject any Acquired Company to any material damage or material penalty assessed
by any Governmental Authority, (b) if not given in the past might have had a
Material Adverse Effect, (c) if not continued in the future, might have a
Material Adverse Effect or (d) might subject any Acquired Company to a
Proceeding by any Governmental Authority.
 
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          3.24 Full Disclosure. To the Knowledge of IRP GP and Resource
Partners, the representations and warranties made by IRP GP and Resource
Partners in this Agreement and the certificates to be delivered pursuant to
Section 2.3(a)(ii) and Section 8.3 of this Agreement do not contain any untrue
statement of material fact or omit to state a material fact necessary to make
any of them in light of the circumstances in which they were made, not
misleading.
 
ARTICLE IIIA
 
REPRESENTATIONS AND WARRANTIES OF SELLERS
 
          Each Seller individually represents and warrants, severally, but not
jointly, to Buyer and only to the extent that the following representations and
warranties pertains to such Seller and its ownership interest in Resource
Partners, as of the date hereof and as of the Closing Date, other than
representations and warranties that expressly speak as of the specific date and
time (which need only be true and correct in all respects or true and correct in
all material respects as applicable, as of such date and time), as follows:
 
          3A.1 Organization. Seller is duly organized, validly existing and in
good standing under the Laws of its jurisdiction of organization.
 
          3A.2 Authorization; Enforceability. Seller has the requisite
organizational power and authority to execute and deliver this Agreement and the
other Transaction Documents and to perform its obligations hereunder and
thereunder. The execution and delivery of this Agreement and the other
Transaction Documents by Seller, and the performance of its obligations
hereunder and thereunder, has been duly authorized by all necessary company
action on the part of Seller, and, upon such authorization, no other proceedings
or actions are necessary to authorize and consummate this Agreement, the other
Transaction Documents or the Contemplated Transactions. This Agreement has been,
and upon the Closing Date the other Transaction Documents will be, duly executed
and delivered by Seller, and, assuming due authorization, execution and delivery
by Buyer, constitute the valid and binding agreements of Seller and are or will
be enforceable against Seller in accordance with their terms, except as may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar Laws relating to or affecting
creditors’ rights generally and general equitable principles (whether considered
in a proceeding in equity or at law).
 
          3A.3 No Conflicts or Approvals. Except as set forth on Schedule 3.6,
the execution, delivery and performance of this Agreement and the other
Transaction Documents and the consummation of the Contemplated Transactions does
not and will not (a) violate, conflict with or result in a breach by Seller of
its Organizational Documents, (b) require any filing with or permit, Consent or
approval of, or the giving of any notice to any Person, or (c) assuming
compliance with applicable requirements under the HSR Act, violate, conflict
with, or result in a material breach of any Governmental Order or Law applicable
to Seller.
 
          3A.4 Interests. The authorized, issued and outstanding Partnership
Interests are set forth on Schedule 3A.4, together with the identity of the
partners. On the Closing Date, Seller will be the record and beneficial owner
and holder of the Partnership Interests shown on Schedule 3A.4 as being owned by
it, free and clear of all Encumbrances. Seller is not a party to any option,
warrant, purchase right, or other contract or commitment (other than this
Agreement) that could require Seller to sell, transfer or otherwise dispose of
Seller’s Partnership Interests.
 
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ARTICLE IV
 
REPRESENTATIONS AND WARRANTIES OF BUYER
 
          Buyer hereby represents and warrants to Sellers, as of the date hereof
and as of the Closing Date, as follows:
 
          4.1 Organization. Buyer is a corporation duly organized, validly
existing and in good standing under the Laws of its jurisdiction of its
formation. Buyer has the requisite organizational power and authority to own,
lease and operate its assets and to carry on its business as now being conducted
and is duly qualified or licensed to do business and is in good standing in the
jurisdictions in which the ownership of its property or the conduct of its
business requires such qualification or license, except where the failure to be
so qualified or licensed would not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect.
 
          4.2 Authorization; Enforceability. Buyer has the requisite
organizational power and authority to execute and deliver this Agreement and the
other Transaction Documents and to perform its obligations hereunder and
thereunder. The execution and delivery of this Agreement and the other
Transaction Documents by Buyer and the performance of its obligations hereunder
and thereunder has been duly authorized by all necessary organizational action
on the part of such party and, upon such authorization, no other organization or
partnership proceedings or actions are necessary to authorize or consummate this
Agreement, the other Transaction Documents or the Contemplated Transactions.
This Agreement and the other Transaction Documents have been duly executed and
delivered by Buyer and, assuming due authorization, execution and delivery by
Sellers, constitute the valid and binding agreements of Buyer and are
enforceable against Buyer in accordance with their terms, except as may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar Laws relating to or affecting
creditors’ rights generally and general equitable principles (whether considered
in a proceeding in equity or at law).
 
          4.3 No Conflicts or Approvals. The execution, delivery and performance
by Buyer of this Agreement and the other Transaction Documents and the
consummation by Buyer of the Contemplated Transactions does not (a) violate,
conflict with or result in a breach by Buyer of its Organizational Documents, or
(b) violate or result in a breach of any Governmental Order or Law applicable to
Buyer or any of its properties or assets.
 
          4.4 Governmental Authorization. Assuming compliance with the
applicable requirement of the HSR Act and compliance with any requirements of
the Securities Act, or the Securities and Exchange Act of 1934, as amended, and
any other United States state or federal securities laws, the execution,
delivery and performance by Buyer of this Agreement and the other Transaction
Documents and the consummation of the Contemplated Transactions, require no
action by or in respect of, or any Governmental Approval, except with any such
action or filing as to which the failure to make or obtain would not be material
to Buyer and its Subsidiaries or prevent Buyer from consummating the
Contemplated Transactions.
 
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          4.5 No Brokers’ or Other Fees. Except for those Persons listed on
Schedule 4.5, whose fees and expenses will be paid by Buyer, no Person has acted
directly or indirectly as a broker, finder, investment banker or financial
advisor in connection with the Contemplated Transactions, and no Person is
entitled to any fee or commission or like payment in connection with the
Contemplated Transactions based upon any agreement, arrangement or other
understanding made by or on behalf of Buyer.
 
          4.6 Permit Blocking. To the Knowledge of Buyer, there is no block or
punitive legal limitation on the ability of Buyer or any of its Affiliates to
apply for or obtain any Permit under any Environmental Law.
 
ARTICLE V
 
EXCLUSIVE REPRESENTATIONS AND WARRANTIES
 
          5.1 WARRANTIES EXCLUSIVE. Except for the express representations and
warranties set forth in Article III, Buyer acknowledges that Sellers are making
no (and Buyer specifically disclaims that it is relying upon or had relied upon
any) representation or warranty, express or implied, at law or in equity, in
respect of the Acquired Companies or any of their respective assets, Liabilities
or operations, and any such other representations or warranties are hereby
expressly disclaimed. Buyer acknowledges that it has inspected and is
knowledgeable of the coal reserves that are included with the Real Property.
Accordingly, except for the representations and warranties in Article III
related to title of the Acquired Companies to the coal reserves or any rights of
title of the Acquired Companies to the coal reserves otherwise existing at Law
or in equity, notwithstanding anything to the contrary in Article III, the coal
reserves that are included with the Real Property are accepted by Buyer on an
“AS IS” basis, there being no warranties or representations, either express or
implied, including but not limited to mineability of the coal, merchantability
of the coal, fitness for a particular purpose, quality of the coal or quantity
of the coal. With respect to any projection or forecast delivered by or on
behalf of Sellers or any Affiliate to Buyer as part of the express
representations and warranties set forth in Article III, Buyer acknowledges that
(w) there are uncertainties inherent in attempting to make such projections and
forecasts, (x) it is familiar with such uncertainties, (y) it is taking full
responsibility for making its own evaluation of the adequacy and accuracy of all
such projections and forecasts so furnished to it, and (z) it shall have no
claim against any Person with respect thereto.
 
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ARTICLE VI
 
COVENANTS AND AGREEMENTS
 
          6.1 Conduct of Business Prior to the Closing.
 
               (a) Sellers covenant and agree that Sellers will, and will
require each Acquired Company to, except (i) as expressly contemplated by this
Agreement, (ii) as disclosed in Schedule 6.1(a) or (iii) with the prior written
consent of an authorized officer of Buyer, from the date hereof to Closing, (A)
conduct the business of each Acquired Company in the Ordinary Course of
Business, (B) use commercially reasonable efforts to preserve intact the current
business organization of each Acquired Company, keep available the services of
the current officers, employees, and agents of each Acquired Company, and
maintain the relations and good will with suppliers, customers, landlords,
creditors, employees, agents, and others having business relationships with each
such Acquired Company, and (C) maintain and renew, if necessary, all insurance
policies listed on Schedule 3.17 and all insurance policies not held in the name
of any Acquired Company but which cover the assets and operations of the
business of any Acquired Company and any Company Employees.
 
               (b) Without limiting the foregoing, Sellers covenant and agree
that they will not, and will require each Acquired Company not to, except (i) as
expressly contemplated by this Agreement, (ii) as disclosed in Schedule 6.1(b)
or (iii) with the prior written consent of an authorized officer of Buyer, from
the date hereof to Closing,
 
                         (A) change any Acquired Company’s authorized or issued
membership interests; grant any option or right to purchase membership interest
of any Acquired Company; issue any security convertible to a membership
interest; grant any registration rights in such membership interests; or sell,
pledge, purchase, redeem, retire, or otherwise acquire any membership interests;
 
                         (B) amend the Organizational Documents of any Acquired
Company;
 
                         (C) pay or increase any bonuses, salaries, severance or
other compensation to any stockholder, director, officer, or employee; adopt or
amend any Benefit Plan or Employee Arrangement, or enter into any employment,
severance, or similar contract with any director, officer, or employee (except
in the Ordinary Course of Business);
 
                         (D) cause a material change in the accounting methods
or practices, collection policies, pricing policies or payment policies used by
any Acquired Company;
 
                         (E) make any Tax election or settle or compromise any
federal, state, local or foreign income Tax Liability, or waive or extend the
statute of limitations in respect of any such Taxes;
 
                         (F) (i) make any loan, or redeem or purchase any equity
interests of an Acquired Company, transfer any asset, or enter into or agree to
enter into any transaction to, with or for the benefit of any Acquired Company
or any of their Affiliates (or agree, whether in writing or otherwise, to do any
of the foregoing) or (ii) make any loans, advances or capital contributions to,
or invest in, any other Person, except for employee advances for expenses in the
Ordinary Course of Business;
 
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                         (G) sell, transfer, license, sublicense, lease, rent or
otherwise dispose of or encumber any of the Leased Real Property, Owned Real
Property or Material Personal Property pertaining to the businesses of the
Acquired Companies, other than the (i) sale of coal, other inventory and
obsolete equipment, (ii) lease, sublease or entering into other contractual
relationships by and among an Acquired Company and one or more other Acquired
Companies or third parties relating to rights of way, surface rights or similar
rights of use, (iii) purchase of leased equipment under existing lease options
that are disclosed on Schedule 3.18(c), or (iv) lease of additional equipment in
the Ordinary Course of Business under existing master leases that are disclosed
on Schedule 3.18(c);
 
                         (H) cancel any debts owed to or waive any material
claims or rights of the Acquired Companies;
 
                         (I) fail to make any capital expenditure or commitment
in the Ordinary Course of Business or as planned as of the date hereof, or make
or commit to make any capital expenditure or commitment outside the Ordinary
Course of Business not planned as of the date of this Agreement;
 
                         (J) recognize any labor union or other employee
representative, or enter into any collective bargaining agreement;
 
                         (K) incur, assume or guarantee any Indebtedness other
than such Indebtedness that is repaid in full prior to Closing, or enter into
any swap or other off-balance sheet transaction for its own account, or enter
into any economic arrangement having the economic effect of any of the
foregoing;
 
                         (L) amend or terminate any Material Contract, Equipment
Lease or Real Property Lease or enter into any agreement that would be
considered a Material Contract, Equipment Lease or Real Property if entered into
prior to the data hereof, or waive or assign any material right under any
Material Contract, Equipment Lease or Real Property Lease, including grants of
Intellectual Property rights by assignment, license or otherwise;
 
                         (M) satisfy any liabilities or compromise or settle
(including by entering into any consent decree) any lawsuit or claim (including
any lawsuit or claim involving a Governmental Authority) unless such
satisfaction or compromise includes the payment in full by the applicable
Acquired Company of all financial obligations arising therefrom;
 
                         (N) fail to pay accounts payable and other obligations,
when they become due and payable;
 
                         (O) merge or consolidate with, or agree to merge or
consolidate with, or purchase the assets of, or otherwise acquire, any business,
business organization or division thereof, or any Person (other than the
purchase of assets from suppliers and vendors in the Ordinary Course of
Business);
 
                         (P) fail to maintain in full force and effect insurance
comparable in amount and scope of coverage to insurance now carried by it; or
 
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                         (Q) agree, whether in writing or by oral agreement, to
do any of the foregoing.
 
               (c) Until such time, if any, as this Agreement is terminated
pursuant to Article IX, Sellers will not, and will cause their respective
representatives not to, directly or indirectly, solicit, initiate, or encourage
any inquiries or proposals from, discuss or negotiate with, provide any
non-public information to, or consider the merits of any unsolicited inquiries
or proposals from, any Person (other than Buyer) relating to any transaction
involving the sale of any Acquired Company, or any of the membership interests
of any Acquired Company, substantially all of the assets of any Acquired
Company, or any merger, consolidation, business combination, or similar
transaction involving any Acquired Company. Sellers, and each of their
respective representatives, shall immediately notify Buyer regarding any contact
between Sellers, and/or their respective representatives and any other Person
regarding any offer, proposal or related inquiry unless such notification could
violate any existing confidentiality agreement to which an Acquired Company is a
party.
 
          6.2 Redemption. Prior to the Closing, Resource Partners shall redeem
all the limited partnership units issuable or outstanding under Resource
Partners’ Restricted Unit Plan for a price equal to such holder’s (the “Redeemed
Partners”) pro rata share of the Purchase Price to which such Redeemed Partner
would have been entitled pursuant to this Agreement had such Redeemed Partner
held such limited partnership units immediately prior to the Closing (the
“Redemption”) and satisfy or enter into an agreement pursuant to which Agent on
behalf of Sellers shall be solely responsible for satisfying any actual or
contingent obligations under Resource Partners’ Long-Term Incentive Plan (the
“Contingency Obligations”). Resource Partners shall enter into a redemption
agreement with each Redeemed Partner and shall enter into an agreement with each
Person entitled to any Contingency Obligation, each in a form reasonably
satisfactory to Buyer which agreements shall include, among other things, a
release by such Redeemed Partner or such Person entitled to any Contingency
Obligations of Resource Partners, Buyer and their Affiliates in a form
reasonably satisfactory to Buyer.
 
          6.3 Access and Investigation. Between the date of this Agreement and
the Closing Date, Sellers will, and will cause each Acquired Company and its
Related Persons to, (a) afford Buyer and its Related Persons and prospective
lenders and their Related Persons (collectively, “Buyer’s Advisors”) reasonable
access to each Acquired Company’s personnel, properties (including subsurface
testing), contracts, books and records, and other documents and data, (b)
furnish Buyer and Buyer’s Advisors with copies of all such contracts, books and
records, and other existing documents and data as Buyer may reasonably request,
and (c) furnish Buyer and Buyer’s Advisors with such additional financial,
operating, and other data and information as Buyer may reasonably request.
 
          6.4 Required Approvals; Consents.
 
               (a) As promptly as practicable after the date of this Agreement,
Sellers will, and will cause each Acquired Company to, make all filings required
by Law to be made by them in order to consummate the Contemplated Transactions
except for filings to be made pursuant to Section 6.10 and Section 6.14 which
shall be governed by those sections. Between the date of this Agreement and the
Closing Date, Sellers will, and will cause each Acquired
 
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Company to, (i) cooperate with Buyer with respect to all filings that Buyer
makes pursuant to Section 6.4(b), and (ii) cooperate with Buyer in obtaining and
use its commercially reasonable efforts to secure all Consents and Governmental
Approvals required as a result of the Contemplated Transactions identified in
Schedule 3.6 and Schedule 3.7 provided that Seller’s commercially reasonable
efforts shall not include making any cash payments to any party from which a
consent is sought other than the Consent Fees.
 
               (b) As promptly as practicable after the date of this Agreement,
in consultation with Sellers, Buyer will, and will cause each of its Related
Persons to, make all filings required by Law to be made by them in order to
consummate the Contemplated Transactions except for filings to be made pursuant
to Section 6.10 and Section 6.14 which shall be governed by those sections.
Between the date of this Agreement and the Closing Date, Buyer will, and will
cause each Related Person to, (i) cooperate with Sellers with respect to all
filings that Sellers make pursuant to Section 6.4(a), and (ii) cooperate with
Sellers in obtaining all Consents and Governmental Approvals required as a
result of the Contemplated Transactions identified in Schedule 3.6 and Schedule
3.7.
 
               (c) To the extent permitted by Law, Buyer and Sellers shall each
cause their respective counsel to supply to the other party copies of all
correspondence, filings or written communications by such party or its
Affiliates with any Governmental Authority or staff members thereof, with
respect to the Contemplated Transactions.
 
          6.5 Further Actions. Between the date of this Agreement and the
Closing Date, Sellers and Buyer will use their respective commercially
reasonable efforts to take, or cause to be taken, all appropriate action, and
do, or cause to be done, all things necessary, proper or advisable under
applicable Laws or otherwise to consummate and make effective the Contemplated
Transactions as promptly as practicable, and cooperate with each other to do so,
including without limitation, obtaining as promptly as practicable all Consents
and Government Approvals necessary in order to consummate the Contemplated
Transactions, all in accordance with the provisions of this Agreement.
 
          6.6 Financing.
 
               (a) Buyer has received, accepted and agreed to a commitment
letter, dated March 6, 2011 (the “Commitment Letter”) from the lenders party
thereto (collectively, the “Lenders”) relating to the commitment of the Lenders
to provide the debt financing required to consummate the Contemplated
Transactions. The debt financing required to consummate the Contemplated
Transactions, whether obtained pursuant to the arrangements contemplated by the
Commitment Letter or through substitute permanent financing arrangements which
may involve public or private offerings of debt or equity securities, is
collectively referred to in this Agreement as the “Financing”. A complete and
correct copy of the executed Commitment Letter has been provided to Agent.
 
               (b) Buyer shall use its reasonable best efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things reasonably
necessary, proper or advisable to consummate and obtain the Financing on the
terms and conditions described in the Commitment Letter, including (i) taking
actions to enforce its rights under the Commitment Letter and (ii) using its
reasonable best efforts to (A) negotiate definitive agreements with respect
thereto on the terms and conditions contained therein or on other terms no more
adverse to Buyer in any material respect, (B) satisfy on a timely basis all
conditions applicable to it in such definitive agreements and (C) consummate the
Financing at or prior to the Closing but in no event later than June 1, 2011.
 
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               (c) Buyer may terminate and replace the Commitment Letter with a
New Commitment Letter or may amend the Commitment Letter to add lenders, lead
arrangers, bookrunners, syndication agents or similar entities who had not
executed the Commitment Letter as of the date hereof, so long as (i) the
addition of such lenders, lead arrangers, bookrunners, syndication agents or
similar entities would not reasonably be expected to prevent or materially delay
the consummation of the Contemplated Transactions and (ii) the Arranger (as
defined in the Commitment Letter) shall remain obligated and committed to fund
its financing commitments under the Commitment Letter (as in effect prior to any
such amendment) on the terms and conditions of, and subject to the assignment
provisions set forth in, the Commitment Letter (as in effect prior to any such
amendment). Upon any such amendment, replacement, supplement or modification of
the Commitment Letter in accordance with this Section 6.6(c), the term
“Commitment Letter” shall mean the Commitment Letter as so amended, supplemented
or modified or any New Commitment Letter in replacement of the Commitment
Letter, as the case may be, and, in the event that Buyer obtains Alternative
Financing in accordance with Section 6.6(d), the term “Commitment Letter” shall
mean the commitment letter (as amended, replaced, supplemented or modified in
accordance with this Section 6.6(c)) related to the Alternative Financing. The
term “New Commitment Letter” shall mean the instrument replacing the existing
Commitment Letter that (A) is on terms not materially less beneficial to Buyer
than those set forth in the Commitment Letter; (B) does not involve any material
conditions precedent to funding the Financing that are not contained in the
Commitment Letter; and (C) would not reasonably be expected to prevent or
materially delay the consummation of the Contemplated Transactions.
 
               (d) In the event any portion of the Financing becomes unavailable
on the terms and conditions contemplated in the Commitment Letter (as such terms
may be modified or adjusted in accordance with the terms of, and within the
limits of, the “flex” provisions contained in the Commitment Letter or
accompanying fee letter) for any reason, Buyer shall use its reasonable best
efforts to obtain, as promptly as practicable but no later than the Drop Dead
Date, financing from alternative sources in an amount sufficient to consummate
the Contemplated Transactions and that would not (i) involve any material
conditions to funding the Financing that are not contained in the Commitment
Letter; (ii) reasonably be expected to prevent or materially delay the
consummation of the Contemplated Transactions; and (iii) include terms that
would be materially adverse when compared to the terms of the Commitment Letter
(an alternative financing meeting the foregoing requirements shall be an
“Alternative Financing”). In the event that Alternative Financing shall be
obtained pursuant to this Section 6.6(d), Buyer shall comply with the covenants
in Section 6.6(e) with respect to such Alternative Financing.
 
               (e) Buyer shall give Sellers prompt written notice of any
material breach by any party of the Commitment Letter (or commitments for any
Alternative Financing obtained in accordance with this Section 6.6(e)) of which
Buyer becomes aware, any termination of the Commitment Letter (or commitments
for any Alternative Financing obtained in accordance with this Section 6.6(e))
or any condition precedent of the Financing (or any Alternative Financing
obtained in accordance with this Section 6.6(e)) which Buyer expects will not be
satisfied at the Closing, as applicable.
 
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               (f) At Buyer’s request, Sellers shall cause the Acquired
Companies, and its or their representatives, to use their reasonable best
efforts to (x) cooperate with Buyer to complete the Financing to the extent that
information relating to, or the participation by members of management of, the
Acquired Companies is reasonably necessary in connection therewith; and (y)
provide all information and assistance that is customarily provided in
financings comparable to the proposed Financing. Without limiting the generality
of the foregoing, Sellers shall cause the Acquired Companies to:
 
                    (i) furnish to Buyer as promptly as practicable, upon
Buyer’s request from time to time, (1) all Financial Statements, (2) all other
financial statements required by the Commitment Letter (or commitments for any
Alternative Financing obtained in accordance with Section 6.6(e)) with respect
to the Acquired Companies within the time periods specified therein, including
information reasonably requested by Buyer to assist in the preparation of pro
forma financial statements and the projected consolidated financial statements
of Buyer and (3) all financial statements, business and other financial data,
audit reports and other information regarding the Acquired Companies of the type
that would be required by Regulation S-X and Regulation S-K promulgated under
the Securities Act for a registered public offering of debt or equity securities
of Buyer (to the extent such information in clauses (2) or (3) currently exists
and, in the event such information does not exist, Sellers will assist in
obtaining such information at Buyer’s expense);
 
                    (ii) use its reasonable best efforts to furnish to Buyer, as
promptly as reasonably practicable, other information with respect to the
Acquired Companies reasonably requested by Buyer in writing (1) so that Buyer
may satisfy the applicable SEC requirements for public capital markets offerings
and (2) of the type and form customarily included in offering documents used in
private placements under Rule 144A under the Securities Act;
 
                    (iii) use its reasonable best efforts to furnish to Buyer,
as promptly as reasonably practicable, information relating to the Acquired
Companies reasonably requested by Buyer in writing that is customarily used in
the preparation of customary offering or information documents or rating agency,
lender presentations or road shows relating to the Financing;
 
                    (iv) upon reasonable advance notice and at Buyer’s expense,
participate in investor presentations, road shows, due diligence sessions and
rating agency presentations in connection with the Financing, including
participation by senior management of the Acquired Companies with appropriate
seniority and expertise;
 
                    (v) cooperate reasonably with Buyer’s Financing sources’ due
diligence, to the extent customary and reasonable and at Buyer’s expense;
 
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                    (vi) assist at Buyer’s expense with the preparation,
including participating in drafting sessions, of any confidential information
memorandum, offering memorandum, prospectus, registration statement or other
offering document (including any amendments or supplements thereto and an
additional version of any confidential information memorandum for use by
“public-side” lenders) or rating agency presentation used by Buyer in connection
with the Financing;
 
                    (vii) request required consents of accountants for use of
their reports in any materials relating to the Financing where the inclusion of
such reports is necessary and request the delivery of customary comfort letters
and customary representation letters;
 
                    (viii) use its reasonable best efforts to facilitate
pledging collateral of the Acquired Companies in connection with any debt
portion of the Financing, including the execution and delivery of customary
pledge and security agreements and other customary certificates and documents
prepared by Buyer, as may be reasonably requested by Buyer (provided that any
obligations contained in such documents shall be effective no earlier than as of
the Closing);
 
                    (ix) provide authorization letters to the Financing sources
authorizing the distribution of the Acquired Companies’ information to
prospective lenders;
 
                    (x) use commercially reasonable efforts to assist Buyer and
the Financing sources in benefiting from the Acquired Companies’ existing
lending and investment banking relationships;
 
                    (xi) take such corporate actions (subject to the occurrence
of the Closing) as are reasonably necessary to complete the Financing; and
 
                    (xii) use reasonable best efforts to facilitate the
execution and delivery (at the Closing) of definitive documents related to the
Financing.
 
Sellers hereby consent to the use of the Acquired Companies’ logos in connection
with the Financing; provided that such logos are used solely in a manner that is
not intended to or reasonably likely to harm or disparage the Acquired Companies
or the Sellers or the reputation or goodwill of the Acquired Companies or the
Sellers.
 
          6.7 Further Assurances. Following the Closing, Sellers and Buyer will,
and each will cause each of its respective Related Persons to, from time to
time, execute and deliver such additional instruments, documents, conveyances or
assurances and take such other actions as shall be necessary, or otherwise
reasonably required by Sellers, on the one hand, and Buyer, on the other hand,
as applicable, to confirm and assure the rights and obligations provided for in
this Agreement and render effective the consummation of the Contemplated
Transactions.
 
          6.8 Purchase Price Deductions; Special Indemnity.
 
               (a) Sellers hereby agree that the Cash Portion of the Purchase
Price shall be reduced by the amounts set forth on Schedule 6.8(a) (the
“Purchase Price Deductions”).
 
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               (b) Sellers hereby covenant and agree that, prior to the Closing,
Sellers shall pay to the extent known and quantifiable (i) any and all
performance bonuses earned by any Company Employee through the Closing Date and
not reflected in Current Liabilities (“Bonuses”); (ii) any and all “change of
control” or similar payments to which any Company Employee is entitled as a
result of the Contemplated Transactions (but only to the extent such right is
not waived in writing by such Company Employee) (“Change of Control Payments”);
and (iii) one-half of any cost or expense incurred by Sellers, Buyer or the
Acquired Companies to induce a third party to that certain lease agreements
listed under Item 3 of Schedule 6.8(c) to consent to the assignments of such
lease and other similar fees related to such lease and arising from the
Contemplated Transactions (the “Consent Fees”).
 
               (c) Sellers hereby covenant and agree that, from and after the
Closing, Sellers shall indemnify each Buyer Indemnitee, to the extent provided
in Section 10.1(a), for any Losses of such Buyer Indemnitee with respect to,
whether disclosed to Buyer or not, any Bonus, Change of Control Payment, Consent
Fees or other matter set forth on Schedule 6.8(c) (the “Special Indemnity
Matters”) arising on or after the Closing Date, not included in the Purchase
Price Deductions pursuant to Section 6.8(a) or not paid by Sellers pursuant to
Section 6.8(b).
 
          6.9 Guarantees; Seller Bonds.
 
               (a) Sellers’ Guarantees. Prior to and after the Closing, Buyer
shall cooperate with Sellers and their Affiliates and shall use its commercially
reasonable efforts, which shall include preparation and submission of documents,
provision of information and response to requests, to cause Buyer and/or one or
more Affiliates of Buyer to be substituted in all respects for Sellers or any
Affiliate of Sellers, in respect of all Liabilities under the Seller Guarantees,
and to cause Sellers and all Affiliates of Sellers to be fully released and
discharged with respect thereto, in each case, as of the Closing Date; provided
that, Buyer’s commercially reasonable efforts shall not include making any cash
payments to any party from which a release is sought or modifying or amending
any agreement with any party from which a release is sought in a manner that is
adverse to the Acquired Companies or Buyer. Without limiting the generality of
the foregoing, with respect to such Seller Guarantees that are the result of
Sellers being an indemnitor under any of Seller Bonds, Buyer may post a
replacement surety bond for the bond of the Company in the manner set forth in
Section 6.9(b) in lieu of being substituted for Sellers. With respect to any
Seller Guarantees which are not fully released and discharged prior to the
Closing Date, Buyer shall continue to use commercially reasonable efforts to
replace such Seller Guarantees and/or to cause Sellers and all Affiliates of
Sellers to be fully released and discharged therefrom effective as of the
Closing Date.
 
               (b) Bonds. With respect to the Seller Bonds, Buyer shall post,
within five (5) Business Days following the Closing Date, a replacement surety
bond for the benefit of the beneficiaries thereof in form and substance and
issued by a surety company that is satisfactory to such beneficiaries. Each such
replacement surety bond so provided by the Buyer shall provide on its face that
it “supersedes and replaces” the applicable Seller Bond as of the Closing Date.
At or prior to the Closing, Buyer shall deliver, or cause to be delivered, to
Sellers, such other documents as may reasonably be requested by Sellers in order
to permit Sellers to effect the full release and discharge of Sellers and all
Affiliates of Sellers as of the Closing Date. Buyer shall reimburse Sellers on a
monthly basis for all reasonable costs and expenses incurred by Sellers or the
Affiliates of Sellers with respect to all such bonds that remain outstanding
following the Closing Date to the extent such costs and expenses accrue on or
after the Closing Date.
 
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               (c) Indemnification After Closing. Buyer shall indemnify and hold
Sellers and all Affiliates of Sellers harmless from and against, and pay and
reimburse Sellers and all Affiliates of Sellers for, any and all Losses that
they may incur arising or relating to the Seller Guarantees or Seller Bonds for
events occurring on or after the Closing Date. Any payment required to be made
by Buyer under this Section shall be made within ten (10) Business Days after
Buyer’s receipt of written notice from Sellers or any Affiliate of Sellers
describing in reasonable detail the amount owing hereunder.
 
               (d) Refund of Premiums. All funds in respect of premiums that are
refunded in respect of Seller Guarantees or Seller Bonds on account of the
replacement thereof by Buyer pursuant to this Section shall be for the account
of Sellers and their Affiliates. Buyer shall pay over or cause the Acquired
Companies to pay over to Sellers any such refunds received by any Acquired
Company after the Closing promptly upon receipt of such refunds.
 
               (e) Required Efforts. Notwithstanding the foregoing, in no event
shall any party hereto be required to or otherwise file any lawsuit in order to
cause the replacement and/or release and discharge of any Seller Guaranty or
Seller Bond. After the Closing, Buyer will not, and will not permit any Acquired
Company to, renew, extend, amend or supplement any loan, contract, lease or
other obligation underlying any guarantee with respect to which Sellers and
their Affiliates are not fully released and discharged as of the Closing Date in
any manner that would extend or increase the Liability of Sellers or any
Affiliate of Sellers without providing Sellers with evidence satisfactory to
Sellers that Sellers and their Affiliates have been fully released and
discharged.
 
               (f) Approval of Replacement Bonds. So long as Buyer provides
adequate credit support for the replacement of each Seller Bond pursuant to this
Section 6.9 on or before the Closing Date, any delay in the release of a Seller
Bond or a bond being replaced at the discretion of Buyer in lieu of replacing
Sellers as an indemnitor for a Seller Bond shall not constitute a breach of the
covenant of Buyer to post such replacement surety bond by the Closing Date.
 
          6.10 Permits.
 
               (a) Pending Transfers; Documents. Within five (5) Business Days
following the Closing Date, Buyer shall submit (i) all filings necessary to
cause the applicable Governmental Authorities to transfer to Buyer the Permits
(the “Transfer Applications”); and (ii) any and all replacement bonds or other
financial security, if applicable, required to complete the transfer of the
Permits and replace the Seller Bonds. The parties acknowledge that some
Governmental Authorities may not require a permit transfer but may require
updated ownership and control information perhaps with a bond replacement and/or
the issuance of a new license or mine number and that any reference herein to a
permit transfer shall also refer to bond replacement and/or ownership and
control information or issuance of a new license or mine number. Prior to
filing, Buyer shall deliver to Agent copies of the Transfer Applications.
Sellers will cooperate with Buyer and take all actions necessary to complete all
necessary forms to effect the Transfer Applications and to effect Buyer’s
ability to operate under Sellers’ permits during the Permits Transfer Period
described below.
 
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               (b) Post-Filing Obligations. Buyer shall diligently pursue and
use its commercially reasonable efforts to expeditiously secure the transfer of
all the Permits within the Permits Transfer Period, which shall include, but is
not limited to, cooperating with the relevant Governmental Authorities,
participating in the public comment process, and working with interested parties
and neighboring landowners. In the event Buyer fails to secure transfer of (i)
all Permits (other than Permits for which there is a pending action) within
three (3) months from the Closing Date and (ii) all Permits for which there is a
pending action within twelve (12) months from the Closing Date, then Buyer shall
pay to Agent, for the benefit of Sellers the amount of any and all reasonable
costs, expenses or damages incurred by Sellers or their Affiliates resulting
from such failure, provided however, that if such failure is caused by Sellers’
actions (including any failure by Sellers to take any necessary action), then
Sellers shall pay to Buyer the amount of any and all reasonable costs, expenses
or damages incurred by Buyers or their Affiliates (including the Acquired
Companies following the Closing) resulting from such failure.
 
               (c) Violations. During the period of time from the Closing Date
until the applications for the transfer of control of the Acquired Companies has
been accepted by the relevant Governmental Authorities (“Permits Transfer
Period”), if Sellers receive a notice of violation under any of the Permits, it
will give Buyer and the applicable Acquired Company (as owned by Buyer) prompt
notice thereof. During the Permits Transfer Period, Buyer and the applicable
Acquired Company (as owned by Buyer) shall use their commercially reasonable
efforts to timely cure such violation. If Sellers reasonably determine that
Buyer or the applicable Acquired Company (as owned by Buyer) will not cause such
violation to be cured in a timely fashion during the Permits Transfer Period,
they shall have the right to cure, or cause to be cured, such violation and be
reimbursed by Buyer or the applicable Acquired Company (as owned by Buyer) for
all reasonable costs incurred in curing such violation.
 
          6.11 Confidentiality. The provisions of that certain letter agreement
by and between Resource Partners and Buyer dated December 14, 2010 (the
“Confidentiality Agreement”), shall continue to apply to the parties as though
all such parties were original signatories thereto. If this Agreement is
terminated for any reason whatsoever, the parties shall continue to be bound by
the terms of the Confidentiality Agreement and the Buyer shall return to the
Company all tangible embodiments (and all copies) of “Evaluation Material” (as
defined in the Confidentiality Agreement) that are in its possession.
 
          6.12 Tax Matters.
 
               (a) Proration of Straddle Period. In the case of Taxes that are
payable with respect to any Straddle Period, the portion of any such Tax that is
attributable to the portion of the period ending on the Closing Date shall be:
 
                    (i) in the case of Taxes that are either (A) based upon or
related to income or receipts, or (B) imposed in connection with any sale or
other transfer or assignment of property (real or personal, tangible or
intangible), deemed equal to the amount that would be payable if the Tax years
of each of the Acquired Companies (and each partnership in which any of the
Acquired Companies is a partner) ended with (and included) the Closing Date; and
 
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                    (ii) in the case of Taxes that are imposed on a periodic
basis with respect to the assets of any Acquired Company, deemed to be the
amount of such Taxes for the entire period (or, in the case of such Taxes
determined on an arrears basis, the amount of such Taxes for the immediately
preceding period), multiplied by a fraction the numerator of which is the number
of calendar days in the portion of the period ending on the Closing Date and the
denominator of which is the number of calendar days in the entire period.
 
               (b) Transfer Taxes. All excise, sales, use, transfer (including
real property transfer or gains), stamp and other similar taxes, together with
any interest, additions or penalties with respect thereto and any interest in
respect of such additions or penalties, resulting directly from the Contemplated
Transactions (the “Transfer Taxes”), if any, shall be borne equally by Buyer, on
the one hand, and Sellers, on the other hand. If Sellers, on the one hand, or
Buyer, on the other hand, pay any Transfer Taxes then the other party shall
reimburse the paying party for one half of such Transfer Taxes actually paid.
Any Tax Returns that must be filed in connection with Transfer Taxes shall be
prepared and filed when due by the party primarily or customarily responsible
under the applicable local law for filing such Tax Returns, and such party shall
use reasonable commercial efforts to provide such Tax Returns to the other party
at least ten (10) days prior to the due date for such Tax Returns.
 
               (c) Cooperation on Tax Matters.
 
                    (i) The Buyer and each of the Acquired Companies, on the one
hand, and the Sellers, on the other hand, shall cooperate fully, as and to the
extent reasonably requested by the other party, in connection with the filing of
Tax Returns and any audit, litigation or other proceeding with respect to Taxes.
Such cooperation shall include the retention and, upon the other party’s
request, the provision of records and information that are reasonably relevant
to any such audit, litigation or other proceeding and making employees available
on a mutually convenient basis to provide additional information and explanation
of any material provided hereunder. The Buyer and each of the Acquired
Companies, on the one hand, and the Sellers, on the other hand, agree to retain
all books and records with respect to Tax matters pertinent to the Acquired
Companies relating to any taxable period beginning before the Closing Date until
the expiration of the statute of limitations (and, to the extent notified by the
other party, any extensions thereof) of the respective taxable periods, and to
abide by all record retention agreements entered into with any taxing authority.
 
                    (ii) The Buyer and the Sellers further agree, upon request,
to use their commercially reasonable efforts to obtain any certificate or other
document from any Governmental Authority or any other Person as may be necessary
to mitigate, reduce or eliminate any Tax that could be imposed (including with
respect to the Contemplated Transactions).
 
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          6.13 Employee Plans. Buyer shall, or shall cause one of its Affiliates
to, provide each individual who is employed by any of the Acquired Companies on
the Closing Date and who continues employment with Buyer or any of its
Affiliates (including the Acquired Companies after Closing) after the Closing
Date (the “Continuing Employees”) with a position providing base pay that is at
least equal to the base pay provided to such Continuing Employees by the
applicable Acquired Company immediately prior to the Closing Date. Nothing in
this Section 6.13, however, will limit the right of Buyer to terminate or
suspend employment of any Continuing Employee after the Closing, subject only to
the provisions of Section 6.15. For a period of at least twelve (12) months
beginning on the Closing Date, the Buyer shall provide, or cause to be provided,
to Continuing Employees, employee benefits and programs that, individually or in
the aggregate, are substantially similar either to the Employee Benefit Plans
maintained or contributed to by the Acquired Companies (as the case may be) for
employees of the Acquired Companies as of the date of this Agreement or to
employee benefit plans and programs provided by the Buyer to similar situated
employees of the Buyer on the date as of which the substantially similar
comparison is made. Continuing Employees shall receive full credit for their
services with the Acquired Companies for purposes of eligibility to participate
and vesting in benefits under any employee benefit plans and programs of the
Buyer and its controlled group of corporations in which they are eligible to
participate; provided, that no credit shall be given for purposes of benefit
accrual or entitlement to severance benefits or if the service credit would
result in a duplication of benefits. For the entire calendar year of 2011,
Continuing Employees shall be permitted to take earned but not taken vacation
time-off as provided in Sellers’ vacation time-off policy. Buyer shall provide
the Continuing Employees and their eligible dependents with credit for any
co-payments, out-of-pocket expenses and deductibles paid (to the same extent
such credit was given under a corresponding benefit plan prior to the Closing
Date) in satisfying any applicable deductible, co-payment or out-of-pocket
requirements in respect of the plan year in which the Closing Date occurs.
 
          6.14 Antitrust Notification.
 
               (a) As promptly as reasonably practicable following the execution
of this Agreement, Buyer and Agent, on behalf of Sellers shall make all
pre-transaction notification filings required under the HSR Act (which shall be
made no later than seven (7) Business Days after the date of this Agreement) and
any other filing under any statute, law, ordinance, rule or regulation designed
to prohibit, restrict or regulate actions for the purpose or effect of
preventing monopolization, restraints of trade or abusing a dominant position
(collectively, “Antitrust Laws”) of any country, state, province or jurisdiction
of competent jurisdiction requiring a notification and observation of a waiting
period or requiring prior approval before consummating the Contemplated
Transactions and the other Transaction Documents (“Pre-Transaction Notification
Rules”). Each of Buyer and Sellers shall: (i) cooperate fully with each other
and shall furnish to the other such necessary information and reasonable
assistance as the other may reasonably request in connection with its
determination as to whether and which Pre-Transaction Notification Rules are
necessary or advisable and the preparation of any filings under any
Pre-Transaction Notification Rules; (ii) keep the other party reasonably
informed of any communication received by such party from, or given by such
party to any Governmental Authority charged with enforcing, applying,
administering, or investigating any Antitrust Law, including the United States
Federal Trade Commission, the United States Department of Justice, any attorney
general of any state of the United States or any other competition authority of
any jurisdiction (“Antitrust Authority”), and of any communication received or
given in connection with any proceeding by a private party related to the
Antitrust Laws, in each case, regarding this Agreement and the other Transaction
Documents and in a manner that protects attorney-client or attorney work product
privilege; and (iii) permit the other party to review and incorporate the other
party’s reasonable comments in any communication given by it to any Governmental
Authority or in connection with any proceeding by a private party related to
Antitrust Laws with any other Person, in each case, regarding the Contemplated
Transactions and in a manner that protects attorney-client or attorney work
product privilege. Unless otherwise agreed and without limiting the obligations
stated in this Section 6.14(a), Buyer and Sellers shall each use their
respective commercially reasonable efforts to ensure the prompt expiration of
any applicable waiting period under any Pre-Transaction Notification Rules and
approval by any relevant Antitrust Authority. Further, without limiting the
obligations stated in this Section 6.14(a), Buyer and Sellers shall each use
their respective commercially reasonable efforts to respond promptly to and
comply with any request for information any Governmental Authority regarding the
Contemplated Transactions or filings under any Pre-Transaction Notification
Rules. Neither party hereto shall initiate, or participate in any meeting or
discussion with any Governmental Authority with respect to any filings,
applications, investigation, or other inquiry regarding the Contemplated
Transactions or filings under any Pre-Transaction Notification Rules without
giving the other party reasonable prior notice of the meeting or discussion and,
to the extent permitted by the relevant Governmental Authority, the opportunity
to attend and participate (which, at the request of any party, shall be limited
to outside antitrust counsel only).
 
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               (b) The parties shall take reasonable efforts to share
information protected from disclosure under the attorney-client privilege, work
product doctrine, joint defense privilege or any other privilege pursuant to
this section so as to preserve any applicable privilege.
 
               (c) No party shall take any action with the intention to or that
could reasonably be expected to hinder or delay the obtaining of clearance or
any necessary approval of any antitrust authority under any Pre-Transaction
Notification Rule or Antitrust Law or the expiration of the required waiting
period under the Pre-Transaction Notification Rules or any other Antitrust Laws.
 
          6.15 WARN Act. Notwithstanding the provisions of Section 6.13, Sellers
agree that prior to the Closing, and Buyer agrees that for ninety (90) days
after the Closing, Sellers or Buyer shall not, and shall not allow any of the
Acquired Companies to, take any act or allow any failure to act that would be a
violation of any WARN Act. Sellers covenant and agree that, from the date hereof
through the Closing, Sellers shall, and shall cause each of the Acquired
Companies, not to terminate more than 30 employees of the Acquired Companies, in
the aggregate, without notice to and the consent of Buyer, which consent shall
not be unreasonably withheld.
 
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          6.16 Schedules. At all times prior to the Closing, Sellers shall
provide Buyer with written notification, which notification may be in the form
of a written update to the schedules (each, an “Update”), of any change, fact,
event, occurrence or other information of any kind whatsoever, whether arising
before or after the date of this Agreement, which, except as provided in this
Section 6.16, causes or constitutes a breach of any representation or warranty
made by Sellers or that would make the timely satisfaction of any of the
conditions set forth in Article VII impossible. Any Update shall specify each
portion of any representation and warranty or condition affected by such Update.
Sellers shall provide to Buyer such information as Buyer may reasonably request
in order to review any matter disclosed in any Update. In connection with
determining the accuracy of any of the representations and warranties made by
Sellers in this Agreement for the purposes of Article X, (a) the delivery of an
Update with respect to any event, fact or matter existing but not disclosed in
an applicable schedule as of the date of this Agreement (a “Pre-Signing Event
Update”) shall not cure or otherwise affect or be deemed a waiver of any breach
of a representation or warranty made as of the date hereof and such Pre-Signing
Event Update shall not qualify any such representation and warranty as of the
date of this Agreement, and (b) the delivery of an Update with respect to any
event, fact or matter first arising after the date of this Agreement (a
“Post-Signing Event Update”) shall be deemed to supplement or amend the
schedules solely for the purpose of qualifying the portions of the
representations and warranties specified in the Post-Signing Event Update as the
same are made at and as of the Closing as if such Post-Signing Event Update had
been incorporated into the schedules theretofore in effect; provided, however,
after delivery of a Post-Signing Event Update to Buyer, Buyer shall have the
right to terminate this Agreement upon written notice to Sellers unless Sellers
agree in the Post-Signing Event Update that such Post-Signing Event Update shall
not be deemed to effect or to qualify any representation or warranty for
purposes of making the representations and warranties herein at and as of the
Closing provided that if Seller does not agree and Buyer does not exercise its
right to terminate and the Closing occurs, Buyer Indemnitee’s right to
indemnification shall be deemed to have been waived. Except as provided in the
immediately preceding sentence, neither the delivery of an Update nor any
Closing thereafter shall be deemed a waiver of any Buyer Indemnitee’s right to
indemnification pursuant to Section 10.1(a) for any breach or nonfulfillment by
Sellers of any covenant or agreement contained in this Agreement with respect to
the subject matter of any Update or for any breach of any representation or
warranty made at and as of the date of this Agreement. In connection with
determining the accuracy of any of the representations and warranties made by
Sellers in this Agreement for the purposes of determining whether any of the
conditions set forth in Article VII has been satisfied (including the condition
in Section 7.1), all Updates, including Post-Signing Event Updates, shall be
disregarded. If an Update is delivered within three (3) Business Days of the
Closing, Buyer shall be entitled, at its option, to delay the Closing by three
(3) Business Days. Each Update shall specify whether it is a Pre-Signing Event
Update or a Post-Signing Event Update.
 
          6.17 Release.
 
               (a) As of the Closing, Sellers, in their individual capacity and
on behalf of their respective Affiliates, and to the extent Sellers have the
authority, any Related Person of any of the foregoing and all Persons claiming
by, through, for or under Sellers on behalf of Sellers, hereby irrevocably and
unconditionally release, settle, cancel, discharge and acknowledge to be fully
and finally satisfied any and all claims, demands, rights, actions, causes of
action, debts, accounts, covenants, contracts, agreements, promises, damages,
costs, reimbursements, compensation, liabilities and expenses, including
attorney’s fees, of any and every kind, nature or description whatsoever, known
or unknown, at law or in equity (including with respect to the allocation among
Sellers of the proportionate amount of consideration received pursuant to the
Contemplated Transactions) other than those that Sellers may have against Buyer
arising under this Agreement or any other Transaction Document (subject to the
terms of this Agreement) (collectively, “Sellers Claims and Losses”), which
Sellers or any of their respective Related Parties, or any other Person claiming
by, through, for or under Sellers on behalf of Sellers, may have had or may now
have or assert against (i) Buyer and its Affiliates, (ii) any of the Acquired
Companies (collectively with Buyer and its Affiliates, “Buyer Released
Parties”), which are on account of any matter whatsoever attributed to the
period, or arising during the period, from the beginning of time through and
including and ending at the Closing (all Sellers Claims and Losses released in
this Section 6.14 being referred to as the “Sellers Released Claims”).
 
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               (b) Sellers agree that neither Sellers nor their Related Parties,
nor anyone claiming under, through or for them or on their behalf will bring,
file, institute, prosecute, maintain, participate in, or recover upon, either
directly or indirectly, or encourage or benefit from the institution of any
suit, charge, administrative proceeding, investigation, or action at law or in
equity against the Buyer Released Parties, or any of them, in or before any
court, agency or forum, state or federal, or otherwise, for or relating to any
of the Sellers Released Claims. Sellers agree that this release may be pleaded
by the Buyer Released Parties as a counterclaim or cross-claim to or as a
defense in bar or abatement of any Sellers Released Claim. Notwithstanding
anything herein to the contrary, this Section 6.17 shall not preclude Sellers
nor their Related Parties, nor anyone claiming under, through or for them from
asserting any claim against the Buyer Released Parties or any of them resulting
from any third-party claim against Sellers or such persons for actions of the
Acquired Companies or any of the Buyer Related Parties or any claims under
Article X.
 
          6.18 Employees. Prior to the Closing, Sellers shall cause (i) each of
the officers and employees of IRP Administrative Services, LLC (“IRP
Administrative”) who spend a substantial portion of their business time
performing services on behalf of the Acquired Companies rather than IRP
Administrative to become officers or employees of one or more of the Acquired
Companies, (ii) each of the employment agreements that any such officer or
employee is a party to as set forth on Schedule 6.18 to be assigned by IRP
Administrative to the applicable Acquired Company and (iii) each such officer or
employee to consent to such assignment of his employment agreement, agree that
such assignment is not included within the definition of “Good Reason” as
defined in his or her employment agreement and waive any rights to any “change
of control” or similar payments such officer or employee may have under such
employment agreement from Buyer or any of the Acquired Companies. For purposes
of this Agreement, any officer or employee of IRP Administrative Services that
will become an officer or employee of one or more of the Acquired Companies
prior to the Closing shall be deemed a “Company Employee.”
 
ARTICLE VII
 
CONDITIONS PRECEDENT TO SELLERS’ OBLIGATIONS TO CLOSE
 
               Sellers’ obligation to effect the Closing under this Agreement is
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived by Agent in whole or in part):
 
          7.1 Representations and Warranties. The representations and warranties
of Buyer in this Agreement that are qualified by materiality shall be true and
correct in all respects and the representations and warranties of Buyer in this
Agreement that are not qualified by materiality shall be true and correct in all
material respects as of the Closing Date, other than representations and
warranties that expressly speak as of a specific date or time (which need only
be true and correct in all respects or true and correct in all material
respects, as applicable, as of such date or time), without giving effect to any
supplement to the schedule.
 
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          7.2 Performance. Buyer shall have performed and complied in all
material respects with all agreements and obligations required by this Agreement
to be so performed or complied with by it at or prior to the Closing.
 
          7.3 Officer’s Certificates. Buyer shall have delivered to Agent a
certificate, dated as of the Closing Date and executed by the chief executive
officer of Buyer, certifying to the fulfillment of the conditions specified in
Sections 7.1 and 7.2.
 
          7.4 Governmental Approvals. All material Governmental Approvals with
respect to the Contemplated Transactions shall have been obtained and all
conditions relating to such Governmental Approvals shall have been satisfied.
 
          7.5 HSR Act. Any required waiting period (and any extension thereof)
applicable to the Contemplated Transactions under the HSR Act and antitrust laws
shall have expired or been terminated.
 
          7.6 AVS List. Buyer shall not be (i) listed on the Applicant Violation
System maintained by the Office of Surface Mining of the United States
Department of the Interior or any counterpart system maintained by each of the
State of West Virginia or the Commonwealth of Kentucky, or (ii) blocked from
obtaining any Permits by any applicable Governmental Authority.
 
          7.7 Seller Guarantees and Seller Bonds Arrangements All Seller
Guarantees and Seller Bonds listed on Schedule 7.7 shall have been released or
adequate credit support for the replacement of Seller Bonds shall have been
provided by Buyer as described in Section 6.9(f).
 
          7.8 Injunctions At the Closing there shall not be in effect any Law or
Governmental Order which restrains, prohibits or declares illegal the
consummation of the Contemplated Transactions and no Governmental Authority of
competent jurisdiction shall have instituted or threatened a Proceeding seeking
to impose any such restraint or prohibition which would have a Material Adverse
Effect.
 
          7.9 Closing Deliveries Buyer shall have delivered in all material
respects all of the closing deliveries required by Section 2.3(b).
 
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ARTICLE VIII
 
CONDITIONS PRECEDENT TO BUYER’S OBLIGATIONS TO CLOSE
 
               Buyer’s obligations to effect the Closing under this Agreement is
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived by Buyer in whole or in part).
 
          8.1 Representations and Warranties. The representations and warranties
of Sellers in this Agreement that are qualified by materiality shall be true and
correct in all respects and the representations and warranties of Sellers in
this Agreement that are not qualified by materiality shall be true and correct
in all material respects as of the Closing Date, other than representations and
warranties that expressly speak as of a specific date or time (which need only
be true and correct in all respects or true and correct in all material
respects, as applicable, as of such date or time), without giving effect to any
supplement to the schedule.
 
          8.2 Performance. Sellers shall have performed and complied in all
material respects with all agreements and obligations required by this Agreement
to be performed or complied with by it at or prior to the Closing.
 
          8.3 Officer’s Certificate. Sellers shall have delivered to Buyer a
certificate, dated as of the Closing Date and executed by the chief executive
officer of each Seller, certifying to the fulfillment of the conditions
specified in Sections 8.1 and 8.2 to the Knowledge of such officer.
 
          8.4 Governmental Approvals. All material Governmental Approvals with
respect to the Contemplated Transactions shall have been obtained and all
conditions relating to such Governmental Approvals shall have been satisfied,
including the expiration or termination of any waiting period (and any extension
thereof) applicable to the Contemplated Transactions under the HSR Act and any
other antitrust laws.
 
          8.5 Other Approvals. All Consents from Persons other than Governmental
Authorities with respect to the Contemplated Transactions listed on Schedule 3.6
shall have been obtained.
 
          8.6 Injunctions. At the Closing there shall not be in effect any Law
or Governmental Order which restrains, prohibits or declares illegal the
consummation of the Contemplated Transactions and no Governmental Authority of
competent jurisdiction shall have instituted or threatened a Proceeding seeking
to impose any such restraint or prohibition which would have a Material Adverse
Effect.
 
          8.7 Closing Deliveries. Sellers shall have delivered, or caused to be
delivered, in all material respects, all of the Closing deliveries required by
Section 2.3(a).
 
          8.8 Material Adverse Effect. At any time on or after the Latest
Balance Sheet Date there shall not have occurred and be continuing a change in
the condition of the Acquired Companies, taken as a whole, that has resulted in
a Material Adverse Effect.
 
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          8.9 Permits. For each Permit that is not transferred at Closing in
accordance with Section 6.10, Sellers shall have fully complied with all of the
terms and obligations of Section 6.10(b).
 
          8.10 Repayment of Indebtedness. Sellers shall have repaid all the
Indebtedness listed on Schedule 2.6 as to be repaid at or before Closing and
shall have delivered to Buyer evidence of such payment in form and substance
satisfactory to Buyer.
 
          8.11 Redemption. The Redemption shall have been completed and the
Contingency Obligations satisfied in accordance with the provisions of this
Agreement.
 
          8.12 Environmental Reports. Sellers shall have caused each Acquired
Company to have completed, to the reasonable satisfaction of Buyers, each of the
matters identified in the Modified Phase I Environmental Site Assessment Report
for Mine Operations Associated with International Resource Partners West
Virginia and Kentucky Operations February 2011, under the heading “The following
housekeeping issues and recommendations were also noted during the site
assessment.”
 
          8.13 Shared Services Agreement. Holdings II and International
Industries shall have executed and delivered a First Amendment to the Shared
Services Agreement between them dated as of June 12, 2007, giving Holdings II
the right to terminate the Shared Services Agreement at any time, with or
without cause, at its sole discretion.
 
ARTICLE IX
 
TERMINATION
 
          9.1 Termination. This Agreement may, by notice given prior to or at
the Closing, be terminated:
 
               (a) by either Buyer or Agent if a material breach of any
provision of this Agreement has been committed by the other party (including, in
the case of termination by Buyer, the Agent or Sellers) and such breach has not
been waived by the party to waive such condition;
 
               (b) (i) by Buyer if any of the conditions in Article VIII has not
been satisfied in all material respects as of the Closing Date or if
satisfaction of such a condition is or becomes impossible (other than through
the failure of Buyer to comply with its obligations under this Agreement) and
Buyer has not waived such condition on or before the Closing Date; or
 
                    (ii) by Agent, if any of the conditions in Article VII has
not been satisfied in all material respects as of the Closing Date or if
satisfaction of such a condition is or becomes impossible (other than through
the failure of Sellers or Agent to comply with their obligations under this
Agreement) and Agent have not waived such condition on or before the Closing
Date;
 
               (c) by mutual consent of Buyer and Agent; or
 
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               (d) by either Buyer or Agent if the Closing has not occurred
(other than through the failure of any party seeking to terminate this Agreement
(including in the case of Agent, Sellers) to comply fully with its obligations
under this Agreement) on or before September 1, 2011 (the “Drop Dead Date”), or
such later date as the parties may agree upon.
 
          9.2 Procedure and Effect of Termination. Each party’s right of
termination under Section 9.1 is in addition to any other rights it may have
under this Agreement or otherwise, and the exercise of a right of termination
will not be an election of remedies. If this Agreement is terminated pursuant to
Section 9.1, all further obligations of the parties under this Agreement will
terminate, except that the obligations in Sections 6.11 and 11.2 will survive;
provided, however, that if this Agreement is terminated by a party because of
the breach of the Agreement by the other party or because one or more of the
conditions to the terminating party’s obligations under this Agreement is not
satisfied as a result of the other party’s failure to comply with its
obligations under this Agreement, the terminating party’s right to pursue all
legal remedies (including damages and attorney’s fees) available at law or
equity, including the remedy of specific performance as set forth in Section
11.18, will survive such termination unimpaired.
 
ARTICLE X
 
INDEMNIFICATION
 
          10.1 Indemnification.
 
               (a) Indemnification by Sellers. Subject to the limitations set
forth in this Section 10.1, Sellers agree to indemnify, defend and hold Buyer
and its respective Affiliates and their respective officers, directors,
partners, members, stockholders, employees, agents, representatives, successors
and permitted assigns (collectively, the “Buyer Indemnitees”), harmless from and
in respect of any and all Losses, net of the proceeds from any insurance
policies or other third party reimbursement for, or any tax benefit Buyer
actually receives as a result of, such loss, and net of any Losses incurred by
Seller Indemnitees and not previously paid pursuant to which they are entitled
to indemnification under Article X that they may incur arising solely out of or
related to:
 
                    (i) any breach of any representation or warranty made by
Sellers, Resource Partners or Agent (in each case without regard to any
“Material Adverse Effect” or other “materiality” qualifier contained therein) in
this Agreement, the Schedules, or any other Transaction Document delivered by
Sellers or Agent pursuant to this Agreement;
 
                    (ii) any breach of any representation or warranty made by
Sellers or Resource Partners (in each case without regard to any “Material
Adverse Effect” or other “materiality” qualifier contained therein) in this
Agreement as if such representation or warranty were made on and as of the
Closing Date;
 
                    (iii) any breach by Sellers, Resource Partners or Agent of
any covenant or obligation of Sellers, Resource Partners or Agent in this
Agreement or any other Transaction Document delivered pursuant to this
Agreement;
 
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                    (iv) any claim by any Person for brokerage or finder’s fees
or commissions or similar payments based upon any agreement or understanding
alleged to have been made by any such Person with Sellers or any Acquired
Company (or any Person acting on their behalf) in connection with any of the
Contemplated Transactions;
 
                    (v) the Redemption and any Contingency Obligations;
 
                    (vi) any Buyer Indemnified Taxes; or
 
                    (vii) any Special Indemnity Matter.
 
               (b) Indemnification by Buyer. Subject to the limitations set
forth in this Section 10.1, Buyer agrees to indemnify, defend and hold Sellers
and their Affiliates and their respective officers, directors, partners,
members, stockholders, employees, agents, representatives, successors and
permitted assigns (collectively, the “Seller Indemnitees”), harmless from and in
respect of any and all Losses, net of the proceeds from any insurance policies
or other third party reimbursement for, or any tax benefit Sellers actually
receives as a result of, such loss, that they may incur arising solely out of or
relating to:
 
                    (i) any breach of any representation or warranty made by
Buyer (in each case without regard to any “materiality” qualifier contained
therein) in this Agreement, the Schedules, or any other Transaction Document
delivered by Buyer pursuant to this Agreement;
 
                    (ii) any breach of any representation or warranty made by
Buyer (in each case without regard to any “materiality” qualifier contained
therein) in this Agreement as if such representation or warranty were made on
and as of the Closing Date;
 
                    (iii) any breach by Buyer of any covenant or obligation of
Buyer in this Agreement or any other Transaction Document delivered pursuant to
this Agreement; or
 
                    (iv) any claim by any Person for brokerage or finder’s fees
or commissions or similar payments based upon any agreement or understanding
alleged to have been made by any such Person with Buyer or any Affiliate (or any
Person acting on their behalf) in connection with any of the Contemplated
Transactions;
 
provided, however, that Buyer shall have no obligation to indemnify any Seller
Indemnitee to the extent that Sellers are required to indemnify the Buyer
Indemnitees or would be so required but for the limitations set forth in Section
10.1(d).
 
               (c) Survival of Representations, Warranties and Indemnities. The
representations, warranties, covenants, undertakings and agreements of the
parties contained in or made pursuant to this Agreement or in any instrument
delivered pursuant hereto, and the rights of the parties to seek indemnification
with respect thereto, shall survive the Closing for a period of fourteen (14)
months from the Closing Date, except that the representations and warranties in
Section 3.3 (Interests) and Section 3A.4 (Interests) shall survive indefinitely
(for each type of indemnification claim, the “Indemnity Termination Date”). Any
claim for indemnification under this Agreement which is made in good faith and
in a writing specifying the factual basis of the claim in reasonable detail to
the extent then known by the claiming party prior to the expiration of the
applicable Indemnity Termination Date shall survive such expiration until
mutually resolved or otherwise determined hereunder, as applicable, and the
applicable Indemnity Termination Date for all purposes hereunder shall
automatically be extended with respect to such claim (but not any other claims)
until such claim is so mutually resolved or otherwise determined hereunder. Any
claim not so made prior to the expiration of the applicable Indemnity
Termination Date shall be deemed to have been waived.
 
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               (d) Limitations. Any recovery by any party under this Article X
with respect to claims for indemnification pursuant to this Section 10.1 shall
be limited as follows:
 
                    (i) The maximum aggregate amount of indemnifiable Losses
under Article X arising out of or resulting from the causes that may be
recovered from Sellers shall not exceed the amounts then remaining of the
General Escrow Amount in the Escrow Fund; provided that, notwithstanding
anything in this Section 10.1(d) to the contrary, in no event will the
limitations set forth in this Section 10.1(d)(i) apply with respect to any
breach of any representation, warranty, or covenant or obligation pursuant to
Section 3.3 (Interests) and Section 3A.4 (Interests); provided, however, that no
Seller shall be liable for the amount of idemnifiable Losses exceeding, on an
aggregate basis, the portion of the Purchase Price received by such Seller;
 
                    (ii) No party shall be entitled to any recovery unless and
until the total of all claims brought by such party for indemnity or damages
pursuant to this Section 10.1 exceeds $500,000 and such party then shall be
entitled to recover only the amount by which such claims for indemnity or
damages exceed $500,000; provided that, notwithstanding anything in this Section
10.1(d) to the contrary, in no event will the limitations set forth in this
Section 10.1(d)(ii) apply (x) in the event of fraud, willful misconduct or bad
faith, (y) with respect to any breach of any representation, warranty or
covenant or obligation pursuant to Section 3.3 (Interests) and Section 3A.4
(Interests), and (z) with respect to any claim for indemnification pursuant to
Section 10.1(a)(iv), (v), (vi), or (vii); and
 
                    (iii) The remedies set forth in this Article X and Sections
2.7 and 2.8 and the specific performance remedy referenced in Section 11.18
shall provide the sole and exclusive remedies arising from this Agreement.
 
               (e) Procedure for Indemnification – Third Party Claims.
 
                    (i) Promptly after receipt by an indemnified party under
Section 10.1(a) or Section 10.1(b) of notice of the commencement of any
proceeding against it, such indemnified party will, if a claim is to be made
against an indemnifying party under such Section, give notice to the
indemnifying party of the commencement of such claim, but the failure to notify
the indemnifying party will not relieve the indemnifying party of any Liability
that it may have to any indemnified party, except to the extent that the
indemnifying party demonstrates that the defense of such action is prejudiced by
the indemnifying party’s failure to give such notice.
 
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                    (ii) If any proceeding referred to in Section 10.1(e)(i) is
brought against an indemnified party and it gives notice to the indemnifying
party of the commencement of such proceeding, the indemnifying party will be
entitled to participate in such proceeding and, to the extent that it wishes
(unless (A) the indemnifying party is also a party to such proceeding and the
indemnified party determines in good faith that joint representation would be
inappropriate, or (B) the indemnifying party fails to provide reasonable
assurance to the indemnified party of its financial capacity to defend such
proceeding and provide indemnification with respect to such proceeding), to
assume the defense of such proceeding with counsel satisfactory to the
indemnified party and, after notice from the indemnifying party to the
indemnified party of its election to assume the defense of such proceeding, the
indemnifying party will not, as long as it diligently conducts such defense, be
liable to the indemnified party under this Section 10 for any fees of other
counsel or any other expenses with respect to the defense of such proceeding, in
each case subsequently incurred by the indemnified party in connection with the
defense of such proceeding, other than reasonable costs of investigation. If the
indemnifying party assumes the defense of a proceeding, (1) it will be
conclusively established for purposes of this Agreement that the claims made in
that proceeding are within the scope of and subject to indemnification; and (2)
no compromise or settlement of such claims may be effected by the indemnifying
party without the indemnified party’s consent unless (x) there is no finding or
admission of any violation of Laws or any violation of the rights of any Person
and no effect on any other claims that may be made against the indemnified
party, and (y) the sole relief provided is monetary damages that are paid in
full by the indemnifying party; and (z) the indemnified party will have no
Liability with respect to any compromise or settlement of such claims effected
without its consent. If notice is given to an indemnifying party of the
commencement of any proceeding and the indemnifying party does not, within ten
(10) days after the indemnified party’s notice is given, give notice to the
indemnified party of its election to assume the defense of such proceeding, the
indemnifying party will be bound by any determination made in such proceeding or
any compromise or settlement effected by the indemnified party.
 
                    (iii) Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable probability that a
proceeding may adversely affect it or its Affiliates other than as a result of
monetary damages for which it would be entitled to indemnification under this
Agreement, the indemnified party may, by notice to the indemnifying party,
assume the exclusive right to defend, compromise, or settle such proceeding, but
the indemnifying party will not be bound by compromise or settlement effected
without its consent (which may not be unreasonably withheld).
 
               (f) Procedure for Indemnification – Other Claims. A claim for
indemnification for any matter not involving a third-party claim may be asserted
by notice to the party from whom indemnification is sought.
 
               (g) Punitive Damages. Notwithstanding any other provision of this
Agreement to the contrary, no indemnifying party shall be liable to an
indemnified party for any punitive damages, special damages, indirect damages,
or similar items except to the extent that a Buyer Indemnitee has become liable
to any third party for such punitive damages, special damages, indirect damages,
or similar items resulting from a third party claim for which indemnification is
provided for in Section 10.1(a).
 
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          10.2 Treatment of Indemnification Payments. All indemnification
payments made under this Agreement shall be treated by Buyer and Sellers as an
adjustment to the Purchase Price.
 
ARTICLE XI
 
MISCELLANEOUS
 
          11.1 Agent. IRP GP (“Agent”) is hereby appointed as agent and
attorney-in-fact for each Seller, and through the Closing, for each Acquired
Company, for and on behalf of Sellers and the Acquired Companies, to act as
Agent for Sellers and the Acquired Companies under this Agreement and each other
Transaction Document, and to give and receive notices and communications, to
agree to, negotiate, enter into settlements and compromises of, and demand
arbitration and comply with orders of courts and awards of arbitrators with
respect to claims for indemnification, to authorize delivery to Buyer or any
Buyer Indemnitee of any payment hereunder, and to take all actions necessary or
appropriate in the judgment of Agent for the accomplishment of the foregoing in
accordance with the terms and provisions of this Agreement and each other
Transaction Document. Notices or communications to or from Agent hereunder shall
constitute notice to or from each Seller or, at or prior to the Closing, the
Acquired Companies. Sellers and the Acquired Companies hereby agree that the
appointment of Agent pursuant to this Section 11.1 shall be irrevocable except
as otherwise provided herein or by non-waivable provisions of Applicable Law.
Notwithstanding the foregoing, such appointment shall be automatically revoked
as to the Acquired Companies as of the completion of the Closing. Any decision,
act, consent or instruction of Agent relating to this Agreement or any other
Transaction Document shall constitute a decision of all of Sellers and, if prior
to or at the Closing, the Acquired Companies, and shall be final, binding and
conclusive upon each Seller and the Acquired Companies (but, with respect to the
Acquired Companies, only to the extent related to any time period ending at or
prior to the Closing) and Buyer may rely upon any such written decision, consent
or instruction of Agent as being the decision, consent or instruction of each
and every Seller and the Acquired Companies. Buyer and the other Buyer
Indemnitees are hereby relieved from any liability to any Person for any acts
done by them in accordance with such decision, consent or instruction of Agent.
Sellers hereby jointly and severally agree to indemnify and hold Agent, its
affiliates and their officers, employees, successors, assigns, attorneys and
agents harmless from all losses, costs, claims, demands, expenses, damages,
penalties and attorney’s fees suffered or incurred by such Agent as a result of
anything which it may do or refrain from doing in connection with this Agreement
or any Transaction Document or any litigation or cause or action arising from or
in conjunction with this Agreement or any Transaction Document or involving the
subject matter hereof; provided that the foregoing indemnification shall not
extend to the gross negligence or willful misconduct of Agent.
 
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          11.2 Fees and Expenses. Except as otherwise provided in this
Agreement, Sellers and Buyer shall bear their own expenses and the expenses of
their respective Affiliates (including, in the case of Sellers, each Acquired
Company and Agent) in connection with the preparation and negotiation of this
Agreement and the consummation of the Contemplated Transactions. Notwithstanding
the foregoing, Sellers and Buyer shall each pay one-half of the fee for the
Notification and Report Forms filed with the Department of Justice and the
Federal Trade Commission under the HSR Act. Sellers and Buyer shall bear the
fees and expenses of any broker or finder retained by such party and their
respective Affiliates (including, in the case of Sellers, each Acquired Company
and Agent) in connection with the Contemplated Transactions.
 
          11.3 Governing Law. This Agreement shall be construed under and
governed by the Laws of the State of New York without regard to conflicts of
laws principles.
 
          11.4 Amendment. This Agreement may not be amended, modified or
supplemented except upon the execution and delivery of a written agreement that
specifically references this Agreement and is executed by the party to be
charged with the amendment. Any amendment, modification or supplement signed by
Agent shall be binding on and effective against all Sellers and, prior to
Closing, the Acquired Companies.
 
          11.5 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any party hereto without
the prior written consent of the other parties, except that Buyer may assign any
of its rights under this Agreement to any of its Affiliates at any time. Subject
to the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by, the parties hereto and their respective
successors and permitted assigns, and is not intended to confer upon any Person
other than the parties hereto and their respective successors and permitted
assigns any rights or remedies hereunder.
 
          11.6 Waiver. The rights and remedies of the parties to this Agreement
are cumulative and not alternative. Neither the failure nor any delay by any
party in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable Law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement. Any waiver given
by Agent shall be binding on and effective against all Sellers and, prior to
Closing, the Acquired Companies.
 
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          11.7 Notices.
 
               (a) Any notice, demand, or communication required or permitted to
be given by any provision of this Agreement shall be deemed to have been
sufficiently given or served for all purposes if (i) personally delivered, (ii)
sent by a internationally recognized overnight courier service, (iii) sent by
registered or certified mail, return receipt requested, postage prepaid, or (iv)
successfully transmitted by facsimile with confirmation of receipt to the
recipient at the address or facsimile number, as applicable, indicated on
Schedule 11.7 or to such other address or facsimile number as any party hereto
may, from time to time, designate in a written notice given in like manner,
provided, however, that any notice of change of address or facsimile number
shall be effective only upon receipt. Any notice given to or by Agent in
accordance with this Section will be deemed given to or by all Sellers.
 
               (b) Except as otherwise provided herein, any notice under this
Agreement will be deemed to have been given (i) on the date such notice is
personally delivered or delivered by facsimile, (ii) the next succeeding
Business Day after the date such notice is delivered to the overnight courier
service if sent by overnight courier, or (iii) five (5) Business Days after the
date such notice is sent by registered or certified mail; provided that in each
case notices received after 4:00 p.m. (local time of the recipient) shall be
deemed to have been duly given on the next Business Day.
 
          11.8 Complete Agreement. This Agreement, the Schedules and the other
documents and writings referred to herein or delivered pursuant hereto contain
the entire understanding of the parties with respect to the subject matter
hereof and thereof and supersede all prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof.
 
          11.9 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
each of which shall be deemed an original.
 
          11.10 Publicity. Sellers and Buyer will consult with each other and
will mutually agree upon any publication or press release of any nature with
respect to this Agreement or the Contemplated Transactions and shall not issue
any such publication or press release prior to such consultation and agreement
except as may be required by Law or by obligations pursuant to any listing
agreement with any securities exchange or any securities exchange regulation or
the rules, regulations or orders of any Governmental Authority, in which case
the party proposing to issue such publication or press release shall make all
reasonable efforts to consult with the other party before issuing any such
publication or press release. Unless consented to by Agent and Buyer in advance
or required by Law or by obligations pursuant to any listing agreement with any
securities exchange or any securities exchange regulation or the rules,
regulations or orders of any Governmental Authority, each party shall, and shall
cause its Affiliates to, keep this Agreement strictly confidential and may not
make any disclosure of this Agreement to any Person.
 
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          11.11 Headings. The headings, table of contents and index contained in
this Agreement are for reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
 
          11.12 Severability. Any provision of this Agreement which is invalid,
illegal or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining provisions hereof in such
jurisdiction or rendering that or any other provision of this Agreement invalid,
illegal or unenforceable in any other jurisdiction.
 
          11.13 Third Parties. Nothing herein expressed or implied is intended
or shall be construed to confer upon or give to any Person or corporation, other
than the parties hereto and their permitted successors or assigns, any rights or
remedies under or by reason of this Agreement, except that the Financing sources
are hereby made express third-party beneficiaries of Section 6.17, 11.3, 11.14
and 11.19.
 
          11.14 Jurisdiction; Service of Process.
 
               (a) Any action or proceeding seeking to enforce any provision of,
or based on any right arising out of, this Agreement shall be brought against
any of the parties in the United States District Court for the Southern District
of New York, and each of the parties consents to the exclusive jurisdiction of
such court (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Process in any action
or proceeding referred to in the preceding sentence may be served on any party
anywhere in the world.
 
               (b) Notwithstanding the foregoing, each of the parties hereto
hereby agrees (i) that any claim, suit, action or proceeding of any kind or
description, whether in law or in equity, whether in contract or in tort or
otherwise, involving any Financing source, or any of its Affiliates or
representatives, arising out of or relating to the Contemplated Transactions,
the Commitment Letter or the accompanying fee letter or the performance of
services or consummation of transactions thereunder, shall be subject to the
exclusive jurisdiction of any court of competent jurisdiction located within the
Borough of Manhattan in the City of New York, New York, whether a state or
Federal court, and (ii) not to bring, or permit any of its Affiliates to bring
or support any other Person in bringing, any such claim, suit, action or
proceeding in any other court.
 
          11.15 Further Assurances. The parties agree (a) to furnish upon
request to each other such further information, (b) to execute and deliver to
each other such other documents, and (c) to do such other acts and things, all
as the other party may reasonably request for the purpose of carrying out the
intent of this Agreement and the documents referred to in this Agreement.
 
          11.16 Time of the Essence. With regard to all dates and time periods
set forth or referred to in this Agreement, time is of the essence.
 
          11.17 Construction. The parties have participated jointly in the
negotiating and drafting of this Agreement. If an ambiguity of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement.
 
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          11.18 Specific Performance. Each of the parties acknowledges and
agrees that the other parties would be damaged irreparably in the event any of
the provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of the parties
agrees that the other parties shall be entitled to an injunction or injunctions
to prevent breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof, in addition to
any other remedy to which they may be entitled, at law or in equity.
 
          11.19 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING BETWEEN THE
PARTIES HERETO ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
 
          11.20 Consent of Limited Partners. .Each of Lightfoot, International,
KED and Tortoise, by executing this Agreement, hereby authorizes and consents to
the sale of the interests of IRP GP in Resource Partners to Buyer. In accordance
with, and pursuant to the terms of the Second Amended and Restated Agreement of
Limited Partnership of International Resource Partners LP dated as of April 18,
2008 (the “Partnership Agreement”), Buyer, as transferee of the general
partnership units of Resource Partners agrees to assume the rights and duties of
IRP GP under the Partnership Agreement and to be bound by the provisions of the
Partnership Agreement, as it may be amended from time to time.
 
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          IN WITNESS WHEREOF, each of the parties hereto has caused this
Purchase Agreement to be executed by its duly authorized officer, in each case
as of the date first above written.
 
JAMES RIVER COAL COMPANY
        By:  /s/ Peter T. Socha        Peter T. Socha        Chairman and Chief
Executive Officer

Signature Page to Purchase Agreement
 

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          IN WITNESS WHEREOF, each of the parties hereto has caused this
Purchase Agreement to be executed by its duly authorized officer, in each case
as of the date first above written.
 
LIGHTFOOT CAPITAL PARTNERS, LP
      By:          Lightfoot Capital Partners GP LLC Its:   General Partner

By:    /s/ Vincent T. Cubbage                 Name:  Vincent T. Cubbage  
        Title: Chief Executive Officer

Signature Page to Purchase Agreement
 

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          IN WITNESS WHEREOF, each of the parties hereto has caused this
Purchase Agreement to be executed by its duly authorized officer, in each case
as of the date first above written.
 

INTERNATIONAL INDUSTRIES, INC.     By:  /s/ James H. Harless        Name:  James
H. Harless        Title: Chairman

Signature Page to Purchase Agreement
 

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          IN WITNESS WHEREOF, each of the parties hereto has caused this
Purchase Agreement to be executed by its duly authorized officer, in each case
as of the date first above written.
 

KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY     By:  /s/ James C. Baker       
Name:  James C. Baker        Title: Vice President

Signature Page to Purchase Agreement
 

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          IN WITNESS WHEREOF, each of the parties hereto has caused this
Purchase Agreement to be executed by its duly authorized officer, in each case
as of the date first above written.
 

TORTOISE CAPITAL RESOURCES CORPORATION     By:  /s/ Ed Russell        Name:  Ed
Russell        Title: President

 
Signature Page to Purchase Agreement
 

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          IN WITNESS WHEREOF, each of the parties hereto has caused this
Purchase Agreement to be executed by its duly authorized officer, in each case
as of the date first above written.
 

INTERNATIONAL RESOURCE PARTNERS GP LLC     By:  /s/ Vincent T. Cubbage       
Name:  Vincent T. Cubbage        Title: Chief Executive Officer

 

Signature Page to Purchase Agreement

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          IN WITNESS WHEREOF, each of the parties hereto has caused this
Purchase Agreement to be executed by its duly authorized officer, in each case
as of the date first above written.
 

AGENT: INTERNATIONAL RESOURCE PARTNERS GP LLC     By:  /s/ Vincent T. Cubbage  
     Name:  Vincent T. Cubbage        Title: Chief Executive Officer

 
Signature Page to Purchase Agreement
 

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EXHIBIT A
 
ESCROW AGREEMENT
 

by and among
 
JAMES RIVER COAL COMPANY,
 
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as escrow agent
 
 
 
and
 
INTERNATIONAL RESOURCE PARTNERS GP LLC
As agent for Sellers
 
 
 
 
 
________________ __, 2011
 

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ESCROW AGREEMENT
 
This Escrow Agreement (this “Escrow Agreement”) is made and entered into as of
the ____ day of __________ 2011, by and among:
 
(1) JAMES RIVER COAL COMPANY, a corporation incorporated under the Laws of the
State of Virginia (“Buyer”);
 
(2) WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as
escrow agent (“Escrow Agent”); and
 
(3) INTERNATIONAL RESOURCE PARTNERS GP LLC, a limited liability company
organized under the Laws of the State of Delaware, solely in its capacity as
agent for Sellers (“Seller Agent”);
 
W I T N E S S E T H:
 
Whereas, Lightfoot Capital Partners, LP, a Delaware limited partnership
(“Lightfoot”), International Industries, Inc., a West Virginia corporation
(“International Industries”), International Resource Partners GP, LLC, a
Delaware limited liability company (“IRP GP”), Kayne Anderson Energy Development
Company, a Maryland limited partnership (“KED”) and Tortoise Capital Resources
Corporation, a Maryland corporation (“Tortoise”, and Lightfoot, International
Industries, IRP GP, KED and Tortoise, each a “Seller” and collectively
“Sellers”), are parties to that certain Purchase Agreement, dated as of March
___, 2011 (the “Purchase Agreement”) pursuant to which Buyer will purchase all
of the outstanding limited partnership units and general partnership units of
International Resource Partners LP, a Delaware limited partnership (“Resource
Partners”);
 
Whereas, Sellers own all of the outstanding limited partnership units and
general partnership units of Resource Partners;
 
Whereas, the Sellers have approved the Purchase Agreement and the transactions
contemplated thereby, including this Escrow Agreement;
 
Whereas, under the Purchase Agreement, each of Buyer and its Affiliates and
their respective officers, directors, partners, members, stockholders,
employees, agents, representatives, successors and permitted assigns
(collectively, the “Buyer Indemnitees”) is entitled to certain rights to
indemnification as provided in Article X and payments as provided in Section
2.8(b) and Section 2.8(c) of the Purchase Agreement;
 
Whereas, to provide funds for the Escrow Fund (as defined below), Buyer will
deposit with the Escrow Agent an aggregate amount equal to $30,000,000; and
 
Whereas, the Escrow Agent has agreed to hold, invest, release and distribute the
Escrow Fund pursuant to the terms of this Escrow Agreement.
 
-1-
 

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Now, Therefore, for and in consideration of the premises and the mutual
covenants and agreements contained in this Escrow Agreement, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties agree as
follows:
 
1. CERTAIN DEFINITIONS.
 
For purposes of this Escrow Agreement, the capitalized terms used but not
defined herein shall have the meanings set forth in the Purchase Agreement.
 
2. APPOINTMENT OF THE ESCROW AGENT.
 
The Escrow Agent is hereby constituted and appointed as the escrow agent under
this Escrow Agreement and the Escrow Agent accepts this appointment in
accordance with the terms and conditions set forth in this Escrow Agreement and
agrees to assume and perform the duties of the escrow agent pursuant to this
Escrow Agreement.
 
3. DEPOSIT AND USE OF THE ESCROW AMOUNT.
 
     3.1 Buyer shall deposit with the Escrow Agent an aggregate amount of
$30,000,000 (the “Escrow Amount”) in immediately available funds on the date
hereof with the Escrow Agent, of which (i) $20,000,000 shall comprise the
“General Escrow Amount” and (ii) $10,000,000 shall comprise the “Special Escrow
Amount”. The Escrow Agent shall deposit such funds, and all earnings and
interest on, and proceeds of such funds, into a segregated account (all of such
amounts related to the General Escrow Amount, the “General Escrow Fund” and all
of such amount related to the Special Escrow Amount, the “Special Escrow Fund”
and, collectively, the “Escrow Fund”). The Escrow Fund shall be used to (i)
satisfy any payment obligation to Buyer in the event that 10,000,000 tons of
Additional Reserves (as defined in the Purchase Agreement) are not proven by the
Escrow Release Date pursuant to Section 2.8(b) of the Purchase Agreement, (iii)
satisfy any reimbursement of drilling and other reasonable out-of-pocket
expenses up to $1,000,000 in connection with any efforts to prove Additional
Reserves pursuant to Section 2.8(b) of the Purchase Agreement; (iii) satisfy any
indemnification liabilities of Sellers for fines, legal fees and damages related
to any Prior Violations (as defined in the Purchase Agreement) pursuant to
Section 2.8(c) of the Purchase Agreement and (iv) satisfy any indemnification
liabilities of the Sellers pursuant to Article X of the Purchase Agreement.
 
     3.2 Immediately after receipt from Buyer of the Escrow Amount, the Escrow
Agent shall confirm to Buyer and Seller Agent such receipt in writing.
 
     3.3 The Escrow Agent agrees to hold, invest, release and distribute the
Escrow Fund, and to act as Escrow Agent in accordance with the terms, conditions
and provisions of this Escrow Agreement.
 
4. DISPOSITION OF THE ESCROW FUND.
 
     4.1 The Escrow Fund shall be released and distributed by the Escrow Agent
in accordance with the provisions set forth below and, in any event, upon its
receipt of, and in accordance with, joint written instructions from Buyer and
Seller Agent. Buyer and Seller Agent agree to jointly instruct the Escrow Agent
to release and disburse the amounts in the Escrow Fund in a manner consistent
with the terms and conditions of the Purchase Agreement and this Escrow
Agreement.
 
-2-
 

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     4.2 Each Buyer Indemnitee, to the extent entitled to receive payment
pursuant to Section 2.8(b) or to be indemnified pursuant to Article X of the
Purchase Agreement or, if Buyer so elects pursuant to Section 4.3(e) hereof,
pursuant to Section 2.8(c)(iii) of the Purchase Agreement, shall be entitled to
claim such amounts as provided in the Purchase Agreement and receive payments
from the General Escrow Fund, in each case, in accordance with the following
provisions:
 
         If any Buyer Indemnitee believes that it has incurred any Losses for
which it is entitled to indemnification under Article X of the Purchase
Agreement or payment under Sections 2.8(b) or 2.8(c)(iii), Buyer shall deliver
to the Escrow Agent written notice (a “Claim Notice”) (i) naming the Buyer
Indemnitee making the claim (the “Buyer Indemnified Person”), (ii) describing
such Losses and, to the extent known, the amount thereof (the “Claim Amount”),
(iii) stating that the Buyer Indemnified Person is entitled to payment under
Section 2.8(b) or Section 2.8(c)(iii) or indemnification under Article X of the
Purchase Agreement for such Losses and providing a reasonable explanation of the
basis thereof, and (iv) demanding payment in the amount of such Losses, to the
extent such Losses are known and then incurred. The Claim Notice must be given
prior to the Escrow Release Date in order to be eligible to receive payments
from the General Escrow Fund. At the time of delivery of any Claim Notice to the
Escrow Agent, a duplicate copy of such Claim Notice shall be delivered by Buyer
to Seller Agent. Promptly, and in any event within two (2) Business Days after
its receipt of the Claim Notice (and notwithstanding any prior delivery of the
Claim Notice by Buyer to Seller Agent), the Escrow Agent shall deliver a copy of
the Claim Notice to Seller Agent. Subject to Paragraph 4.2(b) hereof, the Escrow
Agent shall, promptly after the thirtieth (30th) day after the Escrow Agent’s
delivery of a copy of the Claim Notice to Seller Agent (such 30-day period, the
“Response Period”), (x) with respect to indemnification or payment for a
specified amount, pay or distribute to the Buyer Indemnified Person named in the
Claim Notice cash out of the General Escrow Fund in the amount specified in the
Claim Notice or (y) with respect to contingent indemnification or payment claims
not then payable pursuant to the terms of the Claim Notice, designate and
segregate out of the General Escrow Fund the contingent amount subject to the
Claim Notice. Payment shall be distributed as specified in the Claim Notice.
Buyer, on behalf of itself or any other Buyer Indemnitee, shall in all cases be
the only provider of Claim Notices. “Business Day” means any day that is not (i)
a Saturday, Sunday or other day on which banks are required or authorized by
applicable law to be closed in the City of Charleston, West Virginia and the
City of New York, New York or (ii) any other day on which the Escrow Agent is
closed for business.
 
         Notwithstanding the provisions of Paragraph 4.2(a) hereof, the Escrow
Agent shall not make any payment from the General Escrow Fund with respect to a
Claim Notice if, during the Response Period, Seller Agent shall have delivered
to the Escrow Agent a written objection to the claim for indemnification or
payment made or the Claim Amount set forth in the Claim Notice (an “Objection”).
If the Escrow Agent does not receive an Objection within the Response Period,
then Seller Agent shall be deemed to have acknowledged the obligation to
indemnify or make such payment, as applicable, and the correctness of such Claim
Amount for the full amount thereof subject to a current claim for payment as
specified in the Claim Notice. At the time of delivery of any Objection to the
Escrow Agent, a duplicate copy of such Objection shall be delivered by Seller
Agent to Buyer.
 
-3-
 

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         Upon receipt of an Objection pursuant to this Escrow Agreement, the
Escrow Agent shall (i) deliver notice of the Objection to Buyer, (ii) distribute
to the Buyer Indemnified Person cash out of the General Escrow Fund in an amount
equal to that portion, if any, specified in the Claim Notice which is not
disputed by Seller Agent in such Objection, and (iii) designate and segregate
out of the General Escrow Fund the amount subject to the Claim Notice which is
disputed by Seller Agent in the Objection or is not then payable pursuant to the
terms of the Claim Notice. Thereafter, the Escrow Agent shall not distribute to
the Buyer Indemnified Person or Seller Agent the segregated portion of the
General Escrow Fund subject to the Claim Notice until the Escrow Agent shall
have received joint written instructions from Buyer and Seller Agent, in form
and substance reasonably satisfactory to the Escrow Agent, concerning the
determination of the amount of the indemnification payment, if any, to which the
Buyer Indemnified Person is entitled.
 
         After an Objection has been delivered to the Escrow Agent and Buyer,
Buyer and Seller Agent shall attempt in good faith to agree upon the rights of
the Buyer Indemnified Person with respect to each of the amounts that comprise
the asserted Claim Amount (or the amount subject to the Claim Notice which is
disputed by Seller Agent in the Objection). If Buyer and Seller Agent should so
agree, a memorandum setting forth such agreement shall be prepared and signed by
both Buyer and Seller Agent and, in the case of a demand for recovery from the
General Escrow Fund, shall deliver to the Escrow Agent joint written
instructions from Buyer and Seller Agent setting forth such agreement. If no
such agreement can be reached after good faith negotiation within 30 days after
delivery of an Objection, either Seller Agent or Buyer may pursue any and all
remedies as shall be available to such party pursuant to the Purchase Agreement;
provided, however, that if such dispute relates to a claim for payment related
to any Prior Violations pursuant to Section 2.8(c)(iii) of the Purchase
Agreement, the amounts in dispute shall be submitted to binding arbitration as
set forth in Section 2.8(c)(iv) of the Purchase Agreement. The Escrow Agent will
(i) pay the Buyer Indemnified Person out of the General Escrow Fund the amount
that the Buyer Indemnified Person is entitled to receive as promptly as
practicable after receiving joint written instructions concerning such final
determination from Buyer and Seller Agent and (ii) if applicable, cause to be
distributed to Seller Agent, for the benefit of and distribution to Sellers,
such amount as to which Sellers would be entitled to distribution under
Paragraph 4.6 hereof after giving effect to the foregoing joint written
instructions.
 
     4.3 Buyer, to the extent entitled to payment related to any Prior
Violations pursuant to Section 2.8(c) of the Purchase Agreement, shall be
entitled to claim such amounts equal to such Buyer Indemnitee’s Losses and
receive payments from the Special Escrow Fund, in each case, in accordance with
the following provisions:
 
         (a) If Buyer has incurred any Losses or other damages for which it is
entitled to payment under Section 2.8(c) of the Purchase Agreement, Buyer shall
deliver to the Escrow Agent a Claim Notice (i) describing such Losses and, to
the extent known, the Claim Amount, (ii) stating that the Buyer Indemnified
Person is entitled to payment under Section 2.8(c) of the Purchase Agreement for
such Losses and providing a reasonable explanation of the basis thereof, and
(iii) demanding payment in the amount of such Losses, to the extent such Losses
are known and then incurred. The Claim Notice must be given prior to the Final
Release Date in order to be eligible to receive payments from the Special Escrow
Fund. At the time of delivery of any Claim Notice to the Escrow Agent, a
duplicate copy of such Claim Notice shall be delivered by Buyer to Seller Agent.
Promptly, and in any event within two (2) Business Days after its receipt of the
Claim Notice (and notwithstanding any prior delivery of the Claim Notice by
Buyer to Seller Agent), the Escrow Agent shall deliver a copy of the Claim
Notice to Seller Agent. Subject to Paragraph 4.3(b) hereof, the Escrow Agent
shall, promptly after the Response Period, (x) with respect to payment for a
specified amount, pay or distribute to Buyer, cash out of the Special Escrow
Fund in the amount specified in the Claim Notice or (y) with respect to
contingent payment claims not then payable pursuant to the terms of the Claim
Notice, designate and segregate out the contingent amount subject to the Claim
Notice. Payment shall be distributed as specified in the Claim Notice.
 
-4-
 

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          (b) Notwithstanding the provisions of Paragraph 4.3(a) hereof, the
Escrow Agent shall not make any payment from the Special Escrow Fund with
respect to a Claim Notice if, during the Response Period, Seller Agent shall
have delivered to the Escrow Agent an Objection. If the Escrow Agent does not
receive an Objection within the Response Period, then Seller Agent shall be
deemed to have acknowledged the obligation to indemnify and the correctness of
such Claim Amount for the full amount thereof subject to a current claim for
payment as specified in the Claim Notice. At the time of delivery of any
Objection to the Escrow Agent, a duplicate copy of such Objection shall be
delivered by Seller Agent to Buyer.
 
         (c) Upon receipt of an Objection pursuant to this Escrow Agreement, the
Escrow Agent shall (i) deliver notice of the Objection to Buyer, (ii) distribute
to Buyer cash out of the Special Escrow Fund in an amount equal to that portion,
if any, specified in the Claim Notice which is not disputed by Seller Agent in
such Objection, and (iii) designate and segregate out of the Special Escrow Fund
the amount subject to the Claim Notice which is disputed by Seller Agent in the
Objection or is not then payable pursuant to the terms of the Claim Notice.
Thereafter, the Escrow Agent shall not distribute to Buyer or Seller Agent the
segregated portion of the Special Escrow Fund subject to the Claim Notice until
the Escrow Agent shall have received joint written instructions from Buyer and
Seller Agent, in form and substance reasonably satisfactory to the Escrow Agent,
concerning the determination of the amount of the payment, if any, to which
Buyer is entitled.
 
         (d) After an Objection has been delivered to the Escrow Agent and
Buyer, Buyer and Seller Agent shall attempt in good faith to agree upon the
rights of Buyer with respect to each of the amounts that comprise the asserted
Claim Amount (or the amount subject to the Claim Notice which is disputed by
Seller Agent in the Objection). If Buyer and Seller Agent should so agree, a
memorandum setting forth such agreement shall be prepared and signed by both
Buyer and Seller Agent and, in the case of a demand for recovery from the
Special Escrow Fund, shall deliver to the Escrow Agent joint written
instructions from Buyer and Seller Agent setting forth such agreement. If no
such agreement can be reached after good faith negotiation within 30 days after
delivery of an Objection, the amounts in dispute shall be submitted to binding
arbitration as set forth in Section 2.8(c)(iv) of the Purchase Agreement. The
Escrow Agent will (i) pay Buyer out of the Special Escrow Fund the amount that
Buyer is entitled to receive as promptly as practicable after receiving joint
written instructions concerning such final determination from Buyer and Seller
Agent and (ii) if applicable, cause to be distributed to Seller Agent, for the
benefit of and distribution to Sellers, such amount as to which Sellers would be
entitled to distribution under Paragraph 4.7 hereof after giving effect to the
foregoing joint written instructions.
 
-5-
 

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          (e) Notwithstanding the foregoing, if, prior to the Escrow Release
Date Mine 8 (as defined in the Purchase Agreement) is designated on a Pattern of
Violation (POV) list by the Mine Safety and Health Administration that is
attributable to the Prior Violations, Buyer shall be entitled to payment related
to any Prior Violations pursuant to Section 2.8(c)(iii) of the Purchase
Agreement, Buyer shall have the right, at its sole discretion, to submit a Claim
Notice for Losses or other damages to the Escrow Agent and receive payments from
the General Escrow Fund before proceeding against the Special Escrow Fund.
 
    4.4 At any time prior to the final termination of this Escrow Agreement, the
Escrow Agent shall, if jointly instructed in a writing signed by Buyer and
Seller Agent, release or cause to be released from the Escrow Fund to Buyer or
Seller Agent, for the benefit of and distribution to Sellers, as directed, the
amount of cash specified in any such writing.
 
    4.5 The Escrow Agent shall not dispose of all or any portion of the amounts
in the Escrow Fund other than as specifically provided in this Escrow Agreement.
 
    4.6 On the fourteen (14) month anniversary of the date of this Escrow
Agreement (the “Escrow Release Date”), the Escrow Agent shall cause to be
distributed from the General Escrow Fund to:
 
         (a) Buyer, as promptly as practicable after receiving joint written
instructions from Buyer and Seller Agent, an amount equal to (1) $5,000,000 less
amounts previously paid to Buyer pursuant to Section 2.8(b)(iv) of the Purchase
Agreement multiplied by (2) the ratio of (x) 10,000,000 minus the number of tons
of Additional Reserves (as defined in the Purchase Agreement) proven prior to
the Escrow Release Date to (y) 10,000,000 (plus any accrued interest or earnings
on such amount); provided, however, that if the number of tons of Additional
Reserves is equal to or greater than 10,000,000 tons, Buyer shall not be
entitled to any distribution from the General Escrow Fund pursuant to this
Paragraph 4.6(a); and
 
         (b) To Seller Agent, for the benefit of and distribution to Sellers, an
amount equal to (1) any amount then remaining in the General Escrow Fund
(including any remaining accrued interest or earnings thereon), less (2) if the
distribution contemplated by Paragraph 4.6(a) hereof has not occurred, the
amount that Buyer claims to be entitled to pursuant to Paragraph 4.6(a) as
certified to the Escrow Agent in writing by Buyer no later than the Business Day
preceding the Escrow Release Date, less (3) any amount subject to a Claim Notice
delivered prior to the Escrow Release Date pursuant to Paragraph 4.2 to the
extent such Claim Notice has not been resolved prior to such date. Any amount
retained in escrow from the General Escrow Fund after the Escrow Release Date
pursuant to the preceding sentence shall be held by the Escrow Agent and shall
be used to make any such distribution or distributions contemplated by Paragraph
4.2 hereof and to indemnify or make a payment to the Buyer Indemnitees for such
unresolved Claim Notices subject to the terms and conditions of the Purchase
Agreement (but only as to Buyer and Seller Agent) and this Escrow Agreement
(being the only document by which the Escrow Agent is bound) and upon resolution
and if applicable payment out of the General Escrow Fund in satisfaction of the
foregoing, any remaining amounts in escrow (including any remaining interest or
earnings thereon), shall be promptly distributed by, on behalf of or at the
direction of, the Escrow Agent to Seller Agent, for the benefit of and
distribution to Sellers.
 
-6-
 

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    4.7 Upon the final resolution of all legal proceedings and fines relating to
the Prior Violations, or on joint written direction of Buyer and Seller Agent
(such date, the “Final Release Date”), the Escrow Agent shall pay to Seller
Agent, for the benefit of and distribution to Sellers, an amount equal to (1)
any amount then remaining in the Special Escrow Fund (including any remaining
accrued interest or earnings thereon), less (2) any amount subject to a Claim
Notice delivered prior to the Final Release Date pursuant to Paragraph 4.3 to
the extent such Claim Notices has not been resolved prior to such date. Any
amount retained in escrow from the Special Escrow Fund after the Final Release
Date pursuant to the preceding sentence shall be held by the Escrow Agent and
shall be used to make any such distribution or distributions contemplated by
Paragraph 4.3 hereof and to make a payment to Buyer for such unresolved Claim
Notices subject to the terms and conditions of the Purchase Agreement (but only
as to Buyer and Seller Agent) and this Escrow Agreement (being the only document
by which the Escrow Agent is bound) and upon resolution and if applicable
payment out of the Special Escrow Fund in satisfaction of the foregoing, any
remaining amounts in escrow (including any remaining interest or earnings
thereon), shall be promptly distributed by, on behalf of or at the direction of,
the Escrow Agent to Seller Agent, for the benefit of and distribution to
Sellers.
 
    4.8 Subject to the other provisions of this Escrow Agreement, upon
distribution of the entire amount of the Escrow Fund (including amounts withheld
pursuant to unresolved Claim Notices, if any), this Escrow Agreement shall be
terminated.
 
5. INVESTMENT; EARNINGS.
 
The Escrow Agent is hereby authorized and directed to hold and invest the Escrow
Fund and to distribute such Escrow Fund in accordance with the terms of this
Escrow Agreement. At the joint written direction of Buyer and Seller Agent, the
Escrow Agent shall invest and reinvest the Escrow Fund in (a) obligations issued
or guaranteed by the United States of America or any agency or instrumentality
thereof; (b) certificates of deposits (including money market certificates and
similar instruments) of or accounts with national banks or holding companies of
national banks having capital and surplus in excess of $100,000,000 at the time
of investment; (c) any money market account or fund, whether insured or
uninsured, including, without limitation, a money market account at Wells Fargo
Bank, National Association; (d) repurchase agreements with U.S. Treasuries as
collateral; and (e) other investments that are mutually approved in writing by
Buyer and Seller Agent. In the absence of joint written instructions from Buyer
and Seller Agent, the Escrow Fund shall be invested and reinvested in accordance
with the Investment Selection Instructions set forth as Exhibit A hereto.
Interest accruing on, and any profit realized from, such investment shall be
credited, and any loss resulting from such investments shall be charged, to the
Escrow Fund. Subject to Paragraph 8.4 below, all interest or earnings earned on
amounts in the Escrow Fund, if any, shall be distributed to Seller Agent, for
the benefit of and distribution to Sellers, at the times specified in Paragraphs
4.2, 4.3, 4.6 and 4.7 hereof. The Escrow Agent is hereby authorized and directed
to sell and reduce to cash such investments, if necessary, to make disbursements
under this Escrow Agreement. The Escrow Agent shall not be responsible for any
profit or loss realized on such investments, except in the case of fraud, gross
negligence or willful misconduct by the Escrow Agent. Buyer and Seller Agent
acknowledge that the Escrow Agent is not providing investment supervision,
recommendations, or advice.
 
-7-
 

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6. LIABILITY AND COMPENSATION OF ESCROW AGENT.
 
    6.1 The Escrow Agent’s obligations and duties in connection herewith are
confined to those specifically enumerated in this Escrow Agreement, which
obligations and duties shall be deemed purely ministerial, and not fiduciary, in
nature. The Escrow Agent shall not be required to take notice of the Purchase
Agreement and shall have no duty or responsibility to take any action pursuant
thereto. The Escrow Agent shall not be in any manner liable or responsible for
the sufficiency, correctness, genuineness, or validity of any documents
deposited with it or with reference to the form of execution thereof, or the
identity, authority, or rights of any Person executing or depositing the same,
and the Escrow Agent shall not be liable for any loss that may occur by reason
of forgery, false representation, or the exercise of its discretion in any
particular manner or for any other reason, except for its own fraud, gross
negligence or willful misconduct. The Escrow Agent shall not be required to act
upon or take notice of any direction, demand, notice, communication or
instructions provided to the Escrow Agent by any Seller, but shall act upon and
take notice solely of notices, communications or instructions provided to the
Escrow Agent by Seller Agent and Buyer as provided for herein. The Escrow Agent
shall have no liability with respect to the transfer or distribution of any
funds effected by the Escrow Agent pursuant to wiring or transfer instructions
provided to the Escrow Agent by any party to this Escrow Agreement in accordance
with the provisions of this Escrow Agreement. The Escrow Agent shall not be
obligated to take any legal action or to commence any proceedings in connection
with the Escrow Fund or this Escrow Agreement, or to appear in, prosecute or
defend in any such legal action or proceedings.
 
    6.2 The Seller Agent, on behalf of each Seller, and Buyer jointly and
severally covenant and agree to indemnify, defend and hold harmless the Escrow
Agent and its officers, directors, employees and agents from and against any and
all losses, claims, damages, liabilities, and reasonable out-of-pocket expenses,
including without limitation, reasonable costs of investigation and counsel fees
and disbursements which may be imposed on the Escrow Agent or incurred directly
or indirectly in connection with this Escrow Agreement, its acceptance of this
appointment as the Escrow Agent hereunder, or of the performance of its duties
hereunder, including without limitation, any litigation arising from this Escrow
Agreement or involving the subject matter hereof; provided, that if the Escrow
Agent shall be found guilty of fraud, willful misconduct or gross negligence in
connection with its services under this Escrow Agreement then, in that event,
the Escrow Agent shall bear all such losses, claims, damages, liabilities, and
expenses; provided further, that solely as between Buyer and Sellers, this
Paragraph 6.2 hereof shall not prejudice any right or obligations of Buyer and
Sellers among themselves pursuant to the Purchase Agreement. The provisions of
this Paragraph 6.2 hereof shall survive the termination of this Escrow Agreement
and any resignation or removal of the Escrow Agent.
 
    6.3 If a dispute occurs among the parties hereto or otherwise with respect
to the Escrow Fund, the Escrow Agent shall be entitled to tender into the
registry or custody of any court of competent jurisdiction, upon an order of
such court, all of the Escrow Fund, together with such legal pleadings as it or
its counsel deems appropriate, and, thereupon be discharged from all further
duties and liabilities under this Escrow Agreement. The filing of any such legal
proceedings shall not deprive the Escrow Agent of its compensation (as provided
for herein) earned prior to such filing and the provisions of Paragraph 6.1
hereof shall survive as to such action.
 
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    6.4 The Escrow Agent’s fees hereunder shall be as set forth in Schedule A
hereto (the “Escrow Agent’s Compensation”) and shall be paid one-half by the
Seller Agent, on behalf of each Seller, and one-half by Buyer at the times and
in the manner set forth in Schedule A. In addition, Seller Agent, on behalf of
each Seller, and Buyer shall each pay one-half of all other amounts due and
owing Escrow Agent pursuant to Schedule A. This fee is intended as full
compensation for the Escrow Agent’s services as contemplated by this Escrow
Agreement; provided, however, that if the conditions of this Escrow Agreement
are not fulfilled or the Escrow Agent renders any reasonably required material
service not contemplated in this Escrow Agreement, or there is any assignment of
interest in the subject matter of this Escrow Agreement, or any material
modification hereof, or if any material controversy arises hereunder, or the
Escrow Agent is made a party to or justifiably intervenes in any litigation
pertaining to this Escrow Agreement or the subject matter hereof, the Escrow
Agent shall be reasonably compensated for such extraordinary services and
reimbursed for all reasonable out-of-pocket costs and expenses, including
reasonable attorney’s fees, occasioned by such controversy, litigation, or
event, and the same shall be payable by Seller Agent, on behalf of each Seller,
and Buyer, pursuant to this Paragraph 6.4 hereof.
 
    6.5 The Escrow Agent may resign at any time, upon thirty (30) days prior
written notice to Buyer and Seller Agent, and prior to such resignation shall
deposit the Escrow Fund with a successor escrow agent, which shall be a national
bank, to be jointly designated in writing by Buyer and Seller Agent. Any such
successor escrow agent must agree to be, and shall be bound by, and shall have
all the rights, duties, and responsibilities of the Escrow Agent under this
Escrow Agreement. If, upon the effective date of such resignation, no successor
escrow agent shall have been designated, the Escrow Agent shall be entitled to
treat such failure to designate a successor as a dispute subject to the
provisions of Paragraph 6.3 hereof. Such resignation shall not deprive the
Escrow Agent of its compensation (as provided for herein) earned prior thereto.
 
    6.6 Buyer and Seller Agent may terminate this Escrow Agreement (including in
connection with the appointment of a new escrow agent) by joint written notice
which shall specify the disposition of the Escrow Fund (which disposition must
be in a manner consistent with the Purchase Agreement) and the Escrow Agent
shall, upon receipt thereof, promptly disburse the Escrow Fund in accordance
with such specified disposition.
 
    6.7 The Escrow Agent may from time to time consult with legal counsel of its
own choosing in the event of any disagreement or controversy or question or
doubt as to the construction of any of the provisions hereof or its duties
hereunder, and it shall incur no liability and shall be fully protected in
acting in good faith in accordance with the written opinion or instructions of
such counsel, except in instances of the Escrow Agent’s own fraud, gross
negligence or willful misconduct. Any reasonable fees and expenses of such legal
counsel shall be considered part of the fees and expenses of the Escrow Agent
described herein.
 
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    6.8 No provision of this Escrow Agreement shall require the Escrow Agent to
risk or advance its own funds or otherwise incur any financial liability or
potential financial liability in the performance of its duties or the exercise
of its rights hereunder.
 
    6.9 Subject to Paragraph 6.6, any corporation or association into which the
Escrow Agent may be converted or merged, or with which it may be consolidated,
or to which it may sell or transfer all or substantially all of its corporate
trust business and assets as a whole or substantially as a whole, or any
corporation or association resulting from any such conversion, sale, merger,
consolidation or transfer to which the Escrow Agent is a party, shall be and
become the successor escrow agent under this Escrow Agreement and shall have and
succeed to the rights, powers, duties, immunities and privileges as its
predecessor, without the execution or filing of any instrument or paper or the
performance of any further act.
 
    6.10 In the event that any of the Escrow Fund shall be attached, garnished
or levied upon by any court order, or the delivery thereof shall be stayed or
enjoined by an order of a court, or any order, judgment or decree shall be made
or entered by any court order affecting the Escrow Fund, the Escrow Agent is
hereby expressly authorized, in its sole discretion, to respond as it deems
appropriate or to comply with all writs, orders or decrees so entered or issued,
or which it is advised by legal counsel of its own choosing is binding upon it,
whether with or without jurisdiction. In the event that the Escrow Agent obeys
or complies with any such writ, order or decree it shall not be liable to any of
the parties hereto or to any other person, firm or corporation, should, by
reason of such compliance notwithstanding, such writ, order or decree be
subsequently reversed, modified, annulled, set aside or vacated.
 
    6.11 The Escrow Agent shall not be responsible or liable for any failure or
delay in the performance of its obligation under this Escrow Agreement arising
out of or caused, directly or indirectly, by circumstances beyond its reasonable
control, including, without limitation, acts of God; earthquakes; fire; flood;
wars; acts of terrorism; civil or military disturbances; sabotage; epidemic;
riots; interruptions, loss or malfunctions of utilities, computer (hardware or
software) or communications services; accidents; labor disputes; acts of civil
or military authority or governmental action; it being understood that the
Escrow Agent shall use commercially reasonable efforts which are consistent with
accepted practices in the banking industry to resume performance as soon as
reasonably practicable under the circumstances.
 
7. SELLER AGENT.
 
    7.1 Pursuant to the Purchase Agreement, Seller Agent shall act on behalf of
the Sellers and shall have such powers as are delegated under or pursuant to the
Purchase Agreement. The Seller Agent shall cause to be distributed all
distributions to it from the Escrow Fund to or for the benefit of the Sellers in
accordance with and subject to the terms of the Purchase Agreement.
 
    7.2 None of Buyer, any Buyer Indemnitee or the Escrow Agent shall be
responsible or liable for any acts or omissions of Seller Agent acting in Seller
Agent’s capacity as such.
 
-10-
 

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8. TAXES.
 
    8.1 For all federal, state, local and foreign tax reporting purposes, all
interest and earnings on the Escrow Fund in any calendar year shall for tax
purposes be allocated to and reported by Buyer. Unless and until any portion of
the Escrow Fund is distributed to Seller Agent, for the benefit of and
distribution to Sellers, the Escrow Fund shall be considered as owned by Buyer
for all federal, state or local tax purposes.
 
    8.2 The Escrow Agent annually shall file information returns on Form 1099
with respect to such interest and earning payments consistent with the
provisions of Paragraph 8.1 hereof. Buyer shall provide to the Escrow Agent all
forms and information necessary to complete such information returns, including
but not limited to IRS Form W-8 BEN or W-9, as applicable. The Escrow Agent
shall have no duty to prepare or file any federal or state tax report or return
with respect to the Escrow Fund or any income earned thereon.
 
    8.3 In the event the Escrow Agent becomes liable for the payment of taxes,
including withholding taxes, relating to income or earnings derived from the
Escrow Fund or any payment made hereunder, the Escrow Agent may deduct such
taxes from such income, earnings, or payment allocable or otherwise payable to
Buyer for such taxes.
 
    8.4 No later than fifteen (15) days after the end of each quarter, and upon
the distribution to Seller Agent of any portion of the Escrow Fund pursuant to
Paragraph 4.2, 4.3, 4.6 or 4.7 hereof or otherwise pursuant to this Escrow
Agreement, the Escrow Agent shall distribute to Buyer forty percent (40%) of any
interest or earnings accrued in respect of the Escrow Fund during such quarter
or, in the case of a distribution of any portion of the Escrow Fund, from the
first day of the quarter in which such distribution is made and until and
including the date of such distribution (an “Income Tax Release”); provided
that, for the avoidance of doubt, any Income Tax Release shall have priority and
precede any other release of interest and earnings from the Escrow Fund.
 
9. SUCCESSORS AND ASSIGNS.
 
This Escrow Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns but shall
not be assignable by any party hereto; provided that (i) Buyer or Seller Agent
may assign its rights and delegate its obligations hereunder to any Affiliate or
to any successor corporation in the event of a merger, consolidation or transfer
or sale of all or substantially all of Buyer’s or Seller Agent’s stock or
assets; and (ii) the Escrow Agent may assign its rights hereunder to a successor
escrow agent appointed in accordance with the provisions hereof. In the event of
any such proposed assignment, an amendment to this Escrow Agreement, in form and
substance reasonably acceptable to the Escrow Agent, shall be executed and
delivered if the Escrow Agent reasonably deems such an amendment to be necessary
or desirable.
 
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10. NOTICES.
 
Any notice, demand, or communication required or permitted to be given by any
provision of this Escrow Agreement shall be deemed to have been sufficiently
given or served for all purposes if (i) personally delivered, (ii) sent by an
internationally recognized overnight courier service, (iii) sent by registered
or certified mail, return receipt requested, postage prepaid. Except as
otherwise provided herein, any notice under this Escrow Agreement will be deemed
to have been given (i) on the date such notice is personally delivered or
delivered by facsimile, (ii) the next succeeding Business Day after the date
such notice is delivered to the overnight courier service if sent by overnight
courier, or (iii) five (5) Business Days after the date such notice is sent by
registered or certified mail; provided that in each case notices received after
4:00 p.m. (local time of the recipient) shall be deemed to have been duly given
on the next Business Day. Notwithstanding anything to the contrary herein
provided, the Escrow Agent shall not be deemed to have received any notice or
communication hereunder prior to the Escrow Agent’s actual receipt thereof. The
addresses, as each may be updated from time to time by providing proper notice
hereunder, of the parties for purposes of this Escrow Agreement are:
 

            (i)   If to Buyer:   James River Coal Company           Attn: Peter
Socha, Chairman and Chief           Executive Officer           901 E. Byrd
Street, Suite 1600           Richmond, Virginia 23219-4080                  
with a copy, which shall not   Kilpatrick Townsend & Stockton LLP      
constitute notice, to:   Attn: David A Stockton           1100 Peachtree Street
          Suite 2800           Atlanta, Georgia 30309               (ii)      
If to Escrow Agent:       Wells Fargo Bank, National Association           Attn:
Stefan Victory; Corporate, Municipal and           Escrow Solutions          
7000 Central Parkway, Suite 550           Atlanta, Georgia 30328              
(iii)   If to Seller Agent:               International Resource Partners GP LLC
          c/o Lightfoot Capital Partners GP LLC           Attn: Vince Cubbage,
Chief Executive Officer           725 Fifth Avenue, 19th Floor           New
York, NY 10022                   with a copy, which shall not   Jackson Kelly
PLLC       constitute notice, to:   Attn: Louis S. Southworth, II          
          Elizabeth Osenton Lord           500 Laidley Tower           P.O. Box
553           Charleston, West Virginia 25302 (25322)

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Any party may change the address to which notices, requests, demands or other
communications to such party will be delivered or mailed by giving notice of the
address change to the other parties to this Escrow Agreement in the manner
provided in this Escrow Agreement.
 
11. MISCELLANEOUS
 
    11.1 The Paragraph headings contained in this Escrow Agreement are inserted
for convenience only and shall not affect in any way the meaning or
interpretation of this Escrow Agreement.
 
    11.2 Whenever possible, each provision of this Escrow Agreement shall be
interpreted in such manner as to be effective and valid under applicable Law,
but if any provision of this Escrow Agreement is held to be prohibited by or
invalid under applicable Law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Escrow Agreement.
 
    11.3 Any provision of this Escrow Agreement may be amended or waived only in
writing signed by Buyer, the Escrow Agent and Seller Agent. No waiver of any
provision hereunder or any breach or default thereof shall extend to or affect
in any way any other provision or prior or subsequent breach or default. No
course of dealing between the parties to this Escrow Agreement shall be deemed
to affect or to modify, amend or discharge any provision or term of this Escrow
Agreement. No delay by any party to this Escrow Agreement in the exercise of any
of its rights or remedies shall operate as a waiver thereof, and no single or
partial exercise of any of its rights or remedies shall operate as a waiver
thereof, and no single or partial exercise by any party to this Escrow Agreement
of any such right or remedy shall preclude any other or further exercise
thereof. A waiver of any right or remedy on any one occasion shall not be
construed as a bar to or waiver of any such right or remedy on any other
occasion.
 
    11.4 Except for the Purchase Agreement as it applies only to the parties who
executed the Purchase Agreement, this Escrow Agreement constitutes the complete
agreement among the parties hereto with respect to the subject matter hereof and
supersedes any prior understandings, agreements or representations by or among
the parties, written or oral, which may have related to the subject matter
hereof in any way.
 
    11.5 The parties have participated jointly in the negotiation and drafting
of this Escrow Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Escrow Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of the
provisions of this Escrow Agreement. The word “including” shall mean including
without limitation.
 
    11.6 Nothing expressed or implied or referred to in this Escrow Agreement
will be construed to give any Person other than the parties to this Escrow
Agreement and the Sellers any legal or equitable right, remedy, or claim under
or with respect to this Escrow Agreement or any provision of this Escrow
Agreement.
 
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    11.7 This Escrow Agreement may be executed in multiple counterparts, any one
of which need not contain the signatures of more than one party, but all such
counterparts taken together shall constitute one and the same instrument.
 
    11.8 Buyer and Seller Agent shall have the right under this Escrow
Agreement, upon request, to examine and audit, during business hours or at such
other times as might be reasonable under the circumstances and with reasonable
notice to the Escrow Agent, any and all of the books, records, or other
information of the Escrow Agent concerning this Escrow Agreement or the Escrow
Fund, at the requesting party’s expense.
 
    11.9 The construction and performance of this Escrow Agreement will be
governed by the Laws of the State of New York without giving effect to the
choice or conflict of Law provisions thereof.
 
    11.10 WAIVER OF JURY TRIAL. THE PARTIES HEREBY IRREVOCABLY WAIVE ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
ESCROW AGREEMENT, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE. THE PARTIES AGREE THAT ANY OF THEM MAY
FILE A COPY OF THIS PARAGRAPH 11.10 WITH ANY COURT AS WRITTEN EVIDENCE OF THE
KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO
WAIVE TRIAL BY JURY AND THAT ANY ACTION OR PROCEEDING WHATSOEVER BETWEEN THEM
RELATING TO THIS ESCROW AGREEMENT SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT
JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
 
    11.11 Contemporaneously with the execution and delivery of this Escrow
Agreement and, if necessary, from time to time thereafter, each of the parties
to this Escrow Agreement (other than the Escrow Agent) shall execute and deliver
to the Escrow Agent a Certificate of Incumbency substantially in the form of
Exhibit B-1 and Exhibit B-2 hereto (a “Certificate of Incumbency”) for the
purpose of establishing the identity and authority of persons entitled to issue
notices, instructions or directions to the Escrow Agent on behalf of each such
party. Until such time as the Escrow Agent shall receive an amended Certificate
of Incumbency replacing any Certificate of Incumbency theretofore delivered to
the Escrow Agent, the Escrow Agent shall be fully protected in relying, without
further inquiry, on the most recent Certificate of Incumbency furnished to the
Escrow Agent. Whenever this Escrow Agreement provides for joint written notices,
joint written instructions or other joint actions to be delivered to the Escrow
Agent, the Escrow Agent shall be fully protected in relying, without further
inquiry, on any joint written notice, instructions or action executed by persons
named in such Certificate of Incumbency.
 
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     11.12 Escheat. Buyer and Seller Agent are aware that under applicable state
law, property which is presumed abandoned may under certain circumstances
escheat to the applicable state. The Escrow Agent shall have no liability to
Buyer, Seller Agent, their respective heirs, legal representatives, successors
and assigns, or any other party, should any or all of the Escrow Fund escheat by
operation of law, except to the extent resulting from the Escrow Agent’s gross
negligence or willful misconduct.
 
[Signatures Appear on Following Page]
 
-15-
 

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IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as of
the date first written above.
 

  BUYER:               JAMES RIVER COAL COMPANY    
    By:           Name:            Title:           Tax Identification Number: 
         
        ESCROW AGENT:               WELLS FARGO BANK, NATIONAL   ASSOCIATION, as
escrow agent    
    By:         Name:         Title:          
    INTERNATIONAL RESOURCE PARTNERS   GP LLC   solely in its capacity as Seller
Agent:    
      By:         Name:         Title:      

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SCHEDULE A
 
FEE SCHEDULE
 
Attached.
 

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EXHIBIT A
 
INVESTMENT SELECTION INSTRUCTIONS

 
Agency and Custody Account Direction
For Cash Balances
Wells Fargo Money Market Deposit Accounts
 
Direction to use the following Wells Fargo Money Market Deposit Accounts for
Cash Balances for the escrow account or accounts (the “Account”) established
under the Escrow Agreement to which this Exhibit A is attached.
 
You are hereby directed to deposit, as indicated below, or as we shall jointly
direct further in writing from time to time, all cash in the Account in the
following money market deposit account of Wells Fargo Bank, National
Association:
 
Wells Fargo Money Market Deposit Account (MMDA)
 
Each of us, acting in our respective representative capacities only, understands
that amounts on deposit in the MMDA are insured, subject to the applicable rules
and regulations of the Federal Deposit Insurance Corporation (FDIC), in the
basic FDIC insurance amount of $250,000 per depositor, per insured bank. This
includes principal and accrued interest up to a total of $250,000.
 
Each of us, acting in our respective representative capacities only, acknowledge
that we have full power to direct investments of the Account.
 
We each understand that we may change this direction at any time only upon the
giving of joint written instructions signed by each of us and that it shall
continue in effect until revoked or modified by us by joint written notice to
you.
 
 

Authorized Representative       Authorized Representation James River Coal
Company   International Resource Partners GP LLC      
  Date   Date

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EXHIBIT B-1
 
CERTIFICATE OF INCUMBENCY
 
     The specimen signatures shown below are the specimen signatures of the
individuals who have been designated as authorized representatives of James
River Coal Company and are authorized to initiate and approve transactions of
all types for the escrow account or accounts established under the Escrow
Agreement to which this Exhibit B-1 is attached, on behalf of James River Coal
Company.
 

      Name / Title       Specimen Signature              
      Name

    Signature     Title

          Name

    Signature     Title

          Name

    Signature     Title

          Name

    Signature     Title      

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EXHIBIT B-2
 
CERTIFICATE OF INCUMBENCY
 
     The specimen signatures shown below are the specimen signatures of the
individuals who have been designated as authorized representatives of
International Resource Partners GP LLC and are authorized to initiate and
approve transactions of all types for the escrow account or accounts established
under the Escrow Agreement to which this Exhibit B-2 is attached, on behalf of
the Sellers.
 

      Name / Title       Specimen Signature              
      Name

    Signature     Title

          Name

    Signature     Title

          Name

    Signature     Title

          Name

    Signature     Title      

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