Document:

Blueprint

 

 Exhibit 10.9

 

 

 

 

ASSET
PURCHASE AND SALE AGREEMENT

 

 

between

 

 

THOMAS
M. SHELTON

 

 

And

 

 

WYOMING
COUNTY COAL LLC

 

 

 

 

Dated
as of November 7, 2018

 

 

 

 

 

 

ASSET PURCHASE AND SALE AGREEMENT

 

THIS
ASSET PURCHASE AND SALE AGREEMENT (this “Agreement”), made as of
November 7, 2018, by and between THOMAS M. SHELTON, an individual
(“Seller”), and WYOMING
COUNTY COAL LLC, an Indiana limited liability company
(“Buyer”).

 

BACKGROUND

 

WHEREAS, Seller
desires to sell, assign and transfer to Buyer, and Buyer desires to
purchase from Seller, certain Assets (as defined below) in
accordance with the terms and conditions set forth herein;
and

 

WHEREAS,
concurrently with the execution and delivery of this Agreement,
Buyer and Seller are entering into an Asset Purchase Agreement (the
“Asset Purchase
Agreement”) providing for the sale of 100% of the
Assets (as defined in the Asset Purchase Agreement) in Synergy Coal
LLC to Buyer in accordance with the terms and conditions set forth
therein.

 

NOW
THEREFORE, in consideration of the mutual covenants and promises
contained in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, Seller and Buyer hereby agree as
follows:

 

1. Sale
and Purchase of Assets

 

.
Subject to the terms and conditions of this Agreement, at the
Closing, Seller agrees to sell, assign and transfer to Buyer, and
Buyer agrees to purchase and receive from Seller, the following
assets of Seller as set forth in Sections 1.1 and 1.2
(collectively, the “Assets”):

 

1.1 Real
Property.

 

(a) All of
Seller’s right, title and interest in, to and under the
approximate 1,100 acres of land located in Wyoming County, near
Oceana, West Virginia owned by Seller, as an individual (the
“Shelton
Land”) along with all assets owned by Synergy Coal,
LLC (“Synergy
LLC”) and
conveyed to Seller by the deeds described on Schedule 1.1(a) and included as
a part thereof, which schedule is attached hereto and hereby made a
part hereof (the “Owned Real
Property”).

 

(b) All of
Seller’s right, title and interest in, to and under the
leases, subleases, easements, licenses, rights-of-way, instruments,
or other real property rights conveyed to Seller by the instruments
described on Schedule
1.1(b) attached hereto and made a part hereof and as
generally depicted on the maps attached to Schedule 1.1(b) (collectively,
the “Leases” and, together
with the Owned Real Property, the “Real
Property”).

 

1.2 Data,
Books and Records. All engineering
and operational data, charts, surveys, maps, plans, drawings,
computer files, permit applications, books, records, data, title
and other reports, tax tickets, tax appraisals, documents, papers,
instruments and all other materials of all kinds relating to the
Assets in the possession of Seller and locatable after a diligent
search in good faith other than such materials (a) available from
public records and (b) relating to the valuation of the Assets,
Seller’s economic or business analysis of the transactions
contemplated by this Agreement or any other similar, prior
transaction negotiations, or combined with materials related to the
assets or businesses of Seller’s Affiliates (collectively,
the “Data”) provided, Seller
may retain copies of such Data.

 

 

 

1

 

 

2. Purchase
Price. Buyer shall pay
to Seller the sum of Three Hundred Fifty Thousand Dollars
(US$350,000) paid in cash from the proceeds of the capital raise of
American Resources Corporation (“ARC” parent company to
the Buyer) at a minimum of Five Million Dollars ($5,000,000.00)
raised by ARC (the “Capital Raise”), plus Two Hundred
Fifty Thousand Dollars (US$250,000) secured by a promissory note in
substantially the form of Exhibit A attached hereto and
hereby made a part hereof (the “Note”), and a first
mortgage in the Synergy Land paid in the form of $1.00 per ton for
tons of coal sold (as the case may be) either loaded on the rail or
truck from the property until the Note is paid in full (the
“Deed of
Trust”) (the “Purchase
Price”).

 

3. Representations
and Warranties of Seller. Seller represents
and warrants to Buyer as follows:

 

3.1 Existence.
Seller is an individual.

 

3.2 Authorization.
Seller has the right to execute, deliver and perform this Agreement
and this Agreement constitutes the valid and binding obligations of
Seller, enforceable against Seller, in accordance with their
respective terms except as enforcement may be limited by
bankruptcy, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable
principles.

 

3.3 Compliance
with Other Instruments. Neither the
execution or delivery of the Agreement by Seller nor the
consummation by Seller of the transactions contemplated therein (a)
subject to the Seller Consents, violates or conflicts with or
constitutes a default under the terms of any agreement or
instrument, or any judgment, decree or order applicable to Seller,
or the Assets, (b) will result in the creation at or after the
Closing of any Encumbrance upon all or any part of the Assets,
except for Permitted Encumbrances, or (c) conflicts with,
results in any breach of, constitutes a default (or an event which
with the giving of notice or lapse of time, or both, would become a
default) under, requires any consent under, or gives to others any
rights of termination, amendment, acceleration or cancellation of,
any note, bond, mortgage or indenture, contract, agreement, lease,
sublease, license, permit, franchise or other instrument or
arrangement to which Seller is a party, except as would not
materially and adversely affect the ability of Seller to carry out
its obligations under, and to consummate the transactions
contemplated by, this Agreement, except as set forth on
Schedule 3.4 or
Schedule
3.5.

 

3.4 Approvals
and Consents. Except with
regard to the consents (the “Seller Consents”)
required under the agreements described on Schedule 3.4 attached hereto
and hereby made a part hereof, no permit, consent, approval,
waiver, easement, license or other authorization of or declaration
to or filing with or by any person, entity, court, governmental or
regulatory or other authority is required in connection with the
execution or performance of this Agreement by Seller or the
consummation by Seller of the transactions contemplated
herein.

 

3.5 Title
to Assets. Except as set
forth on Schedule
3.5, Seller owns or leases the Assets free and clear of all
mortgages, claims, liens, security interests, charges, pledges,
options, grants, reversionary rights or other encumbrances
(collectively, the “Encumbrances”) caused or
created by Seller or any Affiliate of Seller, except for Permitted
Encumbrances. Seller will warrant and defend title by, through and
under (as and to the extent applicable) to the Assets unto Buyer,
its successors and assigns, against all claims and demands of all
parties claiming by, through or under Seller except for claims and
demands related to the Permitted Encumbrances provided, the
warranty set out in this sentence is intended to grant the same
warranty as is included in the Deeds and no more. For purposes of
this Agreement, the term “Permitted Encumbrances”
means any Encumbrances (a) for taxes and assessments of a
Governmental Authority not yet delinquent, (b) evidenced by
recorded instruments, (c) created by Buyer, (d) obvious from a
physical inspection of the Real Property, or (e) affecting the Real
Property due to Laws.

 

 

 

2

 

 

3.6 Reliance
of Buyer. Seller disclaims
and makes no representation or warranty, expressed or implied, as
to the accuracy, completeness, usefulness or reliability of the due
diligence information provided to Buyer or any portion thereof
whatsoever, except for such representations and warranties
expressly set forth in this Agreement.

 

4. Representations
and Warranties of Buyer. Buyer hereby
represents and warrants to Seller as follows:

 

4.1 Organization
and Existence of Buyer. Wyoming County
Coal LLC is a limited liability company duly organized and validly
existing under the laws of the State of Indiana.

 

4.2 Authorization
by Buyer. All company
action of Buyer necessary to authorize the execution, delivery and
performance of this Agreement and the Related Agreements to which
it is a party (“Buyer Agreements”) in
connection herewith has been taken and this Agreement and the Buyer
Agreements constitute the valid and binding obligations of Buyer
enforceable against Buyer in accordance with their respective terms
except as enforcement may be limited by bankruptcy, insolvency,
moratorium, reorganization, liquidation or similar laws affecting
the enforcement of creditors’ rights generally and by general
equitable principles.

 

4.3 Compliance
with Other Instruments. Neither the
execution and delivery of this Agreement or any of the Buyer
Agreements nor the consummation at Closing by Buyer of the
transactions contemplated therein (a) violates or conflicts with or
constitutes a default under the terms of the Articles of
Organization or the operating agreement of Buyer, or, subject to
the Buyer Consents, any agreement or instrument, or any judgment,
decree or order applicable to Buyer or any of its properties or (b)
will give rise to any right of rescission or similar remedy under
any limited liability company or securities law with respect to any
of the transactions contemplated by this Agreement.

 

4.4 Consents
and Approvals. Except for the
Permits and those items disclosed on Schedule 4.4
(“Buyer
Consents”), no consent, approval or action of, filing
with or notice to, any Governmental Authority or any other person
or entity, on the part of the Buyer is required in connection with
the execution, delivery and performance of this Agreement or any of
the Buyer Agreements or the consummation of the transactions
contemplated hereby or thereby.

 

4.5 Permitting.
Except as set forth on Schedule 4.5, neither Buyer nor
any person or entity that, together with any Affiliates of Buyer,
owns ten percent (10%) or more of the equity interests of Buyer has
been subject to any bond forfeiture, permit suspension or
revocation or similar effort or any Proceeding instituted by any
Governmental Authority that would prohibit or materially adversely
affect the transfer of the Permits to Buyer. Neither Buyer nor any
person or entity “owned or controlled” by Buyer or any
of their respective Affiliates, has been notified by the Federal
Office of Surface Mining or the agency of any state administering
the Surface Mining Control and Reclamation Act of 1977, as amended
(or any comparable state statute), that it is currently (a)
ineligible to receive additional surface mining permits or (b)
under investigation to determine whether its eligibility to receive
such permits should be revoked, i.e., “permit blocked.”
As used in this Section
4.5, “owned or controlled” shall be defined as
set forth in 30 C.F.R. Section 773.5 (1991). As used in this
Section 4.5, “Proceeding” shall mean
any action, suit, proceeding, arbitration, investigation or audit,
whether or not by any Governmental Authority.

 

 

 

3

 

 

4.6 Financing. The Buyer shall
have, upon the completion of the Capital Raise, sufficient
immediately available funds to pay, in cash, the cash portion of
the Purchase Price and all other amounts payable pursuant to this
Agreement and the Asset Purchase Agreement and all fees and
expenses in connection with the transactions completed hereby and
thereby.

 

5. Closing.

 

5.1 Date
and Place. The closing (the
“Closing”) of the
transactions contemplated by this Agreement shall take place on
such date, time and place as the parties shall mutually agree;
provided that the Closing shall take place concurrently with the
closing under the Asset Purchase Agreement.

 

5.2 Closing
Costs. Buyer shall pay
all sales and transfer taxes due and payable in connection with the
sales, conveyances, assignments, transfers, and deliveries to be
made by Seller to the Buyer under this Agreement.

 

5.3 Closing
Deliveries.

 

(a) At the Closing
(subject to Section 5.4, Buyer shall pay or deliver, as the case
may be, to Seller:

 

(i) stock certificates
for the 1,727,273 common equity shares of ARC;

 

(ii) Two
Hundred Fifty Thousand Dollars (US$250,000) secured by the
Note,

 

(iii) a
certificate signed by the Secretary or an Assistant Secretary of
Buyer certifying as to the truthfulness, completeness and accuracy
of attached copies of resolutions of Buyer’s members
authorizing the execution of this Agreement and all transactions
contemplated herein;

 

(iv) a
certificate of existence for Buyer issued by the Secretary of the
State of New York dated not more than three days prior to Closing;
and

 

(v) such other
documents or instruments, duly executed by Buyer, as may be
reasonably necessary and requested by Seller in order to consummate
the transactions contemplated by this Agreement.

 

(b) At the Closing,
Seller shall deliver to Buyer:

 

(i) a special warranty
deed conveying and transferring to Buyer title to the Owned Real
Property in substantially the form of Exhibit 5.3(b)(i) attached hereto and
hereby made a part hereof (the “Deeds”), duly executed by
Seller;

 

(ii) the
Note duly executed by Seller;

 

(iii) the
Deed of Trust duly executed by Seller; and

 

(iv) the
Bill of Sale duly executed by Seller.

 

 

 

4

 

 

5.4 Post-Closing Deliveries. At the
completion of the Capital Raise, Buyer shall promptly pay to Seller
an amount in cash equal to Three Hundred Fifty Thousand Dollars
(US$350,000) paid promptly upon completion of the preferred Series
C offering or the public offering of American Resource Energy
Company by electronic funds transfer to such accounts as Seller
shall direct Buyer in writing.

 

5.5 Conditions
to Obligations of Buyer. The obligations
of Buyer to consummate the transactions contemplated by this
Agreement shall be subject to Seller’s fulfillment of the
following conditions:

 

(a) Representations and Warranties
True. All representations and warranties made by Seller
under this Agreement shall be true and correct in all material
respects on the date of Closing and Seller shall deliver to Buyer a
certificate to that effect.

 

(b) Approvals and Consents. Seller
shall have obtained and delivered the Seller Consents to Buyer
except as otherwise agreed to by Buyer in writing.

 

(c) Liens Released. Seller shall
have delivered to Buyer evidence reasonably satisfactory to Buyer
that the liens set forth on Schedule 3.5 have been
released.

 

(d) Closing Deliveries. Seller
shall have delivered to Buyer all of the documents set forth in
Section
5.3(b).

 

(e) Asset Purchase Agreement. All
conditions to closing under the Asset Purchase Agreement shall have
been satisfied or waived (other than those conditions that by their
nature will be satisfied at the closing thereunder).

 

(f) Due Diligence. The results of
Buyer’s due diligence investigation shall be satisfactory to
Buyer.

 

5.6 Conditions
to Obligations of Seller. The obligations
of Seller to consummate the transactions contemplated by this
Agreement shall be subject to Buyer’s fulfillment of the
following conditions:

 

(a) Representations
and Warranties True. All
representations and warranties made by Buyer under this Agreement
and the Asset Purchase Agreement shall be true and correct in all
material respects on the date of Closing and Buyer shall deliver to
Seller a certificate to that effect.

 

(b) Closing Deliveries. Buyer shall
have delivered to Seller all of the documents set forth in
Section
5.3(a).

 

(c) Purchase
Price Payment. Buyer shall have
paid to Seller the Purchase Price in accordance with Section 5.3(a)(i).

 

(d) Asset Purchase Agreement. All
conditions to closing under the Asset Purchase Agreement shall have
been satisfied or waived (other than those conditions that by their
nature will be satisfied at the closing thereunder).

 

 

 

5

 

 

5.7 Related
Agreements. For purposes of
this Agreement, the term “Related Agreements” means
the corporate and company resolutions of Buyer, authorizing this
Agreement, the documents to be delivered by Buyer under
Sections 5.3(a) and
by Seller under Section
5.3(b), and any other agreement, certificate or similar
document contemplated in this Agreement as to be executed by any
party hereto.

 

6. Other
Agreements.

 

6.1 Taxes.
Any and all ad valorem real property taxes, personal property
taxes, fees or assessments for the calendar year 2018 due with
respect to the Assets, or payable by Seller pursuant to the terms
of any leases, subleases, licenses, rights-of-way, instruments, or
other agreements by which Seller holds the Real Property or any
other of the Assets shall be prorated between Seller and Buyer, as
of the Closing on a calendar year basis, using the calendar year
2018 tax rates and assessments by the appropriate Governmental
Authority. If any party shall pay such taxes for which it is
entitled to be reimbursed because of such proration, the other
party responsible therefor shall promptly reimburse the party so
paying upon notice of the amount paid by such party together with
supporting documentation thereof.

 

6.2 Consents.
Other than Seller Consents listed in Schedule 3.4 or otherwise
provided in this Agreement, Buyer shall be solely responsible for
obtaining any and all necessary third-party consents and regulatory
agency authorizations, including for the Permits. Seller shall
provide reasonable and customary assistance to obtain such consents
and assignments, provided that such assistance shall not include
payment of any consent or transfer fees or providing guarantees or
financial assistance.

 

6.3 Specific
Performance. Seller and Buyer
each acknowledge that the other will be irreparably damaged and
will have no adequate remedy at law if the acknowledging party
fails to perform any of its obligations under this Agreement. If
either party fails to perform any of its obligations under this
Agreement or the Related Agreements, the other party shall have the
right, in addition to any other rights it may possess, to
injunctive relief to prevent breaches of the provisions of this
Agreement and to enforce the specific performance of this Agreement
and the Related Agreements, in addition to any other remedy to
which it may be entitled, at law or in equity.

 

6.4 Expenses.
Each of the parties hereto shall pay its own expenses and the fees
and expenses of its counsel, accountants, consultants and other
experts and representatives associated with this Agreement and the
transactions contemplated herein.

 

6.5 Waivers.
The waiver by any party to this Agreement of compliance by any
other party with, or a breach of any other party of, any provision
of this Agreement shall be made in writing executed by the party
waiving such compliance or breach which shall be delivered to the
party whose compliance or breach is being waived. The waiver by any
party hereto of compliance with or breach of any provision of this
Agreement shall not operate, or be construed, as a waiver of any
subsequent breach or failure to comply with any other provision of
this Agreement.

 

6.6 Further
Assurances. At or after the
Closing, (a) Seller shall execute and deliver to Buyer all such
further assignments, deeds, agreements, contracts, instruments and
other documents as Buyer may reasonably request in order to
perform, accomplish, perfect or record, if reasonably necessary,
the sale, assignment, transfer and delivery to Buyer of the Assets
as contemplated by this Agreement and to otherwise carry out the
intention and purpose of this Agreement and the Related Agreements,
and (b) Buyer shall execute, or shall cause the execution of, and
deliver to Seller such assignments, deeds, agreements, contracts,
instruments and other documents as Seller may reasonably request in
order to perform, accomplish, perfect or record, if necessary, and
carry out the intention and purpose of this Agreement and the
Related Agreements and the transactions contemplated
thereby.

 

 

 

6

 

 

6.7 Assistance
in Title Matters. Seller shall
execute and deliver all documents, make all truthful and
appropriate affirmations, testify in any proceedings and do all
other acts that may be necessary or desirable, in the reasonable
opinion of counsel for Buyer, to perfect of record the title of
Buyer to the Assets, at Buyer’s sole cost and expense except
as to costs and expenses related to the correction of any defect in
title contrary to the express representations and warranties of
Seller in Article 3.

 

6.8 Disclaimer
of Warranties. The Buyer
acknowledges that the representations and warranties contained in
Article 3 are the only representations or warranties given by the
Seller, and that all other express or implied warranties are
disclaimed. Without limiting the foregoing and except as otherwise
provided in this Agreement, and without waiving any defenses to
liability under any Laws, the Buyer acknowledges that, except as
otherwise provided in Article 3, the Assets are being conveyed to
Buyer “AS
IS”, “WHERE IS” and
“WITH ALL
FAULTS” and that all warranties of condition,
merchantability or fitness for a particular purpose are disclaimed.
WITHOUT LIMITING THE FOREGOING, THE BUYER ACKNOWLEDGES THAT EXCEPT
AS PROVIDED HEREIN, THE SELLER AND ITS RESPECTIVE RELATED PERSONS
HAVE MADE NO REPRESENTATION OR WARRANTY CONCERNING (A) ANY USE TO
WHICH THE ASSETS MAY BE PUT, (B) ANY FUTURE REVENUES, COSTS,
EXPENDITURES, CASH FLOW, RESULTS OF OPERATIONS, FINANCIAL CONDITION
OR PROSPECTS THAT MAY RESULT FROM THE OWNERSHIP, USE OR SALE OF THE
ASSETS, (C) ANY OTHER INFORMATION OR DOCUMENTS MADE AVAILABLE TO
THE BUYER OR RELATED PERSONS, (D) THE CONDITION OF THE ASSETS,
INCLUDING COMPLIANCE WITH ANY ENVIRONMENTAL LAWS OR OTHER LAWS, OR
(E) THE ASSETS PRIOR TO THE DATE SELLER ACQUIRED THE ASSETS. For
purposes of this Section 6.8, “Related Persons” shall
mean Affiliates of Seller and any member, manager, officer,
director, employee, agent, shareholder, representative, successor
or assign of Seller or its Affiliates.

 

6.9 Survival.
All covenants and obligations in this Agreement and the Related
Agreements shall survive the Closing and the consummation of the
transactions contemplated hereunder subject to the terms and
conditions set forth herein.

 

6.10 Conduct
Prior to the Closing. Seller covenants
and agrees that, between the date hereof and the Closing, he shall
maintain ownership of the Assets and conduct his business relating
to the Assets and shall maintain the Assets in the ordinary course
directly or indirectly through his use of a contractor consistent
with past practice. Without limiting the generality of the
foregoing, between the date hereof and the Closing, Seller shall
(a) use commercially reasonable efforts directly or indirectly
through his use of a contractor consistent with past practice to
maintain, preserve and protect all of the Assets in the condition
in which they exist on the date hereof, except for ordinary wear
and tear and except for replacements, modifications or maintenance
in the ordinary course of business; (b) not, directly or
indirectly, sell or otherwise transfer or dispose, or offer, agree
or commit (in writing or otherwise) to sell or otherwise transfer
or dispose of any of the Assets; (c) comply in all material
respects with all laws applicable to him or having jurisdiction
over Seller insofar as they relate to the Assets; (d) maintain in
full force and effect each Permit held by Seller as of the date
hereof, and comply with the terms of each such Permit and not allow
any such Permit to terminate, expire or lapse; and (e) maintain in
full force and effect insurance covering the Assets as in effect on
the date hereof and not allow any such insurance to terminate,
expire or lapse.

 

 

 

7

 

 

7. Termination.

 

7.1 Termination
Events. This Agreement
may be terminated by Seller at any time prior to the Closing if it
appears to the Seller that the Asset Purchase Agreement shall not
Close.

 

7.2 Effect
of Termination. In the event of
termination of this Agreement as provided in Section 7.1, this Agreement
shall forthwith become void and there shall be no liability on the
part of any party hereto except that nothing herein shall relieve
any party from liability for any breach of this Agreement occurring
prior to such termination.

 

8. Miscellaneous.

 

8.1 Assignment.
The rights and obligations of any party arising under this
Agreement, or any interest therein, shall not be assigned,
transferred, conveyed, sold, pledged, mortgaged, hypothecated,
encumbered or otherwise disposed of (whether by operation of law or
otherwise), in whole or in part, without obtaining the prior
written consent of the other party hereto, which consent shall not
be unreasonably withheld or delayed.

 

8.3 Broker.
Each of Seller and Buyer represent to the other that all
negotiations relevant to this Agreement and the transactions
contemplated herein have been carried on by them directly with the
other without the intervention or assistance of any person other
than their respective employees, agents and consultants, and each
agrees to indemnify the other and to hold it harmless against and
in respect of any claim against the other for brokerage or other
commissions relative to this Agreement, the sale of the Assets
hereunder and the transactions contemplated herein.

 

8.4 Notice.
Except as otherwise specified in this Agreement, all notices,
requests, demands and other communications under this Agreement
shall be in writing and shall be deemed to have been duly given on
the date when personally delivered to the party to whom notice is
to be given, on the date of transmission if sent by confirmed
facsimile transmission, or on the second day after mailing, if
mailed to the party to whom notice is to be given, by nationally
recognized overnight delivery service and properly addressed as
follows:

 

If to
the Seller:

 

Thomas
M. Shelton

2153
Windward Shore Drive

Virginia
Beach, VA 23451

Facsimile:
(757) 596-9302

 

WITH
COPIES TO:

 

Greenberg
Traurig, LLP

1000
Louisiana Street, Suite 1700

Houston,
TX 77002

Attention:
William Garner

Office:
(713) 374-3549

Facsimile:
(713) 374-3505

Email:
garnerw@gtlaw.com

 

 

 

8

 

 

If to
the Buyer:

 

Wyoming
County Coal, LLC

P.O.
Box 606

Fishers,
IN 46038

Attention:
Gregory Q. Jensen

Facsimile:
606-393-0190

Email:
gqj@questenergycorp.com

 

Any
party may change its address for the purposes of this section by
giving the other party hereto written notice of the new address in
the manner set forth above.

 

8.5 Third
Parties. Except as
otherwise expressly provided for in this Agreement, nothing in this
Agreement, whether expressed or implied, is intended to confer any
rights or remedies under or by reason of this Agreement on any
persons other than the parties to this Agreement and their
respective successors and permitted assigns, nor is anything in
this Agreement intended to relieve or discharge the obligation or
liability of any third person to any party to this Agreement, nor
shall any provision give any third person any right of subrogation
or action over or against any party to this Agreement.

 

8.6 Governing
Law. This Agreement
shall be governed by, and construed and interpreted in accordance
with, the laws of the State of Indiana, without regard to or
application of its conflict of laws or principles.

 

8.7 Entire
Agreement. This Agreement,
together with the attached Schedules and Exhibits, and, once
executed and delivered, the Related Agreements, constitutes the
entire agreement between the parties with respect to the subject
matter hereof and may not be changed, terminated or discharged
except by writing duly executed by the parties hereto. In the event
of a conflict between the terms and conditions of this Agreement
and the Asset Purchase Agreement, the terms and conditions of the
Asset Purchase Agreement shall control.

 

8.8 Benefit.
This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto, their respective successors and
assigns.

 

8.9 Headings.
The headings contained in this Agreement are included for purposes
of convenience of reference only and shall not affect the
construction or interpretation of any of its
provisions.

 

8.10 Severability.
In the event one or more of the provisions of this Agreement shall,
for any reason, be held invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not
affect the validity, legality or enforceability of any other
provision of this Agreement, and this Agreement shall be construed
as if such invalid, illegal or unenforceable provision was not a
part of this Agreement.

 

8.11 Drafting.
No inference shall be drawn in favor of or against any party based
upon its participation in the drafting of this Agreement or any of
the other documents referenced herein.

 

 

 

9

 

 

8.12 Counterparts.
This Agreement may be executed in counterparts (including via
facsimile and e-mail), each of which shall be deemed an original,
but all of which together shall constitute one and the same
agreement, and shall become effective when one or more counterparts
have been signed by each of the parties hereto. The executed
Agreement together with any attachments hereto may be photocopied
and stored on computer tapes, disks and similar electronic storage
media (“Imaged
Document”). If an Imaged Document is introduced as
evidence in any judicial, arbitration, mediation or administrative
proceeding, neither party shall object to the admissibility of the
Imaged Document on the basis that such was not originated or
maintained in documentary form under either the hearsay rule, the
best evidence rule, or other rule of evidence.

 

8.13 No
Consequential Damages. Except as
prohibited by law, the Buyer hereby waives any right it may have to
claim or recover any special, exemplary, punitive or consequential
(including business interruption) damages, or any damages other
than, or in addition to, actual damages, whether pursuant to this
Agreement, the Related Agreements or otherwise.

 

8.14 Jurisdiction;
Venue. All actions
arising out of or relating to this Agreement shall be heard and
determined exclusively in any United States federal court sitting
in the United States District Court for the Southern District of
Indiana, or in the event (but only in the event) that such court
does not have jurisdiction over such action or proceeding, in any
Indiana state court sitting in Hamilton County. Consistent with the
preceding sentence, the parties hereto hereby (a) submit to the
exclusive jurisdiction of any such United States federal court or
Indiana state court for the purpose of any action arising out of or
relating to this Agreement brought by any party hereto and (b)
irrevocably waive, and agree not to assert by way of motion,
defense, or otherwise, in any such action, any claim that it is not
subject personally to the jurisdiction of the above-named courts,
that its property is exempt or immune from attachment or execution,
that the action is brought in an inconvenient forum, that the venue
of the action is improper, or that this Agreement or the
transactions contemplated by this Agreement may not be enforced in
or by any of the above-named courts.

 

8.15 No
Public Announcements. Each of the
parties to this Agreement hereby agrees not to make any press
release or similar public announcement concerning the execution or
performance of this Agreement prior to or after the Closing without
the consent of the other party.

 

8.16 Definitions.
For purposes of this Agreement:

 

“Affiliate” means any
person or entity that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common
control with, the specified party. In this context, the term
“control” (including the terms controls, controlled by and
under common control with)
means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a person or
entity, whether through the ownership of voting securities, by
contract, or otherwise.

 

“Governmental Authority”
means any United States federal, tribal, state or local, or any
foreign government, governmental authority, regulatory or
administrative agency, governmental commission, court or tribunal
(or any department, bureau or division thereof).

 

“Law(s)” means any
federal, state or local statute, law, ordinance, decree, order,
rule, judgment, or regulation including, but not limited to, those
relating to zoning, employees, wages, and occupational health and
safety currently in effect, applicable to the Real
Property.

 

“Permits” means any
governmental permits applicable to ownership and operations of the
Assets.

 

[Signature Page Follows]

 

 

 

10

 

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

 

 

 

BUYER:

 

WYOMING
COUNTY COAL LLC

 

 

By:                                                                        

Name:                                                                   

Title:                                                                     

 

 

 

 

SELLER:

 

 

By:
_______________________________

       Thomas M.
Shelton

      
Title: ___________________________

 

11Blueprint

 

 Exhibit 10.10

 

 

 

 

 

 

 

 

 

 

ASSET
PURCHASE AGREEMENT

 

by and
among

 

SYNERGY
COAL, LLC

 

AND

 

WYOMING
COUNTY COAL LLC

 

November 7,
2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSET PURCHASE AGREEMENT

 

THIS
ASSET PURCHASE AGREEMENT (this “Agreement”)
is entered into as of November 7, 2018, by and among
(i) Wyoming County Coal LLC, an Indiana company (the
“Buyer”),
and (ii) Synergy Coal, LLC, a West Virginia limited liability
company (the “Company”
or Seller”).
The Buyer and the Seller are sometimes each referred to herein
individually as a “Party”
and collectively as the “Parties.”

 

WHEREAS, the Company is engaged in the
business of owning assets that may be used in performing coal
mining and processing (the “Business”)
in Wyoming County, West Virginia, including a coal washing plant
(“Wash
Plant”) and a coal loadout facility with rail access
(“Loadout”),
commonly known as the Hatcher Preparation Plant (the Wash Plant and
Loadout are collectively known as the “Facility”),
located on the Real Property;

 

WHEREAS, the Seller desires to sell, and
the Buyer desires to purchase, all of the Assets pertaining to the
Business, subject to the terms and conditions set forth in this
Agreement (the “Transaction”);
and

 

WHEREAS, concurrently with the execution
and delivery of this Agreement, Thomas M. Shelton and Buyer are
entering into an Asset Purchase and Sale Agreement (the
“Asset Purchase and
Sale Agreement”) providing for the sale by Thomas M.
Shelton to the Buyer of certain real estate and other assets in
accordance with the terms and conditions set forth
therein.

 

NOW, THEREFORE, in consideration of the
representations, warranties and covenants herein contained, and for
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties agree as
follows:

 

1. Definitions.
For purposes of this
Agreement:

 

“Action”
means any judicial or administrative action, claim, suit,
investigation, hearing, demand or proceeding by or before any
Governmental Authority.

 

“Affiliate”
means, with respect to any specified Person, a Person that,
directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with such
specified Person; it being understood that for purposes of this
definition the term “control”
(including the terms “controlled
by” and “under common
control with”) means the possession, direct or
indirect, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of
voting securities, by contract or otherwise.

 

“Agreement”
has the meaning set forth in the introduction to this
Agreement.

 

“Articles of
Organization” means the Articles of Organization of
the Company filed with the Secretary of State of the State of West
Virginia on October 26, 2011 and all amendments, modifications and
supplements thereto.

 

 

1

 

“Asset Purchase and
Sale Agreement” has the meaning set forth in the third
WHEREAS clause to this
Agreement.

 

“Assets”
has the meaning set forth in Section 2.01
hereof.

 

 “Business”
has the meaning set forth in the first WHEREAS clause to this
Agreement.

 

 “Buyer”
has the meaning set forth in the introduction of this
Agreement.

 

“Buyer Indemnified
Parties” has the meaning set forth in Section 7.02
hereof.

 

“Cap”
has the meaning set forth in Section 7.03
hereof.

 

“Closing”
has the meaning set forth in Section 2.03
hereof.

 

“Closing
Date” has the meaning set forth in Section 2.03
hereof.

 

“Coal Agreement
Assumption” has the meaning set forth in Section 2.04(a)(ii)
hereof.

 

 “Coal
Agreements” means, collectively, that certain (i) Coal
Washing and Loading Agreement, dated November 21, 2013, by and
between the Company and Pioneer Fuel Corporation and (ii) Coal
Purchase Option Agreement, dated November 21, 2013, by and between
the Company and Pioneer Fuel Corporation.

 

“Code”
means the Internal Revenue Code of 1986, as amended from time to
time.

 

“Company”
has the meaning set forth in the introduction to this
Agreement

 

“Company LLC
Agreement” means the Limited Liability Agreement of
the Company, dated as of April 4, 2012 and all amendments,
modifications and supplements thereto.

 

“Company
Properties” has the meaning set forth in Section 3.11(a)
hereof.

 

“Contracts”
shall have the meaning in Section 2.01 (c).

 

“Data”
shall have the meaning in Section 2.01 (e).

 

“Eagle and Gilbert
Permits” means two coal underground permits in Oceana
District of Wyoming County of West Virginia known as Mine 1 and
Mine 2. Mine 1 has been assigned West Virginia Department of
Environmental Protection (“WVDEP”) Article 3 Permit
U301312 for the surface disturbance of 31.56 acres in order to mine
reserves in the Eagle seam of coal. Mine 2 has been assigned WVDEP
Article 3 Permit U301412 for the surface disturbance of 7.65 acres
in order to mine reserves in the Gilbert seam of coal.

 

“Effective
Time” has the meaning set forth in Section 2.03
hereof.

 

“Employee
Plan(s)” has the meaning set forth in Section 3.16(a)
hereof.

 

 

2

 

“Environment”
means soil, land surface or subsurface strata, real property,
surface waters (including navigable waters, ocean waters, streams,
ponds, drainage basins and wetlands), groundwater, water body
sediments, drinking water supply, stream sediments, ambient air
(including indoor air), plant and animal life and any other
environmental medium or natural resource.

 

“Environmental
Law” means any federal, state or local law, including
regulations promulgated thereunder, or common law relating to
emissions, discharges, releases or threatened releases of
pollutants, petroleum, petroleum products, contaminants, chemicals
or toxic or Hazardous Substances or wastes into the indoor or
outdoor environment, including, without limitation, ambient air,
soil, surface water, ground water, wetlands, land or subsurface
strata, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of pollutants, petroleum, petroleum products,
contaminants, chemicals or toxic or Hazardous Substances or
wastes.

 

“Equipment
Leases” has the meaning set forth in Section 3.12
hereof.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as
amended from time to time.

 

“Governmental
Authority” means any United States federal, state or
local, or any foreign government, governmental authority,
regulatory or administrative agency, governmental commission, court
or tribunal (or any department, bureau or division
thereof).

 

“Hazardous
Substance” means, collectively, (i) any petroleum or
petroleum products, explosives, radioactive materials, asbestos,
urea formaldehyde foam insulation, and transformers or other
substances that contain polychlorinated biphenyls, (ii) any
chemicals or other materials or substances that are defined as or
included in the definition of “hazardous substances,”
“hazardous wastes,” “hazardous materials,”
“extremely hazardous wastes,” “restricted
hazardous wastes,” “toxic substances,”
“toxic pollutants,” “contaminants,”
“pollutants” or words of similar import under any
Environmental Law and (iii) any other chemical or other material or
substance, exposure to which is prohibited, limited or regulated
under any Environmental Law.

 

“Imaged
Document” has the meaning set forth in Section 10.05
hereof.

 

“Indebtedness”
means, with respect to any Person, any and all obligations of such
Person (i) for borrowed money, (ii) evidenced by notes, bonds,
debentures or similar instruments, (iii) under or relating to
letters of credit (including any obligation to reimburse the letter
of credit issuer with respect to amounts drawn on such
instruments), (iv) for the deferred purchase price of goods or
services (other than trade payables or accruals incurred and paid
in the ordinary course of business of the Business as presently
conducted), (v) under capital leases, (vi) with respect to bank
overdrafts or otherwise reflected as negative cash in financial
statements of such Person, (vii) for deferred compensation, (viii)
to pay any accrued dividends or dividends that have otherwise been
declared and not yet paid, and (ix) in the nature of guarantees
of the obligations described in clauses (i) through (viii) above of
any other Person.

 

“Indemnified
Party” has the meaning set forth in Section 7.04(a)
hereof.

 

“Indemnifying
Party” has the meaning set forth in Section 7.04(a)
hereof.

 

 

3

 

“IRS”
means the Internal Revenue Service.

 

“Knowledge of the
Company” or “Company’s
Knowledge” means the actual knowledge of the Thomas M.
Shelton.

 

“Laws”
means all laws, statutes, rules, regulations, codes, injunctions,
judgments, orders, decrees, rulings, interpretations,
constitutions, ordinances, common law or treaties of any federal,
tribal, state, local municipal and foreign, international or
multinational Governmental Authority.

 

“Leases”
shall have the meanings in Section 2.01 (b).

 

“Liability”
means any liability or obligation (whether known or unknown,
whether asserted or unasserted, whether absolute or contingent,
whether accrued or unaccrued, whether liquidated or unliquidated,
whether incurred directly or consequential and whether due or to
become due), including any Tax or other liability arising out of
applicable statutory, regulatory or common law, any contractual
obligation and any obligation arising out of tort.

 

“Licenses and
Permits” means all foreign, local, state and federal
licenses, permits, registrations, certificates, Contracts,
consents, accreditations and approvals necessary for the operation
of the Business.

 

“Lien”
means any mortgage, pledge, lien, encumbrance, charge, or other
security interest.

 

“Loadout”
shall have the meaning in the first Whereas clause;

 

“Losses”
means any and all damages, costs, liabilities, losses, judgments,
settlements, awards, penalties, fines, expenses or other costs,
including reasonable attorneys’ fees, expert fees and costs
of investigation, enforcement and collection suffered or incurred
by an Indemnified Party.

 

“Material Adverse
Effect” means, either individually or in the
aggregate, together with all such other changes or events, a
material adverse effect on (i) the Assets or operations of the
Company or the Business as a whole or (ii) the ability of the
Company or the Seller to perform any material obligations under
this Agreement, other than, in the case of clauses (i) and (ii)
above, any change or event that directly results from (A) changes
in United States or global economic conditions that do not
disproportionately impact the Company or the Business or
(B) changes in the industry in which the Business operates
that do not disproportionately impact the Company or the
Business.

 

“Owned Real
Property” shall have the meanings set forth in Section
2.01 (a).

 

“Party”
and “Parties”
have the meanings set forth in the introduction to this
Agreement.

 

“Permits”
shall have the meaning set forth in Section 2.01(f).

 

“Person”
means any individual, partnership, corporation, limited liability
company, association, joint stock company, trust, joint venture,
unincorporated organization, Governmental Authority or other
entity.

 

 

 

4

 

“Personal
Property” shall have the meaning set forth in
Section 2.01
(d).

 

“Proceeding”
has the meaning set forth in Section 4.05
hereof.

 

“Proprietary
Rights” means
all patents, trademarks, service marks, copyrights, trade names and
all registrations and applications and renewals for any of the
foregoing and all goodwill associated therewith.

 

“Purchase
Price” means
one million, seven hundred twenty-seven thousand, two hundred
seventy-three (1,727,273) common equity shares, with full voting
and transfer rights, of American Resources Corporation based on the
per share price of American Resources Corporation at the time of
its public offering.

 

“Real
Property” shall have the meanings in Section 2.01 (b).

 

“Reclamation
Surety” has the
meaning set forth in Section 3.22
hereof.

 

“Release”
means any actual, threatened or alleged spilling, leaking, pumping,
pouring, emitting, dispersing, emptying, discharging, injecting,
escaping, leaching, dumping or disposing of any Hazardous Substance
into the Environment that may cause an environmental liability and
cost (including the disposal or abandonment of barrels, containers,
tanks or other receptacles containing or previously containing any
Hazardous Substance).

 

“Remedial
Action” means
all actions to (i) clean up, remove, treat or in any other way
address any hazardous material, (ii) prevent the Release of any
hazardous material so it does not endanger or threaten to endanger
public health or welfare or the indoor or outdoor environment,
(iii) perform pre-remedial studies and investigations or
post-remedial monitoring and care or (iv) otherwise correct a
condition of noncompliance with Environmental Laws.

 

“Seller”
has the meaning set forth in the introduction to this
Agreement.

 

“Subsidiary”
means with respect to any Person (i) any corporation at least a
majority of whose outstanding voting stock is owned, directly or
indirectly, by such Person or by one or more of its Subsidiaries,
or by such Person and one or more of its Subsidiaries, (ii) any
limited liability company, general partnership, joint venture or
similar entity, at least a majority of whose outstanding limited
liability company, partnership or similar interests shall at the
time be owned by such Person, or by one or more of its
Subsidiaries, or by such Person and one or more of its Subsidiaries
and (iii) any limited partnership of which such Person or any of
its Subsidiaries is a general partner. For purposes of this
definition, “voting stock” means shares, interests,
participations or other equivalents in the equity interest (however
designated) in such Person having ordinary voting power for the
election of a majority of the directors (or the equivalent) of such
Person other than shares, interests, participations or other
equivalents having such power only by reason of the occurrence of a
contingency.

 

“Tax”
or “Taxes”
means any federal, state, local or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under
Section 59A of the Code), customs duties, capital stock, franchise,
profits, withholding, social security (or similar, including FICA),
unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on
minimum, estimated or other tax of any kind whatsoever, including
any interest, penalty or addition thereto, whether disputed or
not.

 

 

5

 

“Tax
Return” means
any return, declaration, report, claim for refund, or information
return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment
thereof.

 

“Third Party
Claim” has the
meaning set forth in Section 7.04(a)
hereof.

 

“Transaction”
has the meaning set forth in the second WHEREAS clause to this
Agreement.

 

“Transfer
Period” means
any such period following Closing through the transfer of the
Permits to Buyer.

 

“UMWA
Agreement” has
the meaning set forth in Section 2.04(a)(i)
hereof.

 

“Wash
Plant” shall have the meaning in the first Whereas
clause;

 

 “WVDEP”
has the meaning set forth in Section 4.06
hereof.

 

2. Acquisition
of Assets

 

2.01 Purchase
and Sale. Subject to the
terms and conditions of this Agreement, at the Closing, the Seller
agrees to sell, transfer and assign to the Buyer and the Buyer
agrees to purchase from the Seller, all of Seller's right, title
and interest in in following assets (collectively, the
“Assets”):

 

(a) Real Property. All of
Seller’s right, title and interest in, to and under that
certain fee tract of land and other real property owned by Seller
in Wyoming County, West Virginia and conveyed to Seller by the
deeds described on Schedule 2.01(a) and as
generally depicted on the map included as a part thereof, which
schedule and map are attached hereto and hereby made a part hereof
(the “Owned Real
Property”).

 

(b) Leases. All of Seller’s
right, title and interest in, to and under the leases, subleases,
easements, licenses, rights-of-way, instruments, or other real
property rights conveyed to Seller by the instruments described on
Schedule 2.01(b)
and as generally depicted on the map included as a part thereof
(collectively the “Leases”
and, together with the Owned Real Property, the “Real
Property”).

 

(c) Contracts. All of
Seller’s right, title and interest in, to and under the
contractual agreements, assignments, and other property rights
relating to the Assets.

 

(d) Personal Property. All of
Seller’s right, title and interest in, to and under the
equipment, machinery, furniture, fixtures, tools, supplies, spare
parts, improvements and other tangible personal property listed on
Schedule 2.01(d) or
located on any Real Property (collectively, the “Personal
Property”).

 

 

6

 

(e) Records. All engineering,
operational data, charts, surveys, maps, plans, drawings, computer
files, permit applications, books, records, data, title and other
reports, tax tickets, tax appraisals, documents, papers,
instruments and all other materials of all kinds relating to the
Assets in the possession of Seller (collectively, the
“Data”),
provided that Seller may retain copies of such Data.

 

(f) Permits. All permits,
approvals, orders, authorizations, consents, licenses,
certificates, franchises, exemptions of or filings or registrations
with or issued by any Governmental Authority relating to the Assets
or the operation of the Facility (collectively, the
“Permits”).

 

2.02

Purchase Price. Upon the public
offering of American Resources Corporation, the Buyer agrees to pay
the Purchase Price to the Seller in exchange for the
Assets.

 

2.03

Time and Place of Closing. The closing of
the Transaction (the “Closing”)
shall take place at the offices of Greenberg Traurig, 200 Park Ave,
New York, NY 10166 on November 7, 2018 or such other date or
place as may be mutually agreed upon by the Parties following the
satisfaction or waiver of all of the conditions to the obligations
of the Parties to consummate the Transaction to be performed on the
Closing Date (other than conditions with respect to actions to be
taken by the Parties at Closing); provided that the Closing shall
take place concurrently with the closing under the Asset Purchase
and Sale Agreement. The date of the Closing is referred to as the
“Closing
Date”. For the purposes of passage of title and risk
of loss, adjustments and other economic or financial effects of the
transactions contemplated hereby, the Closing when completed shall
be deemed to have occurred at 12:01 a.m., local time, on the
Closing Date (the “Effective
Time”).

 

2.04

Closing
Deliveries.

 

(a)            At
the Closing, Buyer shall pay or deliver, as the case may be, to the
Seller:

 

(i) an assignment and
assumption agreement, in substantially the form of Schedule 2.04 attached
hereto and made a part hereof (the “UMWA
Agreement”), pursuant to which the Seller shall assign
and Buyer shall assume all rights, duties and obligations of the
Seller under that certain Agreement Concerning Termination of
Operations, dated May 17, 1993, between Pioneer Fuel Corporation
and the International Union, United Mine Workers of America,
attached hereto as Exhibit A, duly executed
by Buyer;

 

(ii) an
assumption agreement, in substantially the form of Exhibit B attached hereto and
made a part hereof (the “Coal Agreement
Assumption”), pursuant to which Buyer shall agree to
assume and perform the obligations of the Company under the Coal
Agreements;

 

(iii) an
Assignment and assumption agreement so that Buyer will agree to
assume the obligations of Company under the document listed in
items 3-14 of Schedule 3.11(a); items 1,
2, 4, 6 and 7 of Schedule
3.13; and Schedule 3.09.

 

 

7

 

(iv) such
other instruments and documents, duly executed by Buyer, as the
Seller may reasonably request from the Buyer in connection with the
Transaction on or prior to the Closing Date.

 

(b) At the Closing,
Seller shall deliver to Buyer:

 

(i) Deeds to the CNG
Property and the Black Rock Property;

 

(ii) the
UMWA Assumption Agreement, duly executed by the
Seller;

 

(iii) the
Coal Agreement Assumption, duly executed by the
Seller;

 

(iv) the
Assignment and Assumptions listed in Section 2.04(a)(iii);
and

 

(v) such other
instruments and documents, duly executed by the Seller, as Buyer
may reasonably request from the Seller in connection with the
Transaction on or prior to the Closing Date.

 

3. Representations
and Warranties of the Seller. The Seller hereby represents and
warrants to the Buyer as follows, all of which representations and
warranties are true and correct as of the date hereof and shall be
true and correct as of (and as though made at) the Closing and the
Effective Time:

 

3.01

Ownership of Seller's Interest. The Seller is the
beneficial and record owner of the Assets free and clear of any
Liens. The Seller has full right, power and authority to transfer
the Assets. There are no agreements restricting the transfer by the
Seller of the Assets. Upon consummation of the Transaction, the
Buyer will hold the Seller's entire ownership interest in the
Assets, free and clear of all Liens, other than those created by
the Buyer. None of the Assets are subject to any outstanding
option, warrant, call, or similar right of any other person or
entity to acquire the same.

 

3.02

Authorization of the Transaction. The Seller has
the requisite right, power and authority to execute and deliver
this Agreement and the other documents contemplated herein and to
perform their respective obligations hereunder and thereunder. All
actions or proceedings to be taken by or on the part of the Seller
to authorize and permit the execution and delivery by the Seller of
this Agreement, the other documents contemplated herein, the
performance by the Seller of its obligations hereunder and
thereunder, and the consummation by the Seller of the Transaction
have been duly and properly taken. This Agreement and the other
documents contemplated herein, have been duly executed and
delivered by the Seller, constitute their legal, valid and binding
obligation and are, and will be, enforceable in accordance with the
terms and conditions therein, subject only to bankruptcy,
insolvency and similar laws affecting creditors' rights generally
and to general principles of equity.

 

3.03

Noncontravention. The execution and
delivery of this Agreement, the other documents contemplated herein
and the consummation of the Transaction, does not or will not
conflict with, result in a breach of, constitute a default or right
or cause of action under, result in the acceleration of, create in
any Party the right to accelerate, terminate, modify or cancel any
agreement, contract, lease, license, instrument or other
arrangement to which the Seller is a party, by which they are bound
or to which any of their Assets are subject. The Seller is not
required by applicable Law or other obligation to give any notice
to, make any filing with, or obtain any authorization, consent or
approval of any Governmental Authority in order for the Parties to
consummate the Transaction.

 

 

 

8

 

3.04

Brokers' Fees. Neither the
Seller nor any of its Affiliates have any Liability to any broker,
finder, investment bank, financial advisor or other similar Person
arising from or related to the Transaction for which the Buyer or
the Company could be or become liable or obligated.

 

3.05

Powers of Attorney. There are no
outstanding powers of attorney executed on behalf of the Seller in
respect of the Assets.

 

3.06

Litigation. There is no
Action pending to which the Seller is a party or, to the actual
knowledge of the Seller, threatened, against the Seller, which
questions the validity of this Agreement or prohibits the ability
of the Seller to consummate the Transaction.

 

3.07

Title to Assets. The Company has
good and marketable title to, or, in the case of property held
under lease or license, a valid and enforceable right to use under
an enforceable lease or license, the Real and Personal Properties
and Assets, tangible and intangible, owned, leased or used by it,
located on its premises, and used in the conduct of the Business as
currently conducted (excluding the personal property of employees),
in each case free and clear of all Liens, except for:

 

(a) Liens for Taxes not
yet due and payable and for which appropriate reserves have been
established on the Company's books and records; and

 

(b) Statutory Liens for
carriers, warehousemen, materialmen, landlords and the like that
are described on Schedule
3.07(b).

 

The
Liens described in clauses (a) through (b) above shall be referred
to herein as the “Permitted
Liens.”

 

3.08

Compliance with Laws. To the
Company’s Knowledge, it complies in all material respects
with and has conducted the Business (i) in all material respects in
accordance with all applicable Laws, and (ii) in all material
respects in accordance with all injunctions, judgments, orders,
decrees, writs and rulings of all Governmental Authorities to which
the Company is a party. No investigation or review by any
Governmental Authority with respect to the Company is pending or
filed or, to the Knowledge of the Company, threatened nor, to the
Knowledge of the Company, has any Governmental Authority indicated
an intention to conduct the same.

 

3.09

Licenses and Permits. Schedule 3.09 lists all the
Licenses and Permits applicable to Company. No other governmental
authorizations are necessary or required for the Company to own,
lease or use its Assets, other than any governmental authorization
that the failure to hold, own, possess or use could not reasonably
be expected to have a Material Adverse Effect. The Company has not
received any written notice that remains outstanding from any
Governmental Authority or Person regarding any actual or proposed
revocation, withdrawal, suspension, cancellation or termination
(other than by expiration) of any Licenses and
Permits.

 

 

 

9

 

3.10

Taxes.

 

(a) (i) The Company has
at all times been treated as a partnership or disregarded entity
for federal and applicable state income tax purposes and has filed
its federal and state income Tax Returns consistent with such
treatment, (ii) the Company has filed or caused to be filed on a
timely basis (taking into account all applicable extension periods)
all material Tax Returns (as hereinafter defined) that are or were
required to be filed by it pursuant to applicable laws, (iii) all
such Tax Returns were correct and complete in all material
respects, (iv) the Company and each Subsidiary has paid all Taxes
which are due and payable, whether or not shown on such Tax
Returns, (v) none of the federal income Tax Returns of the Company
or the Subsidiaries has been audited by the IRS or any state taxing
authority, (vi) no such audits are proposed or pending, and (vii)
there is not now in force any waiver or agreement by it for the
extension of time for the assessment of any Tax of the Company or
any Subsidiary.

 

(b) To the extent that
any state or local Tax liability is determined for a period that
begins before, but does not end on the Closing Date, the Tax
liability for such taxable period shall be apportioned to Seller
based on the number of days in the tax period ending on or prior to
the Closing Date, and to the Buyer based on the number of days in
the tax period after the Closing Date; and each shall reimburse the
other for any change in any such liability based on a determination
of any state or local tax authority.

 

(c) There are no
material Liens for Taxes upon any of the Assets or property of the
Company and no event has occurred, which with the passage of time
or the giving of notice, or both, could reasonably be expected to
result in a material Lien for Taxes on any of the
Assets.

 

3.11

Real Property.

 

(a)            Schedule
3.11(a) sets forth a true, correct and complete list of all
material real property leases, subleases, licenses, deeds and
easements pursuant to which the Company is a lessor, lessee,
sublessor, sublessee, licensor or licensee, holder or grantor or
grantee in each case as amended through the date hereof (the
“Company
Properties”), which list includes the street address,
the identity of the lessors, lessees, sublessors, sublessees,
licensors or licensees, or with respect to which a Company has
guaranteed the obligations of any other Person, the term thereof
(referencing applicable extension or renewal periods, the rent
payment terms, maximum potential exposure and the current
use).

 

(b) Each lease of
premises utilized by the Company or in connection with the Business
is legal, valid and binding in all material respects, as between
the Company and the other party or parties thereto, except as shown
on Schedule
2.01(b), and the Company is a tenant or possessor in good
standing thereunder, free of any material default or breach on the
part of the Company and, to the Knowledge of the Company, free of
any material default or breach on the part of the lessors
thereunder, and the Company quietly enjoys the premises provided
for therein.

 

(c) No consent of any
Person to any lease, sublease, license or mortgage is required in
connection with the consummation of the Transaction, and no such
event shall be prohibited by, or shall constitute a default under,
any such lease, sublease, license or mortgage.

 

 

10

 

(d) There are no
eminent domain proceedings pending or, to the Knowledge of the
Company, threatened against any Company Properties. There are no
pending or, to the Knowledge of the Company, contemplated zoning
changes, “floor area ratio” changes, variances, special
zoning exceptions, conditions or agreements which have or would
reasonably be expected to have a Material Adverse Effect. Public
utilities currently serve all utility requirements necessary for
the current use of all Company Properties. All of the Company
Properties are currently zoned in the zoning category which permits
operation of such properties as now used and maintained for the
operation of the Business, and none of such Company Properties nor
its respective use is in violation of any local governmental rule,
ordinance, regulation or building code.

 

3.12

Personal Property Leases

 

.
Schedule 3.12 sets
forth a true, correct and complete list and description of all
material agreements (or group of related agreements) to which the
Company is a party for the lease of personal property, including
leases for equipment, including, with respect to each such lease,
the name of the lessor and the lessee, the type of lease (whether
operating, capital or otherwise), a description of the leased
property, the monthly rental payments due and the expiration date
(the “Equipment
Leases”). The Company has not breached any agreement
pertaining to, nor is in default with respect to, or is overdue in
payment of, any amounts owing under any Equipment
Lease.

 

3.13

Contracts.

(a) Schedule 3.13 sets forth a
complete and correct list of all material Contracts relating to the
Business to which the Company is a party or to which the Assets are
subject.

 

(b) All Contracts are
valid, binding, in full force and effect and enforceable against
each party thereto and no material violation, breach or default
exists which has been committed by or with respect to the Company,
or to the Knowledge of the Company, or any other party thereto,
with respect to such Contracts.

 

(c) The Company is not
in material breach of any Contract, nor to the Knowledge of the
Company is any Person in material breach of any such
agreement.

 

(d) The transfer and
sale of the Assets will not terminate, or cause a default under,
any such Contracts.

 

3.14

Insurance. The Company has
in effect insurance coverage for all of its Assets to the extent
reasonably required for its business as presently being conducted.
A complete and accurate list of all primary, excess and umbrella
policies, bonds and other forms of insurance (including workers'
compensation) held or owned by the Company set forth on
Schedule 3.14.
Schedule 3.14 also
sets forth a summary of the Company's current insurance coverage
(listing type, carrier and limits), and includes a list of any
pending insurance claims relating to the Company. None of the
policy limits of such insurance have been exhausted. The Company is
not in material default or breach with respect to any provision
contained in any such insurance policies, nor has the Company
failed to give any notice or to present any claim thereunder in due
and timely fashion. The Company has not received any notice of the
intent of any insurance company to not renew or to cancel any
insurance policies for the Company or materially increase the
premiums thereunder, and, except as set forth on Schedule 3.14, none of the
insurance policies shall terminate as a result of the Transaction.
The Company has timely made all material claims under such
insurance policies. No letters of credit have been posted or cash
restricted for the benefit of any such insurance
policies.

 

 

 

11

 

3.15

Employees and Labor Matters. The Company is
not a party to any collective bargaining agreement or any
employment, consulting or similar agreement or any agreement, plan
or arrangement providing for severance payments to any employee
upon termination of employment or which provide benefits upon a
change in control. Except for the employees set forth on
Schedule 3.15, to
the Knowledge of the Company, no other current or former employees
of Seller are subject to any collective bargaining agreement
currently in effect pursuant to which any of the Assets are subject
or bound. There has been no labor strike, work stoppage, unfair
labor practice charge, grievance or other labor dispute pending or,
to the Knowledge of the Company, threatened against or with respect
to the Company. None of the employees of the Company is represented
by a labor union, and no petition has been filed, nor has any
proceeding been instituted by any employee or group of employees
with any labor relations board or commission seeking recognition of
a collective bargaining representative. There has not been, nor is
there any pending or threatened employee strike, work stoppage or
labor dispute with respect to any employees of the Company. The
Company has complied in all material respects with independent
contractor and immigration and naturalization laws, rules and
resolutions in connection with the employment of its work force and
hiring of independent contractors. Schedule 3.15 sets out a list
of all salaried and hourly employees of the Company together with
their date of hire, job description or grade, age, salary for all
periods since the Company was formed and all material benefits
provided during such period and the applicable terms and conditions
of employment of all such employees.

 

3.16

Employee Plans.

 

(a) The Company has no
Employee Plans (hereinafter defined) to which it contributes or is
obligated to contribute, under which it has or may have any
Liability for premiums or benefits, or which benefits any current
or former employee, director, consultant or independent contractor
of the Company or any beneficiary thereof. For purposes of this
Agreement, the term “Employee
Plan” means any plan, program, agreement, policy or
arrangement (a “Plan”),
whether or not reduced to writing, that is: (i) a welfare benefit
plan within the meaning of Section 3(1) of ERISA; (ii) a pension
benefit plan within the meaning of Section 3(2) of ERISA; (iii) an
option, membership interest bonus, membership interest purchase or
similar equity-based plan; or (iv) any other deferred-compensation,
retirement, welfare-benefit, bonus, incentive or fringe-benefit
plan whether for the benefit of a single individual or a group of
individuals.

 

(b) Multiemployer
Plans. The Company does not contribute, and has never contributed,
to any “multiemployer plan” as defined in Section 3(37)
of ERISA and has no actual or potential withdrawal liability with
respect to any such plan.

 

3.17

Intellectual Property. Schedule 3.17 sets forth a
complete and correct list of all Proprietary Rights owned or used
by the Company in connection with the Business. Except as set forth
on Schedule 3.17,
(i) the Company owns and possesses all right, title and interest in
and to, or has a written and enforceable license to use, all of the
Proprietary Rights set forth on Schedule 3.17, free and clear
of all Liens (other than Permitted Liens); (ii) the Company has not
received any notice of any claim by any third party contesting the
validity, enforceability, use or ownership of any Proprietary
Rights used in connection with the Business, nor to the Knowledge
of the Company, is any such claim threatened; (iii) the Company has
not infringed, misappropriated or otherwise conflicted in any
material respect with any Proprietary Rights of any third party,
nor will any such infringement, misappropriation or conflict occur
as a result of the continued operation of the Business following
the Closing Date in substantially the same manner as currently
conducted; and (iv) all Proprietary Rights set forth on
Schedule 3.17 will
be owned by or available for use by the Company immediately
subsequent to Closing on identical terms and conditions as
currently owned or used.

 

 

 

12

 

3.18

Environmental Matters. Except as set
forth in Schedule
3.18:

 

(a) to the
Company’s Knowledge, the Company is in compliance with all
applicable Environmental Laws and all Licenses and Permits issued
pursuant to the Environmental Laws or otherwise;

 

(b) the Company is not
the subject of any outstanding order or Contract, nor, to the
Knowledge of the Company, is it threatened to be the subject of any
order or Contract, with any Governmental Authority respecting (i)
compliance with Environmental Laws, (ii) Remedial Action, or
(iii) any Release or threatened Release of a Hazardous
Material;

 

(c) the Company has not
received any written communication alleging that the Company may be
in violation of any Environmental Law or any Licenses and Permits
issued pursuant to Environmental Law, or may have any Liability
under any Environmental Law;

 

(d) there are no
investigations of the Business, or currently or previously owned,
operated or leased property of the Company pending or, to the
Knowledge of the Company, threatened which alleges any Liability or
other obligation pursuant to any Environmental Law;
and

 

(e) to the Knowledge of
the Company, within the past five years there is not located at any
property owned, operated or leased by the Company any (i) current
or former underground storage tanks, (ii) asbestos-containing
material, (iii) equipment containing polychlorinated biphenyls,
(iv) asbestos-containing materials or structural asbestos, which is
damaged and, in its present condition, poses an unreasonable risk
of harm to employees or the general public, or (v) equipment which,
contains ozone depleting substances.

 

3.19

Affiliate Transactions. Except as set
forth on Schedule
3.19, the Company is not a party to any transaction with (i)
any employee, officer or director of the Company, (ii) any relative
of any such employee, officer or director of the Company, or (iii)
any Person that, directly or indirectly, is controlled by or under
common control with the Company or with any such employee, officer,
director or relative, including without limitation any contract,
agreement or other arrangement (a) providing for the furnishing of
services by such Person, (b) providing for the rental of real or
personal property from or to such Person, (c) providing for the
guaranty of any obligation of such Person, (d) requiring any
payment to such Person which will continue beyond the Closing Date,
or (e) establishing any right or interest of such Person in the
Assets.

 

3.20

Books and Records. The books and
records of the Company (including minute books and books of
account) contain a record of all material transactions and all
material proceedings of the members and managers of the Company,
are complete and correct in all material respects and have been
maintained in accordance with normal and sound business practice
and Laws.

 

3.21

Litigation. To
Company’s Knowledge there is no legal Action, Proceeding,
arbitration, investigation or claim pending or threatened
pertaining to the Assets.

 

 

 

13

 

3.22

Reclamation Account. Seller has posted
approximately two hundred thirty-four thousand and two hundred and
forty dollars ($234,240) cash with the West Virginia Division of
Mining Reclamation to serve as surety for Seller’s
reclamation obligation (“Reclamation
Surety”) as shown on Schedule 3.22.
Seller will keep the Reclamation Surety on file with the West
Virginia Division of Mining Reclamation until such time as Buyer posts its
own surety in the form of cash or bonds, but for no longer than
twelve (12) months from Closing.

 

3.23

Reliance of Buyer. Seller disclaims
and makes no representation or warranty, expressed or implied, as
to the accuracy, completeness, usefulness or reliability of the due
diligence information provided to Buyer or any portion thereof
whatsoever, except for such representations and warranties
expressly set forth in this Agreement.

 

4. Representations
and Warranties of the Buyer. The Buyer does hereby represent and
warrant to the Seller as follows, all of which representations and
warranties are true and correct as of the date hereof and shall be
true and correct as of (and as though made at) the Closing and the
Effective Time:

 

4.01

Organization of the Buyer. The Buyer is a
limited liability company duly formed, validly existing and
in good standing under the Laws of State of Indiana.

 

4.02

Authorization of the Transaction. The Buyer has the
power and authority to execute and deliver this Agreement and the
other documents contemplated herein and to perform its obligations
hereunder. All actions or proceedings to be taken by or on the part
of the Buyer to authorize and permit the execution and delivery by
the Buyer of this Agreement, the other documents contemplated
herein, the performance by the Buyer of its obligations hereunder
and the consummation by the Buyer of the Transaction have been duly
and properly taken. This Agreement and the other documents
contemplated herein have been duly executed and delivered by the
Buyer, constitutes its legal, valid and binding obligation and is
enforceable in accordance with its terms and conditions, subject
only to bankruptcy, insolvency and similar laws affecting
creditors' rights generally and to general principles of
equity.

 

4.03

Noncontravention. The execution and
delivery of this Agreement, the other documents contemplated herein
and the consummation of the Transaction, does not or will not (i)
conflict with or result in a breach of any provision of the Buyer's
Articles of Organization or Limited Liability Company
Agreement or (ii) conflict with, result in a breach of, constitute
a default or right or cause of action under, result in the
acceleration of, create in any party the right to accelerate,
terminate, modify or cancel any agreement, contract, lease,
license, instrument or other arrangement to which the Buyer is a
party, by which the Buyer is bound or to which any of its assets
are subject, except where such conflict, breach, default,
acceleration or other event would not individually or in the
aggregate have a Material Adverse Effect on the ability of the
Buyer to fulfill its obligations under this Agreement. The Buyer is
not required by applicable Law or other obligation to give any
notice to, make any filing with, or obtain any authorization,
consent or approval of any Governmental Authority or other Person
in order for the Buyer to consummate the Transaction.

 

4.04

Brokers' Fees. The Buyer has no
Liability to any broker, finder, investment bank, financial advisor
or other similar Person arising from or related to the Transaction
for which the Seller could be or become liable or obligated, except
for fees and expenses (if any) which shall be solely the
responsibility of (and will be paid by) the Buyer after the
Closing.

 

 

 

14

 

4.05

Permitting. Except as set
forth on Schedule
4.05, neither Buyer nor any person or entity that, together
with any Affiliates of Buyer, owns ten percent (10%) or more of the
equity interests of Buyer has been subject to any bond forfeiture,
permit suspension or revocation or similar effort or any Proceeding
instituted by any Governmental Authority that would prohibit or
materially adversely affect the transfer of the Permits to Buyer.
Neither Buyer nor any person or entity “owned or
controlled” by Buyer or any of their respective Affiliates,
has been notified by the Federal Office of Surface Mining or the
agency of any state administering the Surface Mining Control and
Reclamation Act of 1977, as amended (or any comparable state
statute), that it is currently (a) ineligible to receive additional
surface mining permits or (b) under investigation to determine
whether its eligibility to receive such permits should be revoked,
i.e., “permit
blocked.” As used in this Section 4.05, “owned or
controlled” shall be defined as set forth in 30 C.F.R.
Section 773.5 (1991). As used in this Agreement,
“Proceeding”
shall mean any action, suit, proceeding, arbitration, investigation
or audit, whether or not by any Governmental
Authority.

 

4.06

Bonding Capacity. Within the first
twelve (12) months after the Closing Date, Buyer will produce
immediately available funds sufficient to replace all Reclamation
Surety associated with the Permits in the amount as may be
determined by the West Virginia Division of Mining Reclamation
(“WVDEP”).
As soon as feasible after Seller’s Reclamation Surety is
replaced by Buyer, Buyer shall reimburse Seller for the Reclamation
Surety.

 

4.07

Financing. The Buyer has,
and shall have as of the Closing, the Purchase Price and all other
amounts payable pursuant to this Agreement and the Asset Purchase
and Sale Agreement and all fees and expenses in connection with the
transactions completed hereby and thereby.

 

5. Covenants.
The Parties agree as follows:

 

5.01

Transaction Expenses. The Parties shall
bear all of their own expenses in connection with the execution,
delivery and performance of this Agreement and the Transaction,
including without limitation all fees and expenses of their agents,
representatives, counsel and accountants.

 

5.02

Press Releases; Confidentiality. None of the
Parties hereto will issue any press release or make any other
public announcement regarding this Agreement or the Transaction
without the consent of the other Parties. Each Party will hold, and
will cause its employees, consultants, advisors and agents to hold,
in strictest confidence the terms of this Agreement and any
non-public information concerning the other Parties (including the
identity of the Parties and their Affiliates) obtained pursuant to
this Agreement or in connection with the negotiation hereof.
Notwithstanding the preceding provisions, a Party may disclose such
information (i) to its Affiliates, investors, prospective investors
and financing sources or (ii) to the extent required by any
applicable Law (including disclosure requirements under federal and
state securities laws and disclosure required in connection with
any judicial or administrative proceeding of any Governmental
Authority), but the Party proposing to disclose such information
will first notify and consult with the other Parties concerning the
proposed disclosure, to the extent reasonably feasible. Each Party
also may disclose such information to employees, consultants,
advisors, agents and actual and potential lenders and investors
whose knowledge is necessary to facilitate the consummation of the
Transaction. Each Party's obligation to hold information in
confidence will be satisfied if it exercises the same care with
respect to such information as it would exercise to preserve the
confidentiality of its own similar information.

 

 

 

15

 

5.03

Access. The Company will
permit representatives of the Buyer to have reasonable access to
all premises, properties, personnel, books, records, contracts and
documents of or pertaining to the Company or the Business. If the
Company shall desire to dispose of any such books, records,
contracts or documents, the Company shall, prior to such
disposition, give the Buyer a reasonable opportunity to segregate
and remove such books and records as the Buyer may
select.

 

5.04

Efforts to Consummate Transaction. The Parties shall
use commercially reasonable efforts to take or cause to be taken
all such actions required to consummate the Transaction, including,
without limitation, such actions as may be necessary to obtain,
prior to the Closing, all necessary governmental or other
third-party approvals and consents required to be obtained by the
Seller, the Company or the Buyer in connection with the
consummation of the Transaction.

 

5.05

Certain Taxes. All transfer,
documentary, sales, use, stamp, registration and other such Taxes
and fees (including any penalties and interest) incurred in
connection with this Agreement (including any corporate-level gains
tax triggered by the sale of the Assets), shall be paid by the
Buyer when due, and the Buyer will, at its own expense, file all
necessary Tax Returns and other documentation with respect to all
such transfer, documentary, sales, use, stamp, registration and
other Taxes and fees and, if required by applicable law, the Seller
will join in the execution of any such Tax Returns and other
documentation.

 

5.06

Disclaimer of Warranties. The Buyer
acknowledges that the representations and warranties contained in
Section 4 or in any
Seller Agreement are the only representations or warranties given
by the Seller, and that all other express or implied warranties are
disclaimed. Without limiting the foregoing and except as otherwise
provided in this Agreement or the Seller Agreements, and without
waiving any defenses to Liability under any Laws, the Buyer
acknowledges that, except as otherwise provided in Section 4 or in the Seller
Agreements, the Assets are being conveyed to Buyer
“AS
IS”, “WHERE
IS” and “WITH ALL
FAULTS” and that all warranties of condition,
merchantability or fitness for a particular purpose are disclaimed.
WITHOUT LIMITING THE FOREGOING, THE BUYER ACKNOWLEDGES THAT EXCEPT
AS PROVIDED HEREIN, THE SELLER AND ITS RESPECTIVE RELATED PERSONS
HAVE MADE NO REPRESENTATION OR WARRANTY CONCERNING (A) ANY USE TO
WHICH THE ASSETS MAY BE PUT, (B) ANY FUTURE REVENUES, COSTS,
EXPENDITURES, CASH FLOW, RESULTS OF OPERATIONS, FINANCIAL CONDITION
OR PROSPECTS THAT MAY RESULT FROM THE OWNERSHIP, USE OR SALE OF THE
ASSETS, (C) ANY OTHER INFORMATION OR DOCUMENTS MADE AVAILABLE TO
THE BUYER OR RELATED PERSONS, (D) THE CONDITION OF THE ASSETS,
INCLUDING COMPLIANCE WITH ANY ENVIRONMENTAL LAWS OR OTHER LAWS, OR
(E) THE ASSETS PRIOR TO THE DATE SELLER ACQUIRED THE ASSETS. For
purposes of this Section, “Related
Persons” shall mean Affiliates of Seller and any
member, manager, officer, director, employee, agent, shareholder,
representative, successor or assign of Seller or its
Affiliates.

 

6. Conditions
to Obligations to Close.

 

6.01

Conditions to Obligations of the Buyer. The obligation of
the Buyer to consummate the Transaction is subject to satisfaction
of the following conditions:

 

 

 

16

 

(a) Representations
and Covenants. The
representations and warranties of the Seller contained in this
Agreement shall be true and correct in all material respects on and
as of the Closing Date with the same force and effect as though
made on and as of the Closing Date. The Seller shall have performed
and complied in all material respects with all covenants and
agreements required by this Agreement to be performed or complied
with by the Seller on or prior to the Closing Date.

 

(b) Approvals.
But for the Eagle and Gilbert Permits, all governmental and third
party approvals, consents, permits and waivers set forth on
Schedule 6.01 shall
have been obtained in form and substance reasonably satisfactory to
the Buyer. The Eagle and Gilbert Permits assignments will be given
to Buyer as soon as Seller receives them from the
assignor.

 

(c) Liens.
All Liens (other than Permitted Liens) on the Assets shall have
been released in a manner satisfactory to the Buyer.

 

(d) Closing
Deliveries. The Seller shall
have delivered to the Buyer all of the documents set forth in
Section
2.04(b).

 

(e) Material
Adverse Change. Since the date of
this Agreement, no material adverse change to the Business shall
have occurred.

 

(f) Absence
of Litigation. No Action shall
be pending before any Governmental Authority wherein an unfavorable
injunction, judgment, order, decree, ruling or charge could
reasonably be expected to (i) prevent consummation of any portion
of the Transaction, (ii) cause any portion of the Transaction to be
rescinded following consummation or (iii) have a Material Adverse
Effect on the rights of the Company (and no such injunction,
judgment, order, decree, ruling or charge shall be in
effect).

 

(g) Asset
Purchase and Sale Agreement. All conditions to
closing under the Asset Purchase and Sale Agreement shall have been
satisfied or waived (other than those conditions that by their
nature will be satisfied at the closing thereunder).

 

The
Buyer specifically waives any condition pertaining to the existence
of valid and current Eagle and Gilbert Permits at the time of
Closing. The Buyer may waive any other condition specified in this
Section 6.01 if it
executes a writing so stating at or prior to the Closing and such
waiver shall not be considered a waiver of any other provision in
this Agreement unless the writing specifically so
states.

 

6.02

Conditions to Obligations of the Seller. The obligations
of the Seller to consummate the Transaction are subject to
satisfaction of the following conditions:

 

(a) Representations and Covenants.
The representations and warranties of the Buyer contained in this
Agreement and the Asset Purchase and Sale Agreement shall be true
and correct in all material respects on and as of the Closing Date
with the same force and effect as though made on and as of the
Closing Date. The Buyer shall have performed and complied in all
material respects with all covenants and agreements required by
this Agreement and the Asset Purchase and Sale Agreement to be
performed or complied with by Buyer on or prior to the Closing
Date.

 

 

17

 

(b) Approvals. All governmental and
third party approvals, consents, permits and waivers set forth on
Schedule 6.01 shall
have been obtained in form and substance reasonably satisfactory to
the Seller.

 

(c) Absence of Litigation. No
Action shall be pending before any Governmental Authority wherein
an unfavorable injunction, judgment, order, decree, ruling or
charge could reasonably be expected to (i) prevent consummation of
any portion of the Transaction or (ii) cause any portions of the
Transaction to be rescinded following consummation (and no such
injunction, judgment, order, decree, ruling or charge shall be in
effect).

 

(d) Purchase Price. The Buyer shall
have paid the Purchase Price in accordance with Section 2.02.

 

(e) Closing Deliveries. The Buyer
shall have delivered to the Seller all of the documents set forth
in Section
2.04(a).

 

(f) Asset Purchase and Sale
Agreement. All conditions to closing under the Asset
Purchase and Sale Agreement shall have been satisfied or waived
(other than those conditions that by their nature will be satisfied
at the closing thereunder).

 

(g) Closing of Asset Purchase and Sale
Agreement. The Asset Purchase and Sale Agreement between
Thomas M. Shelton and Wyoming County Coal LLC shall have
closed.

 

The
Seller may waive any condition specified in this Section 6.02 if it
executes a writing so stating at or prior to the Closing and such
waiver shall not be considered a waiver of any other provision in
this Agreement unless the writing specifically so
states.

 

7. Indemnification.

 

7.01

Indemnification by the Buyer. Following the
Closing, the Buyer shall indemnify and hold harmless the Seller at
all times from and after the Closing Date against and in respect of
Losses arising from or relating to: (i) any breach of any
representation or warranty made by the Buyer in this Agreement; and
(ii) any breach of any covenant and agreement made by the Buyer in
this Agreement. A breach of any representation or warranty in the
Asset Purchase and Sale Agreement by Buyer shall be a breach of
this Agreement.

 

7.02

Indemnification by the Seller. The Seller hereby
agrees to indemnify and hold the Buyer and its respective managers,
officers, directors, employees, Affiliates, member, agents,
attorneys, representatives, successors and permitted assigns
(collectively, the “Buyer Indemnified
Parties”) harmless from and against any Losses arising
from: (i) any breach of the representations and warranties made by
the Seller in this Agreement; and (ii) any breach of the covenants
or agreements made by the Seller in this Agreement.

 

 

 

18

 

7.03

Limitations of Indemnity. Notwithstanding
the foregoing, (i) no claim for indemnification under Section 7.02 shall first be
asserted after the one year anniversary of the Closing Date and
(ii) no Seller shall have any Liability with respect to claims
arising under Section
7.02 until the aggregate of all amounts payable under
Section 7.02
exceeds three hundred thousand dollars ($300,000) and then only for
those amounts that exceed $300,000; provided, that, in no event
shall the amount payable under Section 7.02 exceed the sum of
five hundred thousand dollars ($500,000) (the “Cap”).
Notwithstanding the foregoing, the Cap shall not apply to: (i) a
claim for fraud, nor (ii) a claim for indemnification under
Sections 3.01
(Ownership of Seller's Interest) and 3.07 (Title to
Assets).

 

7.04

Matters Involving Third Parties.

 

(a) If any third party
shall notify any Party (the “Indemnified
Party”) with respect to any matter (a
“Third Party
Claim”) which may give rise to a claim for
indemnification against any other Party (the “Indemnifying
Party”) under this Section 7, then the Indemnified
Party shall promptly notify each Indemnifying Party thereof in
writing; provided, however, that no delay on the part of the
Indemnified Party in notifying any Indemnifying Party shall relieve
the Indemnifying Party from any obligation hereunder unless (and
then solely to the extent) the Indemnifying Party is thereby
prejudiced by such delay.

 

(b) Any Indemnifying
Party will have the right to defend the Indemnified Party against
the Third Party Claim with counsel of its choice reasonably
satisfactory to the Indemnified Party so long as (i) the
Indemnifying Party notifies the Indemnified Party in writing within
20 days after the Indemnified Party has given notice of the Third
Party Claim that the Indemnifying Party will indemnify the
Indemnified Party from and against the entirety of any Losses the
Indemnified Party may suffer resulting from, arising out of,
relating to, in the nature of, or caused by the Third Party Claim,
(ii) the Indemnifying Party provides the Indemnified Party with
evidence reasonably acceptable to the Indemnified Party that the
Indemnifying Party will have the financial resources to defend
against the Third Party Claim and fulfill its indemnification
obligations hereunder, (iii) the Third Party Claim involves only
money damages or otherwise does not seek an injunction or other
equitable relief that could reasonably be expected to have an
adverse effect on the continuing business interests of the
Indemnified Party, (iv) settlement of, or an adverse judgment with
respect to, the Third Party Claim is not, in the good faith
judgment of the Indemnified Party, likely to establish a
precedential custom or practice that could reasonably be expected
to have an adverse effect on the continuing business interests of
the Indemnified Party and (v) the Indemnifying Party conducts the
defense of the Third Party Claim actively and
diligently.

 

(c) So long as the
Indemnifying Party is conducting the defense of the Third Party
Claim in accordance with Section 7.04(b), (i) the
Indemnified Party may retain separate co-counsel at its sole cost
and expense and participate in the defense of the Third Party Claim
and (ii) neither the Indemnifying Party nor the Indemnified Party
will consent to the entry of any judgment or enter into any
settlement with respect to the Third Party Claim without the prior
written consent of the other Party (which consent shall not
unreasonably be withheld).

 

 

19

 

(d) In the event any of
the conditions in Section
7.04(b) is or becomes unsatisfied, however, (i) the
Indemnified Party may defend against, and may consent to the entry
of any judgment or enter into any settlement with respect to, the
Third Party Claim in any manner it may deem appropriate (and the
Indemnified Party need not consult in advance with, or obtain any
consent from, any Indemnifying Party in connection therewith), (ii)
the Indemnifying Party will reimburse the Indemnified Party
promptly and periodically for the reasonable costs of defending
against the Third Party Claim (including attorneys' fees and
expenses) and (iii) the Indemnifying Party will remain responsible
for any Losses the Indemnified Party may suffer resulting from,
arising out of, relating to, in the nature of, or caused by the
Third Party Claim to the extent provided in this Section 7.

 

7.05

Exclusive Remedy. After the
Closing, and except for claims of fraud or intentional
misrepresentation, the obligations to indemnify under this
Section 7 shall
provide the exclusive remedy against a Party for any breach of any
representation, warranty, covenant or other claim arising out of or
relating to this Agreement.

 

8. Termination.

 

8.01

Termination of Agreement. The Parties may
terminate this Agreement as provided below:

 

(a) The Parties may
terminate this Agreement by mutual written consent at any time
prior to the Closing;

 

(b) The Buyer may
terminate this Agreement by giving written notice to the Seller at
any time prior to the Closing (i) if due diligence is
unsatisfactory to Buyer; (ii) in the event the Seller has breached
any representation, warranty or covenant contained in this
Agreement in any material respect, and the Buyer has notified the
Seller of the breach but the breach has continued without cure for
a period of 15 days after the notice of breach or (iii) if the
Closing shall not have occurred on or before December 1, 2018, by
reason of the failure of any condition precedent under Section 6.01 hereof
(unless the failure results primarily from the Buyer breaching any
representation, warranty or covenant contained in this Agreement);
and

 

(c) The Seller may
terminate this Agreement by giving written notice to the Buyer at
any time prior to the Closing or (i) in the event the Buyer has
breached any representation, warranty or covenant contained in this
Agreement in any material respect, the Seller has notified the
Buyer of the breach and the breach has continued without cure for a
period of 15 days after the notice of breach; or (ii) if the
Closing shall not have occurred on or before December 1, 2018 by
reason of the failure of any condition precedent under Section 6.02 hereof
(unless the failure results primarily from the Seller breaching any
representation, warranty or covenant contained in this Agreement).
In the event that the Seller terminates this Agreement for any
reason other than a breach of a representation, warranty or
covenant contained in this Agreement and/or the failure to close on
or before December 1, 2018, the Seller shall pay the Buyer’s
reasonable and necessary legal and due diligence incurred in
investigating and pursuing the Transaction.

 

 

 

20

 

8.02

Effect of Termination

 

. If
any Party terminates this Agreement pursuant to Section 8.01 hereof, all
rights and obligations of the Parties hereunder shall terminate
without any Liability of any Party to any other Party; provided,
however that no termination shall relieve any Party from any
Liability arising from or relating to such Party's breach at or
prior to termination.

 

9. Permitting.

 

9.01

Documents. Following the
Closing, Buyer shall use its commercially reasonable efforts (with
the reasonable cooperation of Seller) to diligently pursue the
transfer of the Permits to Buyer during the Transfer Period. Within
forty-five (45) days of the Closing Date, Buyer shall deliver
copies to Seller of all filings, each in a form reasonably believed
by Buyer to comply with the requirements of the applicable
Governmental Authority for the transfer of Permits to Buyer. Until
such time after the Closing as Buyer shall have secured all
relevant consents and approval as of Governmental Authorities for
the transfer of a particular Permit from Seller to Buyer (and shall
have completed that transfer), Seller will provide reasonable
cooperation (including signing such regulatory forms as necessary
with respect to such transfer) with Buyer in good faith to allow
approval of transfer of such Permits.

 

9.02

Filings. Within sixty (60)
days following the Closing Date, the Buyer shall make all filings
with the appropriate Governmental Authorities, and shall thereafter
diligently pursue the transfer of the Permits to Buyer. Seller
shall cause its Reclamation Surety for the bonds set forth in
Schedule 9.02 to
remain in place in accordance with Section 3.22. Following the
Closing, Seller shall cooperate with the Buyer to file such
applications and pursue issuance of all applicable Permit
transfers, at the sole cost and expense, including signing such
regulator forms as Buyer may reasonably request with respect to the
transfer of the Permits.

 

10. Miscellaneous.

 

10.01

Third Parties. Except as
otherwise expressly provided for in this Agreement, nothing in this
Agreement, whether expressed or implied, is intended to confer any
rights or remedies under or by reason of this Agreement on any
persons other than the Parties to this Agreement and their
respective successors and permitted assigns, nor is anything in
this Agreement intended to relieve or discharge the obligation or
Liability of any third person to any Party to this Agreement, nor
shall any provision give any third person any right of subrogation
or action over or against any Party to this Agreement.

 

10.02

Entire Agreement. This Agreement,
together with the attached Schedules and Exhibits, and, once
executed and delivered, the Related Agreements, constitutes the
entire agreement between the Parties with respect to the subject
matter hereof and may not be changed, terminated or discharged
except by writing duly executed by the Parties hereto. In the event
of a conflict between the terms and conditions of this Agreement
and the Asset Purchase and Sale Agreement, the terms and conditions
of this Agreement shall control.

 

10.03

Assignment. The rights and
obligations of any Party arising under this Agreement, or any
interest therein, shall not be assigned, transferred, conveyed,
sold, pledged, mortgaged, hypothecated, encumbered or otherwise
disposed of (whether by operation of law or otherwise), in whole or
in part, without obtaining the prior written consent of the other
Party hereto, which consent shall not be unreasonably withheld or
delayed.

 

 

 

21

 

10.04

Benefit. This Agreement
shall be binding upon and shall inure to the benefit of the Parties
hereto, their respective successors and assigns.

 

10.05

Counterparts. This Agreement
may be executed in counterparts (including via facsimile and
e-mail), each of which shall be deemed an original, but all of
which together shall constitute one and the same agreement, and
shall become effective when one or more counterparts have been
signed by each of the Parties hereto. The executed Agreement
together with any attachments hereto may be photocopied and stored
on computer tapes, disks and similar electronic storage media
(“Imaged
Document”). If an Imaged Document is introduced as
evidence in any judicial, arbitration, mediation or administrative
proceeding, neither Party shall object to the admissibility of the
Imaged Document on the basis that such was not originated or
maintained in documentary form under either the hearsay rule, the
best evidence rule, or other rule of evidence.

 

10.06

Headings. The headings
contained in this Agreement are included for purposes of
convenience of reference only and shall not affect the construction
or interpretation of any of its provisions.

 

10.07

Notices. Except as
otherwise specified in this Agreement, all notices, requests,
demands and other communications under this Agreement shall be in
writing and shall be deemed to have been duly given on the date
when personally delivered to the Party to whom notice is to be
given, on the date of transmission if sent by confirmed facsimile
transmission, or on the second day after mailing, if mailed to the
party to whom notice is to be given, by nationally recognized
overnight delivery service and properly addressed as
follows:

 

	

TO
SELLER AT

Thomas
M. Shelton

2153
Windward Shore Drive

Virginia
Beach, Virginia 23451

Facsimile:
(757) 596-9302

Email:
tshelton@wmjordan.com

 

WITH
COPIES TO:

Greenberg
Traurig, LLP

1000
Louisiana Street, Suite 1700

Houston
TX 77002

Attention:
William Garner

Office:
(713) 374-3549

Facsimile:
(713) 374-3505

Email:
garnerw@gtlaw.com

	
 

	

TO
BUYER AT

Gregory
Q. Jensen

Wyoming
County Coal LLC

P.O.
Box 606

Fishers,
Indiana 46038

Email:
gqj@questenergycorp.com

 

 

 

 

Any
Party may change its address for the purposes of this section by
giving the other Party hereto written notice of the new address in
the manner set forth above.

 

 

 

22

 

10.08

Governing Law. This Agreement
shall be governed by, and construed and interpreted in accordance
with, the Laws of the State of Indiana, without regard to or
application of its conflict of laws or principles.

 

10.09

Waivers. The waiver by any
Party to this Agreement of compliance by any other Party with, or a
breach of any other Party of, any provision of this Agreement shall
be made in writing executed by the Party waiving such compliance or
breach which shall be delivered to the Party whose compliance or
breach is being waived. The waiver by any Party hereto of
compliance with or breach of any provision of this Agreement shall
not operate, or be construed, as a waiver of any subsequent breach
or failure to comply with any other provision of this
Agreement.

 

10.10

Severability. In the event one
or more of the provisions of this Agreement shall, for any reason,
be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect the
validity, legality or enforceability of any other provision of this
Agreement, and this Agreement shall be construed as if such
invalid, illegal or unenforceable provision was not a part of this
Agreement.

 

10.11

Incorporation of Schedules. The schedules
identified in this Agreement are incorporated herein by reference
and made a part hereof.

 

10.12

Drafting. No inference
shall be drawn in favor of or against any Party based upon its
participation in the drafting of this Agreement or any of the other
documents referenced herein.

 

10.13

No Consequential Damages. Except as
prohibited by law and except to the extent any claim, action, suit
or proceeding is brought by any third party for any special,
exemplary, punitive or consequential damages against an indemnitee,
the Buyer, on its own behalf and on behalf of any indemnitee of
Buyer, and the Seller, on its own behalf and on behalf of any
indemnitee of Seller, waives any right it or they may have to claim
or recover any special, exemplary, punitive or consequential
(including business interruption) damages, or any damages other
than, or in addition to, actual damages, whether pursuant to this
Agreement, the Related Agreements or otherwise.

 

10.14

Jurisdiction; Venue. All Actions
arising out of or relating to this Agreement shall be heard and
determined exclusively in any United States federal court sitting
in the United States District Court for the Southern District of
Indiana, or in the event (but only in the event) that such court
does not have jurisdiction over such Action or Proceeding, in any
Indiana state court sitting in Hamilton County. Consistent with the
preceding sentence, the Parties hereto hereby (a) submit to the
exclusive jurisdiction of any such United States federal court or
Indiana state court for the purpose of any Action arising out of or
relating to this Agreement brought by any Party hereto and (b)
irrevocably waive, and agree not to assert by way of motion,
defense, or otherwise, in any such Action, any claim that it is not
subject personally to the jurisdiction of the above-named courts,
that its property is exempt or immune from attachment or execution,
that the Action is brought in an inconvenient forum, that the venue
of the Action is improper, or that this Agreement or the
transactions contemplated by this Agreement may not be enforced in
or by any of the above-named courts.

 

 

[Signatures on the following page]

 

 

 

23

 

 

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

 

BUYER:

 

WYOMING
COUNTY COAL LLC

 

  
By:                                                                      

  
Name:                                                                  

  
Title:                                                                    

 

 

SELLER:

 

SYNERGY
COAL, LLC

 

  
By:                                                                      

   Name:
Thomas
M. Shelto

  
Title:                                                                    

 

  

 

 

24

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