ACQUISITION AGREEMENT AMONG SGI INTERNATIONAL, BLUEGRASS COAL
DEVELOPMENT COMPANY, AND WYOMING COAL TECHNOLOGY, INC.
This Acquisition Agreement (the "Agreement") is entered into effective
as of this ___ day of April 1999 (the "Effective Date") by and between (a) SGI
International, a Utah corporation ("SGI"), with its principal place of business
at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, purchaser of the
interests herein described, and (b) Bluegrass Coal Development Company, a
Delaware corporation ("Bluegrass"), with its principal place of business at ▇▇▇▇
▇. ▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Bluegrass and Americoal are sometimes
collectively referred to herein as the "Sellers". Americoal Development Company,
a Delaware corporation ("Americoal") is also a party to this Agreement for the
limited purpose of transferring its interests in NuCoal as described in Recital
B below. Capitalized terms used in this Agreement which are not defined herein
shall have the meanings given to them in the Addendum to the TEK-KOL Partnership
Agreement between SGI and Shell Mining Company ("SMC"), dated as of September
30, 1989.
RECITALS
A. Bluegrass is the owner of one hundred percent (100%) of the issued and
outstanding stock ("Encoal Stock") of Encoal Corporation, a Delaware corporation
("Encoal"). Encoal owns a coal upgrading facility (the "Encoal Facilities")
utilizing the LFC Process. The Encoal Facilities are located north of Gillette,
Wyoming on land, commonly referred to as the "Buckskin Mine", owned by Triton
Coal Company LLC ("Triton LLC"). Vulcan Coal Company, L.L.C. ("Vulcan") is the
managing member of Triton LLC. The Encoal Facilities were built, in part, with
funds awarded by the U.S. Department of Energy ("DOE") pursuant to DOE
Cooperative No. DE-FC21-90MC27339, and Encoal is, as of the Effective Date, in
the process of entering into a new agreement with the DOE, with respect to
recovery of such funds ("DOE Agreement"). The Encoal Facilities are, as of the
Effective Date, not in operation. Bluegrass, Wyoming Coal Technology, Inc., a
Wyoming corporation ("WCT"), AEI Resources, Inc. ("AEI"), Vulcan and Triton are
parties to an agreement entitled "Encoal Facility Use and Indemnification
Agreement" dated as of December 11, 1998 ("Encoal Use Agreement"), by which
Triton LLC provides to WCT (1) the use of certain Triton LLC facilities for
purposes of operation of the Encoal Facilities, (2) a lease of the real property
on which the Encoal Facilities are located, and (3) limited rights of access
across certain tracts of the Buckskin Mine, provided that Bluegrass, WCT and AEI
indemnify and hold harmless, and covenant to take certain affirmative actions
for the benefit of, Vulcan and Triton LLC. To the extent that SGI requires
rights to rail and/or road access from third parties to and from the Buckskin
Mine, SGI shall obtain such rights.
B. Encoal is the owner of fifty percent (50%) of the outstanding membership
interests in NuCoal LLC, a Delaware limited liability company ("NuCoal") and
Americoal is the owner of fifty percent (50%) of the outstanding membership
interests in NuCoal. Encoal's and Americoal's membership interests in NuCoal are
collectively referred to herein as the "Membership Interests" and Americoal's
50% membership interest in NuCoal is referred to herein as the "Americoal
Membership Interest". NuCoal is the holder of certain permits or applications
for permits from Wyoming governmental authorities (the "Permits"), described
more specifically on Exhibit A hereto.
C. Bluegrass is also the owner of fifty percent (50%) of the general partnership
interests ("Partnership Interest") in the TEK-KOL Partnership, a California
general partnership ("TEK-KOL"). TEK-KOL owns the patents and intellectual
property interests in the LFC Process, all as more specifically described on
Exhibit A-1 hereto (such patents, along with such intellectual property
interests, collectively referred to herein as the "Patents"). Bluegrass also
owns, as a general partner of TEK-KOL, 50% of certain other tangible and
intangible property owned by TEK-KOL, including but not limited to computers and
furniture. The Patents, Permits and the tangible and intangible property of
TEK-KOL are collectively referred to herein as the "LFC Property."
D. TEK-KOL has been terminated and is, as of the date of this Agreement, in the
process of winding-up its affairs and liquidating its assets.
E. SGI is a research and development company which has proprietary technologies
that it is attempting to market in the United States and overseas.
F. Bluegrass desires to sell to SGI the Encoal Stock, its Partnership Interest
in TEK-KOL, and its rights in and to the LFC Property, Americoal desires to sell
to SGI the Americoal Membership Interest in NuCoal, and SGI desires to purchase
all of the foregoing, on the terms of this Agreement. Further, the parties
desire SGI to assume and/or be solely liable for, and to release (or obtain
releases of) Bluegrass, Americoal and each of their respective shareholders,
parents, affiliates and their respective officers, directors, employees and
agents from all obligations and liabilities arising with respect to Encoal,
NuCoal, TEK-KOL and the Encoal Facilities, as more specifically set forth
herein.
AGREEMENT
In consideration of the above premises, for the consideration, and
subject to the terms and conditions herein set forth, the parties agree as
follows:
I. ACQUISITIONS. Bluegrass hereby agrees to sell, assign, transfer and deliver
to SGI the Encoal Stock, the Partnership Interest, and any interest which
Bluegrass may have in and to the LFC Property, and Americoal hereby agrees to
sell, assign, transfer and deliver to SGI its Americoal Membership Interest in
NuCoal. SGI hereby agrees to purchase the Encoal Stock, the Americoal Membership
Interest, the Partnership Interest, and any interest which Bluegrass may have in
and to the LFC Property.
II. CLOSING. The closing of the transactions contemplated by this Agreement (the
"Closing") will take place at the offices of Holland & ▇▇▇▇ in Denver, Colorado,
within 150 business days after the date on which all of the conditions to
Closing set forth in Sections 4 have been met, or such other date mutually
acceptable to the parties hereto following the date on which all such conditions
shall have been met (the "Closing Date"). If the Closing has not occurred for
any reason by the date which is sixty (60) calendar days after the Effective
Date ("Termination Date"), this Agreement shall automatically terminate without
notice to or by either party, unless this Agreement is extended prior to the
Termination Date by written agreement of the parties.
III. PURCHASE PRICE AND DELIVERIES AT CLOSING.
A. Purchase Price and Deliveries by SGI. The purchase price for the Encoal
Stock, the Americoal Membership Interest, the Partnership Interest, and
Bluegrass' interest in the LFC Property is comprised of the following: (a) SGI
shall obtain the execution of and deliver at Closing a waiver and release, in
favor of Bluegrass, Americoal, AEI, Encoal, ▇▇▇▇▇▇▇▇▇ Resources Inc., ▇▇▇▇▇▇▇
Coal Holding Company and each of their respective affiliates, successors and
assigns, from Mitsubishi Heavy Industries (the "Mitsubishi Waiver"), in the form
attached hereto as Exhibit 3.1A or in form satisfactory to Sellers, of a $1.13
million dollar invoice billed by Mitsubishi Heavy Industries to Encoal; (b)
prior to or at Closing, SGI shall enter into a new contract with Triton LLC on
the terms set forth in the Encoal Use Agreement with certain modifications
("Modifications") to be negotiated by SGI directly with Vulcan and Triton LLC
("New Encoal Use Agreement"), which provides that the New Encoal Use Agreement
is substituted for, and discharges and releases, all obligations, covenants and
liabilities of Bluegrass, WCT, AEI to Vulcan and Triton LLC under and pursuant
to the Encoal Use Agreement, with SGI solely liable for performance of the terms
of the New Encoal Use Agreement, in form satisfactory to Bluegrass and AEI; (c)
SGI shall execute and deliver to Bluegrass at Closing a promissory note in the
form attached hereto as Exhibit 3.1B (the "Note"), secured by 50% of SGI's
royalties as described in and in the form of the security instrument set forth
on Exhibit 3.1C, in the principal amount of Two Million Dollars ($2,000,000)
bearing interest at the prime interest rate as it may be set from time to time
by the Bank of America NT&SA's office in San Francisco, California in effect on
January 1 of each calendar year, with the principal and interest of such Note
due and payable on a date five (5) years from the Closing Date; (d) SGI shall
have entered into a new DOE Agreement with the DOE in form acceptable to
Bluegrass ("New DOE Agreement"), in the same form and on the same terms as the
DOE Agreement described in Recital A of this Agreement, with SGI and DOE
agreeing therein that such New DOE Agreement would be substituted for and
discharge and release the obligations of Encoal and its parents, affiliates,
successors and assigns under the DOE Agreement, with SGI solely liable for
performance of the terms of the New DOE Agreement; (e) SGI shall have complied
with Section 4.2.2 regarding the Employee Plan, and obtained and delivered at
Closing to Sellers the Employee Releases, both as described in Section 4.2.2;
(f) SGI shall have assumed, in form satisfactory to Bluegrass, all obligations
and liabilities of TEK-KOL and of Bluegrass as a partner of TEK-KOL; and (g) SGI
shall have, to Sellers' satisfaction, (i) accomplished segregation or removal of
all governmental permitting obligations of Encoal and NuCoal, or related to
operation of the Encoal Facilities, from the permitting obligations of Triton
LLC or any other person, (ii) assumed all reclamation liabilities and
obligations associated with the Encoal Facilities and obtained in SGI's own name
bonding from relevant governmental authorities regarding such reclamation
liabilities, and (iii) executed and delivered to Bluegrass unconditional
releases from relevant governmental authorities of Bluegrass, AEI, and their
respective affiliates, successors and assigns from all obligations and
liabilities related to the foregoing reclamation liabilities and bonding
obligations.
B. Deliveries by Sellers. At Closing, Bluegrass and/or Americoal, as applicable,
shall deliver the following to SGI:
1. Encoal Stock. Bluegrass shall deliver to SGI a certificate representing the
Encoal Stock, endorsed to, or with a transfer power duly endorsed to, SGI;
2. Americoal Membership Interests. At Closing, Americoal shall deliver an
assignment of the Americoal Membership Interest in the form attached hereto as
Exhibit 3.2.2.
3. TEK-KOL Partnership Interest. At Closing, Bluegrass shall deliver an
assignment of the Partnership Interest to SGI's subsidiary, Occt, with assignee
assuming and SGI and assignee indemnifying Bluegrass against all liabilities and
obligations of TEK-KOL and otherwise in the form attached hereto as Exhibit
3.2.3.
4. LFC Property. At Closing, Bluegrass shall deliver to SGI (i) a ▇▇▇▇ of sale
with respect to Bluegrass' rights in any tangible LFC Property, in the form
attached hereto as Exhibit 3.2.4A; (ii) assignments of Bluegrass' rights in the
Patents, in the form attached hereto as Exhibit 3.2.4B; (iii) assignments of the
Permits, in the form attached hereto as Exhibit 3.2.4C; (iv) assignments of
Bluegrass' rights in any other intangible property of TEK-KOL in a form provided
by Bluegrass; and (v) assignment, in the form of Exhibit 3.2.4D, of any rights
which Bluegrass may have in engineering drawings, plans, specifications,
engineering information and data for construction of an LFC Plant ("Engineering
Plans"), including delivery of any copies of the Engineering Plans which Sellers
may have.
C. OTHER DELIVERIES BY PARTIES AT CLOSING. At Closing, the parties hereto shall
each execute and deliver to each other a general release in the form attached
hereto as Exhibit 3.3 (the "Release"), by which each agrees to waive, release
and covenant not to ▇▇▇ the other with respect to any and all claims,
liabilities and obligations of any kind or nature relating to Encoal, NuCoal,
TEK-KOL, the LFC Property, the Encoal Facilities, and/or pursuant to the License
to SMC from TEK-KOL dated September 30, 1989; provided that such Release shall
not include or encompass a waiver, release or covenant not to ▇▇▇ with respect
to any of the indemnification or other rights either party may have under or
pursuant to this Agreement.
At Closing, SGI shall deliver or cause to be delivered to
Bluegrass such documents, instruments and certificates as Bluegrass shall
reasonably request for the purpose of giving effect to the transactions
contemplated hereby. Bluegrass and/or Americoal, as the case may be, shall
deliver or cause to be delivered to SGI such documents, instruments and
certificates as SGI shall reasonably request for the purpose of giving effect to
the transactions contemplated hereby.
IV. CONDITIONS TO CLOSING.
A. Conditions Precedent to Obligations of SGI. The Closing shall occur at the
time provided in Section 2 provided that all of the following conditions
(collectively, "SGI Conditions") shall have occurred, been satisfied, or waived
in writing by SGI:
1. SGI, with Bluegrass' good faith cooperation, shall negotiate in good faith
with Vulcan to reduce the bond for $36,000,000, as required by the Encoal Use
Agreement, to an amount agreeable to SGI;
2. An agreement satisfactory to SGI shall have been entered into between Triton
LLC and SGI pursuant to which SGI will have the right to purchase coal from
Triton LLC for use in the Encoal Facilities, and such Modifications to the
Encoal Use Agreement shall have been made to the satisfaction of SGI;
3. SGI shall have entered into agreements to sell the process derived fuel
("PDF") and coal derived liquids ("CDL") from production at the Encoal
Facilities;
4. SGI shall have entered into agreements to finance the improvements it intends
to make to the Encoal Facilities and have agreements in place to transfer tax
credits produced through the operation of the Encoal Facilities to a party that
can claim them on its tax return;
5. All necessary or appropriate government authorities have agreed to or
consented to the assignment of the Permits to SGI;
6. All assignments of Patents in a form sufficient for transmittal to the U. S.
Patent Office shall have been executed by Bluegrass (to be delivered at
Closing);
7. All documents required for the dissolution of TEK-KOL shall have been
executed by SGI and Bluegrass in a form sufficient for filing with appropriate
governmental authorities, and all documents necessary to distribute all assets
owned by TEK-KOL to SGI have been executed, with all claims, liabilities and
obligations of any kind or nature of either party to the other relating to
TEK-KOL being satisfied by the execution and delivery of the Release;
8. Sellers shall have made all of the deliveries to be made by either of them
to SGI pursuant to Sections 3.2 and 3.3 above;
9. The operating assets of Encoal or NuCoal shall not have been substantially
(i) damaged, (ii) destroyed, (iii) transferred, (iv) hypothecated, or otherwise
(v) devalued, between the Effective Date and the Closing Date;
10. All directors and officers of Encoal and managers of NuCoal, requested by
SGI in writing to do so, shall have tendered their resignations effective as of
the Closing Date.
11. The representations and warranties of Sellers contained in Section 5 or
elsewhere herein shall be true and correct as of the date hereof, and except to
the extent such representations and warranties relate solely to an earlier date,
as of the Closing Date as though made on and as of the Closing Date; provided,
however, that, if any such representation and warranty is not qualified by a
standard of materiality, such representation and warranty need only be true and
correct in all material respects. Sellers shall have duly performed and complied
in all material respects with all agreements and covenants contained herein
required to be performed or complied with by either of them at or before the
Closing.
B. Conditions Precedent to Obligations of Sellers. The Closing shall occur at
the time provided in Section 2 provided that all of the following conditions
(the "Sellers' Conditions") shall have occurred, been satisfied, or waived in
writing by either of Sellers, as applicable:
1. All documents required for the dissolution of TEK-KOL shall have been
executed by SGI and Bluegrass in a form sufficient for filing with appropriate
governmental authorities;
2. Effective as of the Closing, SGI shall establish for the employees of Encoal
("Employees") new (a) plans which may include pension, savings, welfare,
severance, and other employee benefit plans which are substantially similar to
such plans provided to the Employees prior to Closing, and (b) a post-retirement
plan which is comparable to the plan provided to the Employees and former
employees eligible for post-retirement benefits prior to Closing (each, an
"Employee Plan"). SGI shall defend, indemnify and hold harmless Sellers, AEI,
▇▇▇▇▇▇▇ Coal Holding Company ("▇▇▇▇▇▇▇") and their respective affiliates,
directors officers, employees and agents from, and pay and reimburse them for,
any and all claims, actions, demands, suits, or proceedings pursuant to or in
connection with any Employee Plan, the employment (or non-employment) of any
Employee, or under or pursuant to any employee benefit plans maintained or
previously maintained by AEI, ▇▇▇▇▇▇▇, or any of their respective affiliates,
related companies, or predecessors, from and after the Closing. Further, SGI
shall have obtained full releases from all Employees of Encoal and ▇▇▇▇▇▇▇ and
their respective affiliates, directors, officers, employees and agents, in a
form satisfactory to Sellers (collectively, "Employee Releases").
3. SGI shall have taken the actions and made all of the deliveries to be made
by it pursuant to Sections 3.1 and 3.3;
4. From November 12, 1998 through the date of Closing, SGI shall have paid to
Bluegrass' satisfaction that portion of the salaries, including travel and other
expenses, of all Encoal employees for work engaged in by such Encoal employees
for the benefit or at the request of SGI; and
5. The representations and warranties of SGI contained in Section 5 or elsewhere
herein shall be true and correct as of the date hereof and as of the Closing
Date as through made on and as of the Closing Date; provided, however, that if
any such representation and warranty is not qualified by a standard of
materiality, such representation and warranty need only be true and correct in
all material respects. SGI shall have duly performed and complied in all
material respects with all agreements contained herein required to be performed
or complied with by it at or prior to the Closing.
V. WARRANTIES.
A. Bluegrass or Americoal, as applicable, hereby represent and warrant to SGI
(and where expressed, hereby disclaim representations and warranties) as
follows:
1. Ownership. Bluegrass is the owner of all of the issued and outstanding shares
of stock of Encoal and is the owner of record of 1,000 fully paid and
nonassessable shares of common Encoal Stock. Americoal is the owner of 50% of
the outstanding limited liability company membership interests in NuCoal.
2. Encoal and NuCoal Securities. As of the Effective Date, Encoal is authorized
to issue and has issued a total of 1,000 shares of common stock and NuCoal is
authorized to issue and has issued 100% of its membership interests. No options,
warrants, preferred shares, debentures or other securities of Encoal are
outstanding, nor are there any contractual obligations of any kind to issue any
such options, warrants, preferred shares, debentures or other securities. No
options, warrants, debentures or other securities of NuCoal are outstanding, nor
are there any contractual obligations of any kind to issue any such options,
warrants, preferred shares, debentures or other securities in NuCoal.
3. Encoal Incorporation and NuCoal Organization. Encoal is incorporated and is
in good standing under the laws of the State of Delaware and is qualified to
transact business in the State of Wyoming. NuCoal is organized as a limited
liability company and is in good standing under the laws of Delaware.
4. Authority. Encoal has the corporate power and authority, and NuCoal has the
limited liability company power and authority, to carry on their respective
businesses as currently conducted. Sellers have all requisite power and
authority to execute and deliver this Agreement, to perform their respective
obligations hereunder, and to consummate the transactions contemplated hereby.
The execution, delivery and performance by Sellers of this Agreement has been
duly authorized by Sellers as applicable to the sales and transfers contemplated
hereby, which constitutes all necessary action on the part of Sellers for such
authorization. This Agreement has been duly executed and delivered by Sellers
and, assuming valid execution and delivery by SGI, constitutes the valid and
binding obligation of Sellers, enforceable against Sellers in accordance with
its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting the enforcement of creditor's rights or by general
equitable principles. Sellers hereto represent and warrant that the person
signing for each of them has been authorized by all appropriate actions to
execute this Agreement.
5. Financial Condition. The balance sheet and income statements of Encoal and
NuCoal for year ends December 31, 1996, 1997 and 1998 fully and accurately
reflect the financial condition of Encoal and NuCoal, respectively, as of those
respective dates, and the results of operation of each of them for the periods
then ended.
6. Adverse Change. No transactions, other than in the ordinary and usual course
of business, have been engaged in by Encoal or by NuCoal from December 31, 1998
to the Effective Date, and there has been no material adverse change in the
financial or operating condition of Encoal or NuCoal up to and including the
Effective Date.
7. Defaults or Breach. To the knowledge of Sellers, as of the Effective Date,
Encoal is not, and as of the Closing Date Encoal will not be, in default under
any contract or agreement, or under any order or decree of any court which would
have a material adverse effect on Sellers' execution, delivery or performance of
this Agreement or the consummation of the transactions contemplated hereby. To
the knowledge of Sellers, there are no actions or proceedings pending or
threatened against Encoal as of the date hereof, and neither the execution and
delivery of this Agreement nor the consummation of the transactions herein
contemplated will conflict with, result in the breach of, or accelerate the
performance required by any contract or agreement to which Encoal or Sellers are
now a party.
To the knowledge of Sellers, as of the Effective Date, NuCoal is not, and as
of the Closing
Date NuCoal will not be, in default under any contract or agreement, or
under an order or decree of any court which would have a material
adverse effect on Sellers' execution, delivery or performance of this
Agreement or the consummation of the transactions contemplated hereby.
To the knowledge of Sellers, there are no actions or proceedings
pending or threatened against NuCoal as of the date hereof, and neither
the execution and delivery of this Agreement nor the consummation of
the transaction herein contemplated will conflict with, result in the
breach of, or accelerate the performance required by any contract or
agreement to which NuCoal or Sellers are now a party.
8. Dividends. There are no dividends declared and unpaid on any of the Encoal
Stock.
9. Restrictions. Except for the terms set forth in the Encoal Use Agreement and
as otherwise set forth in this Agreement, Encoal and NuCoal are not parties to
any contract or agreement, and are not subject to any restrictions, which would
preclude either of them from executing, delivering or performing this Agreement
or consummating the transactions contemplated by this Agreement. The execution,
delivery and performance by Sellers, respectively, of this Agreement and the
consummation of the transactions contemplated hereby will not result in any
conflict with their respective Articles of Incorporation or Bylaws.
10. Assets. Attached hereto as Exhibit 5.1.10 and made a part hereof is a list
of the categories and types of assets and properties owned, to the knowledge of
Bluegrass, by Encoal as of March 1, 1999 which are individually valued on such
books in excess of $50,000.00. Except as otherwise stated in Exhibit 5.1.10,
Encoal and NuCoal have good and marketable title to all assets and properties
listed thereon.
11. Permits. To the knowledge of Sellers: none of the (i) permits relating to
the Encoal Facilities listed on Exhibit 5.1.11 hereto ("Encoal Permits") or (ii)
the Permits, have lapsed or have been surrendered or cancelled by any permitting
or governmental authority, nor has there been any violation by Encoal of any of
the Encoal Permits or any of the terms or conditions thereof. Further, to the
knowledge of Sellers: there has been no violation by NuCoal of any of the
Permits or any of the terms or conditions thereof. Sellers hereby expressly
disclaims any representation or warranty concerning whether and to what extent
SGI can construct and/or operate a facility or plant under the Permits.
Additionally, the parties agree that Sellers are transferring only the Permits
which are held (or applications are pending) in the name of NuCoal, and only of
the Encoal Permits which are held in the name of Encoal. Sellers do not hereby
sell, assign or transfer, or purport to sell, assign or transfer any Permits,
Encoal Permits, or any other licenses or permits issued by any governmental
authority which is in the name of any person or entity other than Encoal or
NuCoal.
12. No Litigation. To the knowledge of Sellers: there is no action, suit, claim,
investigation or proceeding, whether involving a court of law, administrative
body, governmental agency, arbitrator, or alternative dispute resolution
mechanism (collectively, "Proceeding") existing, pending or threatened against
or affecting Sellers with respect to or which would adversely affect the
transactions contemplated by this Agreement or any action to be taken by Sellers
pursuant to or in connection with this Agreement.
13. Employee Plans. Effective as of the Closing, the Employees shall cease to
participate in any AEI, ▇▇▇▇▇▇▇ or other Seller employee benefits plan and AEI,
▇▇▇▇▇▇▇, and Sellers, as applicable shall cease to be a participating employer
thereunder. Effective as of the Closing, neither AEI, ▇▇▇▇▇▇▇, nor Sellers shall
have any liability for any claims, actions, demands, suits, or proceedings
pursuant to or in connection with any Employee Plan or the employment (or
non-employment) of any Employee from and after the Closing, including, without
limitation, the ▇▇▇▇▇▇▇ Special Bonus and Severance Plan.
14. Exclusion of Representations and Warranties: Relationship Between the
Parties. It is the explicit intent and understanding of the parties hereto that
none of the parties nor any of their respective affiliates, representatives,
advisors or agents is making any representation or warranty whatsoever, oral or
written, express or implied, other than those set forth in this Agreement and
none of the parties is relying on any statement, representation or warranty,
oral or written, express or implied, made by any other party or such other
party's affiliates, representatives, advisors or agents, except for the express
representations and warranties expressly set forth in this Agreement. EXCEPT AS
OTHERWISE SPECIFICALLY SET FORTH IN THIS AGREEMENT, THE SELLERS EXPRESSLY
DISCLAIM ANY IMPLIED WARRANTY OR REPRESENTATION AS TO CONDITION, MERCHANTABILITY
OR SUITABILITY AS TO ANY OF THE ASSETS OR LIABILITIES OF ENCOAL, NUCOAL,
TEK-KOL, THE LFC PROPERTY, OR THE ENCOAL FACILITIES AND, EXCEPT AS OTHERWISE
SPECIFICALLY SET FORTH IN THIS AGREEMENT, IT IS UNDERSTOOD THAT SGI TAKES SUCH
ASSETS "AS IS", "WHERE IS", AND "WITH ALL FAULTS". WITHOUT LIMITING THE
GENERALITY OF, AND IN FURTHERANCE OF, THE IMMEDIATELY PRECEDING SENTENCES, SGI
ACKNOWLEDGES THAT SELLERS MAKE NO REPRESENTATIONS OR WARRANTIES TO SGI REGARDING
ANY PROFITS, FORECASTS, PROJECTIONS, ESTIMATES, BUSINESS PLANS OR BUDGETS
HERETOFORE DELIVERED TO OR MADE AVAILABLE TO SGI OR ITS AFFILIATES,
REPRESENTATIVES, ADVISORS OR AGENTS WITH RESPECT TO FUTURE REVENUES, PROFITS,
EXPENSES OR EXPENDITURES, FUTURE RESULTS OF OPERATIONS (OR ANY COMPONENT
THEREOF), FUTURE CASH FLOWS OR FUTURE FINANCIAL CONDITION (OR ANY COMPONENT
THEREOF) OF ENCOAL, NUCOAL, TEK-KOL, THE LFC PROPERTY, OR THE ENCOAL FACILITIES.
THE PARTIES HERETO AGREE THAT THIS IS AN ARM'S-LENGTH TRANSACTION IN WHICH THE
PARTIES' UNDERTAKINGS AND OBLIGATIONS ARE LIMITED TO THE PERFORMANCE OF THEIR
OBLIGATIONS UNDER THIS AGREEMENT. SGI ACKNOWLEDGES THAT IT IS A SOPHISTICATED
INVESTOR, THAT IT HAS UNDERTAKEN, AND THAT SELLER HAS GIVEN SGI SUCH
OPPORTUNITIES AS SGI HAS REQUESTED TO UNDERTAKE, A FULL INVESTIGATION OF ENCOAL,
NUCOAL, TEK-KOL, INCLUDING THE LFC PROPERTY AND THE ENCOAL FACILITIES, THE
CONTRACTS, PERMITS, LICENSES, DATA AND INFORMATION, PREMISES, PROPERTIES,
FACILITIES, BOOKS, RECORDS, LIABILITIES, OBLIGATIONS, AND ASSETS OF EACH OF THE
FOREGOING, AND THAT IT HAS ONLY A CONTRACTUAL RELATIONSHIP WITH SELLERS, BASED
SOLELY ON THE TERMS OF THIS AGREEMENT, AND THAT THERE IS NO SPECIAL RELATIONSHIP
OF TRUST OR RELIANCE BETWEEN SGI AND SELLERS.
B. SGI represents, covenants, and warrants as follows:
1. Incorporation. SGI is incorporated, and authorized to do business, under
the laws of the state of Utah and is qualified to do business
in the state of California, and is in good standing in Utah and California.
2. Restrictions. SGI is not a party to any contract or agreement, and is not
subject to any restrictions, which would preclude it from executing, delivering
or performing this Agreement or consummating the transactions contemplated by
this Agreement. The execution, delivery and performance by SGI of this Agreement
and the consummation of the transactions contemplated hereby will not result in
any conflict with its Articles of Incorporation or Bylaws.
3. Authority. SGI has the corporate power and authority to carry on its business
as currently conducted. SGI has all requisite power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution, delivery and performance by
SGI of this Agreement has been duly authorized by the shareholders of SGI, which
constitutes all necessary action on the part of SGI for such authorization. This
Agreement has been duly executed and delivered by SGI and, assuming valid
execution and delivery by the Sellers, constitutes the valid and binding
obligation of SGI, enforceable against SGI in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting the
enforcement of creditor's rights or by general equitable principles. Each of the
parties hereto represents and warrants that the person signing on its behalf has
been authorized by all appropriate corporate actions to execute this Agreement.
4. No Litigation. There is no Proceeding exiting, pending or, to the knowledge
of SGI, threatened against or affecting SGI with respect to or which would
adversely affect the transactions contemplated by this Agreement or any action
to be taken by SGI pursuant to or in connection with this Agreement.
5. Disclosure. Neither SGI nor its authorized representatives (including without
limitation its non-employee consultants) has knowledge of any fact, event or
circumstance which constitutes (or would constitute) or indicates (or would
indicate) a breach of any representation, warranty or covenants made by Sellers
in this Agreement.
6. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. At least 60 days prior to Closing, the parties shall
determine whether they must make a ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act filing with the Federal
Trade Commission and the Antitrust Division of the U.S. Department of Justice
for the transactions contemplated hereby. The parties shall cooperate with each
other in mailing such a filing.
VI. INTERIM OPERATIONS: ADDITIONAL COVENANTS OF WCT AND BLUEGRASS. Encoal and
NuCoal will not enter into any transactions prior to the Closing Date, other
than in the ordinary course of business, except the DOE Agreement with the DOE
which is, as of the Effective Date of this Agreement, in the process of being
negotiated between the DOE and Encoal, and except for matters being negotiated
with Triton LLC with respect to bonding and other terms or requirements under
the Encoal Use Agreement. Sellers will take such actions as are necessary to
insure that Encoal and NuCoal will not enter into any transactions as described
in this Section 6, and in particular neither Encoal nor NuCoal will do any of
the following from and after the Effective Date until the Closing Date, without
the prior written consent of SGI:
A. Indebtedness. Create or incur any indebtedness other than unsecured current
liabilities incurred in the ordinary course of business;
B. Encumbrances. Grant or permit to arise any mortgage, deed of trust, security
interest, lien, or encumbrance of any kind, excluding taxes not yet due and
payable, against the property of Encoal or NuCoal;
C. Disposition. Sell or otherwise dispose of any of the assets of Encoal or
NuCoal other than merchandise or inventory sold in
the ordinary course of business;
D. Dividends. Declare or pay any dividends or repurchase or redeem any of the
Encoal Stock or the NuCoal Membership Interests
or establish a sinking fund or other reserve for such purpose;
E. Share issuance. Issue, sell, or grant options for the sale of any of Encoal's
shares or NuCoal's Membership Interests, whether or not previously authorized or
issued;
F. Expenditures. Expend any funds for capital additions or improvements to the
Encoal Facilities, other than ordinary expenditures for maintenance, repairs,
replacements, and other costs pursuant to the Encoal Use Agreement;
G. Acquisitions. Acquire any interest in any other business enterprise,
whether for cash or in exchange for the stock or other
securities of Encoal or NuCoal;
H. Compensation. Increase the compensation paid to any of Encoal's or NuCoal's
officers or directors above the levels paid as of the Effective Date, or agree
to any of its officers or employees receiving any bonus, severance pay, or
pension, whether under an existing compensation or deferred compensation plan,
or otherwise, except for the 15% retention bonuses which may be payable, in
Bluegrass' sole discretion, to an Employee pursuant to the ▇▇▇▇▇▇▇ Coal Holding
Special Bonus and Severance Pay Plan for which SGI shall not be liable.
VII. INVESTMENT INTENT. SGI represents that the Encoal Stock, the Membership
Interests and the Partnership Interest being acquired by it under this Agreement
are being acquired for SGI's own account for investment purposes only, and not
with a view to reselling the same, distributing, or dividing participation
therein with others, and further, that there is no present intent to resell or
otherwise dispose of all or any part of the Encoal Stock, the Membership
Interests, or the Partnership Interest. SGI understands and acknowledges that
the offer and sale of the Encoal Stock, the Membership Interests, and the
Partnership Interest as contemplated by this Agreement have not been registered
under the Securities Act of 1933, as amended, and the rules, regulations and
forms promulgated thereunder, any state "Blue Sky" law, or any other applicable
regulation, and that any subsequent transfer or offer to transfer by SGI or any
representative thereof of the Encoal Stock, the Membership Interests, or the
Partnership Interest, or any part thereof, is subject to registration
requirements or other restrictions arising under such laws and regulations in
the absence of an available exemption therefrom. The certificates representing
the Encoal Stock to be delivered at Closing shall carry a restrictive legend to
such effect.
VIII. COVENANTS. SGI and Sellers each covenant and agree as follows:
A. Approvals. The parties shall promptly apply for and diligently pursue all
consents, authorizations and approvals from governmental authorities and third
parties as shall be necessary or appropriate to permit the consummation of the
transactions contemplated by this Agreement, and shall use all reasonable
efforts to bring about the satisfaction as soon as practicable of all the
conditions set forth in Section 4 to effect the consummation of the transactions
contemplated by this Agreement; provided however, neither party shall be
required to pay any material remuneration to any third party in exchange for
such third party's consent or approval, or to file any lawsuit or other action
to obtain such consent or approval.
B. Records. As used herein, (a) "Taxes" or "Tax" shall mean all taxes, charges,
fees, duties, levies or other assessments imposed by any federal, state, local
or foreign government or any agency or political subdivision thereof, including
without limitation income, gross receipts, net proceeds, license, payroll,
employment, excise, severance, stamp, business, occupation, premium, windfall
profits, environmental, mineral, customs, duties, capital stock, franchise,
profits, withholding, social security, unemployment, disability, real property,
personal property, sales, use, ad valorem, transfer, registration, value added,
alternative, estimated, or other tax of any kind whatsoever, including any
interest, penalty or addition thereto; and (b) "Tax Returns" shall mean all
federal, state, local and foreign returns, declarations, claims for refunds,
forms, statements, reports, schedules, and information returns or statements,
and any amendments thereof required to be filed with any Tax authority.
With respect to the books and records of Encoal, NuCoal and
TEK-KOL relating to matters prior to the Closing Date, SGI shall retain copies
of all Tax Returns, related schedules and work papers, and all material records
and other documents relating thereto existing on the date hereof or created
through or with respect to taxable periods ending on or before or including the
Closing Date, until six (6) months after the expiration of the statute of
limitations (including extensions) of the taxable years to which such Tax
Returns and other documents relate; and SGI shall cause any person to whom it
may sell or otherwise transfer Encoal or NuCoal (or a significant portion of the
assets of Encoal or NuCoal) to agree to be bound by the provisions of this
Section 8.2 by written acknowledgment delivered to Sellers prior to such sale or
transfer.
SGI and Sellers shall use all reasonable efforts to cooperate
with each other and their respective representatives, in a prompt and timely
manner, in conjunction with any inquiry, audit, examination, investigation,
dispute or litigation involving any Tax Return relating to Encoal, NuCoal or
TEK-KOL filed or required to be filed by or for such entities for any taxable
period beginning before the Closing Date, and relating to any Taxes. Such
cooperation shall include, but not be limited to, making available to Sellers or
SGI, as the case may be, during normal business hours, and within ten (10) days
of any reasonable request therefor, all books, records and information, and the
reasonable assistance of all officers and employees, reasonably required in
connection with any tax inquiry, audit, examination, investigation, dispute,
litigation or any other matter.
C. Tax Returns.
1. Pre-Closing Period. Sellers will prepare and file or cause to be prepared and
filed all Tax Returns relating to Taxes for Encoal and NuCoal required to be
filed for any taxable period that ends on or before the Closing Date
("Pre-Closing Tax Period"). Sellers will pay or cause to be paid all Taxes
required to be paid with respect to any Pre-Closing Tax Period. If required by
applicable law, Sellers will deliver to SGI for signing and filing any Tax
Returns relating to income tax of Encoal or NuCoal with respect to any
Pre-Closing Tax Period (including any short or stub period) that have not been
filed prior to the Closing Date. Sellers will pay all Taxes required to be paid
with respect to such Tax Returns for any Pre-Closing Tax Period.
2. Post-Closing Period. SGI will prepare and file or cause to be prepared and
filed all Tax Returns for Encoal or NuCoal that are required to be filed for all
Tax periods which begin on and continue after the Closing Date. SGI will pay or
cause to be paid all Taxes required to be paid with respect to such Tax Returns.
With respect to any Tax period that would otherwise
include but not end on the Closing Date, to the extent permissible
pursuant to applicable law, Sellers will, and SGI will cause Encoal or
NuCoal to: (a) take all steps which are or may be reasonably necessary,
including, without limitation, the filing of elections or returns with
applicable Tax authorities, to cause such period to end on the Closing
Date; or (b) if clause (a) is inapplicable, to the extent permitted by
applicable law, report the operations of Encoal or NuCoal only for the
portion of such period ending on or immediately before the Closing Date
in a combined, consolidated, or unitary Tax Return filed by Sellers,
notwithstanding that such Tax period does not end on the Closing Date.
If clause (b) applies to a Tax period of Encoal or NuCoal, the portion
of such Tax period included in such return filed by Sellers will be
treated as a Pre-Closing Tax Period described in Section 8.3.1;
provided, however, that SGI shall be responsible for filing all Tax
Returns with respect to all such straddle periods. If neither clause
(a) nor (b) is applicable, then SGI and Encoal and NuCoal shall prepare
and file the appropriate Tax Returns, SGI shall pay any Taxes with
respect thereto, and Sellers shall reimburse SGI for the portion of any
income Taxes shown as due and payable thereon that relate to the
portion of such straddle period that ends on the Closing Date.
3. Cooperation. To assist Sellers in the preparation of all Tax Returns that
Sellers are required to prepare pursuant to this ▇▇▇▇▇▇▇ ▇.▇, ▇▇▇ will prepare
and deliver, or cause Encoal or NuCoal to prepare and deliver, Sellers' standard
Federal and state tax return data gathering packages relating to Encoal or
NuCoal not later than thirty (30) days following receipt of such packages from
Sellers (or sooner, to the extent practicable). In addition to providing such
packages, SGI will promptly provide or cause to be provided to Sellers such
other information as Sellers may reasonably request (including access to books,
records and personnel) in order for the operations of Encoal or NuCoal to be
properly reported in such Tax Returns, for the preparation for any Tax audit, or
for the prosecution or defense of any claim, suit or proceeding relating to
Taxes.
4. Credits and Adjustments. SGI will pay or cause to be paid to Sellers all
refunds, off-sets or credits (including any interest thereon) of Taxes
attributable to Taxes paid by Sellers, Encoal or NuCoal with respect to any
Pre-Closing Tax Period. Sellers will pay or cause to be paid to SGI all refunds,
offsets or credits of Taxes (including any interest thereon) received by Sellers
after the Closing Date and attributable to Taxes paid by SGI that accrued with
respect to a period after the Closing Date. Such payment will be made to Seller
or SGI, as the case may be, within ten (10) days after receipt of any such
refund from or allowance of such credit by the relevant Tax authority.
In the event any adjustment is made or proposed by a Taxing
authority with respect to any Tax subject to this Section 8.3, the person
ultimately responsible for paying any additional Tax (the "Controlling Party"),
shall have the right to contest, litigate, compromise and settle such tax
contest with respect thereto. The Controlling Party shall keep the other party
fully informed as to all significant matters relating to such tax contest and
shall permit the other party and counsel of its choice to participate in any
such contest, litigation, compromise or settlement of any adjustment in such tax
contest. All costs, including legal and accounting expenses, of any tax contest
are to be borne by the party incurring such costs.
D. Insurance. The parties agree that no insurance policy maintained by Sellers
with respect to any of the assets, properties or operations of Encoal, NuCoal
and/or TEK-KOL, including the LFC Property and the Encoal Facilities, shall
cover such properties or operations after the Closing Date, and all benefits and
coverage under each such insurance policy shall terminate at midnight on the
Closing Date. Following the Closing Date, SGI shall be responsible for obtaining
and maintaining any and all insurance policies and coverages in respect of
Encoal, NuCoal, TEK-KOL and their respective assets, properties, operations and
liabilities.
E. Liabilities. SGI hereby acknowledges and agrees that Sellers shall have no
obligations or liabilities (including without limitation any loss, damage,
injury or death, whether known or unknown, asserted or unasserted, absolute or
contingent, accrued or unaccrued, liquidated or unliquidated, whether due or to
become due, regardless of when asserted or arising) (collectively,
"Liabilities") for or with respect to Encoal, NuCoal or TEK-KOL, whether
accruing prior to, on, or after the Closing, and SGI shall indemnify, defend and
hold harmless Sellers from and against, and pay and reimburse Sellers for, all
such Liabilities to the extent Sellers or any of their respective affiliates
shall become liable therefor or any party shall have alleged that Sellers or any
of their respective affiliates is liable therefor.
F. Further Assurances. From time to time, each of the parties hereto will, at
their own cost and expense, execute and deliver such further instruments and
will take such other actions as SGI or Sellers, as the case may be, may
reasonably request in order to effectuate the purposes of this Agreement and to
carry out the terms hereof.
IX. DUE DILIGENCE. SGI shall have a period of 60 calendar days from the
Effective Date to perform due diligence with respect to the matters described in
this Agreement. SGI shall immediately begin to perform its due diligence and
Sellers shall cooperate with SGI in performing the investigation of material
facts relative to this transaction. In order to assist SGI in performing its due
diligence, Sellers shall provide SGI with available financial statements of
Encoal and NuCoal for the years ended December 31, 1996, December 31, 1997,
December 31, 1998, as well as all federal and state tax returns for those years.
X. TERMINATION. This Agreement may be terminated in writing at any time after
the passage of 150 calendar days from the Effective Date: (i) by SGI, if it
determines that there are material legal, financial or personnel problems
associated with Encoal or NuCoal or if it determines it has not been possible to
satisfy the SGI Conditions; or (ii) by Bluegrass or Americoal, if either
determines that the Sellers' Conditions have not been satisfied by the date
which is 150 calendar days from the Effective Date, and the parties do not agree
on an extension or modification to avoid or waive such Sellers' Condition(s),
provided that nothing herein shall obligate either Bluegrass or SGI to agree on
an extension or modification to avoid or waive any or all of Seller's
Conditions.
If, for any reason set forth herein this Agreement is
terminated, the parties agree to proceed with dissolution of TEK-KOL and
liquidation of its assets pursuant to the TEK-KOL Partnership Agreement and
applicable law. The parties further agree that upon execution and delivery of
this Agreement to each other, they will also execute a Release in the form
contemplated by Section 3.3, and including each of Sellers' and SGI's waiver,
release and covenant not to ▇▇▇ the other, or their respective affiliates,
directors, officers, employees, or agents, with respect to any disposition of
the Encoal Facilities by Sellers, in the event this Agreement is terminated,
including without limitation any expansion, improvement, refinement, redesign,
refitting, demolition, dismantlement, and/or relocation of all or any part of
the Encoal Facilities (the "Termination Release"). The Termination Release shall
be in the form of Exhibit 10 hereto. Upon execution of this Agreement by all
parties, duplicate originals of the Termination Release shall be executed and
deposited by the parties into an escrow account with the escrow agent identified
in Exhibit 10. Such Termination Releases shall be released by the escrow agent
to the respective parties (one original to SGI and one original to Sellers) upon
the written certification by either SGI or Sellers to the escrow agent that this
Agreement has terminated.
The parties shall share equally the fees of the escrow agent.
Upon any termination of this Agreement, the parties shall have
no further liability or obligation to each other arising out of this Agreement.
XI. RETURN OF MATERIALS. In the event that the Agreement is terminated in
accordance with the terms herein, then each party shall return to the other
party all documents and materials obtained from the other. Further, each party
shall cause its employees and agents to sign confidentiality agreements relative
to the information discovered in performing the due diligence.
XII. CONFIDENTIALITY. The parties may each obtain confidential and proprietary
information about the other from and after the Effective Date of this Agreement.
Each party shall hold that information in strictest confidence and shall not
disclose it to any third party at any time without the specific consent of the
other party. The parties shall execute the confidentiality agreement in the form
attached hereto as Exhibit 12, which shall be effective as of the Effective
Date.
XIII. PUBLICITY. No announcements relative to the Agreement shall be made by
either party without the prior review and approval of the other party, which
approval shall not be unreasonably withheld, delayed or conditioned, except to
the extent any such announcement is required by applicable law. Notwithstanding
the above, Sellers acknowledge that SGI will be required to make a publicity
announcement relative to the execution of this Agreement and Sellers will
cooperate with SGI in its making that announcement, provided SGI has allowed AEI
to review the announcement prior to being made public and AEI has given their
approval, not to be unreasonably withheld.
XIV. INDEMNIFICATION.
A. Indemnity by Sellers. After Closing, Sellers shall indemnify, defend and hold
harmless SGI and its respective directors, officers, employees and agents from
and against any Liabilities arising out of or resulting from any untrue
representation or breach of warranty of Sellers as set forth in this Agreement,
or a default or breach of any covenant or agreement made by Sellers under this
Agreement.
B. Indemnity by SGI. After Closing, SGI shall indemnify, defend and hold
harmless Sellers, AEI, and their respective shareholders, parents, affiliates,
and each of their respective directors, officers, employees, and agents from and
against any Liabilities arising out of or resulting from any untrue
representation or breach of warranty of SGI as set forth in this Agreement, a
default or breach of any covenant or agreement made by SGI under this Agreement,
and the past, present or future operations, existence, use, or activities of
Encoal, NuCoal, TEK-KOL, the LFC Property, and/or the Encoal Facilities.
C. Claim Notice. No right to indemnification under this Section 14 shall be
available to an indemnitee with respect to a claim, action, demand, suit or
proceeding to be indemnified hereunder (collectively, "Claim") unless the
indemnitee shall have delivered to the indemnitor, within 10 calendar days of
obtaining any knowledge or information about the Claim, a notice describing in
reasonable detail the facts giving rise to such Claim (a "Claim Notice") and
stating that the indemnitee intends to seek indemnification for such Claim from
the indemnitor pursuant to this Section 14.
D. Defense of Claims. Upon receipt of a Claim Notice from an indemnitee with
respect to any Claim, the indemnitor shall have the right to assume and control
the defense thereof (and any related settlement negotiations) with counsel
reasonably satisfactory to such indemnitee, and the indemnitee shall cooperate
in all reasonable respects in such defense. The indemnitee shall have the right
to employ separate counsel at such indemnitee's expense in any action or claim
and to participate in the defense thereof, provided, however, that the
reasonable fees and expenses of counsel employed by the indemnitee shall be at
the expense of the indemnitor if such counsel is retained pursuant to the
following sentence or if the employment of such counsel has been specifically
authorized in writing by the indemnitor. If the indemnitor does not notify the
indemnitee within thirty (30) days after receipt of the Claim Notice of its
intention to assume the defense of such Claim, the indemnitee shall have the
right to defend the claim with counsel of its choosing reasonably satisfactory
to the indemnitor, subject to the right of the indemnitor to assume the defense
of any claim at any time prior to settlement or final determination thereof.
Notwithstanding anything to the contrary contained in this Section 14.4, (a) the
indemnitee shall have the right to employ separate counsel at its own expense if
there shall be available one or more defenses or one or more counterclaims
available to the indemnitee which conflicts with one or more defenses or one or
more counterclaims available to the indemnitor, and (b) the indemnitor shall not
be entitled to control (but shall be entitled to participate at its own expense
in the defense of), and the indemnitee shall be entitled to have sole control
over, the defense or settlement of any Claim to the extent such Claim seeks an
order, injunction, non-monetary or other equitable relief against the indemnitee
which, if successful, could result in a material adverse effect upon the
business, financial condition, results of operations or assets of the
indemnitee. The indemnitee shall send a written notice to the indemnitor of any
proposed settlement of any claim, which settlement the indemnitor may reject, in
its reasonable judgment, within thirty (30) days of receipt of such notice.
Failure to reject such notice within such 30-day period shall be deemed an
acceptance of such notice.
E. Access and Cooperation. After the Closing Date, SGI and Sellers shall (a)
each cooperate fully with the others as to all Claims, shall make available to
the others, as reasonably requested, all information, records and documents
relating to all Claims and shall preserve all such information, records and
documents until the termination of any Claim, and (b) make available to the
others, as reasonably requested, personnel (including technical and scientific),
agents and other representatives who are responsible for preparing or
maintaining information, records or other documents, or who may have particular
knowledge with respect to any Claim.
XV. COSTS AND EXPENSES. Each party hereto shall bear its own costs related to
this Agreement and the transaction, including its own attorneys fees and any
other costs of any kind.
XVI. GOVERNING LAW. The Agreement shall be governed by and enforced in
accordance with the laws of the State of Wyoming.
XVII. DISPUTE RESOLUTION
A. Negotiation of Disputes and Disagreements. In the event of any dispute,
claim, controversy or disagreement arising out of or relating to the
implementation or performance of this Agreement, which dispute the parties
hereto have been unable to settle or agree upon within a period of ten (10)
calendar days after the dispute or disagreement arises, each party shall
nominate a senior officer of its management to meet at an agreed time and place
not later than ten (10) calendar days after the dispute or disagreement has
arisen to attempt to resolve such dispute or disagreement. Should a resolution
of such dispute or disagreement not be obtained within fifteen (15) calendar
days after the meeting of senior officers for such purpose, either party may
then by notice to the other submit the dispute to binding arbitration in
accordance with the provisions of Section 17.2.
B. Arbitration. Any dispute, claim, controversy or disagreement arising out of
or relating to this Agreement shall be settled by binding arbitration
administered by the American Arbitration Association, under its Commercial
Arbitration Rules then in effect.
The place of arbitration shall be Denver, Colorado.
There shall be three arbitrators, with each party selecting
one neutral arbitrator; the third arbitrator, who shall be the chairman of the
panel, shall be selected by the two party-appointed arbitrators. The claimant
shall name its arbitrator in the demand for arbitration and the responding party
shall name its arbitrator within thirty (30) calendar days after receipt of the
demand for arbitration. The third arbitrator shall be named within thirty (30)
calendar days after the appointment of the second arbitrator. The American
Arbitration Association shall be empowered to appoint any arbitrator not named
in accordance with the procedure set forth herein. Each arbitrator will be
qualified by at least ten (10) years experience with commercial purchase and
sale transactions of this type. Prior to the commencement of hearings, each of
the arbitrators appointed shall provide an oath or undertaking of impartiality.
The decision of the arbitrators shall be final and binding
upon the parties without the right of appeal to the courts. In deciding the
substance of any such claim, dispute or disagreement, the arbitrators shall
apply the substantive laws of the State of Wyoming; provided, however, the
arbitrators shall have no authority to award consequential damages, incidental
or punitive damages under any circumstances (whether it be exemplary damages,
treble damages, or any other penalty or punitive type of damages) regardless of
whether such damages may be available under Wyoming law, the parties hereby
waiving their right, if any, to recover consequential or incidental damages or
punitive damages in connection with any such claims, disputes or disagreements.
The award rendered by the arbitrators shall be final and judgment thereon may be
entered by any court having jurisdiction thereof. The costs and expenses of the
arbitration (including reasonable attorneys' fees) will be borne by the losing
party as determined by the arbitrators, unless the arbitrators determine that it
would be manifestly unfair to honor this agreement of the parties with respect
to awarding such costs and attorneys' fees, and determine a different allocation
of costs and attorneys' fees.
Except as may be required by law, neither a party nor an
arbitrator may disclose the existence, content, or results of any arbitration
hereunder without the prior written consent of all parties to the arbitration.
Arbitration proceedings shall be conducted in English.
XVIII. NOTICES AND REQUESTS. Any notice, demand, or request required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given (i) on the date of delivery, if personally delivered, (ii) three
(3) business days after mailing if mailed by certified or registered mail,
postage prepaid, return receipt requested, (iii) one (1) business day after
delivery to any overnight express courier service, and (iv) on the business day
of receipt if sent by facsimile, provided receipt thereof is confirmed and a
copy thereof is sent in the manner provided in clause (i) above, addressed to
the addressee at the principal office of SGI International, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇▇▇. ▇▇▇▇▇, to Bluegrass at ▇▇▇▇ ▇. ▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and to Americoal at ▇▇▇▇ ▇. ▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇. Any party may change its address for purposes of this Agreement by
written notice given in accordance with this Article.
XIX. INTEGRATION. This Agreement constitutes the entire understanding and
agreement between the parties relating to the subject matter hereof and
supersedes and cancels any prior written or oral understanding or agreement
between the parties relating to the subject matter hereof. This Agreement shall
not be amended, altered or supplemented in any way except by an instrument in
writing, signed by the duly authorized representative of the parties.
XX. ASSIGNMENT; BINDING EFFECT. The rights or obligations of the parties hereby
may not be assigned or delegated in any way without the written consent of the
other party, which it may withhold in its sole and absolute discretion. This
Agreement is binding upon each party hereto, and upon each party's respective
successors and permitted assigns.
XXI. SEVERABILITY. If any provision or term of this Agreement is held to be
invalid, void, or unenforceable the remainder of the provisions shall remain in
full force and effect and shall not be affected, impaired, or invalidated.
XXII. TIME OF ESSENCE. The parties hereto agree that time is of the essence in
the completion of all obligations and activities described herein.
XXIII. NO THIRD-PARTY BENEFICIARIES. There are no third-party beneficiaries to
this Agreement and nothing herein shall confer any rights upon any person or
entity who or which is not a party to this Agreement.
XXIV. COUNTERPARTS. This Agreement may be signed in any number of counterparts
with the same effect as if the signatures to each counterpart were upon a single
instrument, and all such counterparts together shall be deemed to constitute an
original and the same instrument. Faxed signatures shall be deemed to be the
same as original signatures.
[signature page follows]
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives, on the day and year first
written above.
SGI INTERNATIONAL, BLUEGRASS COAL DEVELOPMENT
a Utah corporation COMPANY, a Delaware corporation
By: By:
Name: Name:
Title: Title:
AMERICOAL DEVELOPMENT
COMPANY, a Delaware corporation
By:
Name:
Title:
EXHIBIT A-1 TO ACQUISITION AGREEMENT
See Exhibit 3.2.4B
EXHIBIT 3.1A
TO ACQUISITION AGREEMENT
WAIVER AND RELEASE BY AND BETWEEN
MITSUBISHI HEAVY INDUSTRIES AND AEI RESOURCES
This Waiver and Release ("Release") is entered into effective as of
____________, 1999 ("Effective Date") and is made by Mitsubishi Heavy
Industries, a corporation organized and existing under the laws of Japan
("MHI"), having its principal place of business at ▇-▇ ▇▇▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇ - ▇▇, ▇▇▇▇▇, ▇▇▇▇▇.
RECITALS
A. MHI states that during 1997 it performed for the Encoal Corporation
("Encoal") certain engineering and other work more specifically described on an
Invoice attached hereto as Exhibit A (the "Invoice").
B. The approximately $1.13 million reflected on the Invoice has not been paid.
C. Bluegrass Coal Development Corporation ("Bluegrass") is the owner of one
hundred percent (100%) of the issued and outstanding stock of Encoal.
D. Bluegrass, SGI International ("SGI"), and Americoal Development Company have
entered into an Acquisition Agreement dated as of _____________, 1999 by which,
among other things, Bluegrass agreed to sell all Encoal Stock to SGI. In
connection with the Acquisition Agreement, SGI has agreed to obtain this Release
from MHI.
AGREEMENT
NOW THEREFORE, in consideration of the matters set forth in the
Recitals, and for other good and valuable consideration, the parties hereto
agree as follows:
I. Release by MHI. MHI, for itself and on behalf of its partners, parents,
subsidiaries, affiliates, successors, assigns, officers, directors,
shareholders, employees, attorneys, agents, and representatives hereby generally
and unconditionally releases, acquits and forever discharges Bluegrass, Encoal,
Americoal, AEI Resources, Inc., and any of their respective partners, parents,
subsidiaries, affiliates, successors, assigns, officers, directors,
shareholders, employees, attorneys, agents, and representatives (collectively
the "Released Entities") of and from any and all claims, demands, debts, liens,
causes of action, liability, damages, costs and expenses of any nature
whatsoever, whether arising under state, federal or common law, contract or
tort, or in equity, which MHI has ever had, now has or may have, whether such
are known or unknown, discovered or undiscovered, anticipated or unanticipated,
direct or indirect, contingent or fixed, whether or not asserted heretofore,
relating in any way to the Invoice, or any activities associated with the work
performed in connection with the Invoice.
This Release is intended by MHI to constitute a general release of, and
may be plead as a full and complete defense to, and may be used as the basis for
an injunction against, any action, suit, or other proceeding which may be
instituted, prosecuted, or attempted in breach of this general release.
II. No Admissions. This is a release whose purpose is to release any potential
and actual claims of MHI against the Released Entities.
III. Authority to Execute. MHI represents and warrants, and agrees, on its own
behalf and on behalf of its representatives, predecessors, successors, assigns,
trustees in bankruptcy, and agents, as follows:
A. MHI has full power and authority to execute, deliver, and perform this
Release, and has been duly authorized to do so;
B. MHI has not sold, assigned, or otherwise transferred any interest in the
claims, demands, actions, causes of action or rights that are the subject of
this Release to any person or entity;
C. MHI is validly organized and existing under the laws of the place of its
corporation and is duly authorized to enter into the legal commitments contained
in this Release;
D. The signature and execution of this Release is made and undertaken by an
individual who is authorized to execute this Release.
IV. No Amendment. This Release shall not be modified, amended or revoked except
by a writing that sets forth such changes and that is signed by all parties.
V. Entire Agreement. This Release constitutes the entire agreement and
understanding with respect to the subject matter hereof, and it supersedes all
prior agreements and understandings, both written and oral, concerning such
matters but nothing herein limits the other written agreements executed in
connection with this Release, and all rights herein are in addition to the
rights of the parties under those agreements.
VI. Governing Law. This Release shall be governed and enforced in accordance
with the laws of the State of Wyoming.
VII. Faxed Signatures. Faxed signatures shall be deemed to be the same as
original signatures.
IN WITNESS WHEREOF, MHI has this day and year executed and delivered
this instrument.
MITSUBISHI HEAVY INDUSTRIES
By:
Name:
Title:
EXHIBIT 3.1B
TO ACQUISITION AGREEMENT
SECURED NON-RECOURSE PROMISSORY NOTE
$2,000,000
Principal Sum , 1999
FOR VALUE RECEIVED, SGI International, a Utah corporation ("Maker")
promises to pay to the order of Bluegrass Coal
Development Company and Americoal Development Company (collectively, "Payee"),
at Payee's principal place of business, , the principal sum of $2,000,000,
together with interest on the unpaid principal sum from time to time outstanding
at the prime interest rate charged to corporate borrowers of the highest credit
standing for 90-day unsecured loans, as it may be set from time to time by the
Bank of America NT & SA's office in San Francisco, California; provided that
such interest rate shall not be in excess of the highest rate permitted by law.
The initial interest rate on this Note shall be set at ___ percent (__%). The
interest rate of this Note will be adjusted annually on January 1st of each year
to reflect any changes in the prime interest rate. Interest, based on a 365-day
year, shall be accrued for the number of days the principal sum (or any portion
thereof) is actually outstanding. The entire balance of principal and all
interest accrued thereon shall be paid in full on or before , 2004. [a date five
(5) years from the Closing Date]
This Note is referred to in that certain Acquisition Agreement among
Maker and Payee, and is secured by a security agreement of even date herewith,
executed by the undersigned in favor of Payee, providing for a security interest
in certain royalties of Maker.
All payments on this Note shall be applied first to the payment of
accrued interest, and, after all such interest has been paid, any remainder
shall be applied to reduction of the principal balance. The privilege to prepay
all or any part of the principal sum from time to time without penalty is hereby
reserved to Maker, provided that any such principal prepayment shall be
accompanied by all interest then accrued.
At the option of Payee, the entire unpaid principal sum and all accrued
interest shall become immediately due and payable, without notice or demand,
upon the occurrence of any one or more of the following events of default: (a)
failure of Maker to pay any part of the principal or interest when due; (b) any
default in the performance of any obligation of Maker hereunder or under any
instrument or agreement executed and delivered to secure payment of this Note;
(c) Maker shall be unable, or admit in writing Maker's inability, to pay Maker's
debts, or shall not pay Maker's debts generally as they come due, or shall make
any assignment for the benefit of creditors; (d) Maker shall commence, or there
shall be commenced against Maker, any case, proceeding, or other action seeking
to have an order for relief entered with respect to Maker, or to adjudicate
Maker as a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, liquidation, dissolution, or composition under any law relating to
bankruptcy, insolvency, reorganization, or relief of debtors or seeking
appointment of a receiver, trustee, custodian, or other similar fiduciary, with
respect to any part of Maker's business or property; or (e) Maker defaults on
any other debts, obligations, or liabilities to Payee.
In such event, any part of the principal sum and any accrued interest
then due shall, from and after the date of such default, bear interest at the
rate per annum equal to two percentage points in excess of the rate of interest
herein provided for at the time of default, thereafter compounded annually at
December 31. Maker hereby agrees to pay reasonable attorneys' fees and all other
reasonable costs and expenses incurred, after an event of default, in the
enforcement of this Note, the enforcement of any security interest with respect
to this Note, and the collection of amounts due hereunder, whether such
enforcement or collection is by court action or otherwise.
This Note shall be governed as to validity, interpretation,
construction, effect and in all other respects by the laws and decisions of the
State of Wyoming.
Maker waives demand for payment, presentment for payment, notice of
nonpayment or dishonor, protest and notice of protest, and agrees to any
extension of time of payment and partial payments before, at, or after maturity.
No renewal or extension of this Note, no release or surrender of any security
for this Note, no release of any person liable hereon, no delay in the
enforcement hereof, and no delay or omission in exercising any right or power
hereunder, shall affect the liability of Maker. No delay or omission by Payee in
exercising any power or right hereunder shall impair such right or power or be
construed to be a waiver of any default, nor shall any single or partial
exercise of any power or right hereunder preclude any or full exercise thereof
or the exercise of any other right or power. Each legal holder hereof shall have
and may exercise all the rights and powers given to Payee herein.
Payee shall not have recourse to the assets of Maker, except as
specified in the security agreement described above.
SGI INTERNATIONAL, a Utah corporation
By:
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
By:
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Secretary
EXHIBIT 3.1C
TO ACQUISITION AGREEMENT
SECURITY AGREEMENT
This SECURITY AGREEMENT ("Agreement") is entered into effective as of
this ______ day of ________, 1999 ("Effective Date") by and between SGI
International, a Utah Corporation ("Borrower"), whose principal office is ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and Bluegrass Coal
Development Company, a Delaware corporation, its successors and assigns
("Bluegrass"), whose principal office is and Americoal Development Company
("Americoal") whose principal office is ___________________________.
RECITALS
A. This Agreement is executed as of the effective date set forth above in
conjunction with the Promissory Note executed as of even date herewith between
the parties, unless otherwise indicated.
B. SGI has entered into that certain Acquisition Agreement among SGI, Bluegrass
and Americoal Development Company ("Americoal"), dated April ____, 1999 (the
"Acquisition Agreement"). As part of the Acquisition Agreement, SGI has, among
other things, granted to Bluegrass and Americoal a Promissory Note (the "Note")
for Two Million Dollars ($2,000,000) payable five years from the date of Closing
as defined in the Acquisition Agreement.
C. As a material part of the consideration provided by SGI under the Acquisition
Agreement, SGI has agreed to grant to Bluegrass and Americoal a security
interest in fifty percent of the royalties it receives from licensing the
Commercial LFC Process, as defined in the September 30, 1989 Addendum to the
Partnership Agreement between Bluegrass as successor to Shell Mining Company and
SGI International.
AGREEMENT
For good and valuable consideration, the adequacy and sufficiency of
which is hereby acknowledged, Borrower hereby grants and assigns to Bluegrass a
security interest in all of Borrower's present and future right, title and
interest in and to any and all of the following property, whether such property
is now existing or owned or hereafter created, arising or acquired, wherever
located, in any and all additions and accessions thereto and substitutions
therefor, and in the proceeds from all of same (collectively, the "Collateral"):
Fifty percent of the royalties derived from the sale, assignment,
transfer or other use by third parties of the Commercial LFC Process
(the "Process"). Royalties, as used herein, include without limitation,
all payments, receipts, accounts, shares, fees, or income now or
hereafter due and/or payable under and with respect thereto, including
without limitation, payments under all licenses entered into in
connection therewith and damages and payments for past or future use.
The security interests granted hereby are made to secure payment by
Borrower to Bluegrass of the indebtedness evidenced by the Note. The Collateral
provided by this Agreement shall continue as security for such indebtedness
until Borrower's receipt of a termination statement executed by Bluegrass and
Americoal.
BORROWER EXPRESSLY WARRANTS AND COVENANTS:
VIII. Without limiting the scope of this Agreement, if Bluegrass and Americoal,
in their sole discretion, determine that the Collateral has decreased or
threatens to decrease materially in market value, then Borrower will, within 24
hours of delivery of notice of such determination to Borrower's address as shown
above, grant to Bluegrass a security interest in such additional collateral as
may be reasonably required by Bluegrass and will execute additional financing
statements and security agreements evidencing such additional security
interests.
IX. As to the Collateral, whether now or hereafter acquired, Borrower is or will
be the lawful owner thereof, and does and will have good right to pledge, sell,
assign and transfer the same and grant a security interest therein to Bluegrass
and Americoal, free from any lien, security interest or encumbrance other than
that of Bluegrass and Americoal, and none of such Collateral has been or will be
pledged, assigned, transferred, or in any way encumbered to any person or entity
other than to Bluegrass and Americoal. Borrower will not permit or allow the
Collateral to be attached or replevied and will warrant and defend the
Collateral against all claims and demands of all persons at any time claiming
the same or any interest therein.
X. Borrower is duly organized and existing under the laws of Utah, and is duly
qualified and in good standing in every state in which it is doing business.
XI. Borrower will give Bluegrass and Americoal prior written notice of any
change in the location of its principal office or any change in Borrower's name.
Borrower will keep all records concerning the Collateral at .
XII. The execution, delivery and performance of this Agreement are within
Borrower's powers, have been duly authorized, are not in contravention of law or
the terms of Borrower's charter, by-laws, articles of incorporation, or of any
indenture, agreement or undertaking to which Borrower is a party or by which
Borrower is bound.
XIII. Borrower will at all reasonable times and from time to time assist and
allow Bluegrass and Americoal, by or through any of its officers, agents,
employees, attorneys, or accountants, to examine, inspect, and make copies of
Borrower's books and other records, and instruments or other papers evidencing
any security or other documents and information relating thereto. Borrower will
not sell or transfer any interests in the Collateral without the prior written
consent of Bluegrass and Americoal.
XIV. No financing statement covering the Collateral or any proceeds thereof is
on file in any public office. At the request of Bluegrass and Americoal,
Borrower will execute one or more financing statements or other documents or
procure any document in form satisfactory to Bluegrass and Americoal and will
pay all connected costs, as deemed necessary or desirable by Bluegrass and
Americoal to protect the security interest under this Agreement against the
rights or interests of third persons, including through the filing of any
financing statement, this Agreement, any continuation or termination statement,
or other document in all appropriate public offices. A carbon, photographic or
other reproduction of this Agreement, any other security agreement or a
financing statement is sufficient as a financing statement.
XV. Borrower will pay all taxes and assessments of every nature which may be
levied or assessed against the Collateral.
XVI. Borrower shall fully and faithfully account for, and to take all steps
necessary to enable Bluegrass to perfect its security interest in, the
Collateral and its proceeds granted herein.
XVII. Borrower will not use or permit the use of the Collateral in violation of
any applicable statutes, regulation or ordinances.
XVIII. Upon an event of default hereunder, Bluegrass may at any time notify
licensees of the Commercial LFC Process or others from whom royalties on the
Commercial LFC Process that the Collateral has been assigned to Bluegrass and
Americoal and that amounts due thereon shall be paid to Bluegrass and Americoal.
Borrower agrees to cooperate with and join in any such notification given by
Bluegrass and Americoal. Upon request of Bluegrass and Americoal at any time,
Borrower will so notify such licensees that such royalties are payable to
Bluegrass and Americoal.
XIX. Borrower shall at all times keep the Collateral and royalties separate and
distinct from other property of the Borrower and shall keep accurate and
complete records of the Collateral and royalties. In the event of a default
hereunder, Bluegrass and Americoal shall have full power and is hereby appointed
attorney-in-fact for Borrower to collect, compromise, endorse, sell or otherwise
deal with the Collateral or proceeds thereof in its own name or that of
Borrower. Borrower shall pay to Bluegrass on demand any and all expenses,
including legal expenses and reasonable attorneys' fees incurred or expended by
Bluegrass and/or Americoal in the collection or attempted collection of the
liabilities and indebtedness secured by this Agreement.
XX. In the event this Agreement is placed in the hands of an attorney for
enforcement, Borrower will pay the reasonable attorneys' fees of Bluegrass
and/or Americoal and any and all costs and expenses incurred by Bluegrass and/or
Americoal in recovering possession of the Collateral and in enforcing this
Agreement, and the same shall be secured by this Agreement.
BORROWER SHALL BE IN DEFAULT under this Agreement, after written notice
from Bluegrass to Borrower of a default and Borrower fails within 30 calendar
days thereafter to cure such default, upon the happening of any of the following
events or conditions:
A. default in the payment or performance of the obligations evidenced by the
Note;
B. any warranty, representation or statement made or furnished to Bluegrass and
Americoal by or on behalf of Borrower proves to have been false in any material
respect when made or furnished;
C. any event which results in the acceleration of the maturity of any
indebtedness of Borrower to others under any indenture,
agreement or undertaking;
D. dissolution, termination of existence, merger, consolidation, reorganization,
insolvency, business failure, suspension or liquidation of usual business,
issuance of writ of garnishment or attachment or of notice of tax or other lien
against the property of, appointment of a receiver for any part of the property
of, assignment for the benefit of creditors by, entry of judgment against, or
commencement of any proceeding under any bankruptcy or insolvency laws by or
against Borrower or any guarantor or surety for Borrower; or
E. the good faith determination at any time by Bluegrass and Americoal that the
prospect of its receiving any payment on any obligation secured hereby, that the
performance of any of the terms of this Agreement, or that the possibility of
resorting to the Collateral for the purpose of satisfying any obligation, is
impaired.
UPON ANY SUCH DEFAULT and at any time thereafter, Bluegrass may,
without demand or notice, declare all obligations secured hereby immediately due
and payable and shall have the remedies of a secured party under the applicable
Uniform Commercial Code. Bluegrass and Americoal may require Borrower to
assemble the Collateral and deliver or make it available to Bluegrass and
Americoal at a place to be designated by Bluegrass and Americoal. Bluegrass and
Americoal will give Borrower reasonable notice of the time and place of any
public sale thereof or at the time after which any private sale or any other
intended disposition thereof is to be made. The requirements of reasonable
notice shall be met if such notice is mailed, postage prepaid, to the addresses
of Borrower and Americoal shown at the beginning of this Agreement at least ten
days before the time of the sale or disposition. Expenses of retaking, holding,
preparing for sale, selling or the like shall include Bluegrass' and Americoal's
reasonable attorneys' fees and legal expenses.
No waiver by Bluegrass or Americoal of any right, remedy or event of
default with respect to any of Borrower's obligations shall operate as a waiver
of any other right, remedy or event of default on a future occasion. The rights
of Bluegrass and Americoal under this Agreement shall not waive or impair any
other security Bluegrass or Americoal may have or hereafter acquire for the
payment of any notes, liabilities, or other indebtedness, nor shall the taking
of any such additional security waive the rights of Bluegrass or Americoal under
this Agreement. No waiver, change, modification or discharge of any of
Bluegrass' or Americoal's rights or Borrower's duties as so specified or allowed
will be effective unless contained in a written instrument signed by Bluegrass
and Americoal.
All rights of Bluegrass and Americoal hereunder shall inure to the
benefit of their successors and assigns, and all promises and duties of Borrower
shall bind the heirs, executors, administrators, successors or assigns of
Borrower.
Any notices under or pursuant to this Agreement shall be deemed duly
received by Borrower and effective upon delivery in person to any officer or
agent of Borrower or three calendar days after depositing such notice in the
U.S. Mail, postage prepaid, to the address of Borrower shown at the beginning of
this Agreement.
This Agreement and the transactions it secures shall be governed by the
laws of the State of Wyoming. This Agreement shall become effective when it is
signed by Borrower.
XXI. This Security Agreement, together with the Acquisition Agreement
constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Security Agreement. No alteration of or amendment to
this Security Agreement shall be effective unless given in writing and signed by
the party or parties sought to be charged or bound by the alteration or
amendment.
SGI INTERNATIONAL BLUEGRASS COAL DEVELOPMENT
COMPANY
By: By:
Name: Name:
Title: Title:
AMERICOAL DEVELOPMENT COMPANY
By:
Name:
Title:
EXHIBIT 3.2.2
TO ACQUISITION AGREEMENT
LLC MEMBERSHIP INTEREST ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT is entered into effective as
of the ____ day of ____________, 1999 (the "Effective Date") by and between,
AMERICOAL DEVELOPMENT COMPANY, a Delaware Corporation ("Assignor") and SGI
INTERNATIONAL, a Utah corporation ("Assignee"). ENCOAL CORPORATION, a Delaware
Corporation ("Encoal"), is also a party to this Assignment for the limited
purpose of giving its consent to the Assignment as required under the NuCoal LLC
Operating Agreement.
RECITALS
XXII. Encoal is the owner of fifty percent (50%) of the outstanding membership
interests in NuCoal LLC, a Delaware limited liability company (the "Company")
and Americoal is the owner of fifty percent (50%) of the outstanding membership
interests in NuCoal. Americoal's 50% membership interest in NuCoal is referred
to herein as the "Interest".
XXIII. Pursuant to the laws of the State of Wyoming, Assignor's Interest as a
Member of the Company is deemed to be personal property;
XXIV. Assignor, pursuant to the terms of that certain Acquisition Agreement,
effective as of April ___, 1999 among Assignor, Assignee, and Bluegrass Coal
Development Company, wishes to grant its Interest as a Member of the Company and
assign all of its rights in or connected with its Interest as Member of the
Company to the Assignee.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, other good and valuable consideration, the receipt, adequacy
and sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
▇. ▇▇▇▇▇ and Assignment. Pursuant to Article ____ of the Operating Agreement for
the Company and the terms of this Assignment and Assumption Agreement, and for
value received, Assignor hereby grants, assigns, orders and transfers
(collectively "Assigns") the Interest and all of its rights in or connected with
the Interest to the Assignee. Upon such grant, assignment, order, and transfer
(collectively, "Assignment"), Assignee shall be deemed to be the owner of the
Assignor's rights as Member of the Company with respect to the Interest.
II. Consent of the Remaining Member. Encoal, as the sole remaining member of the
Company, pursuant to the Operating Agreement, hereby gives its consent to
Assignor to Assign the Interest to Assignee, and waives any restrictions,
limitations, or prohibitions on assignment or transfer of the Interest contained
in the Company's Operating Agreement.
III. Waiver and Acknowledgment of Receipt of Notice. Encoal hereby acknowledges
that it has received, or otherwise hereby unanimously waives the receipt of,
written notice from Assignor specifying the terms of its proposed Assignment of
the Interest to Assignee, pursuant to the Operating Agreement.
IV. Assumption of Obligations. Assignor and Assignee unanimously agree that the
Assignment shall relieve Assignor individually from obligations of the Company
accruing on or before the Effective Date hereof with respect to the Interest and
that Assignee shall assume such obligations. As such, concurrent with this
Transfer, Assignor hereby delegates all of its obligations for its debts as a
Member of the Company with respect to the Interest to Assignee, and, concurrent
with this Transfer, Assignee hereby assumes all of the obligations for the debts
of Assignor as a Member of the Company with respect to the Interest.
V. Limitation. Nothing in this Assignment and Assumption Agreement shall be
interpreted to impose in any way additional obligations beyond the obligations
for the debts of Assignor as a Member of the Company immediately prior to the
execution of this Assignment and Assumption Agreement.
VI. Governing Law. This Assignment and Assumption Agreement shall be governed
by, interpreted and enforced in accordance with the laws of the State of
Wyoming.
VII. Severability. If any provision of this Assignment and Assumption Agreement
is held to be illegal, invalid or unenforceable under the present or future laws
in effect during the existence of this Assignment and Assumption Agreement, such
provision will be fully severable; this Assignment and Assumption Agreement will
be construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part of this Assignment and Assumption Agreement; and the
remaining provisions of this Assignment and Assumption Agreement will remain in
full force and effect and will not be affected by the illegal, invalid, or
unenforceable provision or by its severance from this Assignment and Assumption
Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Assignment and
Assumption Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
VIII. Waiver. A party's failure to insist on compliance or enforcement of any
provisions of this Assignment and Assumption Agreement shall not affect the
validity or enforceability or constitute a waiver of future enforcement of that
provision or any other provision of this Assignment and Assumption Agreement by
that party or any other party.
IX. Multiple Counterparts. This Assignment and Assumption Agreement may be
executed in several counterparts, each of which will be deemed an original but
all of which will constitute one and the same instrument. However, in making
proof hereof it will be necessary to produce only one copy hereof signed by the
party to be charged.
X. Survival. Notwithstanding any subsequent amendment to the Operating Agreement
of the Company, this Assignment and Assumption Agreement shall remain in full
force and effect.
IN WITNESS WHEREOF, the Parties have executed this Assignment and
Assumption Agreement effective as of the Effective Date.
SGI INTERNATIONAL, AMERICOAL DEVELOPMENT
a Utah corporation COMPANY, a Delaware corporation
By: By:
Name: Name:
Title: Title:
ENCOAL CORPORATION, a Delaware corporation
By:
Name:
Title:
EXHIBIT 3.2.3
TO ACQUISITION AGREEMENT
PARTNERSHIP INTEREST ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT is entered into effective as
of the ______ day of __________, 1999 (the "Effective Date") by and between,
BLUEGRASS COAL DEVELOPMENT COMPANY, a Delaware Corporation ("Assignor") and SGI
INTERNATIONAL, a Utah corporation, ("Assignee").
RECITALS
XI. Assignor is the owner of fifty percent (50%) of the outstanding general
partnership interests in the TEK-KOL Partnership, a California general
partnership (the "Partnership"), and Assignee is the owner of the other fifty
percent (50%) of the outstanding general partnership interests in the
Partnership. Assignor's 50% partnership interest in the Partnership is referred
to herein as the "Interest".
XII. Pursuant to the laws of the State of Wyoming, Assignor's Interest as a
Partner is deemed to be personal property;
XIII. Assignor, pursuant to the terms of that certain Acquisition Agreement
effective as of April ___, 1999 among Assignor, Assignee, and Americoal
Development Company, wishes to grant its Interest as a Partner in the
Partnership and assign all of its rights in or connected with such Interest to
the Assignee.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, other good and valuable consideration, the receipt, adequacy
and sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
▇. ▇▇▇▇▇ and Assignment. Pursuant to Article ____ of the Partnership Agreement
and the terms of this Assignment and Assumption Agreement, and for value
received, Assignor hereby grants, assigns, orders and transfers (collectively
"Assigns") the Interest and all of its rights in or connected with the Interest
to the Assignee. Upon such grant, assignment, order, and transfer (collectively,
"Assignment"), Assignee shall be deemed to be the owner of the Assignor's rights
as a Partner with respect to the Interest.
II. Waiver. Assignor and Assignee, as the sole general partners in the
Partnership, hereby agree to waive any restrictions, limitations, or
prohibitions on Assignor's right to transfer or assign the Interest to Assignee.
III. Assumption of Obligations. Assignor and Assignee unanimously agree that
this Assignment shall relieve Assignor individually from obligations of the
Partnership accruing on or before the Effective Date hereof with respect to the
Interest and that Assignee shall assume such obligations. As such, concurrent
with this Transfer, Assignor hereby delegates all of its obligations for its
debts as a Partner in the Partnership with respect to the Interest to Assignee,
and, concurrent with this Transfer, Assignee hereby assumes all of the
obligations for the debts of Assignor as a Partner with respect to the Interest.
IV. Limitation. Nothing in this Assignment and Assumption Agreement shall be
interpreted to impose in any way additional obligations beyond the obligations
for the debts of Assignor as a Partner immediately prior to the execution of
this Assignment and Assumption Agreement.
V. Governing Law. This Assignment and Assumption Agreement shall be governed by,
interpreted and enforced in accordance with the laws of the State of Wyoming.
VI. Severability. If any provision of this Assignment and Assumption Agreement
is held to be illegal, invalid or unenforceable under the present or future laws
in effect during the existence of this Assignment and Assumption Agreement, such
provision will be fully severable; this Assignment and Assumption Agreement will
be construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part of this Assignment and Assumption Agreement; and the
remaining provisions of this Assignment and Assumption Agreement will remain in
full force and effect and will not be affected by the illegal, invalid, or
unenforceable provision or by its severance from this Assignment and Assumption
Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Assignment and
Assumption Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
VII. Waiver. A party's failure to insist on compliance or enforcement of any
provisions of this Assignment and Assumption Agreement shall not affect the
validity or enforceability or constitute a waiver of future enforcement of that
provision or any other provision of this Assignment and Assumption Agreement by
that party or any other party.
VIII. Multiple Counterparts. This Assignment and Assumption Agreement may be
executed in several counterparts, each of which will be deemed an original but
all of which will constitute one and the same instrument. However, in making
proof hereof it will be necessary to produce only one copy hereof signed by the
party to be charged.
IX. Survival. Notwithstanding any subsequent amendment to the Partnership
Agreement, this Assignment and Assumption Agreement shall remain in full force
and effect.
IN WITNESS WHEREOF, the Parties have executed this Assignment and Assumption
Agreement effective as of the Effective Date.
SGI INTERNATIONAL, BLUEGRASS COAL DEVELOPMENT
a Utah corporation COMPANY, a Delaware corporation
By: By:
Name: Name:
Title: Title:
EXHIBIT 3.2.4A
TO ACQUISITION AGREEMENT
▇▇▇▇ OF SALE WITH WARRANTY OF TITLE
Bluegrass Coal Development Company, a Delaware corporation
("Bluegrass"), located at ________________, in consideration for the payments
and covenants made, and obligations and liabilities assumed, by SGI
International as described in that certain Acquisition Agreement among SGI
International, Bluegrass and Americoal Development Company dated April ___,
1999, the receipt of which is hereby acknowledged, hereby sells to SGI
International any right, title or interest which Bluegrass may have, as a
general partner of the TEK-KOL Partnership, a California general partnership
("TEK-KOL"), in and to any tangible property owned by TEK-KOL, wherever located.
This ▇▇▇▇ of Sale shall be effective as to the transfer of any right,
title or interest which Bluegrass may have in and to the tangible property
described herein as of the date set forth below.
This ▇▇▇▇ of Sale is executed ______________________, 1999.
BLUEGRASS COAL DEVELOPMENT COMPANY, a Delaware company
By:
Name:
Title:
ASSIGNMENT
Assignor: TEK-KOL, a general partnership, having its principal place of
business at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Assignee: SGI International, a corporation of the State of Utah, having its
principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Invention: ?Process for Treating Noncaking, Noncoking Coal to form Char with
Process Derived Gaseous Fuel having a Variably
Controllable Calorific Heating Value?, for which a patent application was
filed on March 11, 1993, as U.S. Patent Application
Serial No. 08/219,529; Patent granted March 28, 1995 as No. 5,401,364.
1) The Invention has previously been assigned by the inventors to SGI
International by way of an Assignment recorded in the United States
Patent and Trademark Office on March 11, 1993 on Reel 6468 at Frame
0961.
2) The invention has previously been assigned by SGI International to
TEK-KOL by way of an Assignment recorded in the United States Patent
and Trademark Office on November 1, 1995 on Reel 7709 at Frame 0665.
3) In consideration of the sum of one dollar ($1.00) and other good and
valuable consideration paid to the above-named Assignor, Assignor
hereby assigns to Assignee all of Assignor?s worldwide right, title and
interest in the Invention, free and clear of all liens and encumbrances
and including all rights to recover for past acts of infringement.
4) Assignor shall:
a) Execute all papers necessary in connection with the Invention and any
continuing, continuation-in-part, or
divisional application thereof;
b) Execute separate assignments in connection with such
continuing, continuation-in-part, or divisional application as
Assignee deems necessary or expedient;
c) Execute all papers necessary in connection with any
interference which may be declared concerning the Invention of
any continuation, continuation-in-part, or divisional
application thereof;
d) Cooperate with Assignee in every way possible in obtaining evidence
and going forward with such interference;
e) Execute all papers and documents, and perform any act which
may be necessary in connection with the claims or provisions
of the International Convention for Protection of Industrial
Property or similar agreements; and
f) Perform all affirmative acts which may be necessary to obtain
a grant of a valid United States patent to Assignee for the
Invention.
5) Assignor hereby:
a) Authorizes and requests the Commissioner of Patents to issue
to Assignee any and all Letters Patents of the United States
resulting from the Invention or any continuation,
continuation-in-part, or divisional applications thereof;
b) Covenants that it has full right to convey the entire interest
herein assigned, and that it has not executed (except as
described herein), and shall not execute, any agreement in
conflict with this instrument, and that it is the true and
only owner of the Invention.
6) Assignor hereby grants to the following persons the power to insert on this
assignment any further identification which may be necessary or
desirable in order to comply with the rules of the United States Patent
and Trademark Office for recordation of this document;
▇▇▇▇ ▇▇▇▇ -Reg. No. 29,554 and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ -Reg. No. 31,678
TEK-KOL Partnership
------------------
Dated:________________ By: ▇▇▇▇ ▇. ▇▇▇▇
ASSIGNMENT
Assignor: TEK-KOL, a general partnership, having its principal place of
business at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Assignee: SGI International, a corporation of the State of Utah, having its
principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Invention: ?Process and Apparatus for Igniting a Burner in an Inert
Atmosphere?, for which a patent application was filed on
May24, 1993, as U.S. Patent Application Serial No. 66,345; Patent granted
December 13, 1994 as No. 5,372,497.
1) The Invention has previously been assigned by the inventors to SGI
International by way of an Assignment recorded in the United States
Patent and Trademark Office on May 24, 1993 on Reel 6648 at Frame 0567.
2) The invention has previously been assigned by SGI International to
TEK-KOL by way of an Assignment recorded in the United States Patent
and Trademark Office on November 1, 1995 on Reel 7709 at Frame 0931.
3) In consideration of the sum of one dollar ($1.00) and other good and
valuable consideration paid to the above-named Assignor, Assignor
hereby assigns to Assignee all of Assignor?s worldwide right, title and
interest in the Invention, free and clear of all liens and encumbrances
and including all rights to recover for past acts of infringement.
4) Assignor shall:
a) Execute all papers necessary in connection with the Invention and any
continuing, continuation-in-part, or
divisional application thereof;
b) Execute separate assignments in connection with such
continuing, continuation-in-part, or divisional application as
Assignee deems necessary or expedient;
c) Execute all papers necessary in connection with any
interference which may be declared concerning the Invention of
any continuation, continuation-in-part, or divisional
application thereof;
d) Cooperate with Assignee in every way possible in obtaining evidence
and going forward with such interference;
e) Execute all papers and documents, and perform any act which
may be necessary in connection with the claims or provisions
of the International Convention for Protection of Industrial
Property or similar agreements; and
f) Perform all affirmative acts which may be necessary to obtain
a grant of a valid United States patent to Assignee for the
Invention.
5) Assignor hereby:
a) Authorizes and requests the Commissioner of Patents to issue
to Assignee any and all Letters Patents of the United States
resulting from the Invention or any continuation,
continuation-in-part, or divisional applications thereof;
b) Covenants that it has full right to convey the entire interest
herein assigned, and that it has not executed (except as
described herein), and shall not execute, any agreement in
conflict with this instrument, and that it is the true and
only owner of the Invention.
6) Assignor hereby grants to the following persons the power to insert on this
assignment any further identification which may
be necessary or desirable in order to comply with the rules of the United
States Patent and Trademark Office for recordation
of this document; ▇▇▇▇ ▇▇▇▇ -Reg. No. 29,554 and
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ -Reg. No. 31,678
TEK-KOL Partnership
------------------
Dated:________________ By: ▇▇▇▇ ▇. ▇▇▇▇
ASSIGNMENT
Assignor: TEK-KOL, a general partnership, having its principal place of
business at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Assignee: SGI International, a corporation of the State of Utah, having
its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Invention: ?Process for Passivation of Reactive Coal Char?, for which a patent
application was filed on September 8, 1995, as U.S. Patent Application
Serial No. 525,235; Patent granted January 27, 1998 as No. 5,711,769.
1) The Invention has previously been assigned by the inventors to TEK-KOL
by way of an Assignment recorded in the United States Patent and
Trademark Office on October 16, 1995 on Reel 7689 at Frame 0768.
2) In consideration of the sum of one dollar ($1.00) and other good and
valuable consideration paid to the above-named Assignor, Assignor
hereby assigns to Assignee all of Assignor?s worldwide right, title and
interest in the Invention, free and clear of all liens and encumbrances
and including all rights to recover for past acts of infringement.
3) Assignor shall:
a) Execute all papers necessary in connection with the Invention and
any continuing, continuation-in-part, or
divisional application thereof;
b) Execute separate assignments in connection with such
continuing, continuation-in-part, or divisional application as
Assignee deems necessary or expedient;
c) Execute all papers necessary in connection with any
interference which may be declared concerning the Invention of
any continuation, continuation-in-part, or divisional
application thereof;
d) Cooperate with Assignee in every way possible in obtaining evidence
and going forward with such interference;
e) Execute all papers and documents, and perform any act which
may be necessary in connection with the claims or provisions
of the International Convention for Protection of Industrial
Property or similar agreements; and
f) Perform all affirmative acts which may be necessary to obtain
a grant of a valid United States patent to Assignee for the
Invention.
4) Assignor hereby:
a) Authorizes and requests the Commissioner of Patents to issue
to Assignee any and all Letters Patents of the United States
resulting from the Invention or any continuation,
continuation-in-part, or divisional applications thereof;
b) Covenants that it has full right to convey the entire interest
herein assigned, and that it has not executed (except as
described herein), and shall not execute, any agreement in
conflict with this instrument, and that it is the true and
only owner of the Invention.
5) Assignor hereby grants to the following persons the power to
insert on this assignment any further identification which may
be necessary or desirable in order to comply with the rules of the
United States Patent and Trademark Office for recordation
of this document; ▇▇▇▇ ▇▇▇▇ -Reg. No. 29,554 and
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ -Reg. No. 31,678
TEK-KOL Partnership
------------------
Dated:________________ By: ▇▇▇▇ ▇. ▇▇▇▇
ASSIGNMENT
Assignor: TEK-KOL, a general partnership, having its principal place of
business at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Assignee: SGI International, a corporation of the State of Utah, having
its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Invention: ?Pyrolysis Process Water Utilization? for which a patent
application was filed on July 18, 1994, as U.S. Patent
Application Serial No. 276,319; Patent granted August 20, 1996 as No. 5,547,548.
1) The Invention has previously been assigned by the inventors to TEK-KOL
by way of an Assignment recorded in the United States Patent and
Trademark Office on July 18, 1994 on Reel 7085 at Frame 0230.
2) In consideration of the sum of one dollar ($1.00) and other good and
valuable consideration paid to the above-named Assignor, Assignor
hereby assigns to Assignee all of Assignor?s worldwide right, title and
interest in the Invention, free and clear of all liens and encumbrances
and including all rights to recover for past acts of infringement.
3) Assignor shall:
a) Execute all papers necessary in connection with the Invention
and any continuing, continuation-in-part, or
divisional application thereof;
b) Execute separate assignments in connection with such
continuing, continuation-in-part, or divisional application as
Assignee deems necessary or expedient;
c) Execute all papers necessary in connection with any
interference which may be declared concerning the Invention of
any continuation, continuation-in-part, or divisional
application thereof;
d) Cooperate with Assignee in every way possible in obtaining evidence
and going forward with such interference;
e) Execute all papers and documents, and perform any act which
may be necessary in connection with the claims or provisions
of the International Convention for Protection of Industrial
Property or similar agreements; and
f) Perform all affirmative acts which may be necessary to obtain
a grant of a valid United States patent to Assignee for the
Invention.
4) Assignor hereby:
a) Authorizes and requests the Commissioner of Patents to issue
to Assignee any and all Letters Patents of the United States
resulting from the Invention or any continuation,
continuation-in-part, or divisional applications thereof;
b) Covenants that it has full right to convey the entire interest
herein assigned, and that it has not executed (except as
described herein), and shall not execute, any agreement in
conflict with this instrument, and that it is the true and
only owner of the Invention.
5) Assignor hereby grants to the following persons the power to
insert on this assignment any further identification which may
be necessary or desirable in order to comply with the rules of the
United States Patent and Trademark Office for recordation
of this document; ▇▇▇▇ ▇▇▇▇ -Reg. No. 29,554 and
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ -Reg. No. 31,678
TEK-KOL Partnership
------------------
Dated:________________ By: ▇▇▇▇ ▇. ▇▇▇▇
ASSIGNMENT
Assignor: TEK-KOL, a general partnership, having its principal place of
business at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇,
▇▇ ▇▇▇▇▇.
Assignee: SGI International, a corporation of the State of Utah, having
its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Invention: ?Method and Apparatus for Removing Particulate and Gaseous
Pollutants from a Gas Stream? for which a patent
application was filed on November 4, 1994, as U.S. Patent Application
Serial No. 334,595; Patent granted December
10, 1996 as No. 5,582,807.
1) The Invention has previously been assigned by the inventors to TEK-KOL
by way of an Assignment recorded in the United States Patent and
Trademark Office on January 13, 1995 on Reel 7310 at Frame 0920.
2) In consideration of the sum of one dollar ($1.00) and other good and
valuable consideration paid to the above-named Assignor, Assignor
hereby assigns to Assignee all of Assignor?s worldwide right, title and
interest in the Invention, free and clear of all liens and encumbrances
and including all rights to recover for past acts of infringement.
3) Assignor shall:
a) Execute all papers necessary in connection with the Invention
and any continuing, continuation-in-part, or
divisional application thereof;
b) Execute separate assignments in connection with such
continuing, continuation-in-part, or divisional application as
Assignee deems necessary or expedient;
c) Execute all papers necessary in connection with any
interference which may be declared concerning the Invention of
any continuation, continuation-in-part, or divisional
application thereof;
d) Cooperate with Assignee in every way possible in obtaining evidence
and going forward with such interference;
e) Execute all papers and documents, and perform any act which
may be necessary in connection with the claims or provisions
of the International Convention for Protection of Industrial
Property or similar agreements; and
f) Perform all affirmative acts which may be necessary to obtain
a grant of a valid United States patent to Assignee for the
Invention.
4) Assignor hereby:
a) Authorizes and requests the Commissioner of Patents to issue
to Assignee any and all Letters Patents of the United States
resulting from the Invention or any continuation,
continuation-in-part, or divisional applications thereof;
b) Covenants that it has full right to convey the entire interest
herein assigned, and that it has not executed (except as
described herein), and shall not execute, any agreement in
conflict with this instrument, and that it is the true and
only owner of the Invention.
5) Assignor hereby grants to the following persons the power to
insert on this assignment any further identification which may
be necessary or desirable in order to comply with the rules of the
United States Patent and Trademark Office for recordation
of this document; ▇▇▇▇ ▇▇▇▇ -Reg. No. 29,554 and
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ -Reg. No. 31,678
TEK-KOL Partnership
------------------
Dated:________________ By: ▇▇▇▇ ▇. ▇▇▇▇
ASSIGNMENT
Assignor: TEK-KOL, a general partnership, having its principal
place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇,
▇▇ ▇▇▇▇▇.
Assignee: SGI International, a corporation of the State of Utah,
having its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Invention: ?Process for Treating Noncaking Coal to Form Passivated Char?
for which an application was filed on December 1,
1995, as U.S. Patent Application Serial No. 565,851; Patent granted
February 11, 1997 as No. 5,601,692.
1) The Invention has previously been assigned by the inventors to TEK-KOL
by way of an Assignment recorded in the United States Patent and
Trademark Office on December 1, 1995 on Reel 7823 at Frame 0891.
2) In consideration of the sum of one dollar ($1.00) and other good and
valuable consideration paid to the above-named Assignor, Assignor
hereby assigns to Assignee all of Assignor?s worldwide right, title and
interest in the Invention, free and clear of all liens and encumbrances
and including all rights to recover for past acts of infringement.
3) Assignor shall:
a) Execute all papers necessary in connection with the Invention and
any continuing, continuation-in-part, or
divisional application thereof;
b) Execute separate assignments in connection with such
continuing, continuation-in-part, or divisional application as
Assignee deems necessary or expedient;
c) Execute all papers necessary in connection with any
interference which may be declared concerning the Invention of
any continuation, continuation-in-part, or divisional
application thereof;
d) Cooperate with Assignee in every way possible in obtaining evidence
and going forward with such interference;
e) Execute all papers and documents, and perform any act which
may be necessary in connection with the claims or provisions
of the International Convention for Protection of Industrial
Property or similar agreements; and
f) Perform all affirmative acts which may be necessary to obtain
a grant of a valid United States patent to Assignee for the
Invention.
4) Assignor hereby:
a) Authorizes and requests the Commissioner of Patents to issue
to Assignee any and all Letters Patents of the United States
resulting from the Invention or any continuation,
continuation-in-part, or divisional applications thereof;
b) Covenants that it has full right to convey the entire interest
herein assigned, and that it has not executed (except as
described herein), and shall not execute, any agreement in
conflict with this instrument, and that it is the true and
only owner of the Invention.
5) Assignor hereby grants to the following persons the power to insert on
this assignment any further identification which may
be necessary or desirable in order to comply with the rules of the
United States Patent and Trademark Office for recordation
of this document; ▇▇▇▇ ▇▇▇▇ -Reg. No. 29,554 and
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ -Reg. No. 31,678
TEK-KOL Partnership
------------------
Dated:________________ By: ▇▇▇▇ ▇. ▇▇▇▇
ASSIGNMENT
Assignor: TEK-KOL, a general partnership, having its principal place of
business at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇,
▇▇ ▇▇▇▇▇.
Assignee: SGI International, a corporation of the State of Utah,
having its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Invention: ?Lean Fuel Combustion Control Method? for which an application
was filed on October 30, 1995, as U.S. Patent
Application Serial No. 550,535; Patent granted March 24, 1998 as No. 5,730,069.
1) The Invention has previously been assigned by the inventors to TEK-KOL
by way of an Assignment recorded in the United States Patent and
Trademark Office on October 30, 1995 on Reel 7760 at Frame 0385.
2) In consideration of the sum of one dollar ($1.00) and other good and
valuable consideration paid to the above-named Assignor, Assignor
hereby assigns to Assignee all of Assignor?s worldwide right, title and
interest in the Invention, free and clear of all liens and encumbrances
and including all rights to recover for past acts of infringement.
3) Assignor shall:
a) Execute all papers necessary in connection with the Invention
and any continuing, continuation-in-part, or
divisional application thereof;
b) Execute separate assignments in connection with such
continuing, continuation-in-part, or divisional application as
Assignee deems necessary or expedient;
c) Execute all papers necessary in connection with any
interference which may be declared concerning the Invention of
any continuation, continuation-in-part, or divisional
application thereof;
d) Cooperate with Assignee in every way possible in obtaining evidence
and going forward with such interference;
e) Execute all papers and documents, and perform any act which
may be necessary in connection with the claims or provisions
of the International Convention for Protection of Industrial
Property or similar agreements; and
f) Perform all affirmative acts which may be necessary to obtain
a grant of a valid United States patent to Assignee for the
Invention.
4) Assignor hereby:
a) Authorizes and requests the Commissioner of Patents to issue
to Assignee any and all Letters Patents of the United States
resulting from the Invention or any continuation,
continuation-in-part, or divisional applications thereof;
b) Covenants that it has full right to convey the entire interest
herein assigned, and that it has not executed (except as
described herein), and shall not execute, any agreement in
conflict with this instrument, and that it is the true and
only owner of the Invention.
5) Assignor hereby grants to the following persons the power to
insert on this assignment any further identification which may
be necessary or desirable in order to comply with the rules of the
United States Patent and Trademark Office for recordation
of this document; ▇▇▇▇ ▇▇▇▇ -Reg. No. 29,554 and
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ -Reg. No. 31,678
TEK-KOL Partnership
------------------
Dated:________________ By: ▇▇▇▇ ▇. ▇▇▇▇
EXHIBIT 3.2.4C
ASSIGNMENT OF PERMITS FROM BLUEGRASS COAL DEVELOPMENT COMPANY TO
SGI INTERNATIONAL
There are no permits pertaining to the LFC business in the names
of Bluegrass or Americoal
EXHIBIT 3.2.4D
TO ACQUISITION AGREEMENT
ASSIGNMENT BY BLUEGRASS COAL DEVELOPMENT COMPANY
TO SGI INTERNATIONAL
This Assignment is made effective as of ___________, 1999, between
Bluegrass Coal Development Company, a Delaware Corporation ("Bluegrass" or
"Assignor") and SGI International, a Utah corporation ("SGI" or "Assignee").
RECITALS
A. Bluegrass, SGI, and Americoal Development Company are parties to that certain
Acquisition Agreement dated April ___, 1999 ("Agreement").
B. Bluegrass and SGI each own a 50% general partnership interest in the TEK-KOL
Partnership, a California general partnership ("TEK-KOL").
C. Pursuant to the Agreement, Bluegrass has agreed to sell to SGI any rights
which Bluegrass may have in any intangible property owned by TEK-KOL and in
certain engineering plans.
ASSIGNMENT OF BLUEGRASS LFC INTERESTS
NOW, THEREFORE, in consideration of the above Recitals, Bluegrass
hereby irrevocably assigns, sets over, transfers and conveys any right, title
and interest it may have in the following:
X. Any intangible property, including any intellectual property rights,
owned by TEK-KOL; and
XI. Any rights which Bluegrass may have in engineering drawings, plans,
specifications, engineering information and data for construction of an LFC
Plant (as defined in the 9/30/89 Addendum to the TEK-KOL Partnership Agreement
dated 9/30/89) (collectively, "Engineering Plans").
This Assignment is executed _________________, 1999.
BLUEGRASS COAL DEVELOPMENT COMPANY
By:
Name:
Title:
ACCEPTANCE
SGI International hereby accepts the Assignment of Bluegrass's
interests as described above.
This Acceptance is executed on ____________, 1999.
SGI INTERNATIONAL, a Utah corporation
By:
Name:
Title:
EXHIBIT 3.3
TO ACQUISITION AGREEMENT
MUTUAL GENERAL RELEASE
This Mutual General Release (the "Release") is made and entered into
effective as of the ____ day of _________, 1999 (the "Effective Date"), by and
between, SGI International, a Utah corporation ("SGI"), and Bluegrass Coal
Development Company, a Delaware corporation ("Bluegrass"), and Americoal
Development Company, a Delaware Corporation ("Americoal") with reference to the
following facts:
RECITALS
A. Bluegrass is the owner of one hundred percent (100%) of the issued and
outstanding stock ("Encoal Stock") of Encoal Corporation, a Delaware corporation
("Encoal"). Encoal owns a coal upgrading facility (the "Encoal Facilities")
located at Triton Coal Company LLC's Buckskin Mine site near Gillette, Wyoming.
The Encoal Facilities are, as of the Effective Date, not in operation.
B. Encoal is the owner of fifty percent (50%) of the outstanding membership
interests in NuCoal LLC, a Delaware limited liability company ("NuCoal") and
Americoal is the owner of fifty percent (50%) of the outstanding membership
interests in NuCoal. Encoal's and Americoal's membership interests in NuCoal are
collectively referred to herein as the "Membership Interests" and Americoal's
50% membership interest in NuCoal is referred to herein as the "Americoal
Membership Interest".
C. Bluegrass is also the owner of fifty percent (50%) of the general partnership
interests ("Partnership Interest") in the TEK-KOL Partnership, a California
general partnership ("TEK-KOL"). SGI is the owner of the other fifty percent
(50%) general partnership interest in TEK-KOL.
D. TEK-KOL has been terminated and is in the process of winding-up its affairs
and liquidating its assets.
E. SGI is a research and development company which has proprietary technologies
that it is attempting to market in the United States and overseas.
F. TEK-KOL and Shell Mining Company ("SMC") are also parties to a License dated
September 30, 1989 with respect to TEK-KOL's license of certain technology and
intellectual property rights to SMC for the design, construction and operation
of the Encoal Facilities ("SMC License").
G. Bluegrass has agreed to sell to SGI, by that certain Acquisition Agreement
executed on April ___, 1999 ("Acquisition Agreement"), the Encoal Stock, its
Partnership Interest in TEK-KOL, and its rights in and to the LFC Property
(defined in the Acquisition Agreement). Americoal has agreed to sell to SGI, by
that Acquisition Agreement, the Americoal Membership Interest in NuCoal, and SGI
has agreed to purchase, by that certain Acquisition Agreement, all of the
foregoing, on the terms thereof. Further, the parties desire SGI to assume
and/or be solely liable for, and to release (or obtain releases of) Bluegrass,
Americoal and each of their respective shareholders, parents, affiliates and
their respective officers, directors, employees and agents ("Bluegrass
Entities") from all obligations and liabilities arising with respect to Encoal,
NuCoal, TEK-KOL, the LFC Property, the SMC License, and the Encoal Facilities,
as more specifically set forth herein. Further, Bluegrass and Americoal have
agreed to release SGI from certain obligations and liabilities as set forth
herein.
AGREEMENT
NOW, THEREFORE, in consideration of the matters set forth in the
Recitals and for other good and valuable consideration the parties hereto agree
as follows:
XII. Release by SGI. SGI, for itself and on behalf of its partners, parents,
subsidiaries, affiliates, successors, assigns, officers, directors,
shareholders, employees, attorneys, agents, and representatives hereby generally
and unconditionally release, acquit and forever discharge the Bluegrass Entities
of and from any and all claims, demands, debts, liens, causes of action,
liability, damages, costs and expenses of any nature whatsoever, whether arising
under state, federal or common law, contract or tort, or in equity, which SGI
has ever had, now has or may have, whether such are known or unknown, discovered
or undiscovered, anticipated or unanticipated, direct or indirect, contingent or
fixed, whether or not asserted heretofore, whether existing now or arising in
the future, relating in any way to Encoal, NuCoal, the Encoal Facilities, the
LFC Property, TEK-KOL, and/or the SMC License, including without limitation any
activities, operations, performance, licensing, sale, commercialization, or use
of or by any of the foregoing. This Release is intended by SGI to constitute a
general release of and may be plead as a full and complete defense to, and may
be used as the basis for an injunction against, any action, suit or other
proceeding which may be instituted, prosecuted, or attempted in breach of this
general release. SGI, as a partner of TEK-KOL, hereby agrees with Bluegrass,
successor in interest to SMC, to the termination of the SMC License and the
release of all rights and obligations accruing to either party thereunder.
XIII. Release by Bluegrass Entities. The Bluegrass Entities, for themselves and
on behalf of their partners, parents, subsidiaries, affiliates, successors,
assigns, officers, directors, shareholders, employees, attorneys, agents, and
representatives hereby generally and unconditionally release, acquit and forever
discharge SGI of and from any and all claims, demands, debts, liens, causes of
action, liability, damages, costs and expenses of any nature whatsoever, whether
arising under state, federal or common law, contract or tort, or in equity,
which the Bluegrass Entities have ever had, now have or may have, whether such
are known or unknown, discovered or undiscovered, anticipated or unanticipated,
direct or indirect, contingent or fixed, whether or not asserted heretofore
whether existing now or arising in the future relating in any way to Encoal,
NuCoal, the Encoal Facilities, the LFC Property, TEK-KOL, and/or the SMC
License, including without limitation any activities, operations, performance,
licensing, sale, commercialization, or use of or by any of the foregoing. This
Release is intended by the Bluegrass Entities to constitute a general release
and may be plead as full and complete defenses to, and may be used as the basis
for an injunction against, any action, suit or other proceeding which may be
instituted, prosecuted, or attempted in breach of this general release.
XIV. No Admissions. The parties hereby acknowledge and agree that this is a
Release whose purpose is to release any potential and actual claims of any party
hereto against the other and is not in any respect nor for any purpose to be
deemed or construed to be, or in any way to be used as evidence of any admission
or concession of any liability whatsoever on the part of any of them to the
other.
XV. Authority to Execute. Each of the parties hereto severally represents and
warrants, and agrees, on its own behalf and on behalf of its representatives,
predecessors, successors, assigns, trustees in bankruptcy, and agents, as
follows:
A. Each party has full power and authority to execute, deliver, and perform
this Release, and has been duly authorized to do so;
B. Neither Party has sold, assigned, or otherwise transferred any interest in
any claim, demand, action, cause of action or right that is the subject of this
Release to any person or entity;
C. Each party to this Agreement is validly organized and existing under the laws
of the place of its corporation and is duly authorized to enter into the legal
commitments contained in this Release;
D. The signature and execution of this Release is made and undertaken by an
individual who is authorized to execute this Release.
XVI. No Amendment. This Release shall not be modified, amended or revoked except
by a writing that sets forth such changes and that is signed by all parties.
XVII. Entire Agreement. This Release constitutes the entire agreement and
understanding among the parties with respect to the subject matter hereof, and
it supersedes all prior agreements and understandings, both written and oral,
concerning such matters but nothing herein limits the other written agreements
executed in connection with to this Release and all rights herein are in
addition to the rights of the parties under those agreements.
XVIII. Governing Law. This Release shall be governed and enforced in accordance
with the laws of the State of Wyoming.
XIX. Counterparts. This Release may be signed in any number of counterparts with
the same effect as if the signatures to each counterpart were upon a single
instrument, and all such counterparts together shall be deemed to constitute an
original and the same instrument. Faxed signatures shall be deemed to be the
same as original signatures.
IN WITNESS WHEREOF, the parties have this day and year executed and
delivered this instrument.
This Mutual General Release is executed , ▇▇▇▇.
▇▇▇ INTERNATIONAL BLUEGRASS COAL DEVELOPMENT
COMPANY
By: By:
Name: Name:
Title: Title:
AMERICOAL DEVELOPMENT COMPANY
By:
Name:
Title:
EXHIBIT 5.1.11 TO ACQUISITION AGREEMENT
None
EXHIBIT 5.1.10 TO ACQUISITION AGREEMENT
Office Equipment and Computers
Mobile Equipment
Intellectual Property - engineering and files
Plant Drawing and Specifications lists
Encoal Plant and Related Facilities
EXHIBIT 10 TO ACQUISITION AGREEMENT
TERMINATION RELEASE
This Termination Release (the "Release") is made and entered into
effective as of the ____ day of _________, 1999 (the "Effective Date"), by and
between, SGI International, a Utah corporation ("SGI"), and Bluegrass Coal
Development Company, a Delaware corporation ("Bluegrass"); and Americoal
Development Company, a Delaware Corporation ("Americoal") ("Bluegrass and
Americoal are collectively referred to herein as "Sellers"):
RECITALS
A. Bluegrass is the owner of one hundred percent (100%) of the issued and
outstanding stock ("Encoal Stock") of Encoal Corporation, a Delaware corporation
("Encoal"). Encoal owns a coal upgrading facility (the "Encoal Facilities")
located at Triton Coal Company LLC's Buckskin Mine site near Gillette, Wyoming.
The Encoal Facilities are, as of the Effective Date, not in operation.
B. Encoal is the owner of fifty percent (50%) of the outstanding membership
interests in NuCoal LLC, a Delaware limited liability company ("NuCoal") and
Americoal is the owner of fifty percent (50%) of the outstanding membership
interests in NuCoal. Encoal's and Americoal's membership interests in NuCoal are
collectively referred to herein as the "Membership Interests" and Americoal's
50% membership interest in NuCoal is referred to herein as the "Americoal
Membership Interest".
C. Bluegrass is also the owner of fifty percent (50%) of the general partnership
interests ("Partnership Interest") in the TEK-KOL Partnership, a California
general partnership ("TEK-KOL"). SGI is the owner of the other fifty percent
(50%) general partnership interest in TEK-KOL.
D. TEK-KOL has been terminated and is in the process of winding-up its affairs
and liquidating its assets.
E. SGI is a research and development company which has proprietary technologies
that it is attempting to market in the United States and overseas.
F. TEK-KOL and Shell Mining Company ("SMC") are also parties to a License dated
September 30, 1989 with respect to TEK-KOL's license of certain technology and
intellectual property rights to SMC for the design, construction and operation
of the Encoal Facilities ("SMC License").
G. Bluegrass has agreed to sell to SGI, by that certain Acquisition Agreement
executed on April ___, 1999 ("Acquisition Agreement"), the Encoal Stock, its
Partnership Interest in TEK-KOL, and its rights in and to the LFC Property
(defined in the Acquisition Agreement). Americoal has agreed to sell to SGI, by
that Acquisition Agreement, the Americoal Membership Interest in NuCoal, and SGI
has agreed to purchase, by that certain Acquisition Agreement, all of the
foregoing, on the terms thereof. Further, the parties desire SGI to assume
and/or be solely liable for, and to release (or obtain releases of) Bluegrass,
Americoal and each of their respective shareholders, parents, affiliates and
their respective officers, directors, employees and agents ("Bluegrass
Entities") from all obligations and liabilities arising with respect to Encoal,
NuCoal, TEK-KOL, the LFC Property, the SMC License, and the Encoal Facilities,
as more specifically set forth herein. Further, Bluegrass and Americoal have
agreed to release SGI from certain obligations and liabilities as set forth
herein.
AGREEMENT
NOW, THEREFORE, in consideration of the matters set forth in the
Recitals and for other good and valuable consideration the parties hereto agree
as follows:
XX. Escrow in the Event Closing Does Not Occur. Pursuant to the Acquisition
Agreement, Section 10, if the Acquisition Agreement terminates, the parties
agree to proceed with dissolution of TEK-KOL and liquidation of its assets
pursuant to the TEK-KOL Partnership Agreement and applicable law. The parties
further agree that upon execution and delivery of the Acquisition Agreement to
each other, they shall execute and deliver duplicate originals of this
Termination Release and deposit such into an escrow account ("Escrow Account")
with the First American Title Company, Cheyenne, Wyoming (the "Escrow Agent").
This Termination Release shall be released by the Escrow Agent to the respective
parties (one original to SGI and one original to Sellers) immediately upon the
written certification by either SGI or Sellers to the Escrow Agent that the
Acquisition Agreement has terminated. Such written certification need not state
the reason for or circumstances surrounding termination, but need state only
that the Acquisition Agreement has terminated. The parties shall share equally
the fees of the Escrow Agent. Escrow Instructions, as required by the Escrow
Agent, are set forth in Section 10 hereof.
XXI. Release by SGI. SGI, for itself and on behalf of its partners, parents,
subsidiaries, affiliates, successors, assigns, officers, directors,
shareholders, employees, attorneys, agents, and representatives hereby generally
and unconditionally release, acquit and forever discharge the Bluegrass Entities
of and from any and all claims, demands, debts, liens, causes of action,
liability, damages, costs and expenses of any nature whatsoever, whether arising
under state, federal or common law, contract or tort, or in equity, which SGI
has ever had, now has or may have, whether such are known or unknown, discovered
or undiscovered, anticipated or unanticipated, direct or indirect, contingent or
fixed, whether or not asserted heretofore, whether existing now or arising in
the future, relating in any way to Encoal, NuCoal, the Encoal Facilities, the
LFC Property, TEK-KOL, and/or the SMC License, including without limitation (a)
any activities, operations, performance, licensing, sale, commercialization, or
use of or by any of the foregoing and (b) any disposition of the Encoal
Facilities by the Bluegrass Entities, including without limitation any
expansion, improvement, refinement, redesign, refitting, demolition,
dismantlement, and/or relocation of all or any part of the Encoal Facilities.
SGI hereby gives its consent to any such disposition and hereby unconditionally
waives any right of first refusal, preemptive right to purchase, or similar
right it may have under the SMC License or otherwise. Additionally, SGI, as a
partner of TEK-KOL, hereby agrees with Bluegrass, successor in interest to SMC,
to the termination of the SMC License and the release of all rights and
obligations accruing to either party thereunder. This Release is intended by SGI
to constitute a general release of and may be plead as a full and complete
defense to, and may be used as the basis for an injunction against, any action,
suit or other proceeding which may be instituted, prosecuted, or attempted in
breach of this general release.
XXII. Release by Bluegrass Entities. The Bluegrass Entities, for themselves and
on behalf of their partners, parents, subsidiaries, affiliates, successors,
assigns, officers, directors, shareholders, employees, attorneys, agents, and
representatives hereby generally and unconditionally release, acquit and forever
discharge SGI of and from any and all claims, demands, debts, liens, causes of
action, liability, damages, costs and expenses of any nature whatsoever, whether
arising under state, federal or common law, contract or tort, or in equity,
which the Bluegrass Entities have ever had, now have or may have, whether such
are known or unknown, discovered or undiscovered, anticipated or unanticipated,
direct or indirect, contingent or fixed, whether or not asserted heretofore
whether existing now or arising in the future relating in any way to Encoal,
NuCoal, the Encoal Facilities, the LFC Property, TEK-KOL, and/or the SMC
License, including without limitation any activities, operations, performance,
licensing, sale, commercialization, or use of or by any of the foregoing. This
Release is intended by the Bluegrass Entities to constitute a general release
and may be plead as full and complete defenses to, and may be used as the basis
for an injunction against, any action, suit or other proceeding which may be
instituted, prosecuted, or attempted in breach of this general release.
XXIII. No Admissions. The parties hereby acknowledge and agree that this is a
Release whose purpose is to release any potential and actual claims of any party
hereto against the other and is not in any respect nor for any purpose to be
deemed or construed to be, or in any way to be used as evidence of any admission
or concession of any liability whatsoever on the part of any of them to the
other.
XXIV. Authority to Execute. Each of the parties hereto severally represents and
warrants, and agrees, on its own behalf and on behalf of its representatives,
predecessors, successors, assigns, trustees in bankruptcy, and agents, as
follows:
A. Each party has full power and authority to execute, deliver, and perform
this Release, and has been duly authorized to do so;
B. Neither party has sold, assigned, or otherwise transferred any interest in
any claim, demand, action, cause of action or right that is the subject of this
Release to any person or entity;
C. Each party to this Agreement is validly organized and existing under the laws
of the place of its corporation and is duly authorized to enter into the legal
commitments contained in this Release;
D. The signature and execution of this Release is made and undertaken by an
individual who is authorized to execute this Release.
XXV. No Amendment. This Release shall not be modified, amended or revoked except
by a writing that sets forth such changes and that is signed by all parties.
XXVI. Entire Agreement. This Release constitutes the entire agreement and
understanding among the parties with respect to the subject matter hereof, and
it supersedes all prior agreements and understandings, both written and oral,
concerning such matters but nothing herein limits the other written agreements
executed in connection with this Release and all rights herein are in addition
to the rights of the parties under those agreements.
XXVII. Governing Law. This Release shall be governed and enforced in accordance
with the laws of the State of Wyoming.
XXVIII. Counterparts. This Release may be signed in any number of counterparts
with the same effect as if the signatures to each counterpart were upon a single
instrument, and all such counterparts together shall be deemed to constitute an
original and the same instrument. Faxed signatures shall be deemed to be the
same as original signatures.
XXIX. Escrow Instructions. The following general provisions shall govern the
Escrow Agent and the Escrow Account:
A. The Escrow Agent shall have no duty to know or determine the performance or
non-performance of any provision of any agreement between the parties hereto,
and any agreement deposited with the Escrow Agent shall not bind said agent in
any manner. The Escrow Agent assumes no responsibility for the validity or
sufficiency of any documents or papers deposited or called for hereunder except
as may be expressly and specifically set forth in these instructions in clear
and unambiguous language, and the duties and responsibilities of the Escrow
Agent are limited to those expressly and specifically stated in these
instructions in such language.
B. The Escrow Agent shall not be in any manner liable or responsible for the
sufficiency, correctness, genuineness, or validity of any instrument deposited
with it, or with reference to the form of execution thereof and shall not be
liable for any loss which may occur for any reason except gross negligence or
willful misconduct of such Escrow Agent.
C. No notice, demand or change of instruction, except as herein otherwise
provided, shall be of any effect in this escrow or Escrow Agent, unless given in
writing by all parties affected thereby.
D. These instructions may be supplemented, altered, amended, modified or revoked
by writing only, signed by all of the parties hereto, and approved by the Escrow
Agent, upon payment of all fees, costs and expenses incident hereto.
E. No assignment, transfer, conveyance or hypothecation of any right, title or
interest in and to the Escrow Account shall be binding upon the Escrow Agent
without Escrow Agent's assent thereto in writing and the written agreement
thereto of all parties hereto.
F. The Escrow Agent shall be under no duty or obligation to ascertain the
identity, authority or rights of the persons (or their agents) executing or
delivering or purporting to execute or deliver these instructions or the
Termination Release deposited with the Escrow Agent.
G. If any disagreement should arise between the parties hereto or any other
party with respect to this Termination Release and if the Escrow Agent in good
faith is in doubt as to what actions should be taken hereunder, the Escrow Agent
shall first attempt to obtain the written understanding of the parties hereto as
to such performance. If the Escrow Agent is unable to obtain such understanding,
the Escrow Agent shall have the absolute right at its election to do either or
both of the following:
1. Withhold or stop any further performance under these instructions until the
Escrow Agent is satisfied that such disagreement has been resolved, or
2. To file and interplead a suit in interpleader and obtain an order in the
District Court of Laramie County, Wyoming, requiring all persons involved to
litigate in such court their respective claims arising out of or in connection
with the Termination Release. The parties hereby agree to the jurisdiction of
such Court for the purposes of such an action, and agree that each party thereto
shall pay its own attorney fees and costs of any such legal proceedings, and the
non-prevailing party shall pay Escrow Agent's attorney fees and costs incurred
in connection therewith.
[signature page follows]
IN WITNESS WHEREOF, the parties have this day and year executed and
delivered this instrument.
This Termination Release is executed , ▇▇▇▇.
▇▇▇ INTERNATIONAL BLUEGRASS COAL DEVELOPMENT
COMPANY
By: By:
Name: Name:
Title: Title:
AMERICOAL DEVELOPMENT COMPANY
By:
Name:
Title: