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EXHIBIT 10.17
EXECUTION VERSION
TERMINATION AND CANCELLATION AGREEMENT
This Termination and Cancellation Agreement ("Termination Agreement") is
made as of October 26, 1999 by and between Anker Coal Group, Inc., a Delaware
corporation (the "Company") and JJF Group Limited Liability Company, a West
Virginia limited liability company ("JJF Group" and, together with the Company,
the "Parties").
WHEREAS, JJF Group is the owner of 2,026 shares of common stock of the
Company (the "Shares") and a party to that certain Shareholders Agreement dated
August 12, 1996 among ▇▇▇▇ ▇. ▇▇▇▇▇▇, JJF Group, P. ▇▇▇▇▇ ▇▇▇▇▇▇, PPK Group
Limited Liability Company, Anker Holding B.V., First Reserve Corporation,
American Oil & Gas Investors, Limited Partnership, AMGO II, Limited Partnership,
First Reserve Fund V, Limited Partnership, First Reserve Fund V-2, Limited
Partnership, First Reserve Fund VI, Limited Partnership and First Reserve Fund
VII, Limited Partnership (the "Stockholders Agreement"); and
WHEREAS, the Company and JJF Group are parties to that certain Put
Agreement dated as of August 25, 1998 (the "Put Agreement"); and
WHEREAS, under the terms of the Put Agreement, JJF Group has the right to
require the Company to purchase the Shares from JJF Group on the dates and for
the consideration set forth in the Put Agreement; and
WHEREAS, in connection with the restructuring of the Company's 9 3/4%
Series B Senior Notes due 2007 and the issuance of 14.25% Series A Second
Priority Senior Secured Notes due 2007 (PIK through April 1, 2000) ("Secured
Notes"), the Company and JJF Group have entered into that certain JJF Group
Exchange Agreement of even date herewith (the "JJF Group Exchange Agreement")
(capitalized terms used without definition in this Termination Agreement have
the meanings assigned to them in the JJF Group Exchange Agreement); and
WHEREAS, the JJF Group Exchange Agreement provides for the issuance to JJF
Group of Secured Notes in an aggregate principal amount of $6.0 million (the
"JJF Notes") in exchange for cancellation of the Shares and release of all
rights of JJF Group (including any amounts owed to JJF Group) under the Put
Agreement; and
WHEREAS, the JJF Group Exchange Agreement further provides that, at the
Closing, the Parties will execute and deliver this Termination Agreement.
NOW THEREFORE, in consideration of the foregoing premises, the mutual
promises of the Parties, and other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Parties hereby agree as
follows:
1. Incorporation of Recitals. The foregoing recitals are hereby
incorporated as part of this Termination Agreement.
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2. Transfer, Delivery and Cancellation of Shares; Termination of Rights;
Resignation of Director. JJF Group hereby (a) assigns and transfers to the
Company all of JJF Group's right, title and interest in and to the Shares; (b)
delivers to the Company original stock certificates, duly endorsed in blank,
representing all of the Shares; and (c) consents to the cancellation of the
Shares on the books of the Company. From and after the date of this Termination
Agreement, JJF Group shall cease to be a party to the Stockholders Agreement and
shall have no further rights or obligations thereunder. Simultaneously herewith,
JJF Group is delivering to the Company the resignation of JJF Group's nominee,
▇▇▇▇▇▇▇▇ ▇▇▇▇, as a director of the Company, which resignation shall be
effective upon issuance of the JJF Notes.
3. Termination of Put Agreement. The Put Agreement is hereby canceled and
terminated in all respects. From and after the date hereof, the Put Agreement
shall be void and of no further force or effect. JJF Group hereby waives and
releases all rights of JJF Group and all obligations of the Company under the
Put Agreement, including without limitation all rights and obligations with
respect to payment of the Put Option Balance (as defined in the Put Agreement)
or accrued and unpaid interest thereon.
4. Representations and Warranties.
(a) The Company represents and warrants to JJF Group as follows:
(i) The Company has the full right, power, and authority to
execute, deliver and carry out the terms of this Termination Agreement and all
documents, agreements and transactions contemplated hereby. This Termination
Agreement has been duly authorized (including, without limitation, obtaining the
requisite approval of the Company's Board of Directors), executed and delivered
by the Company and constitutes the valid and binding obligation of it,
enforceable against it in accordance with its terms except to the extent limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to creditor's rights generally, or general principles of equity. The execution,
delivery and performance by the Company of this Termination Agreement and the
consummation of the transactions contemplated hereby have been authorized by all
necessary corporate and other action and will not, with or without notice or the
lapse of time or both, result in any material and adverse conflict with, or
material and adverse breach, violation or termination of, or default under, any
charter, by-law, law, statute, rule, regulation, judgment order, decree,
mortgage, loan, contract, agreement, deed of trust, indenture or other
instrument to which the Company is a party or by which it is bound.
(ii) There are no actions, suits, arbitrations, proceedings at law
or in equity or other administrative or governmental proceedings pending or
threatened against the Company which would have a material adverse effect on the
transactions contemplated hereby.
(b) JJF Group represents and warrants to the Company as follows:
(i) JJF Group has the full right, power, and authority to execute,
deliver and carry out the terms of this Termination Agreement and all documents,
agreements
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and transactions contemplated hereby. This Termination Agreement has been duly
authorized (including, without limitation, obtaining any requisite approvals of
the managers and members of JJF Group and the heirs of ▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇), executed and delivered by JJF Group and constitutes the
valid and binding obligation of it, enforceable against it in accordance with
its terms except to the extent limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to creditor's rights
generally, or general principles of equity. The execution, delivery and
performance by JJF Group of this Termination Agreement and the consummation of
the transactions contemplated hereby have been authorized by all necessary
corporate and other action and will not, with or without notice or the lapse of
time or both, result in any material and adverse conflict with, or material and
adverse breach, violation or termination of, or default under, any charter,
by-law, law, statute, rule, regulation, judgment order, decree, mortgage, loan,
contract, agreement, deed of trust, indenture or other instrument to which JJF
Group is a party or by which it is bound.
(ii) There are no actions, suits, arbitrations, proceedings at law
or in equity or other administrative or governmental proceedings pending or
threatened against JJF Group which would have a material adverse effect on the
transactions contemplated hereby.
(iii) Except for the approvals of the managers and members of JJF
Group and the heirs of ▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, no consents,
approval or authorizations of any person or entity are required in connection
with the execution, delivery and performance of this Termination Agreement by
JJF Group or the consummation by JJF Group of the transactions contemplated
hereby.
(iv) JJF Group is the record owner of the Shares. JJF Group owns
and holds the Shares free and clear of any and all liens, security interests,
pledges, charges, encumbrances, claims, rights, options and restrictions of any
kind or nature.
5. Miscellaneous. The headings or titles in this Termination Agreement
are for the purposes of reference only. Neither this Termination Agreement nor
any rights, remedies, liabilities or obligations arising under it or by reason
of it shall be assignable by either Party without the prior written consent of
the other Party, which consent shall not be unreasonably withheld. The Parties
shall, with reasonable diligence, do all things and provide all reasonable
assurances as may be required to consummate the transactions contemplated by
this Termination Agreement, and each Party shall provide further documents or
instruments required by the other Party as may be reasonably necessary or
desirable to effect the purpose of this Termination Agreement. The failure by
either Party at any time to enforce any of the terms, provisions or conditions
of this Termination Agreement shall not constitute or be construed as a waiver
of the same and any single or partial exercise by that Party of any right under
this Termination Agreement shall not preclude any further or other exercise of
the same or the exercise of any other right. This Termination Agreement,
together with the other JJF Group Exchange Documents, constitutes the entire
agreement of the Parties with respect to its subject matter and supersedes and
cancels all prior and contemporaneous agreements, claims, representations and
understandings of the Parties in connection with such subject matter. This
Termination Agreement may be executed in counterparts, each of which shall be an
original but all of which together shall constitute a single document. This
Termination Agreement shall not
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be modified or amended except by written agreement signed on behalf of both
Parties by their respective duly authorized representatives. This Termination
Agreement shall be binding on the Parties and their successors and permitted
assigns.
[Signatures appear on following page]
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IN WITNESS WHEREOF, the Parties have caused this Termination Agreement to
be executed by their duly authorized representatives as of the date first
written above.
ANKER COAL GROUP, INC.
By: /s/ B. ▇▇▇▇ ▇▇▇▇▇▇▇
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Name: B. ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Secretary
JJF GROUP LIMITED LIABILITY COMPANY
By: /s/ ▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇
Title: Manager
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