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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

THAYER LAND DEVELOPMENT COMPANY, L.L.C.,

Plaintiff,

vs. PEA RIDGE MINING, LLC,

Defendants.

) ) ) ) ) ) ) ) ) )

Case No. 4:11-cv-01317-RWS Jury Trial Demanded

SECOND AMENDED COMPLAINT FOR

DAMAGES AND INJUNCTIVE RELIEF

COMES NOW Plaintiff Thayer Land Development Company, L.L.C. (“Thayer”), and for

its Second Amended Complaint against Defendant Pea Ridge Mining, LLC (“PRM”), states the

following.

1. Thayer brought this lawsuit seeking damages caused by the actions of Ahti

Vilppula, using his alter ego entity PRM, attempting to convert Thayer’s bargained-for

opportunity to share in the potentially vast profits resulting from Thayer’s investment of time and

resources to reopen a Missouri mine that is replete with scarce resources used in sensitive

military applications and critical commercial, high technology, and environmentally beneficial

products. In addition, the mine has the potential to produce iron ore and pig iron, an ore that is

of such mineral purity that it allows for the domestic production of profitable high-grade steel

within the geographic proximity of a cost-effective shipping source (e.g., the Mississippi River),

thereby creating the realistic expectation of restoring the American steel industry.

2. PRM has intentionally and knowingly attempted to interfere with Thayer’s

contractual relationship with Upland Wings, Inc. (“Upland”), Wings Enterprises, Inc. (“Wings”),

James Kennedy, and Nina Abboud (Upland, Wings, Kennedy, and Abboud are referenced

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collectively as the “Kennedy Group”). PRM has induced, assisted, and encouraged the Kennedy

Group to breach their fiduciary duties. All of this conduct has caused significant damages to

Thayer and threatens—if PRM does not immediately abate its conduct and cease carrying out its

“loan to own” plan—to cause significant additional damages to Thayer now and in the future.

3. After filings its First Amended Complaint, Plaintiff asked the Court to enter a

preliminary injunction preventing PRM from continuing its tortious behavior which has induced

the Kennedy Group to breach its contract with Thayer and from continuing to induce the

Kennedy Group to violate fiduciary duties. After the First Amended Complaint was filed, the

Honorable Judge Shawn McCarver, a state court judge in Washington County, Missouri entered

a preliminary injunction at 3:08 A.M. on September 1, 2011, which he expanded and amended at

3:30 P.M. the same day. Judge McCarver’s injunction held, among other things, that there was a

binding and enforceable contract between Thayer and the Kennedy Group; that it is “undisputed

that Defendants secretly negotiated and entered into transactions with” PRM; that the Kennedy

Group’s transactions with PRM damaged Thayer; that the Kennedy Group, and most notably

Kennedy and Abboud, violated fiduciary duties by entering into the deal with PRM; that the

Kennedy Group’s deal with PRM violates the contract they had with Thayer; that the Kennedy

Group’s deal with PRM was the product of “collusion” and was intended to cut Thayer out of the

deal; and that PRM was “no innocent bystander,” but rather was “fully aware” of the contract

when the deal was entered. Judge McCarver specifically ordered that PRM and Vilppula were

bound by his injunction under Missouri Rule 92.02(e) as they were acting in concert with the

Kennedy Group.

4. Because Judge McCarver has enjoined PRM and Vilppula, Thayer now files this

Second Amended Complaint seeking damages caused by PRM’s conduct and seeking final

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equitable relief permanently invalidating the fraudulent transactions purportedly entered by PRM

relating to the mine.

The Mine

5. This case involves Thayer’s contract and rights relating to a mine located in

Washington and Crawford counties.

6. The mine was an iron ore mine during the twentieth century, but closed in 2001.

7. The mine contains substantial quantities of iron ore and rare earth elements.

8. Rare earth elements are rarely found in concentrated and economically exploitable

forms. Rare earth elements are particularly scarce outside China. China produces 129,000 of

the 132,000 metric tons produced in the world. A report by the federal government released in

March 2011 expressed concern about foreign control over the rare earth elements industry,

explaining that “China’s dominant position as the producer of over 95 percent of the world

output of rare-earth minerals and rapid increases in the consumption of rare earths owing to the

emergence of new clean energy and defense-related technologies, combined with China’s

decisions to restrict exports of rare earths, have resulted in heightened concerns about the future

availability of rare earths.” (Exhibit 1 - Pui-Kwan Tse, China’s Rare Earth Industry, USGS

Open-File Report 2011-1042, pg. 1, available at http://pubs.usgs.gov/of/2011/1042/of2011-

1042.pdf (the “China Report”).)

9. The China Report also explained the various uses of rare earth elements: “Rare

earths are used widely in high-technology and clean-energy products because they impart special

properties of magnetism, luminescence, and strength. Rare earths are also used in weapon

systems to obtain the same properties.” Id. at 1.

10. The discovery of a cache of rare earth elements in the United States is not only

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financially lucrative for those who owned the mine—like the Kennedy Group and Thayer—but

also plays a critical role in protecting American’s national security and economic future.

The Kennedy Group/Thayer Relationship

11. In 2001, the mine was purchased by Kennedy and his wife Abboud, through

corporate entities including Upland and Wings.

12. After years of no mining-related activity, the Kennedy Group contracted with

Alberici Constructors, Inc. (collectively with the Alberici Group, Inc., “Alberici”) for Alberici to

perform construction, reclamation, remediation, and redevelopment work necessary to reopen the

mine. Alberici performed services worth more than $7 million.

13. The Kennedy Group was unable to pay Alberici for its work. Rather than sue for

unpaid services, Alberici agreed to become partners in the mine and to obtain an equity interest

in the mine. This agreement was memorialized between Alberici and the Kennedy Group in

June 2010 (the “Joint Development Agreement”). A copy of the Joint Development Agreement

is attached as Exhibit 2. Among other things, the Joint Development Agreement, as agreed to

by the parties, provided that:

a. Alberici and the Kennedy Group would be partners and joint venturers and

would jointly share control and management of the effort to reopen the

mine;

b. Alberici and the Kennedy Group would jointly develop and manage the

mine through a corporate entity run by a board of three directors—one

appointed by Alberici, one by the Kennedy Group, and one jointly

designated by Alberici and the Kennedy Group;

c. The three-member board would be empowered to review all potential

Exhibit D

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investment offers;

d. The three-member board would require unanimous and legitimate

approval of all “game-changing” decisions, including creating new debt,

admitting a new suitable partner/investor, the sale of a member’s interest,

and the filing of a voluntary bankruptcy;

e. Alberici would provide additional financial assistance directly to the

Kennedy Group;

f. Alberici would continue to provide services, including construction

services, related to the reopening and operation of the mine;

g. Alberici would “manage all business operations” and would have

“financial control” of the entity that ran the mine;

h. Alberici would have the right to obtain substantial equity interests in the

mine, including a right to redeem its investments for a significant equity

stake in the owner of the mine determined by a formula outlined in the

agreement;

i. Alberici would receive a “success fee” in the form of equity in the owner

of the mine.

14. The Kennedy Group accepted the contract and acknowledged the fiduciary nature

of its relationship with Alberici in an email message signed by “Jim and Nina” to Bob Niemeier,

Alberici’s Director of Business Development, noting that the Kennedy Group and Alberici

“share[] . . . long-term objectives in developing the project,” and have a “common goal of

working cooperatively” together to develop the mine. The Kennedy Group’s email also

confirmed that the 3-member board of directors would require “unanimous approval . . . for any

Exhibit D

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‘game-changing’ decisions that might adversely impact the interests of [the Kennedy Group] or

Alberici in moving forward.” The email is attached as Exhibit 3.

15. The Kennedy Group’s attorneys at Husch Blackwell LLP (“Husch”) also

confirmed to Trevor Ladner, Alberici’s General Counsel, that the Kennedy Group would be

bound by the Joint Development Agreement and that Alberici would have a veto power over all

“game-changing” decisions. Husch attorney Jeffrey D. Sigmund left Ladner a voicemail

message confirming that the Kennedy Group agreed that Alberici would be able to veto “creating

new debt, admitting a new partner, a new investor, the sale of a member’s interest, and

specifically . . . the filing of a voluntary bankruptcy . . . .” A copy of Sigmund’s affidavit with a

transcript of his voicemail is attached as Exhibit 4.

16. Alberici performed its obligations under the Joint Development Agreement,

including funding over $9 million of loans to the Kennedy Group and investment of substantial

work in the effort to reopen the mine, including performing all EPA-required remediation. All

told, Alberici has invested approximately $20 million in services, loans, and other investments in

the mine, together with unquantifiable time and expertise.

17. The Kennedy Group failed to perform even the most basic of its obligations under

the Joint Development Agreement, despite receiving Alberici’s substantial financial assistance

and technical expertise.

18. As a result of the Kennedy Group’s breaches of the Joint Development

Agreement, Alberici instituted litigation against the Kennedy Group in Washington County,

Jefferson County, and Crawford County. Alberici Constructors, Inc. v. Wings Enterprises, Inc.,

Case No. 11WA-CC00141 (Washington County, Missouri); Alberici Constructors, Inc. v. Wings

Enterprises, Inc., Case No. 10WA-MC00295 (Washington County, Missouri); Alberici

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Constructors, Inc. v. Wings Enterprises, Inc., Case No. 11WA-CC00141 (Washington County,

Missouri); Alberici Constructors, Inc. v. Wings Enterprises, Case No. 11JE-ML00012 (Jefferson

County, Missouri); Alberici Constructors, Inc. v. Wings Enterprises, Case No. 10CF-ML00003

(Crawford County, Missouri); Alberici Constructors, Inc. v. Wings Enterprises, Case No. 11CF-

CC00011 (Crawford County, Missouri).

19. As the Washington County litigation proceeded, Alberici decided to enter an

agreement to share its financial and other risks related to the mine by entering a joint venture—

Thayer—with TTT Acquisition Corp., a Nevada company (“TTT”). Alberici transferred assets,

liabilities, and other operations relating to the mine into Thayer. Accordingly, Alberici’s rights

referenced above are now Thayer’s. Alberici’s agreement with TTT, and its decision to transfer

its interests to Thayer complied with the Joint Development Agreement, were disclosed to the

Kennedy Group, and were approved by the Washington County court. For the limited purpose

of allowing the transfer of Alberici’s interests to Thayer Alberici and the Kennedy Group agreed

to lift the injunction, at least temporarily.

The Vilppula/PRM Plan to Convert Thayer’s Rights

20. In the Washington County litigation, the Court entered a preliminary injunction in

February 2011 (the “February Injunction”), limiting the parties’ abilities to transfer interests in

the mine to third parties. The injunction provided that the Kennedy Group could not “enter into

any letter of intent, memorandum of understanding, summary of understanding, contract or any

other agreement by any name, designation or description related to the subject matter” of the

Washington County litigation. A copy of the Preliminary Injunction Order and Modified Order

are attached as Exhibit 5.

21. While the February Injunction was in place, the Kennedy Group was holding

Exhibit D

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secret negotiations with Vilppula regarding Vilppula’s plans to join with the Kennedy Group to

force Alberici (and, therefore, Thayer) out of the effort to reopen the mine. These negotiations

were conducted without the knowledge of Alberici, TTT, or Thayer. The Kennedy Group never

disclosed any such entreaties or conversations to Alberici or Thayer. The Kennedy Group

deliberately evaded providing timely, full, and complete responses to discovery propounded by

Thayer in the Washington County litigation.

22. As soon as the February Injunction was lifted for the limited purpose of allowing

Alberici to transfer its interests into Thayer, the Kennedy Group immediately transferred

interests in the mine to PRM, a Vilppula-controlled entity which Vilppula created for the purpose

of carrying out his plan.

23. As noted above, Thayer had the right under the Joint Development Agreement to

review and approve new investors in the mine, a right which—necessarily and customarily,

under well-established business and common sense practices—includes performing meaningful

due diligence that investigates a prospective investor’s financial wherewithal, integrity,

character, reputation, current and past business associations and transactions, business

experience and acumen, the identity and reputations of current and past business associates,

relevant mining experience, and the respect that the investment markets and other potential

investors would have for the prospective investor. This due diligence would include reviewing

information circulated in the public domain, news reports, and information available on the

internet. In discharging their fiduciary duties, the board members of the entity reviewing

potential investors should have fully examined and investigated in abundant detail the proposed

investor before entering into any transaction with him, and should have sought in-depth

explanations and answers to information that even marginally appeared unusual, troubling, or of

Exhibit D

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concern, even if it later was shown to be inaccurate, in whole or in part, or even dubious. For a

project of the importance, scope, and value of this mine, the right to review and approve is vital.

A poor or even marginally suspect decision could realistically and reasonably harm and impair

the project and the ability to attract additional investors.

24. In the discharge of their fiduciary duties, the Kennedy Group should have

conducted a rigorous and thorough investigation of Vilppula, examining in depth his financial

wherewithal, integrity, character, reputation, current and past business transactions, the identity

of current and past business associates, his acumen, his mining experience, and the respect that

the investment markets and other potential investors would have for him, both as a business man

and as a person of integrity. If they had done so, they would have learned of the existence of

abundant information available in the public domain that would have likely put on notice any

reasonably prudent board of directors—properly and genuinely exercising its fiduciary duties in

the best interest of Wings and Upland and not their own personal interests—regarding

meaningful and relevant negative reports about Vilppula and others with whom he has associated

in the past, that rightfully and reasonably created material doubt as to his fitness and suitability

as a credible investor in the mine. Some of those reports are attached hereto collectively as

Exhibit 6. The Kennedy Group’s failure to genuinely conduct due diligence and their failure to

reject Vilppula as a potential investor are further breaches of their fiduciary duties that were

encouraged, incited, and ratified by Vilppula and PRM; PRM’s incitement and encouragement of

the Kennedy Group to not conduct due diligence and to not reject Vilppula is all the more

evidence of PRM’s tortious interference with the Joint Development Agreement.

25. As part of these transactions and in furtherance of Vilppula’s plan, the Kennedy

Group purportedly entered a number of “game-changing” agreements with PRM, including a

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July 1, 2011 Term Sheet (Exhibit 7), the Note and Security Agreement (Exhibit 8), the Option to

Purchase Stock Agreement (Exhibit 9), the Escrow Agreement (Exhibit 10), the Irrevocable

Durable Proxy Wings Enterprises, Inc. (Exhibit 11), the Irrevocable Durable Proxy Upland

Wings, Inc. (Exhibit 12), a Collateral Assignment of Lease (Exhibit 13); and a Deed of Trust

(Exhibit 14). The copies attached as exhibits were admitted into evidence at a public hearing in

the Washington County litigation, hearings attended by members of the public and by the media.

26. The Kennedy Group/PRM deal including the following transactions pursuant to

which, because it had actual and constructive notice of Thayer’s rights in the mine, resulted in

PRM not being a bona fide purchaser:

a. The Kennedy Group purported to sell PRM an option to purchase 70% of

the equity in the mine for $1.

b. The Kennedy Group purported to grant PRM liens and security interests in

the mine to secure up to $20 million of loans made to the Kennedy Group.

This transaction resulted in Upland Wings—a Kennedy Group entity—

taking on debt to support Kennedy and Abboud’s sale of their shares for

$1. The result is essentially a leveraged buyout, i.e., a fraudulent

conveyance.

c. The Kennedy Group purported to increase the number of directors on the

mine entity’s board from 2 to 5, with 3 appointed by PRM and 2 by the

Kennedy Group.

d. The Kennedy Group agreed that in the event that Thayer succeeded in

enforcing its rights under the Joint Development Agreement in the

Washington County litigation, the corporate entities would issue

Exhibit D

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additional stock to ensure that PRM’s share of the mine was never diluted

below a 70% interest.

e. As the two shareholders of stock in the two corporate entities that own the

mine, Kennedy and Abboud purported to execute irrevocable durable

proxies to vote 70% of the shares of both entities.

f. The Kennedy Group used money obtained from PRM to pay hundreds of

thousands of dollars to Nabil Abboud—Nina Abboud’s father—and to

make millions of dollars in additional payments to, among others, media

consultants advising PRM and the Kennedy Group on generating publicity

during the litigation, law firms, and even a “consulting fee” to PRM’s

manager Ulrich Krasukopf.

27. The Kennedy Group did not disclose any of these transactions to Alberici or

Thayer. Even after the Court entered an order compelling the Kennedy Group and enforced a

subpoena compelling the Kennedy Group’s law firm, Polsinelli Shughart PC, to produce all

documents relating to these transactions, both the Kennedy Group and the Polsinelli law firm

have refused to produce documents. Although the Kennedy Group’s attorney had several times

represented that no “side deal” existed between the Kennedy Group and PRM beyond the “70%

for $1” transaction and had represented that the Kennedy Group had produced all documents

relating to the PRM transactions, the attorney only hours later admitted to counsel that in fact

additional transactions had been “fully negotiated” and were waiting to be signed “in the offices

of Lewis Rice.” To this day, the Kennedy Group and Polsinelli refuse to produce the documents

despite numerous court orders overruling all their objections and providing specific days and

times for them to produce documents. Accordingly, it is difficult if not impossible to describe

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the full extent of PRM’s attempts to tortiously interfere with the Joint Development Agreement

or to induce the violations of fiduciary duties at this time.

28. In addition to reviewing and approving the new investors like Vilppula and PRM,

Thayer had the right under the Joint Development Agreement to review and approve all new

investments. Thayer would have thoroughly examined and asked probing questions about the

PRM transactions, including whether it was in the corporation’s best interest to give away 70%

of the equity for $1 of investment. A board of directors exercising its fiduciary duties would

have rejected any such deal as suspicious, grossly inadequate, and fraudulent. Thayer’s inability

to review and veto such a transaction was a product of the breaches of the Joint Development

Agreement and of the fiduciary duties owed by the Kennedy Group, such breaches being

substantially assisted, encouraged, and ratified by PRM.

29. These actions violated the Kennedy Group’s fiduciary obligations to Alberici and

Thayer, including that the Kennedy Group was acting in secret against Alberici/Thayer’s

interests in an effort to thwart their right to participate as an equity partner in the mine’s

redevelopment. These actions violated the Joint Development Agreement, the Washington

County court’s injunctions and temporary restraining orders, and the Kennedy Group’s

obligations under the injunction to act in good faith.

30. PRM and Vilppula knowingly and deliberately interfered with and induced the

Kennedy Group to violate contractual and fiduciary obligations to Thayer. PRM and Vilppula’s

knowledge of and brazen disregard for Thayer’s rights is illustrated most boldly by the fact that

Vilppula had an undisclosed representative attend a Washington County court hearing.

31. Vilppula and PRM have also sought to recruit other investors—including the

“Kazakh Trio” and the Reuben Brothers—to assist their campaign to interfere with Thayer’s

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contractual rights and to induce the Kennedy Group to violate their fiduciary duties. If Thayer

had been allowed its proper seat on the board of directors with the right to veto any potential

investor, it would have conducted due diligence and asked questions about Vilppula’s widely-

known associations and past dealings with the Kazakh Trio—and the three individuals who make

up the “trio”, i.e., Alexander Mashkevich, Patokh Chodiev, and Alijan Ibragimov—and the

Reuben Brothers. Under the Joint Development Agreement, Thayer would have had the right to

object to PRM’s investments in the mine and could have exercised that right if it determined that

PRM’s prior associations with the Kazakh Trio and the Reuben Brothers made PRM and

Vilppula unfit to hold equity in the mine. The Kennedy Group’s failure to allow Thayer to

review and to veto PRM’s investments in light of Vilppula’s prior associations was a violation of

the Joint Development Agreement and a breach of fiduciary duties. The Kennedy Group’s

failure to object and to conduct due diligence about Vilppula’s prior associations with the

Kazakh Trio and the Reuben Brothers was a further breach of fiduciary duties. If the Kennedy

Group had reviewed widely reported information, available in the public domain and easily

available by a simple internet search, they would have seen this information reported and would

have, if they were abiding by their fiduciary duties, asked serious, probing questions about this

information. If the Kennedy Group had engaged in due diligence required by their fiduciary

duties, they would have learned of the existence of abundant information available in the public

domain that would have likely put on notice any reasonably prudent board of directors regarding

negative information about the Kazakh Trio and the Reuben Brothers. Some of those reports are

attached hereto collectively as Exhibit 15.

32. Vilppula and the Kennedy Group brought representatives of the Kazakh Trio

and/or the Reuben Brothers to the mine to discuss potential opportunities for taking over the

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mine, investment opportunities, and equity interests in the mining enterprise. The Kennedy

Group did not disclose any of these negotiations, discussions, or offers to Thayer or Alberici.

33. The various documents that described the Kennedy Group/PRM transactions

involving the mine fail in any meaningful way to limit what or with whom PRM subsequently

might affiliate or convey all or any portion of its purported interest in the mine. Accordingly,

Vilppula and PRM would have the ability under the deal with the Kennedy Group to sell all or

part of their interests in the mine—whatever those interests are—to the Kazakh Trio, the Reuben

Brothers, or any other third party.

34. Regardless of whether the news reports were true, these types of reports are

damaging to a prospective investor’s credibility, suitability, and fitness to be an investor in the

mine, a project that is not only commercially significant, but also has genuine implications for

this nation’s military capabilities and its ability to be competitive in high-technology and

environmentally sensitive projects. Moreover, the threat identified in the USGS publication

quoted and cited above about China’s stranglehold over the supply of rare earths makes it

additionally vital that investors be persons of high standards and free of the cloud of suspicion as

to their suitability and fitness as investors.

35. Thayer has suffered injuries due to PRM’s wrongful conduct, including that

Thayer now faces being forced out of or required to share its joint venture with the Vilppula-

controlled PRM and its comrades the Kazakh Trio and the Reuben Brothers, without being given

proper notice, the right to prevent it from joining the enterprise, or even the right to participate in

due diligence and to ask precisely the questions about these new investors that any director

would in discharging his fiduciary duties.

The Washington County Litigation – The September 1 Injunctions

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36. On August 25, 30, and 31, 2011, the Washington County court held an

evidentiary hearing on converting the TRO into a preliminary injunction.

37. At 3:08 A.M. on September 1 (the night of the last day of the hearing), the

Washington County court entered a preliminary injunction. A copy of the initial preliminary

injunction, which the court circulated via email, is attached as Exhibit 16. Among other things,

the Court entered findings, all of which are true and accurate, that:

a. the Joint Development Agreement described in the First Amended

Complaint is “a fully integrated and binding contract”;

b. Alberici and Thayer “have substantially performed nearly all of their

obligations” under the contract;

c. the Defendants in the Washington County case—described in this Court as

the “Kennedy Group”—“have engaged in a pattern of delay, refusals to

negotiate and refusals to perform,” “have acted in violation of the TRO

and in violation of various security interests of Alberici/Thayer,” and

violation of the contract;

d. the Defendants violated their fiduciary duties by “entering into

transactions with PRM, LLC (Ahti’s company), using Wings and its

interests in the mine, to secure loans in the amount of $20 Million, a

substantial portion of which was to be paid to Ms. Abbound’s [sic]

relatives or for other personal debt of [Kennedy and Abboud]”;

e. “This new deal with Ahti . . . transfers, for consideration of $1.00, an

option for Ahti or his company to own 70% of the shares in Wings, a

company both sides have valued at several hundred million dollars and

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potentially up to a billion dollars.”

38. At 3:30 P.M. on September 1, the Washington County court entered an amended

injunction, which is attached as Exhibit 17. In addition to the previous findings, the court added

approximately 30 pages of specific findings, all of which are true and accurate, including:

Plaintiffs are highly likely to succeed on the merits of their claims that the June 25, 2010 Memorandum Agreement (the “Memorandum Agreement”) is an enforceable contract, that Defendants breached the Memorandum Agreement, and that Plaintiffs are entitled to specific performance. . . .

Based on the parties’ communications, their actions, and the circumstances, it appears that the parties intended to be bound by the Memorandum Agreement and that the Memorandum Agreement is a binding contract. Alberici communicated a written offer to Defendants, and Defendants communicated their acceptance of that offer, both in a written e-mail to Alberici and in a verbal confirmation through their attorneys. Thereafter, Defendants took actions that were consistent with a valid and binding contract having been formed. Defendants also reaffirmed in several conversations and communications with Alberici that the Memorandum Agreement was a binding agreement. . . .

Alberici and Thayer have substantially performed under the Memorandum Agreement. . . . The Statute of Frauds does not prevent enforcement of the Memorandum Agreement. . . . The terms of the Memorandum Agreement are not indefinite.

It is undisputed that Defendants secretly negotiated and entered into transactions with Pea Ridge Mining under which Defendants took on up to $20 million in new secured debt from Pea Ridge Mining, Defendants granted liens in the mine and their assets to Pea Ridge Mining, and Defendants purported to transfer control of the mine owner to Pea Ridge Mining now and give 70 percent of the equity of the mine owner to Pea Ridge Mining in the near future. Defendants have also agreed to issue additional shares of Upland Wings and Wings Enterprises to Pea Ridge Mining at no additional cost to maintain Pea Ridge Mining’s 70% interest in the event that Plaintiffs are found to be entitled to equity in the companies. . . . Such share issuances to Pea Ridge Mining are not compatible with Plaintiffs’ rights under the Memorandum Agreement. Additionally, Defendants and Pea Ridge Mining have contemplated transferring ownership rights and mineral interests in the Pea Ridge Mine into various other operating companies.

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By entering into the transactions with Pea Ridge Mining, Mr. Kennedy and Ms. Abboud appear to have failed to act in the best interests Upland Wings and Wings Enterprises in violation of their fiduciary duties as directors of those two corporations. Mr. Kennedy and Ms. Abboud have caused Upland Wings and Wings Enterprises to borrow $20 million from Pea Ridge Mining with a maturity date of October 24, 2011 in part to replace debt that was in permanent forbearance and to pay debts of Upland Wings and Wings Enterprises that are personally guaranteed by Mr. Kennedy and Ms. Abboud or their family members. . . .

Defendants have acted in collusion with Pea Ridge Mining in structuring a deal that appears poised to cut Plaintiffs out of their deal with Defendants. . . .

Defendants’ transactions with Pea Ridge Mining, if allowed to proceed further, threaten Plaintiffs’ collateral, governance, and equity rights in the mine owner and Defendants’ assets. . . .

Pea Ridge Mining is no innocent bystander. Before entering into the agreements with Defendants, Pea Ridge Mining was fully aware of the Memorandum Agreement and Plaintiffs’ claims in this lawsuit. . . . .

Pea Ridge Mining, LLC, Ahti Vilppula, and Ulrich Krasukopf have been affirmatively and knowingly acting in concert and participation with Defendants as to the actions by Defendants that appear to violate Plaintiffs’ rights under the Memorandum Agreement and the Deed of Trust and Business Security Agreements that Defendants executed in favor of Thayer.

39. The injunction also required the Kennedy Group to immediately cease

implementing the transactions with PRM and Vilppula. The Court’s also required that, at least

on a preliminary basis pending trial, the two entities—Upland Wings, Inc., and Wings

Enterprises, Inc.—appoint a three-person board of directors, a Thayer-designated individual be

placed on the Board, and that Thayer’s consent be required for all corporate activities.

PARTIES

40. Thayer is a limited liability company, organized and existing under the laws of the

State of Missouri, that has its principal place of business within this judicial district. Thayer has

Exhibit D

0097

18

two members, Alberici Group, Inc., a Missouri corporation, and TTT Acquisition Corp., a

Nevada corporation. Except where expressly stated otherwise, Thayer is Alberici’s assignee

with respect to Alberici’s interests in the mine and Alberici’s rights vis-à-vis the Kennedy Group

and PRM.

41. PRM is a limited liability company organized and existing under the laws of the

State of Delaware with its principal place of business located in St. Peter Port, Bailiwick of

Guernsey, Channel Islands. The Channel Islands are one of the world’s hot-spots for “off-

shoring,” hiding corporate information, and shielding assets from courts and other authorities.

(See, e.g., Offshore Tax Evaders Amnesty Bid, BBC News, Apr. 17, 2007, available at

http://news.bbc.co.uk/2/hi/business/6562881.stm; In re Portnoy, 201 B.R. 685, 698 (Bankr.

S.D.N.Y. 1996) (noting that application of Channel Islands law offends strong policies of federal

law)).

42. On information and belief, PRM’s sole member is Belgravia Mining Corporation,

which is, on information and belief, a Mongolian company controlled by Vilppula. Belgravia

Mining Corporation is not organized under the laws of Missouri or Nevada and does not

maintain its principal place of business in Missouri or Nevada.

JURISDICTION AND VENUE

43. This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C.

§1332 because there is complete diversity among the parties and the amount in controversy

exceeds $75,000.00.

44. This Court has personal jurisdiction over PRM and Vilppula because Thayer’s

claims and resulting damages arise out of PRM and Vilppula’s transaction of business in

Missouri and the commission of tortious acts within Missouri.

Exhibit D

0098

19

45. The real estate at issue in this litigation is in Missouri.

46. Venue is proper under 28 U.S.C. § 1391 because a substantial part of the events

giving rise to Thayer’s claims occurred in the counties of Washington, Crawford, and St. Louis,

all of which are within this judicial district.

47. The damages that Thayer has suffered certainly exceed $75,000, including

because Thayer (through Alberici) has already provided services and investment of almost $20

million at the mine. An adequate legal remedy does not presently exist for those damages,

however, because the ultimate outcome of the mine redevelopment remains uncertain in that the

ability to redevelop the mine and the value of what the mine will produce remain speculative at

this time. Moreover, this case addresses real estate and a mining opportunity that are unique.

COUNT I

INTERFERENCE WITH CONTRACT

48. Thayer restates, re-alleges, and incorporates by reference all allegations in the

preceding paragraphs as if fully set forth herein.

49. Alberici and its successor and assignee Thayer had a binding contractual

agreement with the Kennedy Group related to the redevelopment, reopening, and operation of

the mine. The terms of this contractual agreement were set forth in the Joint Development

Agreement.

50. PRM and Vilppula knew about the Joint Development Agreement between

Thayer and the Kennedy Group and about the Kennedy Group’s fiduciary duties to Thayer. This

knowledge is demonstrated, for example, by the presence of a Vilppula/PRM representative at a

court hearing in Washington County addressing these contractual and fiduciary relationships.

Exhibit D

0099

20

51. As the Washington County court held in its injunction order, PRM “is no innocent

bystander. Before entering into the agreements with Defendants, Pea Ridge Mining was fully

aware of the Memorandum Agreement and Plaintiffs’ claims in this lawsuit.” (Exhibit 17, at

¶ 48).

52. PRM and Vilppula interfered with the agreement between Thayer and the

Kennedy Group by inducing the Kennedy Group not to perform and to violate its obligations

under the Joint Development Agreement. This interference included PRM and Vippula causing

the Kennedy Group to execute the PRM deal documents outlined above, including the PRM

Deed of Trust, and to transfer its interests in the mine to PRM (and thus to Vilppula).

53. PRM and Vilppula intended to and intentionally interfered with Thayer’s

contractual rights.

54. PRM and Vilppula’s conduct was not privileged, including because it was

unlawful and aided and abetted Jim Kennedy and Nina Abboud in breaching their fiduciary

rights owed to Upland and Wings and fiduciary duties owed by the Kennedy Group to Thayer.

PRM and Vilppula’s conduct violated the injunction, and constituted a breach of the Kennedy

Group’s fiduciary obligations to Thayer.

55. PRM and Vilppula’s conduct has resulted in additional breaches of the Joint

Development Agreement. In fact, PRM and Vilppula’s conduct has sought to ensure that the

Kennedy Group will not perform or satisfy its obligations under that agreement.

56. Thayer has been damaged by PRM and Vilppula’s conduct, in that, among many

other things, PRM LCC and Vilppula’s conduct has diluted and continues to dilute Thayer’s

interest and ability to participation in the mine and its ability to profit from its investments in the

mine, and has jeopardized the opportunity for Thayer to enforce its contractual rights to

Exhibit D

0100

21

participate as an equity owner in the mine’s redevelopment and operations.

57. PRM and Vilppula’s conduct was knowing and with reckless disregard for

Thayer’s rights.

WHEREFORE, Thayer requests that the Court enter judgment in its favor and against

PRM, and award Thayer:

a. Compensatory and punitive damages in an amount adequate to

compensate Thayer for the injuries it suffered from the tortious conduct of

PRM, and to punish and deter such intentionally wrongful conduct;

b. Prejudgment interest on all damages awarded as permitted by law;

c. Injunctive relief including to prevent PRM from further interfering with

and preventing performance of the agreement between Alberici and its

successor and assignee Thayer and the Kennedy Group;

d. Recovery of attorney fees and costs incurred in this litigation; and

e. All other and further relief that this Court deems just and proper.

COUNT II

AIDING AND ABETTING BREACH OF FIDUCIARY DUTY



59. The arrangement between Thayer and the Kennedy Group established a

partnership and/or joint venture relating to the redevelopment, reopening, and future operation of

the mine.

60. The Kennedy Group owed fiduciary duties to Thayer, including the duty of

loyalty, the duty of candor, the duty to communicate all material developments, and the duty to

Exhibit D

0101

22

creditors.

61. PRM knew about the Kennedy Group’s fiduciary relationship with Thayer.

62. PRM intentionally and deliberately induced and aided the Kennedy Group in

breaching the fiduciary duties owed to Thayer.

63. The Kennedy Group breached its fiduciary duties to Thayer, including that the

Kennedy Group failed to disclose its involvement with Vilppula, executed the PRM Deed of

Trust, and transferred to PRM (and through PRM to Vilppula) the right to participate in the effort

to redevelop, reopen, and operate the mine in an effort to harm, hinder, and undermine Thayer’s

equitable conversion rights and other rights under the Joint Development Agreement.

64. As the Washington County court held in its injunction order (emphasis added):

It is undisputed that Defendants secretly negotiated and

entered into transactions with Pea Ridge Mining under which Defendants took on up to $20 million in new secured debt from Pea Ridge Mining, Defendants granted liens in the mine and their assets to Pea Ridge Mining, and Defendants purported to transfer control of the mine owner to Pea Ridge Mining now and give 70 percent of the equity of the mine owner to Pea Ridge Mining in the near future. Defendants have also agreed to issue additional shares of Upland Wings and Wings Enterprises to Pea Ridge Mining at no additional cost to maintain Pea Ridge Mining’s 70% interest in the event that Plaintiffs are found to be entitled to equity in the companies. Such share issuances to Pea Ridge Mining are not compatible with Plaintiffs’ rights under the Memorandum Agreement. Additionally, Defendants and Pea Ridge Mining have contemplated transferring ownership rights and mineral interests in the Pea Ridge Mine into various other operating companies.

By entering into the transactions with Pea Ridge Mining, Mr.

Kennedy and Ms. Abboud appear to have failed to act in the

best interests Upland Wings and Wings Enterprises in

violation of their fiduciary duties as directors of those two

corporations. Mr. Kennedy and Ms. Abboud have caused Upland Wings and Wings Enterprises to borrow $20 million from Pea Ridge Mining with a maturity date of October 24, 2011 in part to replace debt that was in permanent forbearance and to pay debts of Upland Wings and Wings Enterprises that are personally guaranteed by Mr. Kennedy and Ms. Abboud or their family

Exhibit D

0102

23

members. . . .

What is known is that Defendants, in entering into the

transactions with Pea Ridge Mining, have acted in violation of

the agreement with Plaintiffs requiring that “game changing” decisions up to the $35 Million tranche be only made by unanimous decision of the 3-member board as set forth in the Memorandum Agreement by, among other things, entering into a transaction with Pea Ridge Mining whereby Upland Wings and Wings Enterprises changed their boards to 5-member boards despite Defendants prior agreement with Plaintiffs for a 3-person board. This new deal with Pea Ridge Mining gives Pea Ridge Mining 3 seats on the new board, while Defendants retain only 2 seats. The deal also transfers, for consideration of one dollar, an option for Pea Ridge Mining to own 70% of the shares in Upland Wings and Wings Enterprises, a company both sides have valued at much more than a dollar or so.

This transaction with Pea Ridge Mining has resulted in

damage to Plaintiffs’ position. Money needed by Defendants to avoid a foreclosure by Pea Ridge Mining and resultant loss of the mine property is not guaranteed to Defendants under their transactions with Pea Ridge Mining. Pea Ridge Mining has no apparent legal obligation to advance further money, and with its majority now on the corporations’ boards, Pea Ridge Mining could affirmatively prevent transfer of additional funds needed by Defendants to meet their obligations. Thus, it appears that Defendants have acted in collusion with Pea Ridge Mining in

structuring a deal that appears poised to cut Plaintiffs out of

their deal with Defendants. Defendants’ deal with Pea Ridge Mining was signed 3 days after a previous preliminary injunction was lifted to allow the parties to pursue a third-party investor in furtherance of the terms of the Memorandum Agreement.

65. Thayer has been damaged by PRM’s conduct. PRM have diluted Thayer’s

interest and participation in and jeopardized the opportunity for Thayer to enforce its contractual

rights to participate as an equity owner in the mine’s redevelopment.

66. PRM’s conduct was knowing and with reckless disregard for Thayer’s rights.



a. Compensatory and punitive damages in an amount adequate to

Exhibit D

0103

24

compensate Thayer for the injuries it suffered from the tortious conduct of

PRM, and to punish and deter such intentionally wrongful conduct;

b. Prejudgment interest on all damages awarded as permitted by law;

c. Injunctive relief including to prevent PRM and Vilppula from further

interfering with and preventing performance of the agreement between

Thayer and the Kennedy Group;

d. Recovery of attorney fees and costs incurred in this litigation; and

e. All other and further relief that this Court deems just and proper.

COUNT III

FRAUDULENT CONVEYANCE (INTENT TO DEFRAUD)



68. The Missouri Uniform Fraudulent Transfer Act provides that a transfer is

fraudulent if it was made with the intent to hinder, delay, or defraud. § 428.024.1(1), RSMo. It

also allows parties to obtain injunctive relief, including “avoidance of the transfer in order to

satisfy the creditor’s claim,” “an injunction against further disposition by the debtor or

transferee, or both, of the asset transferred or of other property,” and “any other relief the

circumstances may require.” § 428.039, RSMo.

69. The Kennedy Group executed documents, including the PRM Deed of Trust, and

transferred its interests in the mining operation without receiving reasonably equivalent value for

those interests from PRM.

70. The Kennedy Group’s actions occurred in secret while it was being sued related

to its obligations in the reopening, redevelopment, and operation of the mine. The incurrence of

Exhibit D

0104

25

liability and transfer of property was concealed from the Kennedy Group’s creditors.

71. The Kennedy Group’s actions were undertaken with the deliberate intent to delay

or avoid the satisfaction of its duties and obligations to Thayer.

72. The Kennedy Group’s actions were undertaken with the actual intent to hinder,

delay, and defraud its creditors.

73. As the Washington County court held in its injunction order, the Kennedy Group

“acted in collusion with [PRM] in structuring a deal that appears poised to cut Plaintiffs out of

their deal with Defendants.” (Exhibit 17, at ¶ 46).

74. PRM was the transferee of the Kennedy Group’s interests in the mine operation,

and was the purported beneficiary of the PRM Deed of Trust.

75. The Kennedy Group was insolvent, or became insolvent when the Kennedy

Group performed the actions described above.



a. Avoidance and the setting aside of the PRM Deed of Trust;

b. Avoidance and the setting aside of the transfer of interests from the

Kennedy Group to PRM related to the mine;

c. Mandatory injunctive relief requiring PRM to file a sufficient deed of

release, releasing the PRM Deed of Trust;

d. Injunctive relief including to prevent PRM from receiving or disposing of

any further interests in the mine;

e. Recovery of attorney fees and costs incurred in this litigation; and

f. All other and further relief that this Court deems just and proper.

Exhibit D

0105

26

COUNT IV

FRAUDULENT CONVEYANCE (LACK OF CONSIDERATION)




fraudulent if it was made without receiving a reasonably equivalent value in exchange for the

transfer or obligation and the debtor was engaged in a business for which its assets were

unreasonably small or the debtor intended to incur debts beyond his ability to pay as they became

due. § 428.024.1(2), RSMo. It also allows parties to obtain injunctive relief, including

“avoidance of the transfer in order to satisfy the creditor’s claim,” “an injunction against further

disposition by the debtor or transferee, or both, of the asset transferred or of other property,” and

“any other relief the circumstances may require.” § 428.039, RSMo.




79. As the Washington County court held in its injunction order, the Kennedy

Group’s “deal” with PRM “transfers, for consideration of one dollar, an option for [PRM] to own

70% of the shares in Upland Wings and Wings Enterprises, a company both sides have valued at

much more than a dollar or so.” (Exhibit 17, at ¶ 45). Moreover, the court held that “Mr.

Kennedy and Ms. Abboud have caused Upland Wings and Wings Enterprises to borrow $20

million from [PRM] with a maturity date of October 24, 2011 in part to replace debt that was in

permanent forbearance and to pay debts of Upland Wings and Wings Enterprises that are

personally guaranteed by Mr. Kennedy and Ms. Abboud or their family members.” (Id. at ¶ 42).

Exhibit D

0106

27






82. At the time it executed the PRM Deed of Trust and related documents, the

Kennedy Group was engaged in a business for which its remaining assets were unreasonably

small in relation to the business.

83. The Kennedy Group believed or reasonably should have believed that it would

incur debts beyond its ability to pay as they came due.












COUNT V

FRAUDULENT CONVEYANCE (LACK OF CONSIDERATION)

Exhibit D

0107

28




fraudulent if the debtor made the transfer or incurred the obligation without receiving a

reasonably equivalent value in exchange and the debtor was insolvent or became insolvent as a

result of the transfer. § 428.029, RSMo. It also allows parties to obtain injunctive relief,

including “avoidance of the transfer in order to satisfy the creditor’s claim,” “an injunction

against further disposition by the debtor or transferee, or both, of the asset transferred or of other

property,” and “any other relief the circumstances may require.” § 428.039, RSMo.









89. At the time it executed the PRM Deed of Trust and related documents, the

Kennedy Group was engaged in a business for which its remaining assets were unreasonably

small in relation to the business.

90. As a result of the transfer, one of the Kennedy Group’s entities, Upland Wings,

became liable for, and transferred property interests to secure, the obligations of Kennedy and

Abboud to PRM.

Exhibit D

0108

29

91. As the Washington County court held in its injunction order, the Kennedy

Group’s “deal” with PRM “transfers, for consideration of one dollar, an option for [PRM] to own

70% of the shares in Upland Wings and Wings Enterprises, a company both sides have valued at

much more than a dollar or so.” (Exhibit 17, at ¶ 45). Moreover, the court held that “Mr.

Kennedy and Ms. Abboud have caused Upland Wings and Wings Enterprises to borrow $20

million from [PRM] with a maturity date of October 24, 2011 in part to replace debt that was in


personally guaranteed by Mr. Kennedy and Ms. Abboud or their family members.” (Id. at ¶ 42).

92. The Kennedy Group believed or reasonably should have believed that it would

incur debts beyond its ability to pay as they came due.












Exhibit D

0109

30

Respectfully submitted,

ARMSTRONG TEASDALE LLP

BY: /s/ Richard Scherrer

Richard B. Scherrer # 22667MO David L. Going #34435MO Sara Finan Melly #57501MO Winston E. Calvert #57421MO Michael P. Downey # 47757MO 7700 Forsyth Blvd., Suite 1800 St. Louis, Missouri 63105 T: 314.621.5070; F: 314.621.5065 [email protected] [email protected] [email protected] [email protected] [email protected]

ATTORNEYS FOR PLAINTIFF THAYER LAND DEVELOPMENT COMPANY, L.L.C.

CERTIFICATE OF SERVICE

I hereby certify that on this 7th day of September, 2011, I electronically filed the foregoing with the Clerk of the Court using the ECF system, which sent electronic notification of the filing on the same day to the following:

Andrew Rothschild Thomas P. Berra, Jr. R. Brad Ziegler Lewis Rice Fingersh L.C. 600 Washington, Ste. 2500 St. Louis, MO 63101

/s/ Richard Scherrer

Exhibit D

0110

IN THE CIRCUIT COURT OF WASHINGTON COUNTY, MISSOURI

ALBERICI CONSTRUCTORS, INC., et al., ) ) Plaintiffs, ) ) Cause No. 10WACC00476 v. ) ) UPLAND WINGS, INC., et al, ) ) Defendants. )

AMENDED ORDER GRANTING PRELIMINARY INJUNCTION This matter came before the Court on the Motion for Temporary Restraining Order and

Preliminary Injunction filed by Plaintiffs Alberici Constructors, Inc. (“Alberici”), and Thayer

Land Development Company, L.L.C. (“Thayer”).

On August 11, 2011, the Court entered a Temporary Restraining Order against

Defendants Upland Wings, Inc. (“Upland Wings”), Wings Enterprises, Inc. (“Wings

Enterprises”), James Kennedy, and Nina Abboud.

On August 25, 30, and 31, 2011, the Court held an evidentiary hearing on Plaintiffs’

motion for preliminary injunction. The evidentiary hearing was conducted at the St. Francois

County Courthouse with the consent of all parties. Plaintiffs appeared by counsel Lawrence

Friedman, Eric C. Harris, Richard Scherrer, and David Going. Defendants appeared by counsel

David Baylard. The Court heard testimony of three witnesses—Robert Niemeier (“Mr.

Niemeier”) (Director of Special Projects for Alberici), Herschel Burrow (“Mr. Burrow”) (an

employee of Wings Enterprises), and Nina Abboud (“Ms. Abboud”), who, with her husband

James Kennedy (“Mr. Kennedy”), are the shareholders, officers, and directors of Wings

Enterprises and Upland Wings. The Court also heard arguments of the parties’ counsel.

Exhibit E

0111

- 2 -

After considering Plaintiffs’ motion for preliminary injunction, the testimony, the

evidence, and counsel’s arguments, the Court entered an Order granting the preliminary

injunction at 3:08 a.m. on September 1, 2011. The Order was sent to Plaintiffs’ counsel Mr.

Harris by e-mail at 3:08 a.m. on September 1, 2011 with a request to forward to the other

counsel. At 5:33 a.m. on September 1, 2011, Plaintiffs’ counsel sent a copy of the Order to

Defendants’ counsel. The Court’s Order entered at 3:08 a.m. stated, among other things, that the

Court would enter a typed amended version of the preliminary injunction after submission by

Plaintiffs of a proposed amended version. This Order amends the preliminary injunction as

follows:

The Court had the opportunity to consider the testimony and the demeanor of the

witnesses. The Court finds that the testimony of Mr. Niemeier was credible on all issues. The

Court finds that Mr. Burrow’s testimony was credible on all issues. The Court finds that the

testimony of Ms. Abboud was not credible on any disputed issues.

1. Defendants were given notice and an opportunity to be heard as required by law

and Rule 92.02(c)(1).

2. Plaintiffs have demonstrated that the temporary restraining order should be

converted to a preliminary injunction because immediate and irreparable injury, loss, or damage

will result in the absence of relief.

3. The Court weighs four factors in considering a motion for a preliminary

injunction: (a) the movant’s probability of success on the merits; (b) the threat of irreparable

harm to the movant absent the injunction; (c) the balance between this harm and the injury that

the injunction’s issuance would inflict on other interested parties; and (d) the public interest.

Exhibit E

0112

- 3 -

State ex rel. Director of Revenue, State of Missouri v. Gabbert, 925 S.W.2d 838, 839 (Mo. banc

1996).

4. Based on the evidence adduced, the Court finds that Plaintiffs are highly likely to

succeed on the merits of their claims that the June 25, 2010 Memorandum Agreement (the

“Memorandum Agreement”) is an enforceable contract, that Defendants breached the

Memorandum Agreement, and that Plaintiffs are entitled to specific performance.

5. Based on the parties’ communications, their actions, and the circumstances, it

appears that the parties intended to be bound by the Memorandum Agreement and that the

Memorandum Agreement is a binding contract. Alberici communicated a written offer to

Defendants, and Defendants communicated their acceptance of that offer, both in a written e-

mail to Alberici and in a verbal confirmation through their attorneys. Thereafter, Defendants

took actions that were consistent with a valid and binding contract having been formed.

Defendants also reaffirmed in several conversations and communications with Alberici that the

Memorandum Agreement was a binding agreement.

6. Defendants engaged the services of Alberici for construction work at the mine site

and then to assist them in resolving the United State Environmental Protection Agency (“EPA”)

injunction and site remediation issues. Defendants did not pay for this work, instead entering

into negotiations with Alberici to allow Alberici to convert the construction debt into equity in

the overall mine project. The terms of the agreement were set forth first in a memorandum

agreement dated June 4, 2010, then finalized with only minor changes in the June 25, 2010

Memorandum Agreement.

7. More specifically, in 2001, Defendant Upland Wings purchased the Pea Ridge

Mine property that is located partially within Washington County, Missouri. At the time of

Exhibit E

0113

- 4 -

Upland Wings’ purchase, the Pea Ridge Mine property had little value as a mine because the

price of iron was low.

8. In 2006, Defendants began operations at the Pea Ridge Mine property to reclaim

salvage material that was left over from 38 years of prior operations at the property. In 2008,

Defendants engaged Alberici to provide construction services to improve the reclaim salvage

operations and to construct an iron ore processing facility in Crystal City, Missouri. In 2010,

Defendants further engaged Alberici to perform removal and remediation work that had been

ordered by the EPA. Defendants risked losing key operating permits if the removal and

remediation work were not timely completed.

9. By May 2010, Defendants were at serious risk of losing the Pea Ridge Mine

property to foreclosure because they had borrowed approximately $7 million dollars from

Minmetals, Inc. (“Minmetals”), and did not have any means to repay those amounts. Defendants

were also not paying Alberici for the ongoing construction services that Alberici was performing.

Alberici and Defendants discussed entering into an agreement to jointly develop the Pea Ridge

Mine property (“Pea Ridge Mine project”) that would allow Defendants to keep the Pea Ridge

Mine property and give Alberici an upside return for the investments it had already made and

would make under the agreement to jointly develop the Pea Ridge Mine property. Defendants

were represented at all times in those discussions by the Husch Eppenberger LLC law firm, now

Husch Blackwell LLP.

10. Those discussions led to a memorandum agreement dated June 4, 2010 for the

joint development and operation of the Pea Ridge Mine. On June 11, Mr. Niemeier sent the June

4, 2010 memorandum agreement to Defendants via an e-mail. (Exhibit 19). On June 13, 2010,

Defendants accepted the June 4, 2010 memorandum agreement via an e-mail. (Exhibit 20).

Exhibit E

0114

- 5 -

Under the June 4, 2010 memorandum agreement, Alberici agreed to loan Defendants $7 million

in exchange for, among other things, governance and equity conversion rights in Wings

Enterprises, which was to become the owner of the Pea Ridge Mine Property. (Exhibit 19).

11. It is apparent that Defendants thought this earlier June 4, 2010 memorandum

agreement was a binding contract. (Exhibits 20 and 18 - Defendants communicated their

agreement that the June 4, 2010 memorandum agreement was accurate as to the terms agreed,

and when Defendants were seeking funding from other sources during the same weekend that

they finally agreed to the June 25, 2010 Memorandum Agreement, Defendants told John Cahill

that Alberici was bound to fund $7 Million, indicating that Defendants considered Alberici

bound by the terms of the June 4, 2010 memorandum agreement before the minor changes were

made to that agreement resulting in the Memorandum Agreement at issue in the lawsuit).

12. After the June 4, 2010 memorandum agreement was entered into, Alberici and

Defendants learned that 0884002 B.C. Ltd. acquired the Minmetals secured loan and that the

amount needed to pay off the secured loan was more than the $7 million contemplated in the

June 4, 2010 memorandum agreement. (Niemeier Affidavit (“Aff.”) Exhibit B). Defendants had

discussions with representatives of 0884002 B.C. Ltd. Based on those discussions, Defendants

viewed their options as: (1) surrender everything and lose all their rights and interests due to

foreclosure; (2) pay off the note; or (3) file for bankruptcy protection. (Exhibit 18).

13. Alberici and Defendants began discussing new terms for the joint development

and operation of the Pea Ridge Mine project under which Alberici would provide the necessary

funds for Defendants to pay off 0884002 B.C. Ltd. The terms of the new agreement were set

forth in the Memorandum Agreement that is at issue in this lawsuit. (Niemeier Aff. Exhibit B).

At the same time Defendants were in discussions with Alberici about the Memorandum

Exhibit E

0115

- 6 -

Agreement, Defendants were searching for an investor besides Alberici willing to provide

Defendants money to pay off 0884002 B.C. Ltd., but Defendants were unsuccessful in finding

anyone willing to commit the necessary funds. (Exhibit 18).

14. On June 27, 2010 Mr. Niemeier sent the Memorandum Agreement, which at that

point contained all of the fundamental and essential terms agreed upon by the parties, to

Defendants via e-mail. (Niemeier Aff. Exhibit A). Mr. Niemeier requested from Defendants a

return e-mail confirming, among other things, acceptance of the terms in the Memorandum

Agreement by Defendants. The Memorandum Agreement stated as follows:

With regard to terms agreed between Wings Enterprises (Wings) and Alberici (Alberici) on Friday, June 4, 2010 related to purchasing Minmetals security interests in all related “Wings” assets and agreements, and subsequent discussions over Wings paying-off 0884002 B.C. Ltd (0884002) for what has been reported as 0884002’s purchase of those same security interests from Minmetals; please accept this correspondence as a summary of updated terms needed because of the incremental investment needed above the $7m previously committed on 6-4-10. In an effort to support development of the Wings – Iron Ore project, Alberici is attempting to help Wings pay-off 0884002’s security interests in all related “Wings” assets and agreements, all of which is extremely sensitive and all parties acknowledged needs to be kept confidential. However in providing the incremental investment needed above the $7m previously committed on 6-4-10, additional terms are needed for the additional investment. Therefore predicated on the success of removing 0884002’s formal involvement with “Wings”:

A. Alberici will form a Limited Liability Corporation (“FundCo”) which will provide the funding to Wings to pay its obligations to 0884002. “FundCo” will be secured with a note / second deed of trust / UCC filing for the Pea Ridge mine property and all mineral rights associated with that property as collateral (“FundCo-Security Interest”).

B. Alberici and Wings will form “SalvageCo, LLC” for the purpose of reclaiming and selling existing magnetite run-off from the former Pea Ridge Iron Ore sediment ponds along Mary’s Creek.

C. Upland Wings will convey it rights to process and sell run-off magnetite to “SalvageCo” under a Retrieval and Storage Agreement. o Essentially “SalvageCo” will provide the EPA compliance work and

relocation of existing processing equipment in return for “SalvageCo” having

Exhibit E

0116

- 7 -

the right to process and sell the run-off magnetite. o “SalvageCo” will pay all expenses to process and sell the run-off

magnetite material.

D. Alberici and Wings will execute a “SalvageCo” Operating Agreement to define roles, responsibilities, and distribution of proceeds.

E. In addition to the “SalvageCo” Operating Agreement, Alberici and Wings will also execute a Side Letter of Agreement summarizing the intent for establishing “SalvageCo”, compensating Wings beyond the proceeds of “SalvageCo”, and governance / equity development of the overall Wings – Pea Ridge Iron project. SalvageCo Operating Agreement

1.) Alberici will fund “SalvageCo, LLC” with $3.2m of equity.

2.) “SalvageCo” will use $3m to pay: a.) The costs to remove the run-off magnetite from the former sediment ponds

along Mary’s Creek and complete the remediation work per the EPA Compliance Order.

b.) Relocate and refurbish the existing “cleansing” process equipment into the

existing Central Services Building on the Pea Ridge Iron Ore site. c.) Stockpile the magnetite salvaged from the former sediment ponds along

Mary’s Creek outside the Central Service Building (where the relocated plant is located).

d.) Initial start-up of the processing operation before revenues from sales are

collected (approximately 60-days).

3.) “SalvageCo” will use the remaining $200k to immediately begin payments to existing Wings trade creditors which threaten Wings ability to resume uninterrupted operation of the processing and sale of the magnetite removed from the former sediment ponds along Mary’s Creek.

4.) “SalvageCo” will pay the operating expenses during routine magnetite “cleansing” and loading of sold finished product. This generally includes direct labor, equipment leases, fuel, utilities, consumables, taxes, insurance, maintenance, etc to process the material, and corresponding overhead (G&A) costs. These operating expenses will be subtracted from sales revenues collected to create the profit proceeds to be distributed each month.

5.) Sale of salvaged (cleansed) magnetite will be marketed and invoiced under the

Exhibit E

0117

- 8 -

name of Wings Enterprises as agent for “SalvageCo”. However payments will be directly received and managed by “SalvageCo”.

6.) Nineteen percent (19%) of the proceeds (profits) from sale of the salvaged magnetite shall be distributed to Wings Enterprises, and the remaining eighty one percent (81%) to Alberici.

7.) Wings shall be responsible for the processing (cleansing) the stockpiled magnetite; however “SalvageCo” will directly fund these expenses as a COGS on behalf of Wings.

8.) Wings shall also provide all sales / customer service activities which will be paid by Wings from its distribution of proceeds.

9.) Alberici shall provide overall governance of “SalvageCo”, and responsibility of all financial transactions / reporting.

10.) “SalvageCo” shall operate as a stand alone enterprise independently from equity invested into the development Wings – Pea Ridge Iron Ore project.

11.) An “early termination / buy-out” clause will not be included in the “SalvageCo” operating agreement. This will allow evaluation of equity investment offers and (upon the mutual agreement of Wings and Alberici) can allow establishing terms for development of the overall Wings-Iron Ore project.

12.) Alberici agrees to forebear collection of Wings current debt with Alberici Constructors; and none of Alberici’s distribution of profit proceeds shall be applied to reduction of Wings current debt with Alberici Constructors

13.) “FundCo” will release their magnetite security interests corresponding with payments Alberici receive from their “SalvageCo” distribution of proceeds. Wings – Alberici, Side Letter of Agreement

14.) Upon execution of a “SalvageCo” Operating Agreement and corresponding Side Letter of Agreement between Wings and Alberici; Alberici will issue a $100k closing fee to Jim Kennedy.

15.) Upon execution of a “SalvageCo” Operating Agreement and corresponding Side Letter of Agreement between Wings and Alberici, the remaining “mine assets” in Upland Wings (after conveyance of the run-off magnetite discussed in item ‘B’) will be transferred into Wings Enterprises.

16.) Wings Enterprises will become the “NewCo” needed to further develop the Wings – Iron Ore Project.

17.) Governance of Wings Enterprises (“NewCo”) shall originate from a 3-person

Exhibit E

0118

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Board of Directors; where Wings will designate 1-director, Alberici will designate 1-director, and the 3rd director will be mutually selected by Wings and Alberici. a.) The mission of Wings Enterprises (“NewCo”) is “Planned methodical

development of the Wings – Iron Ore Project”; with priorities to:

i. Refurbish the existing Pea Ridge Mine. ii. Build a pig iron production and bulk shipping facility in Crystal

City. iii. Construct an underground magnetite slurry pipeline from the Pea

Ridge mine to the Crystal City property. b.) The objectives of Wings Enterprises (“NewCo”) are:

i. Attracting Investor Equity

ii. Completing the Pincock Allen and Holt “bankability” validation iii. Raising capital to build and operate the facilities outlined in item #

17a

18.) In the event Wings Enterprises (“NewCo”) is unable to attract adequate investor equity to develop the overall Wings – Iron Ore Project, it was agreed that construction of a benefaction facility capable of processing tailings from the upper lake (aka “DredgeCo”) will be the successor enterprise to “SalvageCo”. Accordingly, the development priority for refurbishing the mine property (Item 17a-i) is: a.) Site infrastructure b.) Reclamation of the tailings lake c.) Construction of shipping facilities d.) Rebuilding the underground mining capability

19.) “FundCo” will only require a note / second deed of trust / UCC filing for the

Pea Ridge mine property and all mineral rights associated with that property as collateral for the funds “FundCo” provides to Wings to “pay-off” 0884002 (“FundCo-Security Interest”).

20.) The “FundCo-Security Interest” and the current debt from Wings to Alberici Constructors for services performed under the current CM-GC construction contract (approximately $2.9m as of 5-30-10) shall remain in forbearance.

21.) Additionally to improve development opportunities of the Wings – Pea Ridge Iron Ore project, Alberici may elect to convert their “FundCo-Security Interest” and current Wings debt (Item-20) into Wings Enterprises (“NewCo”) equity per a “sliding scale” conversion rate: Initial Alberici $7m “FundCo” Investment and Current Wings Debt

Exhibit E

0119

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a.) At a tranche where the total accumulated value of invested equity is greater

than $35m, Alberici will receive 1.1 times the equity purchased per dollar by new investors.

b.) At a tranche where the total accumulated value of invested equity is greater

than $300m, Alberici will receive 2.0 times the equity purchased per dollar by new investors.

c.) If Alberici chooses to convert its “FundCo-Security Interest” and current

Wings debt into Wings Enterprises (“NewCo”) equity at any tranche when the total accumulated value of invested equity is between a $35m $300m; it shall be at a multiplier linearly calculated between 1.1 and 2.0 based upon the total accumulated value of invested equity.

Incremental Alberici Investment for 0884002 Pay-Off (approx $2.25m) d.) Initial Tranche’s which total less than $15m are not eligible for conversion. e.) At a tranche where the total accumulated value of invested equity is

between $15m and $35m, Alberici has the right to convert its incremental investment greater than $7m at 1.8 times the equity purchased per dollar by new investors.

f.) At a tranche where the total accumulated value of invested equity is

between $35m and $50m, Alberici has the right to convert its incremental investment greater than $7m at 2.0 times the equity purchased per dollar by new investors.

g.) At a tranche where the total accumulated value of invested equity is greater

than $50m, Alberici has the right to convert its incremental investment greater than $7m at 2.5 times the equity purchased per dollar by new investors.

22.) At Alberici’s option, its current debt from Wings for services performed under

the current CM-GC construction contract can be paid at a tranche where the total accumulated value of invested equity is at least $35m.

23.) Until such time as Wings Enterprises (“NewCo”) completes a tranche where the total accumulated value of invested equity is at least $300m and is able to hire competent full time staff, Alberici will provide interim personnel as needed to develop the Wings-Iron Ore Project and manage all business operations (i.e. “SalvageCo”, “DredgeCo”, etc). This includes control of financial control of Wings Enterprises (“NewCo”) where designated Alberici interim personnel shall manage the 19% distribution of “SalvageCo” proceeds and issue payments from Wings Enterprises (“NewCo”) to current (and future) trade creditors of Wings Enterprises (“NewCo”).

Exhibit E

0120

- 11 -

24.) All equity investment offers will be reviewed with regard to development of the

overall Wings-Iron Ore project, and that upon mutual agreement of Wings and Alberici modify governance and/or operations oversight of Wings Enterprises per the terms of an acceptable 1st tranche equity investment offer.

25.) Payments to Westbridge Bank shall always be the first priority of “SalvageCo” proceeds debited from Wings 19%. Payments to Husch-Blackwell per a reestablished schedule shall be a second priority of proceeds debited from Wings 19%.

26.) Alberici shall be given 5% equity of Wings Enterprises (“NewCo”) as a “Success Fee” per a “Carry Provision” in consideration of resources provided for the betterment of the project since June-2008 and the forbearances provided per item-20 above. This 5% equity “Success Fee” shall be issued to Alberici at a tranche where the total accumulated value of invested equity is greater than $300m OR when the Alberici chooses to convert its “FundCo-Security Interest”

and / or current Wings debt as noted in Item-21 above (whichever comes first).

27.) Alberici shall be given an additional 3% equity of Wings Enterprises (“NewCo”) as a “Success Fee” per a “Carry Provision” in consideration of resources provided for the betterment of the project by providing the incremental investment into “FundCo” (greater than the $7m previously committed) as needed to pay-off 0884002. The 3% equity “Success Fee” shall be issued to Alberici at a tranche where the total accumulated value of invested equity is greater than $400m OR when Alberici chooses to convert its “FundCo-Security

Interest” as noted in Item-21 above (whichever comes first). Attached with this memorandum is an updated flow diagram of this same information. Under separate cover, the terms outlined in this correspondence will be utilized as the “guiding principles in preparing the various operating agreements (“SalvageCo”, “NewCo”, etc.). Please contact my office with any questions or comment to the content of this memorandum.

(Niemeier Aff. Exhibit B) 15. Defendants communicated their acceptance and agreement to the terms of the

Memorandum Agreement. On June 28, 2010, Defendants Mr. Kennedy and Ms. Abboud sent a

return e-mail to Mr. Niemeier stating, among other things, that “we agree to the terms set forth in

the attached 6-25-10 memorandum entitled ‘updated Wings-Alberici Terms.’” Defendants also

stated in their e-mail that “we also agree to the clarification of Item #17, such that unanimous

Exhibit E

0121

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board approval should be required, at any time prior to the initial raise of the $35M tranche,� for

any '“game-changing” decisions that might adversely impact the interests of Wings or Alberici in

moving forward.” (Niemeier Aff. Exhibit C).

16. “Item # 17” referred to paragraph 17 of the Memorandum Agreement , which

states that “governance of Wings Enterprises (“NewCo”) shall originate from a 3-person Board

of Directors where Wings will designate 1-director, Alberici will designate 1-director, and the

third director will be mutually selected by Wings and Alberici.” (Niemeier Aff. Exhibit B).

Also on June 28, 2010, Defendants’ attorney, Jeff Sigmund, further clarified the parties’ intent in

a voicemail wherein he stated, among other things, “the issues that we talked about in terms of

unanimous board approval for Newco or what you guys are referring to as ‘game changing’

events, that is all agreeable from the Wings Camp. And, just so you know in describing

examples of ‘game changing’ events, we specifically discussed creating new debt, admitting a

new partner/investor, the sale of a member’s interest, and specifically said the filing of a

voluntary bankruptcy by Wings.” (Exhibits 1 and 1A).

17. Alberici would not have provided to Defendants the money necessary to pay off

0884002 B.C. Ltd. if Defendants had not accepted and agreed to be bound by all of the terms of

the Memorandum Agreement and had not agreed that there would be unanimous board approval

(i.e, approval by Alberici) for any “game-changing” events such as creating new debt of the

entity that owns the mine property, admitting a new partner or investor in the entity that owns the

mine property, the sale of a member’s interest in the entity that owns the mine property, and the

filing of a voluntary bankruptcy by the entity that owns the mine property.

�French, meaning a “portion” or “slice” and in financial transactions, referring to a level of structured financing.

Exhibit E

0122

- 13 -

18. The Court finds that the Memorandum Agreement was intended by the parties to

be a fully integrated and binding contract, not merely an “agreement to agree later” or a non-

binding set of “guiding principles.” The Memorandum Agreement was negotiated between and

among the parties and their respective counsel, was offered and accepted, consideration was

given, and very substantial performance thereunder has occurred.

19. On June 28, 2011, the Court approved a transaction whereby Alberici transferred

to Thayer its interests under the Memorandum Agreement with the exception of Alberici’s

interests in SalvageCo and Alberici’s interest in the construction debt incurred by Defendants

since the mechanics liens were filed.2 Thereafter, Thayer became a party to this lawsuit.

20. “The cardinal principle for contract interpretation is to ascertain the intention of

the parties and to give effect to that intent. In order to determine the intent of the parties, it is

often necessary to consider not only the contract between the parties, but subsidiary agreements,

the relationship of the parties, the subject matter of the contract, the facts and circumstances

surrounding the execution of the contract, the practical construction the parties themselves have

placed on the contract by their acts and deeds, and other external circumstances that cast light on

the intent of the parties.” Butler v. Mitchell-Hugeback, Inc., 895 S.W.2d 15, 21 (Mo. banc

1995).3

2 Defendants unpersuasively argue that unanimous board approval for any “game-changing” decisions also applied to decisions made by Alberici, including Alberici’s decision to enter into an agreement to transfer its interests under the Memorandum Agreement to Thayer. Defendants do not have the right to designate a director of Alberici. Accordingly, Defendants cannot require unanimous board approval for decisions made by Alberici’s board.

3 Defendants have requested that the Court read the July 29, 2010 Demand Notes in isolation and find that Defendants have a right to pay the notes at any time without regard to the other agreements of the parties. The Court declines to do so. As instructed by the Missouri Supreme Court, it is often necessary to ascertain the intent of the parties from other external circumstances that cast light on the parties’ intent. That is the case here. The Demand Notes were never intended by the parties to replace or supersede the Memorandum Agreement.

Exhibit E

0123

- 14 -

21. The intent of Alberici and Defendants as reflected in the terms of the

Memorandum Agreement and the acceptance communicated by Defendants, was, among other

things, that Alberici was required to form an affiliate company to provide approximately $9.2

million of funding to Defendants. Defendants were required to provide the funding company

formed by Alberici with a note, business security agreement, and second deed of trust for the Pea

Ridge Mine property and all mineral rights associated with that property as collateral. Upland

Wings was required to convey all of its “mine assets,” which included real property and mineral

rights, to Wings Enterprises. Wings Enterprises is to become Wings Enterprises (“NewCo”), the

entity to develop the Pea Ridge Mine project. Thayer, having obtained Alberici’s rights under

the Memorandum Agreement, has the right to designate one of the three directors of Wings

Enterprises (“NewCo”), and the right to have that designated director mutually select, with the

director designated by Wings Enterprises, the third director. Thayer has the right to review all

equity investment offers with regard to the overall Wings-Iron Ore project and to approve any

offers that modify governance and/or operations oversight of Wings Enterprises (“NewCo”).

Thayer has the right to require unanimous board approval for any “game-changing” decisions

that might adversely impact the interests of Thayer, including creating new debt, admitting a new

partner/investor, the sale of a member’s interest, and filing of a voluntary bankruptcy by Wings.

Thayer has the right to convert Alberici’s cash investment and the outstanding amounts owed

under the existing Construction Contract into equity in Wings Enterprises (“NewCo”) based on a

defined sliding scale as well as additional equity pursuant to two “success fees.”

22. Additional evidence of Defendants’ intent to be bound by the terms of the

Memorandum Agreement is found in Defendants’ communications. On June 27, 2010, Mr.

Kennedy sent an e-mail to John Cahill confirming his understanding that Alberici was making

Exhibit E

0124

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“equity demands” in return for Alberici’s additional investments, which is consistent with

Alberici having equity conversion rights and equity success fees under the Memorandum

Agreement. (Exhibit 18). The claim by Defendants that Alberici only intended to get equity

conversion rights if that was something another investor wanted is not credible and not supported

by the evidence. (Exhibit 18 - Defendants said that Alberici was making “insane” demands for

equity conversion rights and that the claim for equity conversion rights is what Alberici wanted).

The court finds the equity conversion rights were an integral part of the agreement as a whole,

and that the parties never intended to only be bound by each “piece” or “phase” of the deal under

the theory advanced by Defendants.

23. On July 7, 2010, Mr. Kennedy sent an e-mail stating “Jeff has suggested that

CDG draft a property description for the mine-use area so that it can be transferred along with all

mineral rights some time [sic] this week,” which is consistent with Defendant Upland Wings

having a duty to transfer its mine assets under the Memorandum Agreement. (Niemeier Aff.

Exhibit G). On September 20, 2010, Mr. Kennedy sent an e-mail to Greg Kozicz of Alberici

stating in the context of discussing a transaction with Glencore, Ltd. that “Wings and Alberici

will communicate our response and work through terms and other issues,” which is consistent

with Alberici having rights to governance and requiring unanimous board approval for “game

changing” events under the Memorandum Agreement. (Niemeier Aff. Exhibit H). On

November 5, 2010, Mr. Niemeier and Mr. Kennedy had a telephone conversation where Mr.

Kennedy stated, among other things, “Alberici gets, you know, four, five, six percent conversion

… And that’s fine,” which is consistent with Alberici having equity conversion rights and equity

success fees under the Memorandum Agreement. (Exhibits 26 and 27).

Exhibit E

0125

- 16 -

24. Alberici and Thayer have substantially performed under the Memorandum

Agreement. Alberici formed an affiliate company to provide $9.2 Million of funding to

Defendants. (Exhibits C, D, E). Alberici and Thayer have also performed all of their remaining

obligations under the Memorandum Agreement including, among others, forming SalvageCo,

funding SalvageCo, executing a SalvageCo Retrieval and Stockpiling Agreement, executing a

SalvageCo Operating Agreement, providing overall governance for SalvageCo, paying Mr.

Kennedy $100,000, and forbearing on the collection of the $9.2 million of funding provided to

Defendants and the amounts owed by Defendants under the construction contracts. (Exhibit I).

“A party will not be allowed to assume the inconsistent position of affirming a contract in part by

accepting or claiming its benefits, and disaffirming it in part by repudiating or avoiding its

obligations, or burdens.” Cornelius v. CJ Morrill, 302 S.W.3d 176, 180 (Mo. App. 2009).

25. The Statute of Frauds does not prevent enforcement of the Memorandum

Agreement. Alberici requested that Defendants accept the Memorandum Agreement via a reply

e-mail and Defendants so did. The context and surrounding circumstances here show that the

parties consented to conducting transactions by electronic means. Mr. Niemeier testified that it

was customary for Alberici to correspond with Defendants via e-mail. In addition, the parties

had established a practice of sending written contract terms via an e-mail and sending an

acceptance via a reply e-mail. That was the procedure used by Alberici and Defendants when

they entered into the June 4, 2010 memorandum agreement that Defendants stated was

enforceable against Alberici in a June 27, 2011 e-mail. (Exhibits 19 and 20). The Uniform

Electronic Transactions Act, R.S.Mo. §§ 432.200 et seq., gives legal effect to contracts formed

by in this manner. Crestwood Shops, L.L.C. v. Hilkene, 197 S.W.3d 641, 651 (Mo. App. 2006).

Even if an electronic signature were not made here, Alberici and Thayer’s substantial

Exhibit E

0126

- 17 -

performance under the Memorandum Agreement would provide an exception to the Statute of

Frauds. “[One] equitable exception to the Statute of Frauds is where there has been partial

performance in furtherance of the agreement.” Piazza v. Combs, 226 S.W.3d 211, 223 (Mo.

App. 2007).

26. The terms of the Memorandum Agreement are not indefinite. “[W]hen parties

have written down an agreement in terms to which they both have acceded, the courts are

reluctant to hold the agreement ineffectual for indefiniteness. Especially is that true when the

other party has performed his part of the agreement and has, in a manner of speaking, burned his

bridges behind him.” Maupin v. Hallmark Cards, Inc., 894 S.W.2d 688, 695 (Mo. App. 1995).

That is the case here. The Memorandum Agreement contains all of the essential terms. It is not

necessary that the Memorandum Agreement be detailed as to every matter mentioned. “Where []

the essential elements of the agreement are set forth, specific performance is proper.” Bayless

Building Materials Company v. Peerless Land Company, 509 S.W.2d 206, 211(Mo. App. 1974).

27. Defendants’ argument that the Memorandum Agreement is unenforceable because

additional documents were necessary to implement its terms is unavailing. “The language of the

contract that the ‘actual legal documents’ would be drawn up later is no proof that the parties

were still negotiating. The mere fact that parties contemplate a formal written draft of their

agreement at a later time is not sufficient in itself to demonstrate that they did not intend to be

bound at the time of their original agreement. If there is intent not to be bound, it must be

specifically set out in their original agreement.” Hunt v. Dallmeyer, 517 S.W.2d 720, 724-25

(Mo. App. 1974). Application of this concept is evident in the July 1, 2011 Term Sheet that

Defendants signed with Pea Ridge Mining LLC (“Pea Ridge Mining”) wherein the parties to that

Exhibit E

0127

- 18 -

agreement included specific language that the Term Sheet, with some exceptions, “is non-

binding.” No such language exists in the Memorandum Agreement.

28. Plaintiffs have performed all of their obligations under the Memorandum

Agreement, and Defendants performed some of their obligations. There has been very

substantial performance of the Memorandum Agreement that has greatly benefited Defendants.

The Memorandum Agreement allowed Defendants to continue to pursue the mine project and

retain some ownership interest in the mine. Without the Memorandum Agreement, Defendants

would not have received from Plaintiffs, among other things, the $9.2 million that Defendants

used to pay off a secured creditor (which enabled Defendants to avoid foreclosure of the Pea

Ridge Mine Property and Defendants’ other assets) and Plaintiffs’ forbearance of the

multimillion dollar construction debt.

29. It appears that Defendants have breached the Memorandum Agreement.

Defendants have not performed several of the obligations in the Memorandum Agreement.

Defendants have not transferred the Pea Ridge Mine Property and the other mine assets from

Upland Wings to Wings Enterprises. Defendants have not allowed Plaintiffs to participate in the

governance of the mine owner (whether it is Upland Wings or Wings Enterprises), and

Defendants have refused to recognize Plaintiffs’ appointed director. Defendants have not

allowed Plaintiffs to review and approve offers to invest in or provide capital for the mine

project. Defendants have refused to recognize Plaintiffs’ approval rights over “game-changing”

decisions that affect the mine owner, such as taking on new debt or a new investor. Defendants

have taken on new debt and a new investor in their transactions with Pea Ridge Mining without

Plaintiffs’ knowledge or approval. Defendants have also disavowed Plaintiffs’ rights under the

Exhibit E

0128

- 19 -

Memorandum Agreement to have an equity interest in the mine owner and to convert

Defendants’ debt and other financial obligations to Plaintiffs into equity in the mine owner.

30. Defendants have engaged in a pattern of delay, refusals to negotiate, and refusals

to perform in an effort to put off further performance once Alberici acted in good faith under the

Memorandum Agreement and saved Defendants from what was thought to be imminent

foreclosure or loss of the Pea Ridge Mine property prior to execution of the Memorandum

Agreement. Defendants have repeatedly attempted to find other investors to pay off certain

notes and security interests of Plaintiffs in an effort to deprive Plaintiffs of equity conversion

rights in the enterprise.

31. Defendants only performed under the Memorandum Agreement enough to get

Alberici’s help to stave off loss of the mine and related property to buy Defendants time to find a

more favorable investment partner, even though e-mails and communications acknowledged that

Defendants understood and agreed to Plaintiffs’ demand for governance and equity conversion

rights and a very high return on its investment. (Exhibit 18).

32. On October 12, 2010, Defendants entered into an agreement with Glencore Ltd.

without Alberici’s prior knowledge or approval in violation of the terms of the Memorandum

Agreement, and after telling Alberici that “Wings and Alberici will communicate our response

[to Glencore] and work through terms and other issues.” (Exhibit 24).

33. On March 5, 2011, Defendants entered into a Fee Agreement with, among others,

Navis General Trading FZE that conditionally promised rights to minerals at the Pea Ridge

Mine, without Alberici’s prior knowledge or approval in violation of the terms of the

Memorandum Agreement. (Exhibit 2). The Fee Agreement was also entered into at a time that a

Exhibit E

0129

- 20 -

preliminary injunction was in place enjoining Defendants from “otherwise promising to transfer

any interest in the Pea Ridge Mine, including the minerals in and on the Pea Ridge Mine.”

34. On May 20, 2011, Defendants offered 30% equity in the Pea Ridge Mine to

PlasMet LLP for a $60 million investment without Alberici’s prior knowledge or consent in

violation of the Memorandum Agreement. (Niemeier Supplemental Aff. Exhibit A).

35. Defendants, through Mr. Kennedy, represented to the Court on June 28, 2011 that

they planned to remove 25 tons (1 dump trailer load) of minerals and other materials from the

Pea Ridge Mine property. It is undisputed that the minerals and other materials are Thayer’s

collateral. The record reflects that as of June 21, 2011, Defendants had plans to remove a total of

100 tons (5 dump trailer loads) of minerals and other materials from the Pea Ridge Mine

property and Defendants hid this fact from Plaintiffs and the Court on June 28, 2011. (Niemeier

Supplemental Aff. Exhibits B and C).

36. Mr. Burrow testified that on August 26, 2011, Defendants made arrangements to

sell two Heatmor furnaces owned by either Upland Wings or Wings Enterprises for $6,000.00

and planned to have the payment for the heaters made out to either Mr. Kennedy or Ms. Abboud

individually. It is undisputed that the furnaces are Thayer’s collateral. Even if the furnaces were

“scap metal” as Defendants contend, Thayer’s contractual rights would have been violated if the

furnaces had been sold without Thayer’s knowledge and express consent.

37. Defendants have acted in violation of the temporary restraining order and in

violation of the various security interests of Thayer by attempting to sell the two Heatmor

furnaces owned by either Upland Wings or Wings Enterprises the weekend between the first and

second day of the evidentiary hearing on Plaintiffs’ motion for preliminary injunction. Ms.

Abboud only stopped the sale after she got caught. Ms. Abboud had directed proceeds of the

Exhibit E

0130

- 21 -

sale in the amount of $6,000.00 to be made payable to her individually or her husband Mr.

Kennedy instead of to Upland Wings or Wings Enterprises, even after the purported deal with

Pea Ridge Mining, in which Pea Ridge Mining allegedly acquired an option for 70% of Upland

Wings and Wings Enterprises. This sale, had it been completed, would have not only cheated

Plaintiffs, but also Pea Ridge Mining.

38. The record reflects that Defendants, on numerous occasions, stated a desire to cut

Alberici out of its rights under the Memorandum Agreement. On November 7, 2010, Mr.

Kennedy wrote in an e-mail to Anthony Georgiou or Citadel World that “the current issue is

eliminating Alberici.” (Exhibit 8). On November 9, 2010, Mr. Kennedy wrote in an e-mail to

Dan Rubino of 787 Capital that “we want to get rid of Alberici ASAP…” (Exhibit 9). On

November 11, 2010, Mr. Kennedy responded “perfect” to a stated plan that “Wings will seek to

remove [Alberici] from the equation.” (Exhibit 10). On May 4, 2011, Mr. Kennedy wrote in an

e-mail to Bill Raffety that “We need to get a $30,000,000 commitment to get rid of Alberici …”

(Exhibit 12). On May 20, 2011, Mr. Kennedy told Mark Borst “Alberici will be forcefully

purchased out of their position today.” (Niemeier Supplemental Aff. Exhibits D). These

statements show that if not enjoined, Defendants may take further actions that threaten Plaintiffs’

contractual rights.

39. Mr. Kennedy and Ms. Abboud have acted in violation of the Memorandum

Agreement by failing to change the structure of the corporate boards of Upland Wings and

Wings Enterprises to a 3-person board, with one director selected by Defendants, one by

Plaintiffs and the third by mutual agreement. Plaintiffs designated Gregory T. Hesser, Alberici’s

Chief Financial Officer, as their appointed director, but Defendants refused to recognize

Plaintiffs’ appointed director. As a result, none of the actions taken by Upland Wings or Wings

Exhibit E

0131

- 22 -

Enterprises since June 28, 2010 have been authorized or approved by a properly-constituted

board of directors of either entity.

40. The Court finds that unless a preliminary injunction is entered, Plaintiffs will

suffer immediate and irreparable injury, loss, or damage to their collateral, governance, and

equity rights in the mine owner and Defendants’ assets.

41. It is undisputed that Defendants secretly negotiated and entered into transactions

with Pea Ridge Mining under which Defendants took on up to $20 million in new secured debt

from Pea Ridge Mining, Defendants granted liens in the mine and their assets to Pea Ridge

Mining, and Defendants purported to transfer control of the mine owner to Pea Ridge Mining

now and give 70 percent of the equity of the mine owner to Pea Ridge Mining in the near future.

Defendants have also agreed to issue additional shares of Upland Wings and Wings Enterprises

to Pea Ridge Mining at no additional cost to maintain Pea Ridge Mining’s 70% interest in the

event that Plaintiffs are found to be entitled to equity in the companies. (Exhibits 3, 4, 5, 6, 7).

Such share issuances to Pea Ridge Mining are not compatible with Plaintiffs’ rights under the

Memorandum Agreement. Additionally, Defendants and Pea Ridge Mining have contemplated

transferring ownership rights and mineral interests in the Pea Ridge Mine into various other

operating companies.

42. By entering into the transactions with Pea Ridge Mining, Mr. Kennedy and Ms.

Abboud appear to have failed to act in the best interests Upland Wings and Wings Enterprises in

violation of their fiduciary duties as directors of those two corporations. Mr. Kennedy and Ms.

Abboud have caused Upland Wings and Wings Enterprises to borrow $20 million from Pea

Ridge Mining with a maturity date of October 24, 2011 in part to replace debt that was in

Exhibit E

0132

- 23 -


personally guaranteed by Mr. Kennedy and Ms. Abboud or their family members.

43. Defendants’ claim that the Pea Ridge Mining transaction was necessary to prevent

Plaintiffs from foreclosing on a first deed of trust is not credible. Plaintiffs sent a default notice

to Defendants because Plaintiffs believed such a notice was required under applicable law

following a default. If Plaintiffs desired foreclosure, it had the option soon after the June 29,

2010 Demand Notes were executed and when Plaintiffs knew that Defendants had no other

options. Plaintiffs did not foreclose at that time. Plaintiffs appear to have acted in good faith in

their dealings with Defendants, including paying Ms. Abboud $10,000 per month while under no

obligation to do so.

44. The Court is not certain that the entire transactions between Defendants and Pea

Ridge Mining have been disclosed to Plaintiffs or the Court. During the hearing on August 31,

2011, Defendants represented that further documents were drafted relating to the transactions

between Defendants and Pea Ridge Mining. Defendants and the Polsinelli law firm have not

produced those documents, although they were requested by Plaintiffs in discovery and the Court

has previously ordered that such documents be produced.

45. What is known is that Defendants, in entering into the transactions with Pea Ridge

Mining, have acted in violation of the agreement with Plaintiffs requiring that “game changing”

decisions up to the $35 Million tranche be only made by unanimous decision of the 3-member

board as set forth in the Memorandum Agreement by, among other things, entering into a

transaction with Pea Ridge Mining whereby Upland Wings and Wings Enterprises changed their

boards to 5-member boards despite Defendants prior agreement with Plaintiffs for a 3-person

board. This new deal with Pea Ridge Mining gives Pea Ridge Mining 3 seats on the new board,

Exhibit E

0133

- 24 -

while Defendants retain only 2 seats. The deal also transfers, for consideration of one dollar, an

option for Pea Ridge Mining to own 70% of the shares in Upland Wings and Wings Enterprises,

a company both sides have valued at much more than a dollar or so.

46. This transaction with Pea Ridge Mining has resulted in damage to Plaintiffs’

position. Money needed by Defendants to avoid a foreclosure by Pea Ridge Mining and

resultant loss of the mine property is not guaranteed to Defendants under their transactions with

Pea Ridge Mining. Pea Ridge Mining has no apparent legal obligation to advance further

money, and with its majority now on the corporations’ boards, Pea Ridge Mining could

affirmatively prevent transfer of additional funds needed by Defendants to meet their obligations.

Thus, it appears that Defendants have acted in collusion with Pea Ridge Mining in structuring a

deal that appears poised to cut Plaintiffs out of their deal with Defendants. Defendants’ deal

with Pea Ridge Mining was signed 3 days after a previous preliminary injunction was lifted to

allow the parties to pursue a third-party investor in furtherance of the terms of the Memorandum

Agreement. The potential for irreparable harm is great, and the Court has every reason to believe

that without a preliminary injunction, Defendants will act in contravention of the Memorandum

Agreement. Defendants should not be permitted to do this until a full trial can be concluded.

Without a preliminary injunction, there will likely be no asset over which the parties can fight.

47. The mine and the equity of the mine owner have a unique value such that

Plaintiffs are entitled to specific performance of their rights under the Memorandum Agreement

as to the mine and the mine owner. Defendants’ transactions with Pea Ridge Mining, if allowed

to proceed further, threaten Plaintiffs’ collateral, governance, and equity rights in the mine owner

and Defendants’ assets. By issuing a preliminary injunction, the Court will preserve Plaintiffs’

contractual rights until the merits of Plaintiffs’ claims are adjudicated and, assuming that the

Exhibit E

0134

- 25 -

Court rules in Plaintiffs’ favor, will be able to grant specific performance and permanent

injunctive relief enforcing Plaintiffs’ contractual rights.

48. A preliminary injunction will not impose undue injury on Defendants or third

parties. It appears that Defendants agreed to the Memorandum Agreement. Thus, they should be

preliminarily enjoined so that they can still perform their obligations under the Memorandum

Agreement if the Court ultimately rules in Plaintiffs’ favor on the merits. Moreover, while a

preliminary injunction might impact Pea Ridge Mining, Pea Ridge Mining is no innocent

bystander. Before entering into the agreements with Defendants, Pea Ridge Mining was fully

aware of the Memorandum Agreement and Plaintiffs’ claims in this lawsuit. Finally, Defendants

have repeatedly acted in violation of this Court’s orders, including temporary restraining orders

and preliminary injunctions.

49. A preliminary injunction is in the public interest. Absent a preliminary

injunction, Defendants may enter into agreements with third parties that purportedly affect the

equity, assets, and governance of the mine owner. If the Court denies a preliminary injunction

and Plaintiffs eventually prevail on the merits of their claims under the Memorandum

Agreement, there could be an irreconcilable conflict between Plaintiffs’ collateral, equity, and

governance rights under the Memorandum Agreement and similar rights purportedly granted to

third parties (such as Pea Ridge Mining) by Defendants under other agreements. The public

interest favors the Court taking whatever action is necessary to protect the sanctity of contract, to

protect creditor’s rights, to protect the rights of shareholders and those parties holding equity

conversion rights, to prevent interference with any of those rights, to enforce fiduciary duties, to

enforce this Court’s jurisdiction, and to protect the status quo. From the public’s perspective, the

Exhibit E

0135

- 26 -

best course is to issue a preliminary injunction and preserve the status quo until the merits of this

case are decided.

50. It appears that Plaintiffs are likely to succeed on the merits of their claim that the

Memorandum Agreement is a valid contract. Plaintiffs have requested specific performance and

the Court would have the authority to declare void any “game changing” actions taken since June

28, 2010 without the consent of the director appointed by Plaintiffs. Gieselmann v. Stegeman,

443 S.W.2d 127, 135-36 (Mo. 1969); Faber v. Parent, 164 Fed.Appx. 596, 598-99 (9th Cir.

2006).4 To maintain the status quo pending final resolution of the case and because the

Defendants have repeatedly refused to obey the Court’s prior orders which sought to maintain

the status quo, and have attempted to put in place a series of transactions behind the backs of the

Plaintiffs and of the Court which seek to undermine the Court’s authority and to circumvent this

Court’s attempts to protect and to maintain the status quo pending an ultimate resolution of this

case, the Court will enjoin the Defendants from further implementing any of those agreements

and will require the Defendant corporations to be governed in accordance with the terms of the

Memorandum Agreement.

51. Accordingly, Defendants Upland Wings, Inc., Wings Enterprises, Inc., James

Kennedy, and Nina Abboud and their respective directors, officers, affiliates, employees,

shareholders, those holding or purporting to hold proxies to vote shares of any such shareholders,

agents, and any other person or entity which holds or purports to hold any authority, power, or

4 The Missouri Supreme Court has recognized the need to rely on federal case law concerning preliminary injunction proof because “there is relatively little Missouri case law concerning the elements required to obtain a preliminary injunction or a stay because such matters are interlocutory and generally not appealable.” In State ex rel. Director of Revenue, State of Mo. v.

Gabbert, 925 S.W.2d 838 (Mo. 1996).

Exhibit E

0136

- 27 -

right in any of the Defendants, either individually or acting in concert, are each hereby enjoined

from doing any of the following without the prior written consent of Thayer:

(A) taking any actions in furtherance of the July 1, 2011 Term Sheet, the Note and

Security Agreement, the Option to Purchase Stock Agreement, the Escrow Agreement,

the Irrevocable Durable Proxy Wings Enterprises, Inc., the Irrevocable Durable Proxy

Upland Wings, Inc., the Collateral Assignment of Lease, all with Pea Ridge Mining,

LLC, or any other agreements with Pea Ridge Mining, LLC, or its affiliates,

shareholders, officers, and agents, including, but not limited to:

(1) taking any further loan advances under the Note and Security Agreement

or any other agreement with Pea Ridge Mining, LLC;

(2) transferring any assets of, or any stock, securities, or equity interest in,

Upland Wings, Inc., or Wings Enterprises, Inc., to Pea Ridge Mining, LLC or

Enterprise Bank & Trust, as Escrow Agent under the Escrow Agreement;

(3) taking any actions to effect or recognize the transfer of any assets of, or

any stock, securities, or equity interest in, Upland Wings, Inc., or Wings

Enterprises, Inc., to Pea Ridge Mining, LLC;

(4) entering into any “Definitive Agreements” (as defined in the July 1, 2011

Term Sheet between Defendants and Pea Ridge, Mining, LLC) or any other new

agreements with Pea Ridge Mining, LLC;

(5) transferring any stock, securities, or equity interest in Upland Wings, Inc.,

or Wings Enterprises, Inc., pursuant to the terms of the Escrow Agreement;

(6) exercising any conversion or other rights under the Option to Purchase

Stock Agreement;

Exhibit E

0137

- 28 -

(7) issuing any new shares or other securities of Upland Wings, Inc., or Wings

Enterprises, Inc.;

(8) exercising or permitting the exercise of any voting or other shareholder

rights pursuant to either the Irrevocable Durable Proxy Wings Enterprises, Inc., or

the Irrevocable Durable Proxy Upland Wings, Inc.; and

(9) recognizing or giving effect to in any manner the exercise or the purported

exercise of any voting or other shareholder rights pursuant to either the

Irrevocable Durable Proxy Wings Enterprises, Inc., or the Irrevocable Durable

Proxy Upland Wings, Inc.

(B) discussing, negotiating, or entering into any letter of intent, memorandum of

understanding, summary of understanding, contract, or agreement by any name,

designation, or description that involves or is related in any way to the subject matter of

this litigation, the Pea Ridge Mine Property, or the minerals in or on the Pea Ridge Mine

Property;

(C) conducting or having conducted any appraisals, feasibility studies, engineering

assessments, site plans, or surveys related in any way to the Pea Ridge Mine Property;

(D) taking any action to grant or transfer or otherwise promising to grant or transfer

any type of interest, whether as security or otherwise, in the Pea Ridge Mine Property, the

minerals in or on the Pea Ridge Mine Property, or the assets, property, equity, or

securities of any incorporated or unincorporated entity that directly or indirectly owns the

Pea Ridge Mine Property or the minerals in and on the Pea Ridge Mine Property;

(E) taking any actions that cause any incorporated or unincorporated entity that

directly or indirectly owns the Pea Ridge Mine Property or the minerals in or on the Pea

Exhibit E

0138

- 29 -

Ridge Mine Property to borrow any additional monies or accept any investments from

any source;

(F) paying or attempting to pay any indebtedness or other obligations owed to

Plaintiffs that Plaintiffs claim is subject to equity conversion rights in the June 25, 2010

Memorandum Agreement;

(G) removing any minerals or other materials or any equipment from the Pea Ridge

Mine Property;

(H) entering on the Pea Ridge Mine Property except in accordance with applicable

laws and with the express prior written consent of Plaintiff Thayer Land Development

Company L.L.C. or Alberici Constructors, Inc., which consent shall not be unreasonably

withheld;

(I) directing or causing the filing of any petition for relief under the federal

Bankruptcy Code by Upland Wings, Inc., or Wings Enterprises, Inc.

52. The current boards of directors of Upland Wings, Inc., and Wings Enterprises,

Inc., and each director thereon are hereby suspended and enjoined from taking any further action

on behalf of Upland Wings, Inc., or Wings Enterprises, Inc., including, but not limited to,

incurring new debt, issuing or transferring any stock, security, or equity interest, accepting any

investor, or filing any petition for relief under the federal Bankruptcy Code.

53. Effective immediately, the boards of directors of Upland Wings, Inc., and Wings

Enterprises, Inc., each consist of three directors: (1) one director jointly appointed by Defendants

James Kennedy and Nina Abboud with written notice to Thayer; (2) one director appointed by

Thayer with written notice to Defendants; and (3) and one director to be mutually selected by

Thayer and Defendants James Kennedy and Nina Abboud. Defendant Nina Abboud is

Exhibit E

0139

- 30 -

designated as the initial director jointly appointed by Defendants James Kennedy and Nina

Abboud and shall serve until and unless Defendants James Kennedy and Nina Abboud jointly

appoint a different director. Gregory T. Hesser is designated as the initial director appointed by

Thayer and shall serve until and unless Thayer appoints a different director. Joseph Murray,

attorney at law in Park Hills, Missouri, is designated as the initial third director and shall serve

until and unless Thayer and Defendants James Kennedy and Nina Abboud mutually select a

different director. Unless specifically authorized by this Court, Upland Wings, Inc., and Wings

Enterprises, Inc., shall take no action without the prior express written approval of the director

appointed by Thayer, including, but not limited to incurring new debt, issuing or transferring any

stock, security, or equity interest, accepting any investor, or filing any petition for relief under

the federal Bankruptcy Code.

54. Defendants Upland Wings, Inc., Wings Enterprises, Inc., James Kennedy, and

Nina Abboud shall immediately prepare, execute, and file with the proper authorities, in proper

form, all needed and necessary resolutions, amendments to articles of incorporation, amendments

to by-laws, or other amendments to any other appropriate documents and all other documents as

may be required, to reduce the size of the boards of directors of Upland Wings, Inc., and Wings

Enterprises, Inc., to three members, to replace the existing directors with those set forth in this

Order, and to take such other action required in the preceding paragraph of this Order. This

action is to be taken immediately. Plaintiffs are directed to prepare all needed and necessary

documents to give full effect hereto, and Defendants shall execute these documents immediately

upon presentation and return them to Plaintiffs, who shall file said documents.

55. In accordance with Rule 92.02(e), this Preliminary Injunction Order is binding

upon Defendants and their officers, agents, servants, employees, and attorneys and upon those

Exhibit E

0140

- 31 -

persons in active concert or participation with them who receive actual notice of this Preliminary

Injunction Order by personal service or otherwise.

56. Plaintiffs shall a serve a copy of this injunction upon Pea Ridge Mining, LLC and

any other person or entity Plaintiffs desire, from time to time. The Court specifically finds that,

in light of the evidence introduced at the hearing, Pea Ridge Mining, LLC, Ahti Vilppula, and

Ulrich Krasukopf have been affirmatively and knowingly acting in concert and participation with

Defendants as to the actions by Defendants that appear to violate Plaintiffs’ rights under the

Memorandum Agreement and the Deed of Trust and Business Security Agreements that

Defendants executed in favor of Thayer. The Court was also informed that the attorney for Pea

Ridge Mining LLC and Ahti Vilppula consented to be bound by this Order before the Honorable

Judge Rodney Sippel of the United States District Court for the Eastern District of Missouri.

Accordingly, Pea Ridge Mining, LLC, Ahti Vilppula, and Ulrich Krasukopf and their attorneys,

agents, directors, managers, and anyone acting on their behalf or in concert with them are

individuals and entities bound by this Order to the fullest extent permissible under Rule 92.02(e).

57. Likewise, the Court specifically finds that Enterprise Bank & Trust, as the

Escrow Agent under the purported Escrow Agreement, is bound by this Order to the fullest

extent permissible under Rule 92.02(e).

58. Nothing in this Preliminary Injunction Order shall prevent SalvageCo, LLC, from

continuing operations under its governing corporate documents.

59. Plaintiffs have posted security in the amount of $3,100,000 with the Court in the

form of a preliminary injunction bond. The Court finds that this amount is adequate to protect

Defendants from any potential harm or injury that they may suffer as a result of the entry of this

amended preliminary injunction. Defendants have argued that the Court should consider a bond

Exhibit E

0141

- 32 -

in the amount of $1 billion based on Defendants’ projections about the value of a fully

operational project. Defendants’ argument is not credible because, among other reasons, the

record reflects that on July 1, 2011, Defendants purported to grant an option to transfer 70% of

the equity of each of Upland Wings and Wings Enterprises for $1. While the Court does not

believe that the option price reflects the real value of the project, Defendants should not be

permitted to argue that an injunction bond should be based on a much higher valuation of the

venture when they purported to value the equity at such a low amount. Further, the parties have

said the mine project may be worth substantial sums in the future, but not at the present time

given the early stages of development of the overall project. The 3.1 Million Dollar bond posted

with the preliminary injunction entered earlier today is sufficient in light of a consideration of all

relevant factors. Further, the preliminary injunction bond posted with the preliminary injunction

posted earlier today shall apply to this amended preliminary injunction.

60. The Temporary Restraining Order entered on August 11, 2011 is hereby

dissolved. The Clerk shall release to Plaintiffs the original Temporary Restraining Order Bond.

This Order is issued on September 1, 2011 at 3:30 o’clock P.M.

SO ORDERED: /s/ Shawn McCarver 9-1-11 3:30 pm Shawn McCarver, Judge

Exhibit E

0142

Overland-based Alberici partners with Canadian firm to buy mine

BY LISA BROWN • [email protected] > 314-340-8127 | Posted: Wednesday, January 4, 2012 9:58 am

Canadian commodities supply chain firm MFC Industrial Ltd. has partnered with Alberici Constructors, an Overland-based construction firm, to acquire the Pea Ridge iron ore mine in Washington County.

MFC and Alberici will jointly develop the Pea Ridge mine near Sullivan, which has been at the center of efforts to mine valuable rare earth elements in Missouri since businessman Jim Kennedy bought the mine in 2001. Kennedy is president of Wings Enterprises, which is based in the St. Louis area.

The Pea Ridge mine has been embroiled in a legal dispute over ownership and development rights for months.

In a July lawsuit filed in federal court, an entity affiliated with Alberici asked the court to void a transfer of Alberici's interest in the mine to Pea Ridge Mining LLC, an affiliate of Belgravia Mining Corp.

The lawsuit alleged Alberici negotiated a joint development agreement in 2010 that assigned the construction company an equity interest in Wings Enterprises and allowed the construction company to participate in management of the mine's operation.

Alberici says it got the deal in exchange for the construction of processing facilities at the Pea Ridge Mine and work at a shipping facility in Crystal City.

In a statement released today, MFC said numerous contractual disputes and lawsuits related to Pea Ridge have all been settled.

"We are pleased to have settled all legal disputes with the owners of the Pea Ridge mine," MFC's Chairman and Chief Executive Michael Smith said in a statement.

MFC said that it paid $13 million for its stake in the mine and assumed an unspecified amount of debt. Alberici declined to comment on its interest and a spokesman referred questions to MFC.

MFC and Alberici appear to be more interested in Pea Ridge's iron than its rare earth elements. Rare earth elements, which are used in cell phone batteries, flat screen TVs and weapons systems, shot up in price after China signaled in 2009 that it would cut rare earth exports. China produces more than 90 percent of rare earth output. However, the Chinese government said in late December that it will keep its rare earth export quotas unchanged from 2011.

As part of MFC and Alberici’s acquisition, Pea Ridge’s “previous owners” will retain a 2.6 percent royalty on iron, or ferrous, mineral returns and will hold a 70 percent ownership stake mineral rights on non-ferrous minerals at the mine. The two companies didn’t detail who were the previous owners. Kennedy couldn’t be reached for comment.

MFC and Alberici jointly own the remaining 30 percent in the entity that controls non-ferrous minerals.

The Pea Ridge mine was originally developed by a partnership between Bethlehem Steel and St. Joe Minerals and operated as a underground mine from 1963 to 2001. The mine was owned by Woodridge Resources when it closed in 2001.

The mine, which has been estimated to contain more than 150 million metric tons of high-grade magnetite iron ore reserves, was to supply ore for a smelter in Crystal City on the site of the former Pittsburgh Plate Glass plant, which shuttered in 1990.

The Crystal City project has been hailed as an economic boon that would bring 1,000 jobs to the city, but only weeds have grown on the site since Kennedy signed a 100-year lease for the property in 2007.

Crystal City Mayor Tom Schilly, a supporter of the smelter, said Wednesday he did not know how the Pea Ridge acquisition would affect the plans for the smelter and that he needs to confer with city attorneys.

Leah Thorsen of the Post-Dispatch contributed to this report.

Exhibit F

0143

Exhibit G

0144

Case: Alberici Constructors v. Upland Wings, et al.

Volume No.

Transcript of the Testimony of Audio Recording

Date: December 21, 2011

This transcript is printed on 100% recycled paper

515 Olive Street, Suite 300St. Louis, MO 63101Phone:314.241.6750

1-800-878-6750Fax:314.241.5070

Email:[email protected]

Exhibit H

0145

1222217d-d77a-48aa-b4bb-6612168447fd

Alberici Constructors v. Upland Wings, et al. Audio Recording

12-21-2011

314.241.6750 [email protected] Gore Perry Reporting _ Video

Page 1

IN THE CIRCUIT COURT OF THE COUNTY OF WASHINGTON

STATE OF MISSOURI

ALBERICI CONSTRUCTORS, INC.,

Plaintiff,

vs. No. 10WC-CC00476

UPLAND WINGS, et al.,

Defendants.

HEARING

Taken on December 21st, 2011

Exhibit H

0146

1222217d-d77a-48aa-b4bb-6612168447fd


12-21-2011


2 (Pages 2 to 5)

Page 2

1 IN THE CIRCUIT COURT OF THE COUNTY OF WASHINGTON

2 STATE OF MISSOURI

3

4 ALBERICI CONSTRUCTORS, INC.,

5

6 Plaintiff,

7

8 vs. No. 10WC-CC00476

9

10 UPLAND WINGS, et al.,

11

12 Defendants.

13

14 TRANSCRIPTION OF AUDIOTAPED HEARING

15 taken on the 21st day of December, 2011, by Gretta

16 G. Cairatti, RPR, CRR, MO-CCR #790, IL-CSR

17 #084-003418, and Notary Public.

18

19

20

21

22

23

24

25

Page 3

1 APPEARANCES OF COUNSEL:23 FOR THE PLAINTIFF:4 RICHARD B. SCHERRER, ESQ.5 WINSTON CALVERT, ESQ.6 ERIC HARRIS, ESQ.7 Armstrong Teasdale LLP8 7700 Forsyth Boulevard, Suite 18009 St. Louis, MO 6310510 314/621-507011 [email protected] [email protected] [email protected] AND15 LAWRENCE C. FRIEDMAN, ESQ.16 Thompson Coburn LLP17 One US Bank Plaza18 St. Louis, MO 6310119 314/552-600020 [email protected]

Page 4

1 APPEARANCE OF COUNSEL (CONTINUED):23 FOR THE DEFENDANT:4 DAVID L. BAYLARD, ESQ.5 Baylard, Billington, Dempsy & Jenson, PC6 30 South McKinley7 Union, MO 630848 636/239-84009 [email protected] _ _ _ _ _ _ _ _1213141516171819202122232425

Page 5

1 INDEX23 PAGE4 Direct Examination By Mr. Scherrer 15567 EXHIBITS89 PAGE10 Plaintiff's Exhibit 41 2011 Plaintiff's Exhibit 42 2512 Plaintiff's Exhibit 43 2613 Plaintiff's Exhibit 44 3314 Plaintiff's Exhibit 46 3715 Plaintiff's Exhibit 46 4416 Plaintiff's Exhibit 47 51171819202122232425

Exhibit H

0147

1222217d-d77a-48aa-b4bb-6612168447fd


12-21-2011


3 (Pages 6 to 9)

Page 6

1 (WHEREUPON, the following tape-recorded2 hearing was transcribed on January 16, 2012.)3 THE COURT: Okay. The Court calls the case4 of Alberici Constructors, et al., versus Upland5 Wings, et al., 10WA-CC00476. This is a Washington6 County case being heard for trial today in7 St. Francis County by agreement of all parties. The8 parties that are present are Alberici Constructors9 represented by Mr. Laurence Friedman. Thayer Land10 Development by Mr. Richard Scherrer. Local counsel11 for the Plaintiffs is Eric Harris. He's present as12 well. Are you with --13 MR. HARRIS: I'm with Winston Calvert at14 Armstrong Teasdale.15 THE COURT: All right. And you -- you16 represent Thayer; is that correct?17 MR. HARRIS: Correct.18 THE COURT: Mr. Winston Calvert, also of19 Armstrong Teasdale, is present here representing20 Thayer Land Development, all on the side of the21 Plaintiffs.22 The Defendants are represented here by23 Mr. David Baylard, attorney at law.24 To make the record clear, the Defendants,25 Jim Kennedy and Nina Abboud are not present but I

Page 7

1 understand that's by design and with agreement of2 counsel; is that correct, Mr. Baylard?3 MR. BAYLARD: Yes, Sir, that is correct.4 THE COURT: All right. The docket sheet in5 the Washington County case lists Rose Marie Abboud6 also as a Defendant. I don't think she was ever7 joined. I think there was a request, maybe at one8 point. I don't think it was ever acted on. Does9 everyone agree that she is not a party?10 MR. BAYLARD: Yes, Sir.11 MR. SCHERRER: Plaintiff's do, Your Honor.12 MR. FRIEDMAN: She's not a party, Your13 Honor. That may have been a reference to the fact a14 subpoena was served on her. She's never been --15 THE COURT: All right.16 MR. FRIEDMAN: -- a Defendant.17 THE COURT: All right. I did not think so18 and I have handled most of this stuff in this case19 since it came up, anyway, so I did not ever remember20 her being a party. So she's not a party even though21 she's on the docket sheet, and I want the record to22 be clear that that's on there by mistake. Is23 Mr. Going here?24 UNIDENTIFIED SPEAKER: No, he is not.25 THE COURT: No, he is not. Okay. Folks,

Page 8

1 with respect to the question of -- and Mr. Friedman,2 do I understand that for purposes of today's trial,3 Mr. Scherrer is sort of taking the lead for the4 plaintiffs; is that correct?5 MR. FRIEDMAN: That's correct, Your Honor.6 He'll be putting on the evidence.7 THE COURT: Does everyone then agree that --8 Typically I go -- From my perspective, I go9 clockwise around to ask people -- to ask the lawyers10 or parties questions.11 Does everyone agree, then, that Mr. Scherrer12 can answer for all of -- everyone who's here for the13 Plaintiffs, Mr. Baylard, of course, for the14 Defendant's. Is that okay with everybody?15 UNIDENTIFIED SPEAKERS: Yes, Sir.16 THE COURT: Mr. Scherrer, do you agree that17 this trial can be -- you don't have to keep18 standing, we're not that formal here. Do you --19 Mr. Scherrer, do you agree that this Washington20 County matter can be heard -- the trial of it can be21 heard here in St. Francis County?22 MR. SCHERRER: Yes, Your Honor.23 THE COURT: And you -- your side has not24 requested and therefore affirmatively waives any25 right to a jury trial that you may or may not have?

Page 9

1 MR. SCHERRER: That is correct, Your Honor.2 MR. BAYLARD: All right.3 THE COURT: And Mr. Baylard, do you also4 agree that this final trial can be held in St.5 Francis County?6 MR. BAYLARD: I do.7 THE COURT: Do you also waive, on behalf of8 you and your clients, any jury trial rights that you9 may have had?10 MR. BAYLARD: Yes, Sir, I do.11 THE COURT: All right. Now, the other issue12 is with respect to the notice that was filed,13 noticing this up for trial. The parties contacted14 me wanting to have a hearing date sometime quickly15 to get this matter resolved by trial. I said we16 could do it today if we did it here. Unfortunately17 that didn't comply with our local five-day notice18 rule.19 Mr. Scherrer, has your side been asked, I20 presume that you're waiving any objection to the --21 related to the five-day notice requirement?22 MR. SCHERRER: That is correct, Your Honor.23 THE COURT: And Mr. Baylard, on behalf of24 the Defendants, I understand that you've probably25 had some phone calls, but as far as an actual

Exhibit H

0148

1222217d-d77a-48aa-b4bb-6612168447fd


12-21-2011


4 (Pages 10 to 13)

Page 10

1 written notice, I believe we got it yesterday, do2 you, Sir, also waive any objections related to time3 period of the notice on this trial.4 MR. BAYLARD: Yes, I do, Your Honor.5 THE COURT: All right. Mr. Scherrer, have6 we covered everything that you would like me to7 cover in pretrial before you start introducing your8 evidence?9 MR. SCHERRER: Yes, Your Honor, with perhaps10 one thing, and that is, we are going to move to11 dismiss without prejudice certain counts. I have12 those --13 THE COURT: Why don't you do that after your14 evidence, that way we'll see where we're at in terms15 of, you know, proof and some of that kind of stuff.16 MR. SCHERRER: That's fine.17 THE COURT: You know, when you get ready to18 finish up your case, you can do that.19 And just for the record, it's my20 understanding that you're going to be proceeding21 primarily at this trial on your breach of contract22 count requesting a remedy of specific performance;23 is that correct?24 MR. SCHERRER: Yes.25 THE COURT: And just because it's my usual

Page 11

1 policy, I would ask ahead of time, do you have a2 proposed judgment?3 MR. SCHERRER: Yes, we do, Your Honor.4 THE COURT: All right. And since it's5 specific performance and since my understanding of6 the case law is that in the judgment, you're going7 to have to have real specific ideas of what you want8 done, not just a -- a list of things. I presume9 your judgment is very specific as to what you're10 going to have me order; is that correct?11 MR. SCHERRER: That is correct, Your Honor.12 THE COURT: All right.13 MR. SCHERRER: In addition, Your Honor, we14 seek a permanent injunction as well.15 THE COURT: That's fine. Yes, you told me16 that in pretrial and I forgot to mention it. So17 you're going to be proceeding on the breach of18 contract and the request for permanent injunction;19 is that correct?20 MR. SCHERRER: Yes, Your Honor.21 THE COURT: Mr. Baylard, any proposed22 judgment on your side of the case?23 MR. BAYLARD: No, Your Honor, we do not.24 The Defendants do voluntarily dismiss, without25 prejudice, their counterclaim in order to shorten

Page 12

1 this trial.2 THE COURT: Okay. The -- And this applies3 to all claims and causes of action that have been4 raised by the Defendants at any time during this5 case; is that correct?6 MR. BAYLARD: That is correct.7 THE COURT: And Mr. Scherrer, the dismissal8 I've been handed by Mr. Baylard, I'm going to mark9 it as filed today on December 21st. Do you agree10 that -- It says it's without prejudice.11 MR. SCHERRER: We agree, Your Honor.12 THE COURT: All right. Very well. Any13 other pretrial matters, folks?14 UNIDENTIFIED SPEAKER: I don't believe so.15 THE COURT: Oh, wait, I'm sorry, we may have16 another one. Because we talked about it in17 pretrial, I believe the parties are in agreement18 that I would take judicial notice of all pleadings,19 orders, judgment, findings, as well as all testimony20 heard at all prior hearings in this matter. I know21 Rule 92 allows me to consider for purposes of the22 trial, all evidence heard over our three-day hearing23 on the request to turn the TRO into a preliminary24 injunction. It would be my intention to do that. I25 want to make sure no one has any -- I'm sure there's

Page 13

1 a valid objection to it, but I'm going to ask2 Mr. Scherrer, do you agree to that?3 MR. SCHERRER: Yes, we do, Your Honor.4 THE COURT: Okay. And Mr. Baylard?5 MR. BAYLARD: Yes.6 THE COURT: And now, are there any other7 pretrial matters?8 MR. BAYLARD: None that I know of, Your9 Honor.10 MR. SCHERRER: None for the Plaintiffs, Your11 Honor.12 THE COURT: Very well. Mr. Scherrer, you13 may call your first witness.14 MR. SCHERRER: Robert Niemeier, please.15 THE COURT: Mr. Niemeier, come on up. You16 testified here for about two full days before, so I17 know you know to speak loudly and if a question18 calls for yes or no, say it. I give that speech19 about hundred times a day.20 All right. Now, raise your right hand21 please. Do you swear the tell the truth, the whole22 truth, and nothing you the truth, so help you God?23 THE WITNESS: Yes, Sir.24 THE COURT: Very well. Mr. Scherrer, you25 may proceed.

Exhibit H

0149

1222217d-d77a-48aa-b4bb-6612168447fd


12-21-2011


5 (Pages 14 to 17)

Page 14

1 MR. SCHERRER: Thank you, Your Honor.2345678910111213141516171819202122232425

Page 15

1 ROBERT NIEMEIER,23 of lawful age, having been first duly sworn on4 behalf of the Plaintiffs to testify the truth, the5 whole truth, and nothing but the truth in the case6 aforesaid, says in reply to oral interrogatories7 propounded as follows, to-wit:8 DIRECT EXAMINATION9 QUESTIONS BY MR. SCHERRER:10 Q You are Robert Niemeier, an employee of one11 of the Plaintiffs, Alberici Construction?12 A Yes.13 Q You reside in St. Louis County; is that14 right, Sir?15 A Yes.16 Q Now, you previously, as the Court noted,17 testified for a number of days at the preliminary18 hearing of this matter; correct?19 A Yes, I did.20 Q One of the aspects of the preliminary21 injunction, Mr. Niemeier, involved the Court22 enjoining the Defendants from going ahead with any23 business transactions involving a company called Pea24 Ridge Mining, LLC; is that your understanding?25 A Yes, it is.

Page 16

1 Q And you're the principal contact for2 Alberici and Thayer with respect to this project,3 are you not, Sir?4 A Yes, I am.5 Q It is under your direct supervisory control?6 A Yes, it is.7 Q What is your title?8 A I am project director for that.9 Q And by -- by the mining project, we're10 referring to what is commonly called the Pea Ridge11 Mine located primarily in Washington County and some12 portions of Crawford County in the State of13 Missouri; correct?14 A Yes.15 Q Now, you were present for depositions,16 virtually all of them, taken in this case; correct?17 A Yes, I have been.18 Q And in addition, you've had an opportunity19 to review, as they came in, documents that were20 produced in discovery and identified during the21 course of the deposition; is that right, Sir?22 A That is correct.23 Q In the course of the depositions, have you24 come to know the name of an individual named Ahti25 Vilppula?

Page 17

1 A Yes, I have.2 THE COURT: Let me stop you, as another3 matter of pretrial announcement, I think it goes4 without saying, since I said I was taking judicial5 notice of all the previous testimony and so forth, I6 didn't specifically mention the voluminous notebooks7 filled with exhibits. Those were admitted before.8 I want the record to be clear that I'm taking all of9 those as admitted at this trial as well since they10 were brought in at the hearing on the preliminary11 injunction. Mr. Scherrer, do you agree?12 MR. SCHERRER: Yes, I do, Your Honor.13 THE COURT: Mr. Baylard.14 MR. BAYLARD: Yes, I do.15 THE COURT: My apologies for interrupting16 you. When you started talking about exhibits, I17 realized I had forgotten to say that.18 MR. SCHERRER: Thank you, Your Honor.19 THE COURT: The last question, are you20 familiar with Ahti Vilppula?21 THE WITNESS: I'm familiar with his name,22 yes.23 THE COURT: All right. Go ahead.24 QUESTIONS BY MR. SCHERRER:25 Q What is his relationship with Pea Ridge

Exhibit H

0150

1222217d-d77a-48aa-b4bb-6612168447fd


12-21-2011


6 (Pages 18 to 21)

Page 18

1 Mining, LLC, as you've come to know it, Sir?2 A As I've come to know it, he is the sole3 owner, if you will, of Pea Ridge Mining.4 Q When considering -- Well, strike that.5 In the memorandum agreement, which was6 marked and identified as an exhibit during the7 preliminary junction hearing, contained certain8 provisions relating to the approval and consent of9 the Plaintiffs with respect to investors; is that10 correct?11 A Correct.12 Q And obviously that approval and consent was13 never obtained from the Plaintiffs, as we know, with14 respect to Mr. Vilppula or his company, PRM, LLC,15 making an investment in the mining project; is that16 right?17 A That is correct, we were unaware.18 Q How did you come to know that Mr. Vilppula19 had any relationship with the Pea Ridge Mine?20 A As I had previously testified, we were21 alerted to the -- the security that was filed as a22 second Deed of Trust against the mining property in23 Washington County, Missouri, and -- and his name is24 listed on the face of that document.25 Q Among other things, when you learned of that

Page 19

1 name from that document, did you endeavor to2 determine or obtain any information from public3 sources with respect to Mr. Vilppula?4 A Yes, I did.5 Q Can you generally tell us what you did,6 please?7 A The first thing I did is went to Google8 and -- and frankly there was all kinds of articles9 that -- that popped up about him.10 Q Very well. Now, I'll get -- I'll get to11 that with more specificity in a moment, but as it12 relates to the approval process to approve an13 investor, what, if anything, would the Plaintiffs be14 looking for in terms of an investor?15 A Well, as I had previously testified, we16 would be looking first for someone that has the17 experience to be a partner in this endeavor, to be18 able to meet their obligations.19 The second issue would be their financial20 wherewithal to, again, to meet what those21 obligations would be.22 And then thirdly, not necessarily in23 priority, is the culture. If they're going to be24 your partner and you're all going to be at risk in25 some form of venture together, you want to have

Page 20

1 confidence that you share values and that we're not2 placing ourselves at risk through that association.3 Q Subsequently, when you learned that4 Mr. Vilppula had an interest as an investor in the5 project, did you take a closer look at the6 information that you were able to locate from your7 Google searches and other things within the public8 domain and the public media?9 A Yes, I did.10 MR. SCHERRER: I lost an exhibit, Your11 Honor, I apologize.12 THE COURT: Take your time, we're fine.13 MR. SCHERRER: I don't know where they are.14 Here it is.15 QUESTIONS BY MR. SCHERRER:16 Q Let's --17 THE COURT: If he's going to testify about18 it, he might as well have them.19 MR. SCHERRER: Absolutely.20 QUESTIONS BY MR. SCHERRER:21 Q I'm going to hand you with the Court's22 permission --23 THE COURT: Go ahead.24 QUESTIONS BY MR. SCHERRER:25 Q -- Plaintiff's Exhibit 41. And actually,

Page 21

1 it -- there's another copy of it which contains some2 highlights. I'll hand up a courtesy copy to the3 court.4 THE COURT: Thank you. And just -- just so5 we know, you're starting your exhibits at 41 today,6 I'm assuming that that takes into account the fact7 that we had a bunch of exhibits before?8 MR. SCHERRER: Correct.9 THE COURT: So in other words, what you're10 doing today starts sequentially from what we had at11 the preliminary injunction hearing?12 MR. SCHERRER: That is correct, Your Honor.13 THE COURT: Very well.14 QUESTIONS BY MR. SCHERRER:15 Q Now, you have before you Plaintiff's16 Exhibit 41. Would you identify that generally?17 What is that and how did you come by it?18 A This is an article from the Helsinki Times19 in Finland from 2000 -- May of 2008, yeah.20 Q Is that a document that you came across21 pursuant to this Googling process that you22 described?23 A Yes.24 Q And that that -- does that particular25 document which you downloaded or printed off of

Exhibit H

0151

1222217d-d77a-48aa-b4bb-6612168447fd


12-21-2011


7 (Pages 22 to 25)

Page 22

1 the -- after your Googling efforts with Mr. Vilppula2 does it contain information about his background?3 A It does.4 Q Now, you're not standing here and saying5 that the information that is contained therein or6 that any of the others -- two other documents that7 I'm going to present you, is necessarily true.8 You're not testifying as to the -- or contending9 that they are true; is that right, Sir?10 A Correct, I don't know if they are true.11 Q This is just information as we understand it12 that you gleaned in order to determine who13 Mr. Vilppula was and whether or not there would be14 any issue as to his suitability as an investor;15 correct?16 A That's correct.17 MR. SCHERRER: And I'll read -- Well, I'll18 move that -- for admission into evidence,19 Plaintiff's Exhibit 41, Your Honor.20 THE COURT: Obviously we don't have to prove21 the stuff is true. You can base your decision on22 whether you want to invest with somebody on any23 number of factors, including an article that may or24 may not be true. Clearly it's admissible.25 Exhibit 41 is in. And I presume it's coming in to

Page 23

1 explain why Alberici didn't want to do business.2 MR. SCHERRER: Why they had concerns, Your3 Honor.4 THE COURT: Understand. Continue.5 MR. SCHERRER: Yes.6 QUESTIONS BY MR. SCHERRER:7 Q So you've highlighted certain portions so we8 can shorten this up. Would you read into the record9 what you've highlighted that are part of Plaintiff's10 Exhibit 41?11 A Sure. This talks about how Mr. Vilppula12 is -- is a part of --13 THE COURT: You want him to read it verbatim14 or -- or did you just want to put -- give me the15 highlights?16 QUESTIONS BY MR. SCHERRER:17 Q Why don't you give the Court the highlights,18 please?19 A That Mr. Vilppula and two other Finnish20 gentlemen are aggressive Finnish businessmen.21 They're in a variety of industries, and they22 traditionally work together in several different23 types of projects, and it says, By reputation,24 Vilppula, Makela (phonetic), and Sam Oduri25 (phonetic) -- I'm sure I'm not pronouncing it

Page 24

1 correctly -- are not regarded as exactly shiny white2 knights or business angels. They are heavyweight3 investors who are used to meeting serious returns on4 the sums that they lay out. The caveman, this was a5 name that Ahti Vilppula and Kai Makela started to6 use about themselves a few years ago.7 Q All right. And is the theme of the article8 generally the notion about contributions they've9 made to political candidates in Finland?10 A It is primarily that, although it also11 references the fact that they've been involved in12 more third world type countries and political13 payoffs in terms of other paper mining industries.14 Q And what other parts of the article in15 particular caught your attention which is16 Plaintiff's Exhibit 41?17 A The relationship with a group commonly known18 as the Costocontrio (phonetic) but it's three former19 ministry directors of the -- of -- before the Soviet20 Union was disbanded into everything else. And21 they're expected -- Vilppula is tied to this group22 of billionaires that are suspected by the Belgian23 authorities of money laundering counterfeited24 document, links to organized crime, I could go on.25 Q All right. You may set that aside. Now, as

Page 25

1 a result of what you read about the -- this trio of2 individuals, did you then do a search with respect3 to the Costocontrio (phonetic)?4 A Yes, yes.5 Q And did that then result in information that6 you located which is contained within Plaintiff's7 Exhibit 42, a copy of which I'm going to hand up to8 the Court?9 THE COURT: Thank you.10 QUESTIONS BY MR. SCHERRER:11 Q And would you identify Plaintiff's12 Exhibit 42?13 A This is an article from Forbes Magazine from14 March of 2006.15 Q And does it reference the Costocontrio16 (phonetic)?17 A It does. And it talks, again, about all18 these sweetheart deals with long-serving presence of19 various countries and steel tycoons and money20 laundering charges, the inappropriate sales against21 the laws that are in those countries, that type of22 thing.23 Q Anything else that we didn't cover?24 A No, I think that's the gist of it.25 MR. SCHERRER: All right. Move for

Exhibit H

0152

1222217d-d77a-48aa-b4bb-6612168447fd


12-21-2011


8 (Pages 26 to 29)

Page 26

1 admission into evidence, Your Honor, please,2 Plaintiff's Exhibit 42?3 THE COURT: 42 is admitted.4 QUESTIONS BY MR. SCHERRER:5 Q And then did you also have occasion to6 download -- download a -- another document which is7 Plaintiff's Exhibit 43?8 A Yes, I did.9 Q And what is the publication?10 A It is The -- The Independent, which is one11 of London's daily newspapers.12 Q What's the date of the article?13 A August 8, 2004.14 Q And what, if anything, caught your interest15 in terms of your due diligence or your efforts to16 find out more information about Mr. Vilppula and his17 colleagues or business acquaintances?18 THE COURT: You handed me two of those.19 What's interesting I find that I only need one copy.20 MR. SCHERRER: Thank you, Your Honor.21 THE WITNESS: That they have actually been22 brought to trial in Brussels and other countries.23 They're in constant surveillance by the National24 Criminal Intelligence Services for money laundering25 and agreements that do not follow law.

Page 27

1 QUESTIONS BY MR. SCHERRER:2 Q If Mr. Vilppula, pursuant to the process set3 forth in the memorandum agreement, had been brought4 to Alberici and Thayer, the Plaintiffs in this case,5 as a possible investor, would it, based upon the6 information that's set forth in Plaintiff's7 Exhibit 41, 42, and 43, have caused any concern?8 A Absolutely.9 Q And that would have impacted the issues10 about whether or not Mr. Vilppula and his business,11 Pea Ridge Mining, LLC, would have been a suitable12 investor in the mining project?13 A Correct. Going back to my earlier example,14 it's the one if they're going to be your partner,15 you're now putting your reputation and interests at16 risk with the person you're in partnership with, so17 we would want to vet whether or not those18 allegations are true.19 THE COURT: Exhibit 43, are you offering it20 now?21 MR. SCHERRER: Yes, I am, Your Honor.22 THE COURT: It's admitted. Mr. Baylard, I23 assume you have no objection?24 MR. BAYLARD: No objection, Your Honor.25 THE COURT: It's admitted. Forty-three is

Page 28

1 admitted.2 QUESTIONS BY MR. SCHERRER:3 Q Mr. Niemeier, did there come a time when you4 attended a deposition on November 22nd of 2011, in5 Pittsburgh, Pennsylvania, of an individual named6 Buli Koskov (phonetic)?7 A Yes, I did.8 Q And you had heard that name before?9 A Yes, I had heard it, and I read it because10 he was the individual that signed all of the Pea11 Ridge Mining agreements that were entered into.12 Q And what did you understand from the13 deposition and/or information that you have before14 you?15 THE COURT: Hold on one second, because we16 don't have a court reporter, we're on audio, let's17 wait until these emergency vehicles pass. I don't18 want any of the record to be spoiled by the noise.19 All right. They seem to be far enough away now. Go20 ahead.21 MR. SCHERRER: Thank you.22 QUESTIONS BY MR. SCHERRER:23 Q What was your understanding, based upon the24 deposition of Mr. Koskov (phonetic) as well as any25 information you had before that, as to Mr. Koskov's

Page 29

1 (phonetic) title and role with respect to Pea Ridge2 Mining, LLC?3 A Well, he's titled as the manager of Pea4 Ridge, LLC -- Pea Ridge Mining, LLC, pardon me, and5 he said during testimony that he was the sole6 employee of Pea Ridge Mining, LLC, and that he7 receives regular compensation in that role through8 checks that are disbursed by the Lewis Rice law firm9 in St. Louis.10 MR. SCHERRER: Now, Your Honor, this is a11 little unorthodox, but I'm going to read, if I may,12 with the Court's permission, a brief portion of the13 deposition that was taken in this case of Mr. Koskov14 (phonetic), and then ask Mr. Niemeier some15 questions. So that's why it sort of flows, perhaps.16 THE COURT: You bet, go ahead.17 MR. SCHERRER: Thank you, Sir.18 THE COURT: You're welcome. You said the19 deposition of Mr. Koskov (phonetic) was in20 Pennsylvania?21 THE WITNESS: Pittsburgh, Pennsylvania.22 QUESTIONS BY MR. SCHERRER:23 Q He appeared pursuant to a subpoena that was24 served on him?25 A Yes.

Exhibit H

0153

1222217d-d77a-48aa-b4bb-6612168447fd


12-21-2011


9 (Pages 30 to 33)

Page 30

1 Q And there was some resistance to the2 subpoena and documents that he was asked to produce,3 was there not?4 A For four months.5 Q For four months. But finally and6 ultimately, on November 22nd of 2011, he did appear7 for his deposition?8 A Yes, he did.9 Q Although there were certain questions that10 he declined to answer with respect to the Pea Ridge11 Mining, LLC, transaction?12 A There were many questions he declined.13 Q But in any event, at one point during the14 course of his deposition, this question was asked by15 Counsel for the plaintiffs, Mr. Friedman:16 Mr. Koskov (phonetic), is Exhibit 55 a copy17 of an e-mail from your files identified as Metal18 Resources 010690, on the first page, an e-mail from19 you to Mr. Kennedy on June 3rd of 2011?20 Answer: The e-mail is from me addressed to21 Mr. Kennedy.22 And did you prepare the chart that's on the23 second and third pages?24 Answer: Yes, I did.25 Question by Mr. Friedman: And you called

Page 31

1 it, quote, Wings critical death summary, end of2 quote; correct?3 Answer by Mr. Koskov (phonetic): Yes.4 Questions: And why did you prepare that?5 Answer: Just as a better visual to pull --6 pull those numbers together and put it in front of7 the peoples -- people discussing it.8 Question: You said, quote, Just boiling9 down the parameters to focus lawyers on the10 immediate subjects, end of quote. Do you see that11 on the first page?12 Answer: Yes.13 Question: Which lawyers were you referring14 to there?15 Answer: Lewis Rice.16 Question: If this was the information for17 the lawyers on your side, why did you send it to18 Mr. Kennedy?19 Answer: Because it is a condensed visual of20 the points we are facing, and Mr. Kennedy, if21 anybody, would be able to point out our mistakes or22 wrong assumptions or wrong amounts.23 Question: Where do the numbers come from24 that you used?25 Answer: The numbers were given by, I think,

Page 32

1 either Mr. Kennedy or his wife, and I put it2 together. This chart -- I put together this chart3 and sent it to him for verification.4 Question: And you wrote, quote, stop5 Alberici action, find leverage to negotiate6 walk-away note down at a minimum pay, majority out7 of earnings, remove Alberici from project, end of8 quote.9 Answer: I see that sentence.10 Now, for the record -- Well, I've got just a11 few more.12 You then wrote -- Question: You then wrote,13 quote, remove Alberici from project, end of quote.14 Do you see that?15 Answer: Yes, I see that.16 And why did you put that as part of the17 strategy; the question asked.18 Answer: Well the strategy, as I said19 before, is forward looking. At this point I assumed20 we had some kind of an agreement. As I lined it out21 here, once we had an agreement, Alberici had no22 further role in the project.23 Question: And I take it, then, you wanted24 to remove Alberici from the project?25 Answer: As I stated before, assuming we had

Page 33

1 reached an agreement that there would be no further2 role for Alberici on the project.3 Now, you generally remember, obviously, him4 testifying to that; is that correct?5 A Yes, I do.6 Q And that exhibit was particularly vivid to7 you, was it not?8 A Yes, it was.9 Q I'm going to hand you what's been marked as10 Plaintiff's Exhibit 44, and a copy to the Court.11 THE COURT: Thank you.12 QUESTIONS BY MR. SCHERRER:13 Q Now, is -- in looking at that document,14 Plaintiff's Exhibit 44, which is a three page15 document, is that the Exhibit 55 that you just heard16 me read from the deposition testimony of Mr. Koskov17 (phonetic)?18 A Yes, it is.19 Q And as a person who participated and20 listened in the deposition, looked at -- at21 virtually every document produced in this case, and22 I know that because I know you, Mr. Niemeier, and23 you did, and what do you deduce from that document?24 What inferences do you draw from it as you look at25 it with respect to what Pea Ridge Mining, LLC, if

Exhibit H

0154

1222217d-d77a-48aa-b4bb-6612168447fd


12-21-2011


10 (Pages 34 to 37)

Page 34

1 they had gone forward and hadn't been preliminarily2 enjoined, intended to do to Alberici?3 A They were going to forcibly push us out of4 the project which mirrors what Mr. Kennedy told5 Plasmid (phonetic) in one of the other exhibits that6 he had in there as to what the intent of Pea Ridge7 Mining was.8 Q Should I be standing closer to the mikes?9 THE COURT: I'm sure you're fine.10 MR. SCHERRER: All right, good.11 THE COURT: Just keep -- stand anywhere,12 keep your voice up, you'll be fine.13 QUESTIONS BY MR. SCHERRER:14 Q Anything else that you -- you didn't cover?15 A Just that, you know, through a bunch of16 other discovery that came around, I mean, it was the17 intent of Mr. Vilppula since late May to forcibly18 push Alberici out of the project. He had hired19 attorneys to start to, you know, draft documents,20 procedures, he -- in making Koskov (phonetic) the21 manager. There were further communications to22 Kennedy that this is our project, you take your23 direction from Mr. Koskov (phonetic), I mean, it was24 all part of a cadence of activities.25 MR. SCHERRER: Your Honor, at this time I

Page 35

1 would move for admission into evidence of2 Plaintiff's Exhibit 44, which is Exhibit 55 to the3 deposition of Mr. Koskov (phonetic).4 MR. BAYLARD: No objection.5 THE COURT: Thank you. Exhibit 44, Trial6 Exhibit 44, Deposition Exhibit 55, is admitted into7 evidence.8 QUESTIONS BY MR. SCHERRER:9 Q Now, one more portion --10 THE COURT: I'm sorry, I note on here also11 that the footnote on page 2 of this Exhibit 4412 mentions the PortCo (phonetic) scenario. Is that13 the same PortCo (phonetic) that I considered and14 ruled on some discovery issues concerning a CPA15 accountant named Sylvia Aronrine (phonetic).16 MR. SCHERRER: Yes, it is, Your Honor.17 THE COURT: Okay. Thank you.18 MR. SCHERRER: Now, at this point in time,19 again, a bit unorthodox, I propose to read from20 certain portions.21 THE COURT: Go ahead, that's fine.22 MR. SCHERRER: Question by Mr. Friedman of23 Mr. Koskov (phonetic): Mr. Koskov (phonetic),24 you've been handed Exhibit 79.25 Answer: Thank you.

Page 36

1 Question: This is an e-mail from2 Mr. Short's files that he produced to us. Do you3 recognize it? It's identified as S Short 022874.4 Answer: I see that.5 Question: Do you recognize it as an e-mail6 that you sent to Mr. Holts and Mr. Short on July 13?7 Answer: I see that.8 Question: And you wrote, quote, please find9 a way to keep communication away from Jim's and10 Nina's e-mail which we know is monitored. Do you11 see that?12 Answer: Yes.13 Question: What did you mean when you said14 their e-mail is being monitored?15 Answer: I was under the impression that at16 that time, correspondence from Mr. Kennedy and his17 wife was monitored.18 Question: What do you mean? Who was19 monitoring it?20 Answer: I don't know who was monitoring it.21 I think everybody is aware that there was a very big22 and widespread problem with AOL e-mail accounts in23 general.24 Question: What was the big and widespread25 problem with AOL accounts at that time?

Page 37

1 Answer: They were widely hacked in and2 abused and monitored, I don't know by whom, but they3 are insecure.4 Question: Were you aware that Alberici had5 filed several motions with the court in Missouri6 asking the Defendants to produce copies of the7 e-mails that they were sent from that account that8 involved the Pea Ridge Mine?9 Answer: I didn't know that there was a10 portion -- there were motions filed. It wouldn't11 surprise me, but I wasn't -- but I wasn't aware of12 it.13 Do you generally remember that discussion14 with respect to that e-mail?15 A I do, yes.16 Q I'm going to hand you what's been marked as17 Plaintiff's Exhibit 46.18 THE COURT: Did we skip 45?19 MR. SCHERRER: Yes, we did.20 THE COURT: That's okay, I just wanted to21 make sure.22 MR. SCHERRER: And I intended to present the23 witness -- thank you, Your Honor -- with Plaintiff's24 Exhibit 45, which I'll put before you, and a copy to25 the Court.

Exhibit H

0155

1222217d-d77a-48aa-b4bb-6612168447fd


12-21-2011


11 (Pages 38 to 41)

Page 38

1 THE COURT: Thank you.2 QUESTIONS BY MR. SCHERRER:3 Q And in looking at Plaintiff's Exhibit 45, is4 that an e-mail which was just referenced by the5 deposition testimony of Mr. Koskov (phonetic)?6 A Yes, it was.7 Q And you heard his explanation -- Well, you8 heard his explanation as to why he was advising that9 folks cease to use AOL and come up with a different10 e-mail account?11 A I did hear that explanation, yes.12 Q And at or about the time that this e-mail13 was written, was there active discovery that was14 endeavoring to find out e-mails with respect to the15 parties that are involved in this litigation?16 A Yes, there was. In fact, at this point in17 time, there was failures to produce documents and we18 were going through additional motions to compel, and19 Mr. Koskov (phonetic) was on distribution in the20 e-mail from Dan Short, where this came from, and21 others such that he should have been aware.22 Q Are you somewhat dubious of the explanation23 that Mr. Koskov (phonetic) gave that he was only24 giving this advice because he was worried about the25 insecurity of the AOL e-mail system?

Page 39

1 A I'm frankly very skeptical of it, yes.2 Q Do you draw the inference that perhaps this3 might have been something to make sure that maybe4 some discovery was not forthcoming in this case?5 A That -- That would be my opinion, yes.6 MR. SCHERRER: I would move for admission7 into evidence of Plaintiff's Exhibit 45, Your Honor.8 MR. BAYLARD: No objection, Your Honor.9 THE COURT: Forty-five is admitted into10 evidence.11 QUESTIONS BY MR. SCHERRER:12 Q Mr. Niemeier, as part of your duties as the13 project manager of the mine project, have you from14 time to time done research and analysis with respect15 to the projected economic impact of this mine16 project if it goes forward with respect to17 Washington County, surrounding counties, the State18 of Missouri?19 A Yes, I have.20 Q And you have certain documents, I don't21 think we're going to mark those as exhibits to22 shorten things up, but do you have those before you?23 A I have them here.24 Q Okay. Just generally tell the Court what25 those are, please.

Page 40

1 A These are various newspaper articles as well2 as valuations from the courts from other third party3 type organizations like Morgan Stanley, for example,4 that discuss the value of the products that would be5 produced from the Pea Ridge Mine, and then6 subsequently, the means and methods that would be7 used to produce those projects -- products, pardon8 me, which of course ripples into jobs both temporary9 from a construction standpoint as well as permanent10 jobs, and then revenue, obviously, that comes from11 it.12 Q You believe that the information that you're13 looking at from which you're about to testify are --14 is reliable data and admittedly looking forward, but15 based upon existing projects and existing mine16 projects?17 A I believe it to be reliable data, as did18 director, David Kerr, of the Missouri Department of19 Economic Development.20 Q Did you interact with Mr. Kerr --21 A Yes.22 Q -- with respect to the economic prospect?23 A Yes, I did, on behalf of Mr. Kennedy.24 Q And you had correspondence with him?25 A I do, yes.

Page 41

1 Q What -- What information -- What have you2 learned with respect to the potential number of jobs3 for people who would be involved in activities with4 respect to the construction of the mine project?5 A We've -- We believe that the project will6 peak with as many as 2,000 people through its7 three-year duration. Just as a reminder, there is8 the Pea Ridge Mine site that is 12 miles south of9 Sullivan, or between Sullivan and Potosi, but then10 there is also the property leased in Crystal City,11 Missouri, that's on the site of the former PPG12 manufacturing complex that would be used to create13 pig iron from the iron ore, and then bulk ship it by14 rail in March.15 So between those two locations, which will16 be going on simultaneously, we would peak at about17 2,000. Overall, we're guessing that there would be18 about 2,500 people at some point that would receive19 a paycheck related to that, and in our business,20 often times we equate that to full-time equivalence,21 in other words, if it full time work, and it would22 be about 950.23 Of course, we went into -- Alberici had24 already established a labor agreement for the25 project earlier on with 17 basic trades, and, you

Exhibit H

0156

1222217d-d77a-48aa-b4bb-6612168447fd


12-21-2011


12 (Pages 42 to 45)

Page 42

1 know, you're looking at a salary of probably $75,0002 a year, on average, for the folks at Pea Ridge.3 Q And of course, Alberici, as you just stated,4 did do construction work at the Pea Ridge Mine5 project, so Alberici was familiar with the project6 from that perspective?7 A Yes.8 Q Even though there's a lot more work if this9 mine project goes forward in terms of construction10 alone; isn't that right?11 A That is correct.12 Q Now, what, if anything, did you find from13 your analysis and your study with respect to a14 reasonable estimate of the future number of jobs15 that would be created if this mine project goes16 operational?17 A It would be approximately 1,000 jobs, about18 350 at the Pea Ridge Mine location, and then the 65019 that would be at the PPG site, that those we've20 estimated those to be at $55,000 a year of21 compensation package with full benefits.22 Q Per person.23 A Yes. Yes, I apologize.24 Q And the 75,000, for clarity, was per worker.25 A Correct.

Page 43

1 Q On the construction aspects.2 A Yes.3 Q Now, did you also come to a reasonable4 conclusion as to the future revenue, if this mine is5 feasible and goes forward, that would be generated6 on an annual basis --7 A Mm-mm.8 Q -- dollars?9 A Based upon the plan capacity of the systems10 we put in, which was 4 million tons a year, and11 using what then was a $325 per ton sell price of the12 pig iron, it was estimated that there would be13 around $750,000 -- million dollars a year, pardon14 me, of revenue that would be generated from the Pea15 Ridge Iron Ore Company.16 Q Is there any estimate as to the life of this17 mine if it goes operational?18 A It is -- It's estimated to be a 100-year19 source of supply between the proven reserves and the20 probable reserves.21 Q Am I correct amongst the documents that you22 have there which you're testifying support your23 testimony about the economic impact would be,24 including things that were authored by Mr. Kennedy,25 one of the Defendants in this case?

Page 44

1 A Yes.2 Q As well as documents from the State, as well3 as some documents that are news articles?4 A Correct, like this article from the Post5 Dispatch with Senator Bond.6 Q Senator Bond?7 A Yes, he was a big supporter of it.8 Q You may set that aside. Let's move on to9 one other item for your testimony, I think, and that10 is, I'm putting before you Plaintiff's Exhibit 46,11 and in particular, referring to --12 THE COURT: Thank you.13 MR. SCHERRER: Sorry, Your Honor.14 THE COURT: That's all right.15 QUESTIONS BY MR. SCHERRER:16 Q -- page 51. And actually, for some reason,17 I marked -- it's entitled China Rare Earth Industry.18 A Yes.19 Q Before we get into the highlighted portion,20 tell me what Plaintiff's Exhibit 46 is, Sir.21 A This is a -- a report or an assessment by22 the US Geological Society as to the -- the use and23 value of rare earth elements in the global economy.24 Q What's the date of the document? I think it25 says 2011.

Page 45

1 A It does say 2011. I was looking for the2 date. Yes, it's 2011.3 Q The second page, it says US Geological4 Survey, Reston, Virginia --5 A 2011, correct.6 Q So this is current?7 A Yes, this is current.8 Q Put out by the Federal Government?9 A Yes.10 Q And it's an overview of the rare earth11 industry; is that correct?12 A It is.13 Q And what, if anything, does rare earth have14 to do -- First of all, tell us whether this -- where15 you got this document. Does this come from your16 files?17 A It does. It would have been part of -- of18 various -- the documents that we accumulated in19 continuing our -- our project development type20 activities.21 Q Why is rare earth germane to the Pea Ridge22 Mine project?23 A In addition to the very unique chemistry of24 iron ore that's at the Pea Ridge Mine deposit, there25 is also a somewhat unique deposit of rare earth

Exhibit H

0157

1222217d-d77a-48aa-b4bb-6612168447fd


12-21-2011


13 (Pages 46 to 49)

Page 46

1 elements, frankly, for the most part, only known to2 exist in North America at the Pea Ridge Mine.3 Q And what does -- what use or value is rare4 earth?5 A Rare earths are an additive. You don't make6 anything out of a rare earth, but the various types7 of them are added with other minerals to enhance the8 performance, specifically electrical or mechanical9 performance. For example, high performance Lithium10 batteries that are now used in computers and11 televisions and -- and cars rely heavily on rare12 earth elements. It's what continues to make13 microprocessor are chips smaller, but able to do14 many more functions as relates to it.15 In the large motors in the wind tower16 industry, it is additive for the magnet where17 frankly there's -- they're more contacts between the18 shaft and the armature. So it's a high performance,19 low wear type apparatus.20 Q And you have read Plaintiff's Exhibit 46 --21 A I have.22 Q -- in its entirety at some point in time?23 A Yes.24 Q Generally tell the Court what the overall25 theme is of it, and then I'll just have a few

Page 47

1 questions on specific sections.2 A Through the late 1990s, China started to3 dramatically develop what are rare earth deposits4 that exist in that country. And being a5 monopolistic society, they were able to control what6 is the price that went with that. And what they7 systematically did is sell rare earth elements below8 what was production costs for darn near everybody9 else in the world, not the least of which was a10 large mine that was started in the early '50s in the11 Mohave desert, and it called the Mountain Pass Mine.12 It was own by Chevron Corporation, which is13 certainly no small outfit.14 And they dropped their prices so low that15 Chevron, after they had much money for three years,16 and said, it's not worth it, they shuttered the17 mine. The net result was is that the Chinese ended18 up controlling over 95 percent of the world's rare19 earth supply.20 And in the recent year, year and a half, it21 actually started in July of 2010, they announced22 that they were going to start restricting exports of23 rare earth elements such that if you are a24 manufacturer of a product that needs them, you25 either have to build a manufacturing place in China

Page 48

1 to be able to get the elements, or you have to but2 the key subassemblies that go into your final3 report.4 Senator Bond's key interest which this5 addresses is, most of our strategic nation defense6 products such as guided missiles or navigational7 gear rely on this intense products such that8 companies Honeywell or Boeing or Johnson Control,9 Rockwell, they would have to build factories in10 China to build our nation's defense products.11 Q That doesn't sound like a good idea.12 A No, it doesn't.13 THE COURT: That's the understatement of the14 year.15 MR. SCHERRER: So I would move for admission16 into evidence of Plaintiff's Exhibit 46, Your Honor.17 MR. BAYLARD: No objection.18 THE COURT: Forty-six is admitted.19 QUESTIONS BY MR. SCHERRER:20 Q So I don't think we need to refer to21 specific things because I think you already did in22 your testimony.23 A By the way, the economic numbers that I24 spoke to before never included a rare earth impact,25 because when we originally started assembling those

Page 49

1 quotes and models, it -- that was before the2 upcoming Chinese restriction on exports. So we3 hadn't put it in the business model because you'd4 never be able to cover the cost of capital to have a5 facility for it, because you couldn't sell it and6 make a profit at it. Those dynamics have changed7 and certainly would increase the economic value.8 Q So there are commercial and military9 strategic issues at play with respect to the rare10 earth industry?11 A Yes.12 Q And the United States Government reported on13 those concerns and worries and facts that you've14 testified to in Plaintiff's Exhibit 46; right?15 A Yes, and other documents.16 Q And other documents.17 MR. SCHERRER: I believe that's all the18 questions I have of this witness, Your Honor.19 THE COURT: Mr. Niemeier, I'm going to20 tender you now to Mr. Baylard to see if he has any21 cross-examination for you. Mr. Baylard?22 MR. BAYLARD: No questions, Your Honor.23 THE COURT: Very well. Mr. Niemeier, thank24 you very much for your testimony, and you may step25 down. Mr. Scherrer, your next witness?

Exhibit H

0158

1222217d-d77a-48aa-b4bb-6612168447fd


12-21-2011


14 (Pages 50 to 53)

Page 50

1 MR. SCHERRER: I -- The last thing that I2 propose to do is read a very brief portion -- thank3 you, Mr. Niemeier -- from the deposition of Nina4 Abboud which was taken in this action on5 September 20th of 2011, which was after the6 preliminary injunction was entered, so it's new7 evidence. And in particular, I'm reading from8 page 319, Lines 16 through 25, of Miss Abboud's9 testimony.10 Question by Mr. Scherrer: Based upon your11 dealings with Mr. Vilppula, did you have an12 understanding of -- as to whether or not he had an13 appreciation and understanding of the position of14 the Plaintiff, Alberici, and the Defendants Wings15 Uplands, you and your husband?16 Answer: Yes, I believe he understood.17 Question: So it's your belief that he was18 fully informed about the background of the19 litigation?20 Answer: Yes.21 And then the next --22 THE COURT: And you're referring there to23 Mr. Ahti Vilppula being informed about the24 litigation?25 MR. SCHERRER: Yes, that is correct.

Page 51

1 THE COURT: The litigation being this2 litigation.3 MR. SCHERRER: That's right, Sir.4 THE COURT: Thank you.5 MR. SCHERRER: At this point in time, I have6 Plaintiff's Exhibit 47. It is a document that bears7 the signature of Miss Abboud and Mr. Kennedy, and it8 has at the top Pea Ridge Mining, LLC. It's dated in9 St. Louis, Missouri, on July 14, 2011, and it's10 entitled, To Whom It May Concern. And it states --11 and I can read it because it's fairly brief -- To12 the best of their knowledge, the undersigned -- that13 would be Miss Abboud and Mr. Kennedy --14 unequivocally and irrevocably confirm that they have15 made Pea Ridge Mining, LLC, aware of and have16 presented any and all information that they are17 aware of about anything connected or referring to18 the Pea Ridge Mine actions against the Kennedys, or19 any other involved party, that any and all debts20 that are outstanding are declared, and that any21 other issues/items that may impact the project are22 fully stated.23 And, of course, the reference there to24 actions against the Kennedys would, for clarity,25 refer to this case that puts us here today, Your

Page 52

1 Honor. And I would then move for admission into2 evidence of Plaintiff's Exhibit 47, please.3 MR. BAYLARD: No objection.4 THE COURT: Exhibit 47 is admitted.5 MR. SCHERRER: I believe that's all that we6 have to offer, Your Honor, and so the Plaintiff7 rests.8 THE COURT: Plaintiff has rested.9 Mr. Baylard, do you wish to produce any evidence on10 this trial?11 MR. BAYLARD: No, Your Honor, I'll rely on12 the evidence previously presented.13 THE COURT: And therefore you are resting?14 MR. BAYLARD: We are resting.15 THE COURT: Very well. Folks, I heard16 evidence over about three days in this preliminary17 injunction matter which I've said that I would18 consider, and which I'm allowed to consider under19 Rule 92. I do find that there's been a breach of20 contract, that specific performance should be21 ordered. I will enter a final judgment, probably22 later today. Mr. Scherrer, I know you said you23 brought a proposed judgment, I will review it for24 any changes.25 I do want to make it clear that during the

Page 53

1 course of this litigation, in reliance upon the2 memorandum agreement, there were two of them, the3 second one, which was deemed to be the final one,4 which had on a few minor changes to it, I appointed5 Mr. Murray as interim director to serve only until6 both sides could agree upon a third director7 pursuant, that -- the agreement as to the third8 director never occurred. Mr. Murray put in9 substantial time on this. I do intend to award him10 a fee as part of my judgment.11 Mr. Murray, I believe you have -- you are12 present in the courtroom and have been here for most13 of the proceedings this morning. Did you bring with14 you an itemization of your time.15 MR. MURRAY: I did, Judge.16 THE COURT: Would you bring it up to the17 Court, please?18 MR. MURRAY: I will.19 THE COURT: Have you provided copies to the20 Plaintiffs and Defendant?21 MR. MURRAY: To Mr. Harris and then also to22 Miss Abboud last night, gave it to her attorneys.23 THE COURT: Mr. Baylard, have you seen it?24 MR. BAYLARD: I have not, but I think the25 Polsinelli group has.

Exhibit H

0159

1222217d-d77a-48aa-b4bb-6612168447fd


12-21-2011


15 (Pages 54 to 57)

Page 54

1 THE COURT: All right. It is my intention,2 because the Plaintiffs were seeking enforcement of3 an agreement, the burden of proof was on them,4 because of that it is my intention to tax5 Mr. Murray's fee against the Plaintiffs, not against6 your clients. However, if you wish to review the7 time statement before we close the evidence here,8 I'll allow you time to do that.9 MR. SCHERRER: That's fine, Judge.10 THE COURT: All right. Very well. I'm11 going to admit -- And you folks on the Plaintiffs12 side have also reviewed this already; is that13 correct?14 MR. SCHERRER: Yes, we have, Your Honor. We15 have --16 THE COURT: Are there any objections to17 Mr. Murray's time statement?18 MR. SCHERRER: -- no objection and are very19 grateful of Mr. Murray's service, Your Honor.20 THE COURT: All right. Okay. Any other21 evidence for the Plaintiffs?22 MR. SCHERRER: No, Your Honor.23 THE COURT: All right. Mr. Baylard,24 anything else from you, Sir?25 MR. BAYLARD: No, Sir.

Page 55

1 THE COURT: Do either of you -- I probably2 should have asked if anyone wanted to make closing3 arguments, since you didn't introduce evidence, I4 did not think we would want to. But if anyone does,5 I will be happy to consider that.6 MR. SCHERRER: None from the Plaintiff, Your7 Honor. In addition to the specific performance, we8 are seeking a permanent injunction as proposed in9 our judgment.10 THE COURT: It is my intention to grant the11 permanent -- It is my intention to find that there's12 been a breach of contract, grant specific13 performance and grant a permanent injunction, and14 also tax Mr. Murray's fee against the Plaintiffs.15 Court costs, I presume, will be taxed --16 MR. SCHERRER: It's in our proposed17 judgment.18 THE COURT: Okay. If you have it in your19 proposed judgment, I will undoubtedly do what you20 have written in there about Court costs. The main21 thing I want to do is make sure that nobody's22 intending to waive the court costs. Everybody's23 got -- Washington County is a poor county, but in24 any event, anything else for the Plaintiff?25 MR. SCHERRER: At this point in time, Your

Page 56

1 Honor, with your permission, Plaintiffs voluntarily2 move to dismiss our -- or dismiss, without3 prejudice, Count 2, which had to do with the breach4 of duty of good faith and fair dealing, Count 3, the5 anticipatory breach of contract, and Count 4,6 tortious interference, and I have a document for7 filing, I believe I've provided a copy to8 Mr. Baylard.9 THE COURT: Counts 2, 3 and 4 will be deemed10 dismissed without prejudice pursuant to the filing11 by Mr. Scherrer. That means I'm granting relief12 essentially on Count -- Counts 1 and 5?13 MR. SCHERRER: That is correct, Your Honor.14 THE COURT: One being the breach of15 contract, and five being the injunction count.16 MR. SCHERRER: Yes, Your Honor.17 THE COURT: Whatever it is, it is. If I18 recited it wrong, I'll make sure it's correct in the19 judgment. But --20 MR. SCHERRER: Count 1 is breach of21 contract, Count 5, specific performance, and Count 622 injunctive.23 THE COURT: Counts, 1, 5 and 6. All right.24 Plaintiffs, anything else?25 MR. SCHERRER: No, Your Honor. The only

Page 57

1 other thing is that we have an order -- the proposed2 judgment, if you find in favor of the Plaintiffs,3 contains a section that asks the Court to order the4 release of stock that is being held in escrow5 pursuant to the Pea Ridge Mining, LLC, agreement,6 and we're asking you to authorize us to do that. In7 addition, we have a separate order, just so the8 escrow company can see a separate order if --9 assuming you find for the Plaintiffs, in which they10 are instructed by the Court to turning over those11 shares of stock which are being held in escrow. It12 tracks the escrow agreement and we believe we're13 entitled to those.14 THE COURT: The stock was put into escrow15 why originally?16 MR. SCHERRER: The stock was put into escrow17 pursuant to the Pea Ridge Mining, LLC, transaction,18 which it voided --19 THE COURT: So the Defendants did that?20 MR. SCHERRER: Yes.21 THE COURT: All right. Yes, I will sign22 that order as well. Anything else the Plaintiffs23 want?24 MR. SCHERRER: I've looked at my battalion25 of lawyers --

Exhibit H

0160

1222217d-d77a-48aa-b4bb-6612168447fd


12-21-2011


16 (Pages 58 to 60)

Page 58

1 THE COURT: Yes, battalion of lawyers back2 there, and Mr. Baylard, as usual, it's about 183 against one, and you've done a fine job representing4 your clients all throughout this case, given the5 amount of opposition you had; okay? Is there6 anything else you want?7 MR. BAYLARD: No, Sir.8 THE COURT: Very well. That will be all.9 We'll go off the record. I'll take it under10 advisement and review your proposed judgment and.11 MR. SCHERRER: Thank you for your courtesy.12 THE COURT: Thank very much, for being here13 in St. Francis County.141516171819202122232425

Page 59

1 STATE OF MISSOURI.2 SS.3 CITY OF ST. LOUIS4 I, Gretta G. Cairatti, RPR, CRR, MO-CCR #790,5 IL-CSR #084-003418, and Notary Public in and for the6 State of Missouri, duly commissioned, qualified and7 authorized to administer oaths and to certify to8 depositions, do hereby certify that pursuant to9 agreement in the civil cause now pending and10 undetermined in the Circuit Court of the County of11 Washington, State of Missouri, to be used in the12 trial of said cause in said court, I was attended at13 the offices of Gore Perry Reporting & Video Company,14 515 Olive Street, Suite 300, St. Louis, Missouri,15 with the audio recording on the 21st day of16 December, 2012.17 That the said proceedings are shown in the18 foregoing transcript, said proceedings being by me19 reported in shorthand and caused to be transcribed20 into typewriting, and that the foregoing pages21 correctly set forth the proceedings, and is in all22 respects a full, true, correct and complete23 transcript.24 I further certify that I am not of counsel or25 attorney for either of the parties to said suit, not

Page 60

1 related to nor interested in any of the parties or2 their attorneys.3 Witness my hand and notarial seal at4 St. Louis, Missouri, this 16th day of January, 2012.5 My Commission expires October 29, 2012.67 _ _ _ _ _ _ _ _ _ _ _ _8 Notary Public in and for the9 State of Missouri10111213141516171819202122232425

Exhibit H

0161

pea ridge court docs exhibits numbered and labeled

Documents