Exhibit 2.1
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
PITTSTON COAL COMPANY
AND
XXXXXXXXX-XXXXXXX COAL COMPANY, LLC
October 29, 2002
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS............................................................................................ 1
1.1. 273 Threshold........................................................................................ 1
1.2. Administrative Services Agreement.................................................................... 2
1.3. Affiliate............................................................................................ 2
1.4. Agreement............................................................................................ 2
1.5. Asset Sale Companies................................................................................. 2
1.6. Asset Sale Non-Signatory Company..................................................................... 2
1.7. Asset Sale Signatory Company......................................................................... 3
1.8. Assignment and Assumption Agreements................................................................. 3
1.9. Assumed Liabilities.................................................................................. 3
1.10. Bills of Sale........................................................................................ 3
1.11. Books and Records.................................................................................... 3
1.12. Business............................................................................................. 4
1.13. Buyer................................................................................................ 4
1.14. Buyer's Affiliates, Successors, Assigns, Lessees or Contractors...................................... 4
1.15. Buyer Closing Certificate............................................................................ 4
1.16. Buyer's Ultimate Parent.............................................................................. 4
1.17. CERCLA............................................................................................... 4
1.18. CERCLIS.............................................................................................. 4
1.19. Classified Employee.................................................................................. 5
1.20. Classified Employee Retiree Medical Plans............................................................ 5
1.21. Classified Employment................................................................................ 5
1.22. Closing.............................................................................................. 5
1.23. Closing Date......................................................................................... 5
1.24. Coal Act............................................................................................. 6
1.25. Coal Inventory....................................................................................... 6
1.26. COBRA................................................................................................ 6
1.27. Code................................................................................................. 6
1.28. Collective Bargaining Agreements..................................................................... 6
1.29. Contaminated......................................................................................... 8
1.30. Contracts............................................................................................ 8
1.31. Controlled Group..................................................................................... 8
1.32. Conveyance Deeds..................................................................................... 8
1.33. Cooperation Agreement................................................................................ 8
1.34. CPA Arbitrator....................................................................................... 8
1.35. D-R Service Agreement................................................................................ 9
1.36. Dispute.............................................................................................. 9
1.37. Employee............................................................................................. 9
1.38. Employee Benefit Plans............................................................................... 9
1.39. Environment.......................................................................................... 9
1.40. Environmental Laws................................................................................... 9
1.41. Environmental Matter................................................................................. 10
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TABLE OF CONTENTS
(continued)
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1.42. Environmental or Response Action..................................................................... 10
1.43. EPA.................................................................................................. 11
1.44. Equipment............................................................................................ 11
1.45. ERISA................................................................................................ 11
1.46. ERISA Affiliates..................................................................................... 11
1.47. Fiduciary............................................................................................ 12
1.48. Governmental Authority............................................................................... 12
1.49. Hazardous Substances................................................................................. 12
1.50. Health and Safety Requirements....................................................................... 12
1.51. HIPAA................................................................................................ 13
1.52. Income Tax or Income Taxes........................................................................... 13
1.53. Indemnification and Guaranty Agreement............................................................... 13
1.54. Independent Surveyor................................................................................. 13
1.55. Intellectual Property................................................................................ 13
1.56. IRS.................................................................................................. 14
1.57. Knowledge of PCC..................................................................................... 14
1.58. Law.................................................................................................. 14
1.59. Lien................................................................................................. 14
1.60. Liability............................................................................................ 14
1.61. Material Adverse Effect.............................................................................. 14
1.62. Medical Plans........................................................................................ 15
1.63. Mining Activities.................................................................................... 15
1.64. Mining Data.......................................................................................... 15
1.65. Mining Environmental Liabilities..................................................................... 15
1.66. MSHA................................................................................................. 15
1.67. Multiemployer Plan................................................................................... 16
1.68. Non-Classified Employee.............................................................................. 16
1.69. Non-Classified Employee Retiree Medical Plan......................................................... 16
1.70. Operator............................................................................................. 16
1.71. Ordinary Course of Business.......................................................................... 16
1.72. OSM.................................................................................................. 16
1.73. Parts, Fuel and Supplies Inventory................................................................... 16
1.74. PBGC................................................................................................. 16
1.75. PCC.................................................................................................. 17
1.76. PCC Bonds............................................................................................ 17
1.77. PCC Closing Certificate.............................................................................. 17
1.78. PCC Group............................................................................................ 17
1.79. PCC Parent........................................................................................... 17
1.80. Pension Plans........................................................................................ 17
1.81. Permits.............................................................................................. 17
1.82. Permitted Liens...................................................................................... 17
1.83. Person............................................................................................... 18
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TABLE OF CONTENTS
(continued)
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1.84. Post-Closing Period.................................................................................. 18
1.85. Pre-Closing Period................................................................................... 18
1.86. Promissory Note...................................................................................... 18
1.87. Purchase Price....................................................................................... 18
1.88. Purchased Assets..................................................................................... 18
1.89. Qualified Plans...................................................................................... 19
1.90. RCRA................................................................................................. 19
1.91. Real Property........................................................................................ 19
1.92. Reclamation Laws..................................................................................... 19
1.93. Related Persons...................................................................................... 19
1.94. Release.............................................................................................. 20
1.95. Retained Liabilities................................................................................. 20
1.96. Security Agreement................................................................................... 28
1.97. SMCRA................................................................................................ 28
1.98. Straddle Period...................................................................................... 28
1.99. Tax or Taxes......................................................................................... 29
1.100. Tax Return........................................................................................... 29
1.101. UMWA................................................................................................. 29
1.102. UMWA Pension Plans................................................................................... 29
1.103. VDEQ................................................................................................. 29
1.104. VDMME................................................................................................ 30
1.105. WARN Act............................................................................................. 30
1.106. Welfare Plans........................................................................................ 30
1.107. Workers' Compensation Acts........................................................................... 30
ARTICLE II PURCHASE AND SALE OF ASSETS.......................................................................... 30
2.1. Transfer of Assets................................................................................... 30
2.2. Bills of Sale, Assignment and Assumption Agreements, Conveyance Deeds and Other Documents............ 31
2.3. Assumption of Liabilities............................................................................ 31
2.4. Proration of Liabilities............................................................................. 31
2.5. Indemnification and Guaranty Agreement............................................................... 31
2.6. Cooperation Agreement................................................................................ 32
2.7. Administrative Services Agreement.................................................................... 32
2.8. D-R Service Agreement................................................................................ 32
2.9. Security Agreement................................................................................... 32
2.10. Additional Documents................................................................................. 32
2.11. Coal Inventory Adjustment............................................................................ 33
2.12. Allocation of Purchase Price and Assumed Liabilities................................................. 34
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PCC............................................................... 35
3.1. Incorporation........................................................................................ 35
3.2. Execution, Delivery and Performance.................................................................. 36
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TABLE OF CONTENTS
(continued)
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3.3. Authorization........................................................................................ 37
3.4. Absence of Changes................................................................................... 38
3.5. Real Property........................................................................................ 40
3.6. Purchased Assets..................................................................................... 43
3.7. Intellectual Property................................................................................ 44
3.8. Permits and Environmental Compliance................................................................. 44
3.9. Reclamation Bonds.................................................................................... 48
3.10. Contracts............................................................................................ 49
3.11. Litigation; Claims................................................................................... 49
3.12. Employee Benefits.................................................................................... 50
3.13. Employment Matters................................................................................... 55
3.14. No Broker............................................................................................ 56
3.15. Health and Safety Requirements....................................................................... 56
3.16. Restrictions on Business Activities.................................................................. 56
3.17. Powers of Attorney................................................................................... 57
3.18. Transactions With Affiliates......................................................................... 57
3.19. Absence of Certain Payments.......................................................................... 57
3.20. Disclosure........................................................................................... 58
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER.............................................................. 58
4.1. Organization......................................................................................... 58
4.2. Execution, Delivery and Performance.................................................................. 58
4.3. Authorization........................................................................................ 59
4.4. No Broker............................................................................................ 59
4.5. Reclamation and Environmental Compliance............................................................. 59
4.6. Financing............................................................................................ 60
4.7. Disclosure........................................................................................... 60
ARTICLE V CERTAIN COVENANTS..................................................................................... 60
5.1. Operation in Ordinary Course......................................................................... 60
5.2. Compliance with Law.................................................................................. 61
5.3. Cooperation.......................................................................................... 61
5.4. Notices and Consents................................................................................. 61
5.5. Publicity............................................................................................ 62
5.6. Permits; Replacement Bonds; Insurance and Guarantees; Other Filings.................................. 63
5.7. Exclusivity.......................................................................................... 65
5.8. Access............................................................................................... 65
5.9. Notice of Developments............................................................................... 66
5.10. Benefits Provided by PCC............................................................................. 66
5.11. Coal Inventory....................................................................................... 66
5.12. Further Assurances................................................................................... 67
ARTICLE VI CONDITIONS PRECEDENT TO CLOSING...................................................................... 67
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TABLE OF CONTENTS
(continued)
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6.1. Conditions Precedent to Each Party's Obligations..................................................... 67
6.2. Conditions Precedent to Obligations of Buyer......................................................... 68
6.3. Conditions Precedent to Obligations of PCC........................................................... 70
ARTICLE VII CERTAIN TAX MATTERS................................................................................. 72
7.1. Property Taxes....................................................................................... 72
7.2. Sales and Use Taxes.................................................................................. 73
7.3. Transfer Taxes....................................................................................... 74
7.4. Access for Tax Returns............................................................................... 74
ARTICLE VIII COVENANTS REGARDING EMPLOYEES...................................................................... 74
8.1. Employees............................................................................................ 74
8.2. Collective Bargaining Obligations.................................................................... 75
ARTICLE IX TERMINATION........................................................................................... 75
9.1. Termination.......................................................................................... 75
9.2. Effect of Termination................................................................................ 77
ARTICLE X MISCELLANEOUS......................................................................................... 77
10.1. Entire Agreement..................................................................................... 77
10.2. Amendment............................................................................................ 77
10.3. Extension; Waiver.................................................................................... 77
10.4. Expenses............................................................................................. 78
10.5. Bulk Sales Waiver.................................................................................... 78
10.6. Governing Law........................................................................................ 78
10.7. Assignment........................................................................................... 78
10.8. Notices.............................................................................................. 79
10.9. Counterparts; Headings............................................................................... 80
10.10. Interpretation; Construction......................................................................... 80
10.11. Severability......................................................................................... 81
10.12. No Reliance.......................................................................................... 81
10.13. Retention of and Access to Records................................................................... 81
10.14. Arbitration.......................................................................................... 82
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EXHIBITS
Exhibit A Outline of Administrative Services Agreement
Exhibit B Assignment and Assumption Agreements
Exhibit C Bills of Sale
Exhibit D Buyer Closing Certificate
Exhibit E Conveyance Deeds
Exhibit F Cooperation Agreement
Exhibit G D-R Service Agreement
Exhibit H Indemnification and Guaranty Agreement
Exhibit I PCC Closing Certificate
Exhibit J Opinion of Counsel to PCC
Exhibit K Opinion of Counsel to Buyer
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SCHEDULES
Schedule 1.5 Asset Sale Companies
Schedule 1.9 Assumed Liabilities
Schedule 1.25 Coal Inventory Locations
Schedule 1.30 Contracts of Asset Sale Companies
Schedule 1.44(a) Equipment Owned by Asset Sale Companies
Schedule 1.44(b) Equipment Leased by Asset Sale Companies
Schedule 1.55(a) Intellectual Property Owned by the Asset Sale Companies
Schedule 1.55(b) Intellectual Property Leased by the Asset Sale Companies
Schedule 1.57 Knowledge of PCC
Schedule 1.65 Mining Environmental Liabilities
Schedule 1.73 Parts, Fuel and Supplies Inventory
Schedule 1.81 Permits
Schedule 1.82 Permitted Liens
Schedule 1.91 Real Property of the Asset Sale Companies
Schedule 1.95(a) Retained Liabilities
Schedule 1.95(k)(1) Classified Employees with 20 Years of Credited Service or
10 Years of Credited Service at Age 55
Schedule 1.95(k)(2) Purchased Assets for Certain Classified Employees
Schedule 1.95(k)(3) Classified Employees who may be Recalled or Hired between
Closing Date and December 31, 2003
Schedule 1.95(y) Excluded Contracts
Schedule 2.11(b) Independent Survey of the Coal Inventory-Principles and
Format
Schedule 3.1 Foreign States
Schedule 3.2 Conflicts
Schedule 3.4 Absence of Changes
Schedule 3.5(a) Real Property Matters
Schedule 3.5(b) Real Property - Lease Compliance
Schedule 3.5(d) Real Property - Third Party Mining Rights
Schedule 3.6(c) Purchased Assets Exceptions
Schedule 3.7 Intellectual Property Exceptions
Schedule 3.8 Permits and Environmental Compliance
Schedule 3.9 PCC Bonds
Schedule 3.10(b) Contract Exceptions
Schedule 3.10(c) Consents
Schedule 3.11 Litigation; Claims
Schedule 3.12(a) Employee Benefit Plans
Schedule 3.12(d) Plan Administration
Schedule 3.12(f) Severance Entitlements
Schedule 3.13(a) Labor Unions
Schedule 3.13(b) Panel of Employees
Schedule 3.17 Powers of Attorney
Schedule 3.18 Transactions with Affiliates
Schedule 5.4(a) PCC Consents
Schedule 5.4(b) Buyer Consents
Schedule 5.6 PCC Guaranties
Schedule 6.1(e)(i) PCC Material Consents
Schedule 6.1(e)(ii) Buyer Material Consents
Schedule 8.1 Asset Sale Companies with pre-Closing termination
Employees
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made as of the 29th day of October, 2002,
by and between PITTSTON COAL COMPANY, a Delaware corporation ("PCC"), and
XXXXXXXXX-XXXXXXX COAL COMPANY, LLC, a Delaware limited liability company
("Buyer").
RECITALS
WHEREAS, PCC owns, directly or indirectly, all of the outstanding capital
stock of the corporations listed on Schedule 1.5 (the "Asset Sale Companies");
WHEREAS, PCC desires to cause to be sold and assigned, and Buyer desires
to purchase and assume, certain of the assets and certain of the Liabilities (as
hereinafter defined) of the Asset Sale Companies;
WHEREAS, PCC desires to cause the Asset Sale Companies to retain certain
assets and certain Liabilities;
NOW, THEREFORE, in consideration of the mutual covenants, conditions and
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, PCC and Buyer agree
that:
ARTICLE I
DEFINITIONS
When used in this Agreement, the following terms shall have the meanings
specified:
1.1. 273 Threshold.
"273 Threshold" shall have the meaning given to it in Section
1.95(k) hereof.
1.2. Administrative Services Agreement.
"Administrative Services Agreement" shall mean the agreement by and
between PCC and Buyer, an outline of which is attached hereto as Exhibit A.
1.3. Affiliate.
"Affiliate" shall mean, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"Control" shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise. For
purposes of this Agreement, none of Dominion Terminal Associates or any of its
partners, other than Pittston Coal Terminal Corporation, shall be deemed an
Affiliate of PCC or any of its Affiliates.
1.4. Agreement.
"Agreement" shall mean this Asset Purchase Agreement, together with
the Exhibits and Schedules attached hereto, which are incorporated into this
Asset Purchase Agreement by this reference, as the same may be amended from time
to time in accordance with the terms hereof.
1.5. Asset Sale Companies.
"Asset Sale Companies" shall have the meaning given to it in the
Recitals to this Agreement. The term "Asset Sale Company" shall mean one of the
Asset Sale Companies.
1.6. Asset Sale Non-Signatory Company.
"Asset Sale Non-Signatory Company" shall mean the Asset Sale Company
designated as "Asset Sale Non-Signatory Company" on Schedule 1.5.
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1.7. Asset Sale Signatory Company.
"Asset Sale Signatory Company" shall mean the Asset Sale Company
designated as "Asset Sale Signatory Company" on Schedule 1.5.
1.8. Assignment and Assumption Agreements.
"Assignment and Assumption Agreements" shall mean the assignment and
assumption agreements substantially in the form of Exhibit B attached hereto.
1.9. Assumed Liabilities.
"Assumed Liabilities" shall mean all Liabilities of the Asset Sale
Companies listed on Schedule 1.9.
1.10. Bills of Sale.
"Bills of Sale" shall mean the bills of sale substantially in the
form of Exhibit C attached hereto.
1.11. Books and Records.
"Books and Records" shall mean the original or true and complete
copies of all of the books and records of the Asset Sale Companies pertaining to
the Purchased Assets, including but not limited to, customer lists, employee
records for those Employees employed by Buyer on or immediately following the
Closing Date, purchase orders and invoices, sales orders and sales order log
books, credit and collection records, plats, drawings and specifications,
environmental and mining reports and studies, correspondence and miscellaneous
records with respect to customers and supply sources, lessors and lessees, maps,
core logs, engineering data, equipment maintenance records and all other general
correspondence, records, books and files owned by any Asset Sale Company, but
excluding any and all Tax Returns, books and records relating to the Retained
Liabilities and corporate records of the Asset Sale Companies.
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1.12. Business.
"Business" shall mean the coal mining and sale business conducted by
the Asset Sale Companies using the Purchased Assets.
1.13. Buyer.
"Buyer" shall have the meaning given to it in the preamble of this
Agreement.
1.14. Buyer's Affiliates, Successors, Assigns, Lessees or Contractors.
"Buyer's Affiliates, Successors, Assigns, Lessees or Contractors"
shall mean Buyer's Affiliates, Buyer's contractual successors and assigns, and
lessees and contractors who, as part of a contractual arrangement with Buyer or
one of its Affiliates, offer employment to the current or former Employees of an
Asset Sale Company.
1.15. Buyer Closing Certificate.
"Buyer Closing Certificate" shall mean the certificate of Buyer
substantially in the form of Exhibit D attached hereto.
1.16. Buyer's Ultimate Parent.
"Buyer's Ultimate Parent" shall mean Alpha Natural Resources, LLC, a
Delaware limited liability company.
1.17. CERCLA.
"CERCLA" shall have the meaning set forth in Section 1.40 hereof.
1.18. CERCLIS.
"CERCLIS" shall have the meaning set forth in Section 3.8 hereof.
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1.19. Classified Employee.
"Classified Employee" shall mean any Employee whose employment is
governed by any of the Collective Bargaining Agreements. The term "current and
former Classified Employees" shall mean any Persons who fall within the term
Classified Employee at any time prior to the Closing Date.
1.20. Classified Employee Retiree Medical Plans.
"Classified Employee Retiree Medical Plans" shall mean the Pittston
Coal Group Companies Managed Care Employee Benefit Plan for UMWA Represented
Employees dated April 1, 1999 and the Pittston Coal Group Companies Employee
Benefit Plan for UMWA Represented Employees dated June 21, 1994.
1.21. Classified Employment.
"Classified Employment" shall mean employment, the terms of which
are governed by a collective bargaining agreement between an employer and the
UMWA, including any of the Collective Bargaining Agreements.
1.22. Closing.
"Closing" shall mean the closing of the transactions contemplated by
this Agreement beginning at 10:00 a.m., local time, on the Closing Date, at the
offices of Hunton & Xxxxxxxx, Riverfront Plaza, East Tower, 000 Xxxx Xxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000.
1.23. Closing Date.
"Closing Date" shall mean November 30, 2002 or such other date as
the parties may mutually agree in writing.
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1.24. Coal Act.
"Coal Act" shall mean the Coal Industry Retiree Health Benefit Act
of 1992 as amended through the Closing Date (codified at Subtitle J of the
Code).
1.25. Coal Inventory.
"Coal Inventory" shall mean the coal stockpile inventory and loaded
shipments in transit to a pier or at a pier owned by the Asset Sale Companies at
the locations listed on Schedule 1.25.
1.26. COBRA.
"COBRA" shall mean the Consolidated Omnibus Budget Reconciliation
Act of 1986, as amended.
1.27. Code.
"Code" shall mean the Internal Revenue Code of 1986, as amended,
and, where appropriate, any predecessor or successor provisions of Law, and all
regulations thereunder.
1.28. Collective Bargaining Agreements.
"Collective Bargaining Agreements" shall mean, collectively, the
Agreement Between the United Mine Workers of America and the Pittston Coal Group
Companies dated January 1, 1999 and the Memorandum of Understanding Regarding
New Virginia Operations dated March 23, 2002, each of which includes (a) any and
all employee benefit plans or programs maintained thereby or incorporated
therein; (b) that certain Settlement Agreement, dated March 20, 1996, in the
case UMWA 1974 Pension Trust, et al. v. The Pittston Company, et al., Civil
Action No. 88-0969 (TFH)(U.S. District Court for the District of Columbia; (c)
any precedential grievance settlements, arbitration decisions and binding past
practices or customs; and (d) any and all memoranda of understanding, local or
district agreements, correspondence
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and other documents incorporated by reference therein or attached thereto,
including, without limitation, the following:
Memorandum of Understanding Concerning Participation in the United
Mine Workers of America 1974 Pension Plan dated January 1, 1999;
Memorandum of Understanding Regarding XxXxxxx River Preparation Plan
dated October 2, 1996;
Agreement Regarding Clinchfield Electrical Crew dated April 5, 1999;
Undated Agreement between Clinchfield Coal Company and Members of
Local 7950 (Construction Crew)(regarding pay in lieu of portal);
Clinchfield Agreement Regarding Forestry Department dated March 23,
2000;
Agreement Between Local Union 7950 and Clinchfield Coal Company
dated March 23, 2000 (regarding waiver of cumulative 60 day limit as temporary
supervisor);
Agreement Regarding Clinchfield Construction Crew dated March 29,
2000;
Agreement dated April 3, 1996 (regarding work performed by the
Clinchfield Central Shop on behalf of non signatory operations of the company);
Agreement Regarding Clinchfield Central Shop dated January 26-27,
1999;
Agreement dated September 10, 1996 (regarding work performed by the
Clinchfield Electrical Line Crew and the Clinchfield Truck Shop on behalf of non
signatory operations of the company);
Agreement dated February 5, 1993 (regarding the staffing of the
seniority units which encompass the operation of Highwall Continuous Mining
Machines);
Three letters dated March 23, 2002 between Xxxxx Xxxxxxxx and Xxxxx
Xxxxxxxx; and
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Seven letters dated January 1, 1999 between Xxxxx Xxxxxxxx and Xxxxx
Xxxxxxx.
"Collective Bargaining Agreements" shall not include the PCO/UMWA
Agreements dated January 1, 1999.
1.29. Contaminated.
"Contaminated" shall mean the presence of one or more Hazardous
Substances in such quantity or concentration as to: (i) violate any
Environmental Law; (ii) require disclosure to any Governmental Authority; (iii)
require remediation or removal; (iv) interfere with or prevent the use of the
Real Property or any of the Purchased Assets as customarily intended; or (v)
create any contribution Liability to fund the clean up of the Real Property.
1.30. Contracts.
"Contracts" shall mean the written contracts, agreements, personal
and real property leases, relationships and commitments, of the Asset Sale
Companies listed on Schedule 1.30.
1.31. Controlled Group.
"Controlled Group" shall have the meaning set forth in Code Section
1563.
1.32. Conveyance Deeds.
"Conveyance Deeds" shall mean the deeds substantially in the form of
Exhibit E attached hereto.
1.33. Cooperation Agreement.
"Cooperation Agreement" shall mean the agreement by and among the
PCC Parent, PCC and Buyer substantially in the form of Exhibit F attached
hereto.
1.34. CPA Arbitrator.
"CPA Arbitrator" shall have the meaning set forth in Section 2.12
hereof.
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1.35. D-R Service Agreement.
"D-R Service Agreement" shall mean the agreement by and between
Buyer and PCC, substantially in the form of Exhibit G attached hereto.
1.36. Dispute.
"Dispute" shall have the meaning set forth in Section 10.14 hereof.
1.37. Employee.
"Employee" shall mean any Person (i) employed by and rendering
personal services for an Asset Sale Company, (ii) receiving short-term or
long-term disability benefits from an Asset Sale Company under an Employee
Benefit Plan or (iii) laid-off or on inactive status from an Asset Sale Company.
The term "current and former Employees" shall mean any Persons who fall within
the term Employee at any time prior to the Closing Date.
1.38. Employee Benefit Plans.
"Employee Benefit Plans" shall have the meaning set forth in Section
3.12 hereof.
1.39. Environment.
"Environment" shall mean surface or ground water, water supply, soil
or the ambient air.
1.40. Environmental Laws.
"Environmental Laws" shall mean collectively, all federal, foreign,
state, and local Laws in effect as of the Closing Date that relate to (a) the
prevention, abatement or elimination of pollution, or the protection of the
environment, or of natural resources, including, without limitation, Laws
applicable to coal mining operations or related activities, (b) the generation,
handling, treatment, storage, disposal or transportation of waste materials, (c)
the regulation of or exposure to Hazardous Substances, including, without
limitation, the
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Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C.
Sections 9601 et. seq. ("CERCLA"), the Solid Waste Disposal Act, as amended by
the Resource Conservation and Recovery Act, as amended, 42 U.S.C. Sections 6901
et. seq. ("RCRA"), the Clean Air Act, 42 U.S.C. Sections 7401 et. seq., the
Clean Water Act, 33 U.S.C. Sections 1251 et. seq., the Toxic Substances Control
Act, 15 U.S.C. Sections 2601 et. seq., the Emergency Planning and Community
Right to Know Act, 42 U.S.C. Sections 11001 et. seq., and any foreign, state,
county, municipal, or local statutes, Laws or ordinances similar or analogous to
the federal statutes listed in this sentence.
1.41. Environmental Matter.
"Environmental Matter" shall mean any assertion of a violation,
claim or directive by any Governmental Authority or any other Person for
personal injury, damage to property or the Environment, nuisance, contamination
or other adverse effects on the Environment, or for damages or restrictions
resulting from or related to (i) the operation of PCC's or its Affiliates'
business or any predecessor or the ownership, use or operation at or on any real
property or other assets owned, operated or leased by PCC or its Affiliates or
any predecessor; or (ii) the existence or the continuation of a Release of, or
exposure to, or the transportation, storage or treatment of any Hazardous
Substance into the Environment from or related to any real property or assets
currently or formerly owned, operated or leased by PCC or its Affiliates or any
activities on or operations thereof.
1.42. Environmental or Response Action.
"Environmental or Response Action" shall mean all actions required
(i) to clean up, remove, treat or in any other way address any Hazardous
Substance or other substance; (ii) to prevent the Release or threat of Release,
or minimize the further Release of any Hazardous Substance or other substance so
it does not migrate or endanger or threaten to endanger public
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health or welfare or the indoor or outdoor Environment; (iii) to perform
pre-remedial studies and investigations or post-remedial monitoring and care;
(iv) to bring facilities on any real property currently or formerly owned,
operated or leased by PCC or its Affiliates and the facilities located and
operations conducted thereon into compliance with all Environmental Laws and
Reclamation Laws and all permits and other authorizations, and the filing of all
notifications and reports required under any Environmental Laws and Reclamation
Laws; or (v) for the purpose of environmental protection of any real property
currently or formerly owned, operated or leased by PCC or its Affiliates.
1.43. EPA.
"EPA" shall have the meaning set forth in Section 3.8 hereof.
1.44. Equipment.
"Equipment" shall mean the tangible machinery, vehicles, equipment,
furniture, fixtures, furnishings, trailers, tools, parts and other personal
property owned or leased by the Asset Sale Companies listed on Schedules 1.44(a)
and 1.44(b), respectively.
1.45. ERISA.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
1.46. ERISA Affiliates.
"ERISA Affiliates" shall mean any trade or business (whether or not
incorporated) that is part of the same Controlled Group as, or under common
control with, or part of an affiliated service group that includes, PCC and each
of the Asset Sale Companies within the meaning of Section 414(b), (c), (m) or
(o) of the Code.
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1.47. Fiduciary.
"Fiduciary" shall have the meaning set forth in ERISA Section 3(21)
1.48. Governmental Authority.
"Governmental Authority" shall mean any governmental, judicial,
legislative, executive, administrative or regulatory authority of the United
States, or of any foreign, state or local government or any subdivision, agency,
commission, office, authority or bureau thereof or any quasi-governmental entity
or authority of any nature.
1.49. Hazardous Substances.
"Hazardous Substances" shall mean any substance, chemical, waste,
solid, material, pollutant or contaminant that is defined or listed as hazardous
or toxic under any applicable Environmental Laws. Without limiting the
generality of the foregoing it shall also include any radioactive material,
including any naturally-occurring radioactive material, and any source, special
or by-product material as defined in 42 U.S.C. 2011, et seq., any amendments or
authorizations thereof, any asbestos-containing materials in any form or
condition, any polychlorinated biphenyls in any form or condition, radioactive
waste, or natural gas, natural gas liquids, liquified natural gas, condensate,
or derivatives or byproducts thereof or oil and petroleum products or by
products and constituents thereof.
1.50. Health and Safety Requirements.
"Health and Safety Requirements" shall mean all applicable federal,
state, local and foreign Laws concerning public health and safety and worker
health and safety each as in effect as of the Closing Date, other than
Environmental Laws.
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1.51. HIPAA.
"HIPAA" shall mean the Health Insurance Portability and
Accountability Act of 1996, as amended, and all rules and regulations
thereunder.
1.52. Income Tax or Income Taxes.
"Income Tax or "Income Taxes" shall mean any Tax based on or
measured by net income.
1.53. Indemnification and Guaranty Agreement.
"Indemnification and Guaranty Agreement" shall mean the agreement by
and among PCC Parent, PCC, Buyer and Buyer's Ultimate Parent substantially in
the form of Exhibit H attached hereto.
1.54. Independent Surveyor.
"Independent Surveyor" shall have the meaning set forth in Section
2.11(b) hereof.
1.55. Intellectual Property.
"Intellectual Property" shall mean the trademarks, service marks,
patents, copyrights (including any registrations, applications, licenses or
rights relating to any of the foregoing), technology, logos, trade secrets,
confidential information related to the Purchased Assets, inventions, know-how,
designs, technical data, drawings, customer and supplier lists, pricing and cost
information, or computer programs and processes and all goodwill associated
therewith and rights thereunder, remedies against infringements thereof, and
rights to protection of interests therein under the laws of all jurisdictions
owned or licensed or leased by the Asset Sale Companies listed on Schedules
1.55(a) and 1.55(b), respectively.
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1.56. IRS.
"IRS" shall mean the United States Internal Revenue Service.
1.57. Knowledge of PCC.
"Knowledge of PCC" shall mean, for the individuals listed on
Schedule 1.57, any such individual's actual knowledge and what any such
individual should have known after reasonable inquiry within the scope of that
individual's job responsibilities.
1.58. Law.
"Law" and "Laws" shall mean any applicable United States or foreign,
federal, state, local or other law or governmental requirement of any kind, and
the rules, regulations and orders promulgated thereunder.
1.59. Lien.
"Lien" shall mean any lien, encumbrance, mortgage, charge, claim,
restriction, pledge, security interest or imposition of any kind.
1.60. Liability.
"Liability" shall mean any liability or obligation (whether known or
unknown, whether asserted or unasserted, whether absolute or contingent, whether
liquidated or unliquidated and whether due or to become due), including any
liability for Taxes. Liabilities shall mean one or more items of Liability.
1.61. Material Adverse Effect.
"Material Adverse Effect" shall mean any event, change or occurrence
that individually, or together with any other event, change or occurrence, has a
material adverse impact on the Business, taken as a whole, without regard to the
duration of such material adverse impact.
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1.62. Medical Plans.
"Medical Plans" shall mean any and all benefit plans that provide
medical, dental and other benefits to current or former Employees sponsored or
maintained by or on behalf of, or for the benefit of, PCC or any Asset Sale
Company, including the Comprehensive Medical Expense Benefits Plan of The
Pittston Company and Its Subsidiaries, the Pittston Coal Group Companies Managed
Care Employee Benefit Plan for UMWA Represented Employees dated April 1, 1999,
the Pittston Coal Group Companies Employee Benefit Plan for UMWA Represented
Employees dated June 21, 1994, and the Pittston Coal Group Companies Employee
Benefit Plan for UMWA Represented Employees dated February 21, 1990.
1.63. Mining Activities.
"Mining Activities" shall mean those activities of the Asset Sale
Companies that have taken place on or through the use of the Purchased Assets
that involve surface, underground and auger mining, processing or transporting
of coal and the handling of coal by-products.
1.64. Mining Data.
"Mining Data" shall have the meaning set forth in Section 3.5(d)
hereof.
1.65. Mining Environmental Liabilities.
"Mining Environmental Liabilities" shall mean Liabilities that
relate to or arise from both of the following: (i) any of the Hazardous
Substances set forth on Schedule 1.65 and (ii) an Environmental Matter or
Environmental and Response Action associated with Mining Activities to the
extent that such Mining Activities conformed to industry standard practices at
the time such Mining Activities were conducted.
1.66. MSHA.
"MSHA" shall have the meaning set forth in Section 3.8 hereof.
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1.67. Multiemployer Plan.
"Multiemployer Plan" shall have the meaning set forth in Section
3.12 hereof.
1.68. Non-Classified Employee.
"Non-Classified Employee" shall mean an Employee, the terms of whose
employment are not or were not, at the time of the determination of the
Employee's status, governed by a collective bargaining agreement, including any
of the Collective Bargaining Agreements.
1.69. Non-Classified Employee Retiree Medical Plan.
"Non-Classified Employee Retiree Medical Plan" shall mean the
Comprehensive Medical Expense Benefits Plan of The Pittston Company and its
Subsidiaries.
1.70. Operator.
"Operator" shall have the meaning set forth in Section 3.8 hereof.
1.71. Ordinary Course of Business.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
1.72. OSM.
"OSM" shall have the meaning set forth in Section 3.8 hereof.
1.73. Parts, Fuel and Supplies Inventory.
"Parts, Fuel and Supplies Inventory" shall include the categories of
items listed on Schedule 1.73.
1.74. PBGC.
"PBGC" shall mean the Pension Benefits Guaranty Corporation.
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1.75. PCC.
"PCC" shall have the meaning given to it in the preamble to this
Agreement.
1.76. PCC Bonds.
"PCC Bonds" shall have the meaning set forth in Section 3.9 hereof.
1.77. PCC Closing Certificate.
"PCC Closing Certificate" shall mean the certificate of PCC
substantially in the form of Exhibit I attached hereto.
1.78. PCC Group.
"PCC Group" shall have the meaning set forth in Section 1.95(j)
hereof.
1.79. PCC Parent.
"PCC Parent" shall mean The Pittston Company, a Virginia
corporation.
1.80. Pension Plans.
"Pension Plans" shall have the meaning set forth in Section 3.12
hereof.
1.81. Permits.
"Permits" shall mean the written permits, licenses, orders,
certificates, registrations, approvals and similar rights held by the Asset Sale
Companies listed on Schedule 1.81.
1.82. Permitted Liens.
"Permitted Liens" shall mean: (i) Liens for property Taxes not due
and payable; (ii) encumbrances that would be apparent in a physical inspection
of the surface of the Real Property; (iii) all instruments of record in the
offices of the Clerk of the Circuit Court for each
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county where the Real Property is located; and (iv) those Liens affecting the
Purchased Assets that are listed on Schedule 1.82.
1.83. Person.
"Person" shall mean any individual, corporation, general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union or other entity or Governmental
Authority.
1.84. Post-Closing Period.
"Post-Closing Period" shall mean any taxable period beginning after
the Closing Date.
1.85. Pre-Closing Period.
"Pre-Closing Period" shall mean any taxable period ending on or
before the Closing Date.
1.86. Promissory Note.
"Promissory Note" shall mean the secured promissory note made by
Buyer in favor of PCC determined in accordance with Section 2.11, to be dated as
of the Closing Date, in a form to be agreed upon by the parties hereto.
1.87. Purchase Price.
"Purchase Price" shall mean the cash amount of $8,170,000 (which
amount shall include $880,000 for the Parts, Fuel and Supplies Inventory,
$3,180,000 for the Coal Inventory and $110,000 for two continuous miners), plus
the Promissory Note.
1.88. Purchased Assets.
"Purchased Assets" shall mean all right, title and interest in and
to the Coal Inventory, Parts, Fuel and Supplies Inventory, Equipment, Books and
Records, Real Property,
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Mining Data and Intellectual Property of the Asset Sale Companies and the rights
of the Asset Sale Companies with respect to the Contracts and the Permits.
1.89. Qualified Plans.
"Qualified Plans" shall have the meaning set forth in Section 3.12
hereof.
1.90. RCRA.
"RCRA" shall have the meaning set forth in Section 1.40 hereof.
1.91. Real Property.
"Real Property" shall mean the real property rights and interests
owned, leased or subleased by the Asset Sale Companies and any improvements,
fixtures, easements, rights of way, and other appurtenants thereto (such as
appurtenant rights in and to public streets) that are listed on Schedule 1.91.
1.92. Reclamation Laws.
"Reclamation Laws" shall mean all federal, state and local Laws, as
now or hereafter in effect, relating to coal mining reclamation activities or
Liabilities. For purposes of this definition, "coal mining" shall include, but
not be limited to, any activities defined under the Surface Mining Control and
Reclamation Act of 1977, as amended, as "surface coal mining operations."
1.93. Related Persons.
"Related Persons" shall mean related persons as that term is defined
in Section 9701(c)(2) of the Coal Act, except that it shall not include
successors in interest.
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1.94. Release.
"Release" shall mean any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, dumping or disposing into
the Environment of Hazardous Substances.
1.95. Retained Liabilities.
"Retained Liabilities" shall mean all of the Liabilities of each
Asset Sale Company, other than the Assumed Liabilities, including, without
limitation, the following:
(a) the Liabilities listed on Schedule 1.95(a);
(b) all Liabilities arising under applicable Workers' Compensation
Acts for or based upon the employment of (i) the current and former
Employees of the Asset Sale Companies who are not hired by Buyer or one of
Buyer's Affiliates, Successors, Assigns, Lessees or Contractors, and (ii)
the current and former Employees of the Asset Sale Companies who are hired
by Buyer or one of Buyer's Affiliates, Successors, Assigns, Lessees or
Contractors, but only with respect to claims where the date of injury or
the date of last injurious exposure occurred prior to the date such
Employees began working for Buyer or one of Buyer's Affiliates,
Successors, Assigns, Lessees or Contractors;
(c) all Liabilities arising under the federal black lung Laws for or
based upon the employment of (i) the current and former Employees of the
Asset Sale Companies who are not hired by Buyer or one of Buyer's
Affiliates, Successors, Assigns, Lessees or Contractors and (ii) the
current and former Employees of the Asset Sale Companies who are hired by
Buyer or one of Buyer's Affiliates, Successors, Assigns, Lessees or
Contractors, to the extent and in the amounts provided in the federal
black lung Laws, but
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only until such time as Buyer or one of Buyer's Affiliates, Successors,
Assigns, Lessees or Contractors becomes the responsible operator under the
federal black lung Laws for such Employees;
(d) unless such Liabilities are otherwise retained pursuant to
Sections 1.95(j) or 1.95(k) hereof, all Liabilities for medical, dental,
vision, sickness and accident, life, death, accidental death and
dismemberment, and other benefits and expenses covered under the Medical
Plans including related insurance costs or premiums for or based upon the
employment of (i) the current and former Employees of the Asset Sale
Companies who are not hired by Buyer or one of Buyer's Affiliates,
Successors, Assigns, Lessees or Contractors, (ii) the current or former
Employees of the Asset Sale Companies who are hired by Buyer or one of
Buyer's Affiliates, Successors, Assigns, Lessees or Contractors, but only
with respect to the period prior to the date such Employees began working
for Buyer or one of Buyer's Affiliates, Successors, Assigns, Lessees or
Contractors and (iii) in either case, all such Liabilities under COBRA,
HIPAA and other Laws, including all Liabilities of a Fiduciary for breach
of fiduciary duty or any other failure to act or comply in connection with
the administration of such Medical Plans;
(e) unless such Liabilities are otherwise retained pursuant to
Sections 1.95(j) or 1.95(k) hereof, all Liabilities arising under or based
upon the Employee Benefit Plans sponsored or maintained by, on behalf of
or for the benefit of such Asset Sale Company or its Employees or in which
such Asset Sale Company participated (other than the UMWA Pension Plans
and the Medical Plans), including all Liabilities arising from or related
to the termination thereof or Liabilities of a Fiduciary for breach of
fiduciary duty
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or any other failure to act or comply in connection with the
administration or investment of the assets of any such Employee Benefit
Plan;
(f) all Liabilities for salaries, wages, bonuses, vacation days,
personal days, contributions, if any, to the UMWA Pension Plans required
under the Collective Bargaining Agreements and similar forms of leave or
compensation for or based upon the employment of (i) the current and
former Employees of the Asset Sale Companies who are not hired by Buyer or
one of Buyer's Affiliates, Successors, Assigns, Lessees or Contractors,
and (ii) the current and former Employees of the Asset Sale Companies who
are hired by Buyer or one of Buyer's Affiliates, Successors, Assigns,
Lessees or Contractors, that are accrued, due or earned up to the date
such Employees began working for Buyer or one of Buyer's Affiliates,
Successors, Assigns, Lessees or Contractors and for which such Employees
are eligible;
(g) all Liabilities for terminated contract miner performance escrow
amounts (including interest) accrued up to the Closing Date;
(h) all Liabilities for accounts payable for which goods have been
shipped and delivered (whether or not invoiced) or services have been
performed (whether or not invoiced) and related notes, trade payables and
earned royalties, to the extent that an Asset Sale Company received a
benefit before the Closing Date;
(i) all Liabilities for claims of any current or former Employees
pursuant to the WARN Act arising out of acts or omissions of the Asset
Sale Companies prior to and including the Closing Date;
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(j) (1) all Liabilities, if any, of any Asset Sale Company and its
Related Persons (collectively, the "PCC Group") under the Coal Act, and
(2) all Liabilities, if any, of the PCC Group under any post-Closing
amendments to the Coal Act for (i) beneficiaries eligible under the Coal
Act who are assigned to a member of the PCC Group or for whom a member of
the PCC Group is required to provide or pay for medical benefits pursuant
to Sections 9711 or 9712 of the Coal Act or (ii) death benefit premiums or
unassigned beneficiary premiums (as those terms are used in Sections
9704(c) and 9704(d) of the Coal Act) for beneficiaries eligible under the
Coal Act, that are assessed against any member of the PCC Group; provided,
for the avoidance of doubt, that the Liabilities retained pursuant to (1)
and (2) above shall not be affected by Buyer or any of its Affiliates
being identified under the Coal Act or any post-Closing amendments thereto
as a successor, successor in interest or "Related person" under the Coal
Act or any post-Closing amendments thereto to any member of the PCC Group
solely as a result of Buyer's purchase of the Purchased Assets;
(k) notwithstanding anything in Article VIII to the contrary, all
Liabilities for retiree medical benefits provided through any Classified
Employee Retiree Medical Plan maintained pursuant to any of the Collective
Bargaining Agreements in which such Asset Sale Signatory Company
participates as of the Closing Date for (i) the current and former
Classified Employees (and their eligible dependents and beneficiaries) of
the Asset Sale Signatory Company who, as of the Closing Date, have retired
and are receiving benefits from any such Classified Employee Retiree
Medical Plan, (ii) the current and former Classified Employees (and their
eligible dependents and beneficiaries) of the Asset Sale Signatory Company
who, based on age, service, and/or disability, satisfy the eligibility
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criteria in any such Classified Employee Retiree Medical Plan to receive
retiree health benefits and whose last signatory Classified Employment is
with the Asset Sale Signatory Company, (iii) the current and former
Classified Employees listed on Schedule 1.95(k)(1) (and their eligible
dependents and beneficiaries) who (1) are recalled or hired after the
Closing Date by Buyer or one of Buyer's Affiliates, Successors, Assigns,
Lessees or Contractors pursuant to or as a result of any of the Collective
Bargaining Agreements to work at the Purchased Assets listed on Schedule
1.95(k)(2), (2) based on age, service, and/or disability, satisfy the
eligibility criteria in any such Classified Employee Retiree Medical Plan
to receive retiree health benefits and (3) whose last signatory Classified
Employment is with Buyer or one of Buyer's Affiliates, Successors,
Assigns, Lessees or Contractors; and (iv) the current and former
Classified Employees listed on Schedule 1.95(k)(3) (and their eligible
dependents and beneficiaries) who (1) are recalled or hired between the
Closing Date and December 31, 2003 by Buyer or one of Buyer's Affiliates,
Successors, Assigns, Lessees or Contractors pursuant to or as a result of
any of the Collective Bargaining Agreements to work at the Purchased
Assets listed on Schedule 1.95(k)(2), (2) based on age, service and/or
disability effective as of December 31, 2003 (but excluding any
individuals who meet the disability criteria as a result of having
incurred the disability after being employed by Buyer or one of Buyer's
Affiliates, Successors, Assigns, Lessees or Contractors) satisfy the
eligibility criteria in any Classified Employee Retiree Medical Plan to
receive retiree health benefits and (3) whose last signatory Classified
Employment is with Buyer, or one of Buyer's Affiliates, Successors,
Assigns, Lessees or Contractors, provided, however, that PCC shall not
retain Liabilities pursuant to (iii) and (iv) above with respect to (A)
any Employee listed on
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Schedule 1.95(k)(1) or Schedule 1.95(k)(3) who works for an employer other
than Buyer or one of Buyer's Affiliates, Successors, Assigns, Lessees or
Contractors, that is signatory to a collective bargaining agreement with
the UMWA, between the time the Employee last worked for the Asset Sale
Signatory Company and is recalled or hired by Buyer or one of Buyer's
Affiliates, Successors, Assigns, Lessees or Contractors or (B) any
Employee who is listed on Schedule 1.95(k)(1) or Schedule 1.95(k)(3) (and
their eligible dependents and beneficiaries) where, at the time such
Employee is hired or recalled by Buyer or one of Buyer's Affiliates,
Successors, Assigns, Lessees or Contractors, the total number of
Classified Employees working at the Purchased Assets listed on Schedule
1.95(k)(2) exceeds 273 (the "273 Threshold"); and provided further that
the Liabilities described in (iii) and (iv) above shall exist regardless
of when such Classified Employees actually retire or seek to receive
retiree health benefits, and shall continue for so long as Buyer or one of
Buyer's Affiliates, Successors, Assigns, Lessees or Contractors would be
obligated to provide those benefits but for the terms of this Agreement;
(l) all Liabilities, if any, of such Asset Sale Companies for
retiree medical benefits with respect to Non-Classified Employees of such
Asset Sale Company (and their eligible dependents and beneficiaries) who,
on or prior to the Closing Date, satisfy the requirements for retiree
medical benefits under any Non-Classified Employee Retiree Medical Plan in
which such Asset Sale Company participates;
(m) all Liabilities relating to assets held in trust under any
Qualified Plan sponsored or maintained by, on behalf of or for the benefit
of such Asset Sale Company or its current or former Employees or in which
such Asset Sale Company participates
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(other than the UMWA Pension Plans) arising or relating to the period
prior to the Closing Date;
(n) all Liabilities with respect to withdrawal by the Asset Sale
Companies or their Affiliates, if any, from the UMWA Pension Plans or any
other Multiemployer Plan;
(o) all inter-company indebtedness owed by any Asset Sale Company to
the PCC Parent or any of the PCC Parent's Affiliates;
(p) all Liabilities arising out of or in connection with compliance
prior to the Closing Date with Health and Safety Requirements pertaining
to the Purchased Assets, and all Liabilities arising out of or in
connection with compliance with all Laws relating to equal employment
opportunity, employment, or labor relations concerning the employment of
any Employee by the Asset Sale Companies, or relating to any other action
taken or not taken by the Asset Sale Companies concerning (i) the current
and former Employees of the Asset Sale Companies who are not hired by
Buyer or one of Buyer's Affiliates, Successors, Assigns, Lessees or
Contractors, and (ii) the current and former Employees of the Asset Sale
Companies who are hired by Buyer or one of Buyer's Affiliates, Successors,
Assigns, Lessees or Contractors, but only with respect to matters arising
out of the employment of such Employees by the Asset Sale Companies;
(q) except as set forth on Schedule 1.9, all Liabilities for the
claims, legal actions, suits, litigation, arbitrations, grievances,
disputes or investigations listed on Schedules 3.5(c), 3.8 and 3.11;
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(r) all Liabilities of any of the Asset Sale Companies for unpaid
Taxes with respect to any Tax year or portion thereof ending on or before
the Closing Date or for any Tax year beginning before and ending after the
Closing Date to the extent allocable to the portion of such period
beginning before and ending on the Closing Date (to the extent of any
inconsistencies with Article VII hereof, Article VII shall be
controlling);
(s) all amounts payable as the result of the consummation of the
transactions contemplated by this Agreement that arise due to any change
of control provision of any Contract other than those Contracts listed on
Schedule 5.4(b);
(t) all Liabilities of any of the Asset Sale Companies for the
unpaid Taxes of any Person (including PCC and its subsidiaries) under Reg.
Section 1.1502-6 (or any similar provision of state, local, or foreign
law), as a transferee or successor, by contract, or otherwise;
(u) all Liabilities for any Environmental Matter or Environmental or
Response Action related to real property or any other asset owned,
operated or leased by PCC or any of its Affiliates that is not a Purchased
Asset (except to the extent otherwise provided in the D-R Service
Agreement or any other agreement entered into contemporaneously with this
Agreement pursuant to which reclamation and other services are to be
performed on PCC's or its Affiliates' idle properties);
(v) all Liabilities for any Environmental Matter or Environmental or
Response Action (other than Mining Environmental Liabilities) to the
extent the underlying claim relates to or arises from any activity on or
through the use of the Purchased Assets and is attributable to acts or
omissions occurring at or prior to the Closing;
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(w) all Liabilities of PCC that become a Liability of Buyer under
any bulk transfer Law of any jurisdiction;
(x) all Liabilities under the Collective Bargaining Agreements that
do not pertain to or arise out of any Asset Sale Signatory Company's
ownership of the Purchased Assets;
(y) all Liabilities under the contracts, agreements, personal and
real property leases, relationships and commitments of the Asset Sale
Companies listed on Schedule 1.95(y); and
(z) all Liabilities related to Equipment retained by PCC and the
Asset Sale Companies after the Closing Date but included within the
Equipment leases listed in Schedule 5.4(b).
1.96. Security Agreement.
"Security Agreement" shall mean the Security Agreement between Buyer
and PCC, to be dated as of the Closing Date, in a form to be agreed upon by the
parties hereto.
1.97. SMCRA.
"SMCRA" shall have the meaning set forth in Section 3.8 hereof.
1.98. Straddle Period.
"Straddle Period" shall mean any taxable period covering days before
and after the Closing Date.
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1.99. Tax or Taxes.
"Tax" or "Taxes" mean any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under Code
Section 59A), custom duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, reclamation fees or other tax of any kind whatsoever,
including any interest, penalty, or addition thereto, whether disputed or not,
but shall not include, for purposes of this Agreement only, Liabilities under
the Coal Act, of whatever nature and regardless of how denominated.
1.100. Tax Return.
"Tax Return" shall mean any original or amended report, return,
declaration, claim for refund, statement, document, schedule, attachment or
other information supplied or required to be supplied to a Governmental
Authority with respect to Taxes, including any return of an affiliated, combined
or unitary group.
1.101. UMWA.
"UMWA" shall mean the International Union, United Mine Workers of
America, including its district and local unions.
1.102. UMWA Pension Plans.
"UMWA Pension Plans" shall mean the United Mine Workers of America
1950 and 1974 Pension Plans and Trusts.
1.103. VDEQ.
"VDEQ" shall have the meaning set forth in Section 3.8 hereof.
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1.104. VDMME.
"VDMME" shall have the meaning set forth in Section 3.8 hereof.
1.105. WARN Act.
"WARN Act" shall mean the Worker Adjustment and Retraining
Notification Act, as amended.
1.106. Welfare Plans.
"Welfare Plans" shall have the meaning set forth in Section 3.12
hereof.
1.107. Workers' Compensation Acts.
"Workers' Compensation Acts" shall mean Laws that provide for awards
to employees and their dependents for employment-related accidents and diseases.
ARTICLE II
PURCHASE AND SALE OF ASSETS
2.1. Transfer of Assets.
On the Closing Date, PCC (on behalf of the Asset Sale Companies)
shall cause to be sold, conveyed, transferred, assigned, and delivered to Buyer,
and Buyer shall acquire, the Purchased Assets. At the Closing, subject to the
terms and conditions of this Agreement, PCC agrees to: (i) cause title to the
Purchased Assets to be transferred and delivered to Buyer; and (ii) perform its
obligations under this Agreement to be performed at or before Closing. In full
payment for the Purchased Assets, Buyer shall: (i) assume the Assumed
Liabilities; (ii) pay to PCC (which shall receive such amounts on behalf of the
Asset Sale Companies) the Purchase Price by wire transfer of cash or other
immediately available funds and execute and deliver to PCC the Promissory Note;
and (iii) perform its obligations under this Agreement to be performed at or
before Closing. Buyer shall not assume or have any responsibility with respect
to any
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Liability of PCC Parent, PCC, the PCC Group or the Asset Sale Companies that is
not an Assumed Liability.
2.2. Bills of Sale, Assignment and Assumption Agreements, Conveyance Deeds
and Other Documents.
At the Closing, PCC shall cause each of the Asset Sale Companies to:
(i) execute and deliver to Buyer the Bills of Sale, the Assignment and
Assumption Agreements, the Conveyance Deeds and such other documents as may be
necessary to convey to Buyer the Purchased Assets; and (ii) perform its
obligations under the Agreement to be performed at or before the Closing.
2.3. Assumption of Liabilities.
At the Closing, Buyer shall execute and deliver to PCC the
Assignment and Assumption Agreements and such other documents and instruments as
may be necessary for Buyer to assume all of the Assumed Liabilities. Buyer shall
not assume or have any responsibility, however, with respect to any Liability of
PCC Parent, PCC, the PCC Group or the Asset Sale Companies that is not an
Assumed Liability.
2.4. Proration of Liabilities.
PCC and Buyer shall cooperate with each other to provide for
payments due with respect to the Assumed Liabilities and the Retained
Liabilities during the payment period in which the Closing occurs with all such
Liabilities prorated as of the Closing Date, if applicable.
2.5. Indemnification and Guaranty Agreement.
At the Closing, PCC, PCC Parent, Buyer's Ultimate Parent and Buyer
shall execute and deliver the Indemnification and Guaranty Agreement.
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2.6. Cooperation Agreement.
At the Closing, PCC and Buyer shall, and PCC shall cause PCC Parent
to, execute and deliver the Cooperation Agreement pursuant to which Buyer, PCC
Parent and PCC shall provide each other certain information and other assistance
in connection with the collection, administration and/or satisfaction of certain
of the Retained Liabilities.
2.7. Administrative Services Agreement.
At the Closing, PCC and Buyer shall execute and deliver the
Administrative Services Agreement pursuant to which PCC or one of its Affiliates
will provide certain services to Buyer and the Asset Sale Companies for a
transition period.
2.8. D-R Service Agreement.
At the Closing, PCC and Buyer shall execute and deliver the D-R
Service Agreement pursuant to which Buyer will cause one of its Affiliates to
perform reclamation and other services on idle properties.
2.9. Security Agreement.
At the Closing, in order to secure Buyer's obligations under the
Promissory Note, PCC and Buyer shall execute and deliver the Security Agreement.
2.10. Additional Documents.
At the Closing, PCC and Buyer shall, and PCC shall cause the Asset
Sale Companies to, execute and deliver all such other documents or instruments
necessary or appropriate to effect the transactions contemplated by this
Agreement, including the documents provided in Section 5.6 hereof and in this
Article II.
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2.11. Coal Inventory Adjustment.
(a) In accordance with the provisions of this Section 2.11, Buyer
shall pay PCC the amount, if any, by which the value of the Coal Inventory
(as calculated in accordance with Sections 2.11(b)) is finally determined
to be greater than $3,180,000. Such payment shall constitute an adjustment
to the Purchase Price and shall be paid by fixing the face amount of the
Promissory Note within one business day after the completion of the
procedures contemplated in Sections 2.11(b).
(b) No later than three days before the Closing Date, the parties
will agree upon the density of the various stockpiles that constitute the
Coal Inventory. No later than two business days prior to the Closing Date,
PCC and Buyer shall cause PennTree Engineering (the "Independent
Surveyor") to prepare and deliver to each of them a survey of all Coal
Inventory of the Asset Sale Companies as of the Closing, which survey
shall be conducted in accordance with the principles set forth on and
shall be in substantially the format attached hereto as part of Schedule
2.11(b). PCC and Buyer shall, and shall cause their respective Affiliates
to, cooperate with and make available any information reasonably requested
by the Independent Surveyor in its preparation of its survey of the Coal
Inventory. All determinations made by the Independent Surveyor in its
survey of the Coal Inventory shall be final, binding and conclusive on the
parties. PCC and Buyer shall each bear fifty percent of the fees and costs
of the Independent Surveyor and any other third party incurred in
connection with the calculation of the Coal Inventory pursuant to this
Section 2.11(b).
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2.12. Allocation of Purchase Price and Assumed Liabilities.
The Purchase Price and the Assumed Liabilities (to the extent they
constitute part of the amount realized for federal Income Tax purposes) shall be
allocated among the Purchased Assets in accordance with a schedule to be agreed
upon by Buyer and PCC after the Closing Date. Buyer shall prepare such
allocation schedule and deliver it to PCC upon a date to be agreed upon between
the parties, which date shall be no later than 60 days after the Closing Date.
PCC shall be deemed to agree with such allocation schedule unless, within ten
(10) days after the date PCC receives the allocation schedule from Buyer, PCC
notifies Buyer in writing of (i) each allocation with which it disagrees and
(ii) for each such allocation, the amount that PCC proposes to allocate. If PCC
provides such notice to Buyer, the parties shall proceed in good faith to
resolve mutually the disputed allocation amounts within fifteen (15) days after
the date on which PCC notifies Buyer of a disagreement with Buyer's proposed
allocation. If PCC and Buyer cannot resolve any such differences, the parties
agree to submit such differences to arbitration in Abingdon, Virginia, by the
accounting firm of Deloitte & Touche, LLP or another accounting firm mutually
acceptable to both parties (the "CPA Arbitrator") to resolve such differences.
The CPA Arbitrator shall make such review and examination of the relevant facts
and documents as the CPA Arbitrator deems appropriate and shall permit each of
Buyer and PCC to make a written presentation of their respective positions.
Within forty-five (45) days after submission of such dispute by both parties,
the CPA Arbitrator shall resolve such dispute in writing and shall prepare and
deliver its decision, which shall (i) be based upon a determination of the fair
market value of the Purchased Assets, (ii) defer to valuations that have been
prepared in accordance with generally accepted valuation techniques absent
manifest error, (iii) be final and binding upon the parties without further
recourse or collateral attack and (iv) accept either Buyer's or PCC's position
in its entirety. The party whose position is not accepted by the CPA
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Arbitrator shall pay all fees and costs of such CPA Arbitrator to arbitrate such
dispute. The allocation schedule shall include, at a minimum, information
necessary to complete Part II of IRS Form 8594. The allocation to the Purchased
Assets is intended to comply with the requirements of Section 1060 of the Code.
The parties shall cooperate to comply with all substantive and procedural
requirements of Section 1060, and except for any adjustment to the Purchase
Price hereunder, after the completion and agreement by the parties to the
allocation schedule, such allocation schedule shall be adjusted only if and to
the extent necessary to comply with such requirements of Section 1060. Buyer and
PCC agree that they will not take nor will they permit any Affiliate to take,
for Income Tax purposes, any position inconsistent with such allocation schedule
to the Purchased Assets; provided, however, that (i) Buyer's cost for the
Purchased Assets may differ from the total amount allocated hereunder to reflect
the inclusion in the total cost of items (for example, capitalized acquisition
costs) not included in the total amount so allocated and (ii) the amount
realized by the Asset Sale Companies may differ from the total amount allocated
hereunder to reflect transaction costs that reduce the amount realized for
federal Income Tax purposes.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PCC
PCC hereby represents and warrants to Buyer that the statements contained
in this Article III are correct and complete, except as set forth in the
Schedules delivered by PCC to Buyer in connection with this Agreement. The
Schedules are arranged in paragraphs corresponding to the lettered and numbered
paragraphs contained in this Article III.
3.1. Incorporation.
PCC and each of the Asset Sale Companies are corporations duly
organized, validly existing and in good standing under the Laws of the
respective state or commonwealth of
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each such company's incorporation. PCC and each of the Asset Sale Companies that
is not a corporation incorporated under the Laws of Virginia are duly qualified
or licensed to transact business as a foreign corporation in Virginia and are in
good standing under the laws of Virginia. Set forth on Schedule 3.1 is the name
of each state or other jurisdiction in which each such company has either paid
taxes or had an office in the three years prior to the date of this Agreement.
3.2. Execution, Delivery and Performance.
The execution, delivery and performance by PCC of this Agreement and
by PCC and the applicable Asset Sale Company of each other agreement or
instrument to which it is a party executed in connection herewith or delivered
pursuant hereto and the consummation of the transactions contemplated herein and
therein will not, with or without the giving of notice or the passage of time,
or both: (i) conflict with, or result in a violation or breach of, or a default,
right to accelerate, right to exercise any remedy or loss of rights under, or
result in the creation of any Lien (other than Permitted Liens) under or
pursuant to, any provision of PCC's or any Asset Sale Company's Articles of
Incorporation or Bylaws or of any material franchise, mortgage, deed of trust,
Lien, lease, license, instrument, agreement, consent, approval, waiver or
understanding to which PCC or any Asset Sale Company is a party or by which any
Asset Sale Company is bound, or any Law or any order, judgment, writ, injunction
or decree to which PCC or any Asset Sale Company is a party or by which PCC, any
Asset Sale Company or the Purchased Assets may be bound or affected; (ii)
require the approval, consent or authorization of, prior notice to, or filing or
registration with any Governmental Authority or, except as set forth on Schedule
1.81, contravene, conflict with or result in a violation of any of the terms or
requirements of, or give any Governmental Authority the right to revoke,
withdraw, suspend, cancel or terminate any
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authorization or Permit issued by a Governmental Authority that is held by PCC
or the Asset Sale Companies or that otherwise relates to the Purchased Assets;
or (iii) give any Governmental Authority or other Person the right to challenge
any of the transactions contemplated hereunder or exercise any remedy or obtain
any relief under any Law to which PCC or any Asset Sale Company is subject.
3.3. Authorization.
PCC has full power and authority to enter into and deliver this
Agreement and to perform its obligations hereunder and each of PCC and the Asset
Sale Companies has full power and authority to enter into and deliver each other
agreement or instrument to which it is a party executed in connection herewith
and delivered pursuant hereto and to perform its obligations thereunder. PCC's
execution, delivery and performance of this Agreement and the execution,
delivery and performance of all other agreements and instruments by PCC and each
of the Asset Sale Companies in connection herewith and delivered pursuant hereto
and the transactions contemplated hereby have been duly authorized by all
requisite corporate action on the part of PCC and each of the Asset Sale
Companies. This Agreement and all other agreements or instruments executed by
PCC or any of the Asset Sale Companies in connection herewith and delivered by
PCC or any of the Asset Sale Companies pursuant hereto have been duly executed
and delivered by PCC or such Asset Sale Companies and this Agreement and all
other agreements and instruments executed by PCC or any of the Asset Sale
Companies in connection herewith and delivered by PCC or any of the Asset Sale
Companies pursuant hereto constitute the legal, valid and binding obligation of
PCC or such Asset Sale Company, as the case may be, enforceable in accordance
with their respective terms (subject to any applicable bankruptcy,
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insolvency, reorganization, moratorium or other similar Laws affecting generally
the enforcement of creditors' rights).
3.4. Absence of Changes.
Except as contemplated by this Agreement, since December 31, 2001,
none of the Asset Sale Companies has, with respect to the Purchased Assets:
(a) borrowed or agreed to borrow any funds or incurred, or become
subject to, any Liability, or issued any note, bond or other debt
security, or guaranteed any indebtedness for borrowed money or capitalized
lease obligation, except Liabilities incurred in the Ordinary Course of
Business, none of which would reasonably be expected to result in an
impact greater than $100,000;
(b) paid any Liability other than current Liabilities in the
Ordinary Course of Business;
(c) sold, transferred or otherwise disposed of, or agreed to sell,
transfer or otherwise dispose of any of the Equipment or Real Property,
or, other than in the Ordinary Course of Business, any other Purchased
Assets, or canceled or otherwise terminated, or agreed to cancel or
otherwise terminate, other than in the Ordinary Course of Business, any
Permits;
(d) except in the Ordinary Course of Business, entered into any
agreement, contract, lease or license (or series of related agreements,
contracts, leases and licenses) or made or permitted any material
amendment to or termination, acceleration, modification or cancellation of
any Contract or breached any provision of any Contract;
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(e) merged or consolidated with any other Person;
(f) mortgaged, pledged or subjected to any Lien any of its assets or
properties, other than Permitted Liens;
(g) made any capital expenditure (or series of related capital
expenditures) either (x) involving more than $100,000 or (y) outside the
Ordinary Course of Business;
(h) made any capital investment in, any loan to, or any acquisition
of the securities or assets of, any other Person (or series of related
capital investments, loans and acquisitions) either (x) involving $100,000
or (y) outside the Ordinary Course of Business;
(i) delayed or postponed the payment of accounts payable and other
Liabilities outside the Ordinary Course of Business;
(j) cancelled, compromised, waived or released any right or claim
(or series of related rights and claims) either (x) involving more than
$100,000 or (y) outside the Ordinary Course of Business;
(k) made any loan to, or entered into any other transaction with,
any of the directors, officers and employees of such Asset Sale Company
outside the Ordinary Course of Business;
(l) entered into any employment contract or collective bargaining
agreement, written or oral, or modified the terms of any existing such
contract;
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(m) except in the Ordinary Course of Business adopted, amended,
modified or terminated any bonus, profit-sharing, incentive, severance or
other plan, contract or commitment for the benefit of any of the
directors, officers and Employees of the Asset Sale Companies, or taken
any such action with respect to any other Employee Benefit Plan;
(n) made any other change in employment terms for any of the
directors, officers and Employees of the Asset Sale Companies outside the
Ordinary Course of Business;
(o) suffered any damage, destruction or loss, whether or not covered
by insurance, that has had or would reasonably be expected to have a
Material Adverse Effect;
(p) implemented or adopted any change in its accounting methods or
principles or the application thereof; or
(q) entered into any agreement, arrangement or understanding with
respect to any of the foregoing.
3.5. Real Property.
(a) PCC has made available to Buyer all deeds, leases, bills of
sale, documents of title, abstracts, surveys, plats and maps in the
possession of the Asset Sale Companies or their Affiliates that relate to
the Real Property. With respect to the Real Property:
(i) the Asset Sale Companies have marketable title to the
owned Real Property, taken as a whole, and the Real Property is free
and clear of any Lien (other than Permitted Liens);
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(ii) there are no pending or, to the Knowledge of PCC,
threatened condemnation proceedings, lawsuits, or administrative
actions relating to the Real Property;
(iii) the legal description for the parcels contained in the
deed thereof describes such parcel fully and adequately, and the
buildings and improvements are located within the boundary lines of
the described parcels of land;
(iv) none of the Asset Sale Companies have been notified that
any buildings or improvements located on the Real Property are in
violation of applicable zoning laws and ordinances; and
(v) there are no outstanding options or rights of first
refusal to purchase the parcel of Real Property, or any portion
thereof or interest therein.
(b) Schedule 1.91 identifies the coal leases, coal subleases and
surface leases that comprise a portion of the Real Property. PCC has made
available to Buyer all coal leases, coal subleases and surface leases
listed on Schedule 1.91. With respect to each such lease and sublease:
(i) the lease or sublease is legal, valid, binding,
enforceable, and in full force and effect;
(ii) except for the consents set forth on Schedule 3.10(c)
that are required to be obtained and the notices given, the lease or
sublease will continue to be legal, valid, binding, enforceable, and
in full force and effect on identical
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terms following the consummation of the transactions contemplated
hereby (including the assignments and assumptions referred to
above);
(iii) no Asset Sale Company nor, to the Knowledge of PCC, any
other party to the lease or sublease is in breach or default, and no
event has occurred which, with notice or lapse of time, would
constitute a breach or default or permit termination, modification,
or acceleration thereunder;
(iv) no Asset Sale Company nor, to the Knowledge of PCC, any
other party to the lease or sublease has repudiated any provision
thereof; and
(v) none of the Asset Sale Companies has assigned,
transferred, conveyed or subjected to a Lien any interest in the
leasehold or subleasehold, other than those created pursuant to the
terms of that lease or sublease.
(c) There is not any third party adverse claim to any of the Real
Property, other than Permitted Liens, and, to the Knowledge of PCC, no
party is in wrongful possession of any parcel of the Real Property.
(d) PCC has made available to Buyer geological data, reserve data,
mine maps, core hole logs and associated data, coal measurements, coal
samples, lithologic data, coal reserve calculations or reports,
washability analyses or reports, mine plans, mining permit applications
and supporting data, engineering studies and all other information, maps,
reports and data in the possession of the Asset Sale Companies and
relating to or affecting the Real Property, including the coal reserves,
coal ownership, coal leases to the Asset Sale Companies, coal leases from
the Asset Sale Companies to
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third parties, mining conditions, mines, and mining plans of the Asset
Sale Companies as prepared and utilized by the Asset Sale Companies in
their day to day Mining Activities (collectively, the "Mining Data").
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, BUYER ACCEPTS
THE ASSET SALE COMPANIES' COAL RESERVES IN OR UNDER THE REAL PROPERTY, AS
IS, WHERE IS, TOGETHER WITH THE MINING DATA, FREE OF ANY WARRANTY (EXPRESS
OR IMPLIED) WITH REGARD TO THE MINEABILITY, WASHABILITY, RECOVERABILITY,
VOLUME, OR QUANTITY OR QUALITY OF ANY COAL RESERVE. The coal reserves
mined by the Asset Sale Companies (whether such reserves are owned or
leased by the Asset Sale Companies) are not subject to any mining rights
of any other Person.
3.6. Purchased Assets.
(a) The Asset Sale Companies (i) own good and transferable title to
all of the Purchased Assets, other than Real Property, free and clear of
all Liens and restrictions on transfer, other than Permitted Liens or (ii)
lease such Purchased Assets under a valid and enforceable lease (subject
to any applicable bankruptcy, insolvency, reorganization, moratorium or
other similar Laws affecting generally the enforcement of creditors'
rights). No rights of the Asset Sale Companies under such leases have been
assigned or otherwise transferred as security for any obligation of the
Asset Sale Companies. The consummation of the transactions contemplated by
this Agreement will not create or constitute, either with or without
notice or the passage of time a default or event of default under any such
lease or require the consent of any other party to such lease in order to
avoid a default or event of default.
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(b) Except for the items set forth on Schedule 1.95(y), the
Purchased Assets include all tangible and intangible assets owned by the
Asset Sale Companies and used in the Business.
(c) The Equipment that is currently in use has been maintained in
accordance with normal industry practice and is suitable for the purposes
for which the Asset Sale Companies are presently using such Equipment.
(d) The value of the Parts, Fuel and Supplies Inventory as of the
Closing Date shall be at least $880,000.
3.7. Intellectual Property.
No third party has asserted any interest in the Intellectual
Property, nor has any third party alleged that any Asset Sale Company has
infringed on any Intellectual Property of any third party. To the Knowledge of
PCC, none of the Asset Sale Companies interferes with, infringes upon,
misappropriates, or otherwise comes into conflict with, any Intellectual
Property rights of third parties as a result of the continued operation of the
Business as presently conducted.
3.8. Permits and Environmental Compliance.
(a) Each Asset Sale Company is in material compliance with all
Environmental Laws related to the Purchased Assets. Neither PCC nor any
Asset Sale Company (such Persons being hereafter referred to in this
Section 3.8 as "Operators") has been notified by any Governmental
Authority of any current, alleged or unresolved violation of any
Environmental Laws applicable to Mining Activities, including any
investigatory, remedial or corrective obligations, that would result in
(i) closure, suspension or
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restriction of any mine or mining-related activity on the Real Property,
(ii) revocation or suspension of any license or Permits, or (iii) exposure
of Buyer to the imposition of any fines or other civil or criminal
monetary penalty in excess of $5,000. The Permits include all material
permits, licenses, franchises and other authorizations necessary to
conduct the Mining Activities as currently conducted and the Asset Sale
Companies are in material compliance with all such Permits. No such Permit
is the subject of any proceeding by or in front of any Governmental
Authority that might affect its validity and no such proceeding is pending
or, to the Knowledge of PCC, threatened.
(b) PCC has made available to Buyer true and complete copies of (i)
the Permits, (ii) all of the mining permits and other permits held by each
Operator pertaining to the Purchased Assets, together with a description
of the permitted property or facility, the amount of the bond for each
such Permit and the surety for each such bond or manner in which each such
bond has otherwise been posted, (iii) all other licenses, franchises,
certificates, concessions and other governmental approvals and
authorizations held by each Operator pertaining to the Purchased Assets,
as amended, supplemented and modified through the date hereof, and (iv)
any and all pending applications for additional mining permits and other
licenses and authorizations that have been submitted to any governmental
agency by an Operator pertaining to the Purchased Assets or are in the
process of development either in-house or through consultants.
(c) Schedule 3.8 includes a true and complete list of all of the
citations, notices of non-compliance and notices of violation received by
each Operator with respect to the Purchased Assets from the Virginia
Department of Mines, Minerals and Energy ("VDMME"), the Virginia
Department of Environmental Quality ("VDEQ"), the federal
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Environmental Protection Agency ("EPA"), the federal Office of Surface
Mining ("OSM"), the federal Mine Safety and Health Administration
("MSHA"), or any other Governmental Authority that remain outstanding. No
Operator is subject to any cessation orders, cease and desist orders,
closure orders or show cause orders issued by VDMME, VDEQ, EPA, OSM, MSHA,
or any such other Governmental Authority with respect to the Purchased
Assets.
(d) With respect to the Purchased Assets, each Operator is in
material compliance with all of the requirements of the Surface Mining
Control and Reclamation Act of 1977 ("SMCRA"), the Federal Mine Safety and
Health Act of 1977, as amended, all similar statutes of the Commonwealth
of Virginia, and all rules and regulations promulgated under those Acts
and statutes by OSM, MSHA, VDMME, VDEQ and any other Governmental
Authority. With respect to the Purchased Assets, no Operator has been
subjected to any bond forfeiture, permit suspension or revocation, or
similar effort and proceedings instituted by OSM, VDMME or any other
Governmental Authority.
(e) To the Knowledge of PCC, after the Closing, Buyer will not be
liable for any fines, penalties, fees, Taxes or other governmental charges
assessed with respect to notices of violation, cessation orders, closure
orders, show cause orders or other governmental enforcement actions issued
prior to Closing with respect to the Purchased Assets. Neither this
Agreement nor the consummation of the transactions that are the subject of
this Agreement will result in any Buyer Liabilities for site investigation
or cleanup, or notification to or consent of any Governmental Agency or
third parties, pursuant to any of the so-called "transaction-triggered" or
"responsible property transfer" Environmental Laws. The representation in
the previous sentence does not relate to any
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matters for which Buyer has the responsibility, pursuant to this
Agreement, to notify any Governmental Authority or to otherwise process
with any Governmental Authority in connection with the transfer of any
Permit.
(f) None of the Purchased Assets is identified on (i) the current or
proposed National Priorities List under 40 C.F.R. Section 300, (ii) the
Comprehensive Environmental Response, Compensation and Liability Inventory
System ("CERCLIS") list, or (iii) any list arising from a federal, state
or local statute similar to CERCLA. To the Knowledge of PCC, the Real
Property is not Contaminated with any Hazardous Substance.
(g) (A) None of the Purchased Assets has been or is being used in
any manner associated with the production, manufacture, processing,
generation, storage, treatment, disposal, management, shipment or
transportation of Hazardous Substances and no such Purchased Assets are
Contaminated by any Hazardous Substance; (B) there are no underground
storage tanks regulated pursuant to RCRA Section 9001 (42 U.S.C. Section
6991) or equivalent authorized state program, and no above ground storage
tanks, located at, on, in or under the Purchased Assets; (C) there is no
asbestos-containing material in any form or condition located at, on, in
or under the Purchased Assets; (D) there are no materials or equipment
containing polychlorinated biphenyls located at, on, in or under the
Purchased Assets, (E) there are no landfills or other areas located at,
on, in or under the Purchased Assets where Hazardous Substances have been
disposed, and (F) neither PCC nor any Asset Sale Company has disposed of
any Hazardous Substance at any offsite disposal area located on the
property of any other Person, other than a facility permitted by any
Governmental Authority with jurisdiction to receive such Hazardous
Substance.
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(h) No Asset Sale Company has, with respect to the Purchased Assets,
either expressly or by operation of Law, assumed or undertaken any
Liability, including without limitation, any Liability for corrective or
remedial action, of any other Person relating to any Environmental Laws.
(i) To the Knowledge of PCC, no conditions existing as of the
Closing Date and relating to the Purchased Assets or the activities of the
Asset Sale Companies or any of their respective predecessors or Affiliates
will prevent or materially hinder Buyer's compliance with Environmental
Laws, require Buyer to undertake any investigatory, remedial or corrective
actions pursuant to Environmental Laws or impose upon Buyer any other
Liabilities pursuant to Environmental Laws, including without limitation,
any Environmental Laws relating to onsite or offsite releases or
threatened releases of Hazardous Substances or imposing Liability for
personal injury, property damage or natural resource damage.
3.9. Reclamation Bonds.
Schedule 3.9 contains a list of all bonds, including guaranties,
indemnities, letters of credit and other forms of surety, posted by and/or for
the benefit of the Asset Sale Companies to secure the performance of their
respective reclamation or other Liabilities pursuant to, in connection with or
as a condition of, the Permits (collectively, the "PCC Bonds"). The PCC Bonds
are sufficient to permit the Asset Sale Companies and their Affiliates to
conduct the Mining Activities in compliance with Laws and are in full force and
effect.
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3.10. Contracts.
(a) PCC has made available to Buyer copies of all of the written
Contracts, or a written summary setting forth the terms and conditions
where no copies exist, including all amendments, modifications, waivers
and elections applicable thereto.
(b) As to the Asset Sale Companies party thereto: (i) the Contracts
are valid and binding, enforceable in accordance with their respective
terms (subject to any applicable bankruptcy, insolvency, reorganization,
moratorium or other similar Laws affecting generally the enforcement of
creditors' rights), and are in full force and effect; (ii) the
consummation of the transactions contemplated herein will not, with or
without the giving of notice or the passage of time, or both, conflict
with, or result in a violation or breach of, or a default, right to
accelerate, right to exercise any remedy or loss of rights under the
Contracts; (iii) no Asset Sale Company, nor to the Knowledge of PCC, any
other party is in material breach or default, and no event has occurred
that, with notice or lapse of time, would constitute a breach or default,
or permit termination, modification or acceleration, under the Contracts;
and (iv) no Asset Sale Company, nor to the Knowledge of PCC, any other
party has repudiated any provision of the Contracts.
(c) Schedule 3.10(c) sets forth the consents and approvals of third
parties and Governmental Authorities required to be obtained as a result
of the transactions contemplated by this Agreement.
3.11. Litigation; Claims.
(a) Schedules 3.5(c), 3.8 and 3.11 list all claims, legal actions,
suits, litigation, arbitrations, disputes, investigations, proceedings by
or before any Governmental
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Authority involving more than $100,000 and all orders, decrees or
judgments, now pending or in effect, or, to the Knowledge of PCC,
threatened or contemplated, against or affecting the Asset Sale Companies,
the Purchased Assets, or the consummation of the transactions contemplated
by this Agreement, except to the extent involving Taxes for Pre-Closing
Periods. Schedule 3.11 also lists all grievances and arbitrations that are
pending against the Asset Sale Signatory Company as of the Closing Date.
(b) There are no existing claims by or disputes involving more than
$100,000 with Persons owning or occupying lands or realty adjoining or
near any of the Real Property regarding Mining Activities by the Asset
Sale Companies or regarding the location of boundary lines, encroachments,
mineral rights, subsidence, water quantity or quality, blasting damage,
transportation of coal or other materials, nuisances or any other similar
matter.
3.12. Employee Benefits.
(a) Schedule 3.12(a) contains a list of all "employee benefit plans"
(as defined in Section 3(3) of ERISA) and all other employee benefit
plans, programs or arrangements, including each severance pay, bonus,
deferred compensation, incentive compensation, stock purchase, stock
option or other equity-based compensation, death benefit, group insurance,
hospitalization or other medical, dental, health, life (including all
individual life insurance policies as to which any of the Asset Sale
Companies is the owner, beneficiary or both), disability or other
insurance, Code Section 125 "cafeteria" or "flexible" benefit plan,
pension, savings, profit-sharing or retirement plan, program or
arrangement: (i) under which Employees or former Employees are entitled to
participate
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by reason of their employment with any of the Asset Sale Companies or
their respective ERISA Affiliates, whether or not any of the foregoing is
funded, whether insured or self-funded, and with respect to which any of
the Asset Sale Companies are a party or a sponsor or a fiduciary thereof
or by which any of the Asset Sale Companies are bound; or (ii) with
respect to which any of the Asset Sale Companies otherwise may have, as of
the Closing Date, any direct or indirect Liability (the "Employee Benefit
Plans"). Schedule 3.12(a) identifies: (i) each Employee Benefit Plan that
is a "pension plan" (as defined in Section 3(2) of ERISA) (other than the
UMWA Pension Plans) (the "Pension Plans"), and denotes those Pension Plans
intended to be qualified under Section 401(a) of the Code (the "Qualified
Plans"); (ii) each Employee Benefit Plan that is a "multiemployer plan"
(as defined in Section 3(37) or Section 4001(a)(3) of ERISA) (a
"Multiemployer Plan"); and (iii) each Employee Benefit Plan that is a
"welfare plan" (as defined in Section 3(1) of ERISA) (the "Welfare
Plans"). PCC has delivered to Buyer correct and complete copies of the
Medical Plans maintained by the Asset Sale Signatory Company pursuant to
any of the Collective Bargaining Agreements and the most recent Form 5500
Annual Report for such Medical Plans.
(b) Each Qualified Plan meets the requirements of a "qualified plan"
under Code Section 401(a) and has received, pursuant to a request that
accurately described such Qualified Plan, a favorable determination letter
from the IRS to the effect that the form of such Qualified Plan satisfies
the requirements of Section 401(a) of the Code and that its related trust
is exempt from taxation under Section 501(a) of the Code. To the Knowledge
of PCC, there are no facts or circumstances that would jeopardize or
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adversely affect in any material respect the qualification under Code
Section 401(a) of any Qualified Plan.
(c) As of the Closing Date, full payment to each Employee Benefit
Plan of all contributions (including all employer contributions and
employee salary reduction contributions) that are required to be made by
the Asset Sale Companies under the terms thereof and under the Collective
Bargaining Agreements, ERISA or the Code in respect of the current and
prior plan years, if any, have been made for all Employee Benefit Plans
(except for The Savings and Investment Plan of The Pittston Company and
Its Subsidiaries, which payment shall be made as soon as possible after
the Closing Date). All contributions that are required to be made by the
Asset Sale Companies for any period ending on or before the Closing Date
that are not yet due have been paid to each such Employee Benefit Plan or
accrued in accordance with the past custom and practice of the Asset Sale
Companies. All premiums that are due on or before the Closing Date have
been paid with respect to each such Welfare Plan. As of the latest
actuarial determination, no "accumulated funding deficiency" (as defined
in Section 302 of ERISA or Section 412 of the Code), whether or not
waived, exists with respect to any Pension Plan. The present value of all
accumulated benefit obligations under each Qualified Plan (based on the
assumptions used for purposes of Statement of Financial Accounting
Standard No. 87) did not as of the last annual valuation date applicable
thereto exceed the fair market value of the assets of such Qualified Plan.
No "reportable event" within the meaning of Section 4043 of ERISA has
occurred in connection with any of the Pension Plans.
(d) Employee Benefit Plan Compliance.
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(i) Each Employee Benefit Plan (other than the Multiemployer
Plans) has been administered substantially in accordance with its
terms;
(ii) each Employee Benefit Plan (other than the Multiemployer
Plans) and each related trust, insurance contract or fund complies
in form and in operation and has been administered substantially in
accordance with any applicable provisions of ERISA, the Code and all
other Laws, all reports, returns and other documentation (including
Form 5500 Annual Reports and PBGC-1s) that are required to have been
filed with the IRS, the United States Department of Labor, the PBGC
or any other Governmental Authority have been filed on a timely
basis in each instance in which the failure to file such reports,
returns and other documents would result in any material Liability
to PCC or the Asset Sale Companies;
(iii) other than routine claims for benefits, no Liens,
lawsuits or complaints to or by any Person or Governmental Authority
have been filed or, to the Knowledge of PCC, are contemplated or
threatened, with respect to any Employee Benefit Plan (other than
the Multiemployer Plans) except for those that would not reasonably
be expected to result in any material Liability to PCC or the Asset
Sale Companies.
(e) Neither PCC nor any of the Asset Sale Companies has received a
written notice of, or incurred, any withdrawal liability with respect to a
Multiemployer Plan.
(f) The consummation of the transactions contemplated by this
Agreement will not (i) entitle any Person to severance pay for which Buyer
will be liable after the
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Closing; (ii) accelerate the time of payment or vesting of, increase the
amount of, or satisfy a condition to the compensation due to any Person
under any Employee Benefit Plan for which Buyer will be liable after the
Closing; or (iii) result in the payment of an amount that could,
individually or in combination with any other such payment, constitute an
"excess parachute payment" under Code Section 280G(b)(1).
(g) No "prohibited transaction" (as such term is defined in Section
406 of ERISA or Section 4975 of the Code) has occurred with respect to any
Employee Benefit Plan subject to ERISA, other than such a transaction
subject to an administrative or statutory exemption, with respect to which
a Tax, penalty or other amount may reasonably be expected to be imposed on
any of the Asset Sale Companies or their respective ERISA Affiliates.
(h) Neither the PCC Parent, PCC, the Asset Sale Companies nor any of
their respective ERISA Affiliates, nor any organization with respect to
which any such entity is a successor or parent corporation, within the
meaning of Section 4069(b) of ERISA, has engaged in any transaction
described in Sections 4069 or 4212(c) of ERISA.
(i) Each Pension Plan that is not qualified under Code Section
401(a) or 403(a) is exempt from Parts 2, 3 and 4 of Title I of ERISA as an
unfunded plan that is maintained primarily for the purpose of providing
deferred compensation for a select group of management or highly
compensated employees, pursuant to ERISA Sections 201(2), 301(a)(3) and
401(a)(1).
(j) No assets of any of the Asset Sale Companies are allocated to or
held in a "rabbi trust" or similar funding vehicle.
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(k) Neither the PCC Parent, PCC, the Asset Sale Companies nor any of
their respective ERISA Affiliates has received any notification that any
Multiemployer Plan is in reorganization (within the meaning of Section
4121 of ERISA), is insolvent (within the meaning of Section 4245 of ERISA)
or has been terminated (within the meaning of Title IV of ERISA), and to
the Knowledge of PCC, no Multiemployer Plan is reasonably expected to be
in reorganization, insolvent or terminated.
(l) No Welfare Plan is a "multiple employer welfare arrangement" as
defined in Section 3(40) of ERISA.
3.13. Employment Matters.
(a) The Asset Sale Non-Signatory Company is not a party to, bound
by, or negotiating with respect to any agreement with any labor union,
association or other employee group, nor is any unit of Employees of the
Asset Sale Non-Signatory Company represented by any labor union or similar
association. No labor union or employee organization has been certified or
recognized as the collective bargaining representative of any Employees of
the Asset Sale Companies. To the Knowledge of PCC, there are no union
organizational campaigns or representation proceedings underway or
threatened with respect to any Employees of the Asset Sale Non-Signatory
Company, nor are there any existing or threatened labor strikes, work
stoppages, slowdowns, grievances, unfair labor practice charges,
discrimination charges or labor arbitration proceedings affecting Mining
Activities at or deliveries to any mine or other facility of any of the
Asset Sale Companies. Each of the Asset Sale Companies has been and is in
compliance with all applicable Laws respecting employment and employment
practices, terms and conditions
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of employment and wages and hours, except where the failure to be in
compliance would not reasonably be expected to impose any material
Liability on the Asset Sale Companies.
(b) To the Knowledge of PCC, Schedule 3.13(b) sets forth the panels
of Employees Buyer must assume as part of its assumption of the Asset Sale
Signatory Company's obligations under the Collective Bargaining
Agreements.
3.14. No Broker.
None of the Asset Sale Companies, PCC or the PCC Parent has had any
dealings, negotiations or communications with or retained any broker or other
intermediary in connection with the transactions contemplated by this Agreement
and none of the foregoing is committed to any Liability for any brokers' or
finders' fees or any similar fees in connection with the transactions
contemplated hereby, other than Rothschild Inc., who shall be compensated solely
by PCC or an Affiliate of PCC.
3.15. Health and Safety Requirements.
As it relates to the Purchased Assets, each of the Asset Sale
Companies has complied with all applicable Health and Safety Requirements and no
action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice is currently outstanding against any of them alleging any
failure to so comply, except for those that would not reasonably be expected to
have a Material Adverse Effect.
3.16. Restrictions on Business Activities.
Except for this Agreement, there is no agreement, judgment,
injunction, order or decree binding upon PCC or any of the Asset Sale Companies
that has or would reasonably be expected to have the effect of prohibiting the
conduct of the Business.
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3.17. Powers of Attorney.
There are no outstanding powers of attorney executed on behalf of
any of the Asset Sale Companies affecting the Purchased Assets.
3.18. Transactions With Affiliates.
The Contracts do not include any Liability between any Asset Sale
Company and any Affiliate of such Asset Sale Company. At the Closing, the
Purchased Assets will not include any receivable or other Liability from an
Affiliate of any Asset Sale Company.
3.19. Absence of Certain Payments.
During the five (5) year period prior to the date of this Agreement,
to the Knowledge of PCC, none of the Asset Sale Companies have (nor has any
director, officer, agent, or employee of any Asset Sale Company nor any other
person, acting on behalf of any Asset Sale Company) directly or indirectly: used
any of such company's funds for unlawful contributions, gifts, entertainment or
other unlawful expenses relating to political activity; made any unlawful
payment to foreign or domestic government officials or employees or to foreign
or domestic political parties or campaigns from such company's funds; violated
any provision of the Foreign Corrupt Practices Act of 1977 applicable to such
company; established or maintained any unlawful or unrecorded fund of such
company's monies or other assets; made any false or fictitious entry on the
books or records of such company; or made any bribe, rebate, payoff, influence
payment, kickback, or other unlawful payment, to any person or entity, private
or public, regardless of form, whether in money, property, or services, to
obtain favorable treatment in securing business or to obtain special concessions
for such company, or to pay for favorable treatment for business secured or for
special concessions already obtained for such company.
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3.20. Disclosure.
The representations and warranties contained in this Article III do
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements and information
contained in this Article III not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to PCC that:
4.1. Organization.
Buyer is a duly formed limited liability company, validly existing
and in good standing under the Laws of the State of Delaware.
4.2. Execution, Delivery and Performance.
The execution, delivery and performance of this Agreement and each
other agreement or instrument executed in connection herewith or delivered
pursuant hereto and the consummation of the transactions contemplated herein and
therein will not, with or without the giving of notice or the passage of time,
or both, (i) conflict with, or result in a violation or breach of, or a default,
right to accelerate or loss of rights under, or result in the creation of any
Lien, under or pursuant to, any provision of Buyer's organizational documents or
of any franchise, mortgage, deed of trust, lease, license, instrument,
agreement, consent, approval, waiver or understanding, any Law, or any finding,
order, judgment, writ, injunction or decree to which Buyer is a party or by
which Buyer or its respective assets may be bound or affected; or (ii) require
the approval, consent or authorization of, or prior notice to, filing with or
registration with, any Governmental Authority, or any other Person or entity;
provided that this Section 4.2 shall not apply to any requirement of Buyer to
obtain any consent of the applicable Governmental Authority to transfer or
modify the Permits.
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4.3. Authorization.
Buyer has full power and authority to enter into and deliver this
Agreement, and each other agreement or instrument (to which it is a party)
executed in connection herewith or delivered pursuant hereto and to perform its
obligations hereunder and thereunder. Buyer's execution, delivery and
performance of this Agreement and all other agreements and instruments executed
in connection herewith or delivered pursuant hereto and the transactions
contemplated hereby have been duly authorized by all requisite action. This
Agreement and all other agreements or instruments executed by Buyer in
connection herewith or delivered by Buyer pursuant hereto have been duly
executed and delivered by Buyer and this Agreement and all other agreements and
instruments executed by Buyer in connection herewith or delivered by Buyer
pursuant hereto constitute Buyer's legal, valid and binding obligation,
enforceable in accordance with their respective terms (subject to any applicable
bankruptcy, insolvency, reorganization, moratorium or other similar Laws
affecting generally the enforcement of creditors' rights).
4.4. No Broker.
Buyer has had no dealings, negotiations or communications with any
broker or other intermediary in connection with the transactions contemplated by
this Agreement nor is it committed to any Liability for any brokers' or finders'
fees or any similar fees in connection with the transactions contemplated
hereby.
4.5. Reclamation and Environmental Compliance.
Buyer and all operators it owns or controls are in compliance with
all Environmental Laws and Reclamation Laws in all material respects, and are
not "permit blocked" under the Applicant Violator System administered by the
Department of the Interior.
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4.6. Financing.
Buyer will have available to it, at the Closing, financial resources
sufficient to consummate the transactions contemplated by this Agreement.
4.7. Disclosure.
The representations and warranties contained in this Article IV do
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements and information
contained in this Article IV not misleading.
ARTICLE V
CERTAIN COVENANTS
5.1. Operation in Ordinary Course.
Except as provided in this Agreement, between the date of this
Agreement and the Closing, PCC shall cause each of the Asset Sale Companies, in
relation to the Purchased Assets, to: (i) carry on its business in the Ordinary
Course of Business; (ii) use commercially reasonable efforts to preserve intact
its current business organization, Mining Activities and properties until the
Closing Date, and maintain the relations and good will with its suppliers,
customers, landlords, creditors, agents, and others having business
relationships with such Asset Sale Company; (iii) not enter into any contract or
other obligation binding upon such Asset Sale Company involving its Employees,
the UMWA, or an expenditure, purchase, sale, cost or commitment (unless such
contract is cancelable in thirty or fewer days, involves less than $100,000, or
is for consumable purchases) without the prior written consent of Buyer; (iv)
not settle or otherwise resolve any labor grievance or arbitration, without
prior consent of Buyer, that (x) is listed on Schedule 1.9 or (y) could
reasonably be expected to affect the operation of the Business after the
Closing; and (v) report regularly to Buyer concerning the status of the
business, Mining Activities and finances of such Asset Sale Company.
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5.2. Compliance with Law.
Between the date of this Agreement and the Closing, each of the
Asset Sale Companies shall comply in all material respects with all Laws and
with all orders of any Governmental Authority.
5.3. Cooperation.
Subject to the terms and conditions herein provided, each of PCC and
Buyer agrees to use its commercially reasonable efforts to take, or cause to be
taken, all action, and to do, or cause to be done, all things necessary, proper
and advisable under Law, to consummate and make effective the transactions
contemplated by this Agreement. In case at any time after the Closing Date any
further action is necessary or desirable to carry out the purposes of this
Agreement, PCC and Buyer will, and PCC will cause the Asset Sale Companies to,
execute any additional instruments reasonably necessary to consummate the
transactions contemplated hereby. Prior to and following the Closing Date, PCC
shall make available to Buyer, at reasonable times, and in a manner so as not to
interfere with the normal business operations of the Asset Sale Companies, all
documents, maps and other information necessary to transfer all Permits to Buyer
in accordance with Law.
5.4. Notices and Consents.
PCC and Buyer each will use their commercially reasonable efforts to
obtain consents of all Governmental Authorities and other third parties
necessary to the consummation of the transactions contemplated by this
Agreement. PCC shall have responsibility for providing any notices to third
parties that may be required by the transactions contemplated by this Agreement
and for obtaining, or causing to be obtained, at its sole cost and expense, the
consents listed on Schedule 5.4(a) and Buyer shall have responsibility for
obtaining, at its sole cost and
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expense, all consents listed on Schedule 5.4(b), which Schedule shall include
all Equipment leases, and all consents necessary to transfer the Permits, with
the other party in each case using its commercially reasonable efforts to assist
the responsible party in obtaining such consents or Permits.
5.5. Publicity.
All general notices, releases, statements and communications to any
Employees, suppliers, distributors and customers of the Asset Sale Companies, to
the general public and to the press relating to the transactions contemplated by
this Agreement shall be made only at such times and in such manner as may be
mutually agreed upon by PCC and Buyer; provided, however, that either party
hereto (or, in the case of PCC, the PCC Parent) shall be entitled to make a
public announcement of the foregoing if: (a) in the opinion of its legal
counsel, such announcement is required to comply with Law or any listing
agreement with any national securities exchange or inter-dealer quotation
system; and (b) such disclosing party gives a reasonable period of notice and
opportunity to comment to the other party hereto of its intention to make such
public announcement; provided, that, failure to comment within 24 hours of
receipt of such notice shall be deemed a waiver of the opportunity to comment;
and provided, further, that nothing in this Section 5.5 shall operate to
prohibit any Asset Sale Company or Buyer from communicating, after the Closing
Date, with their respective suppliers, distributors, customers and Governmental
Authorities the fact that the transaction has occurred or to employees or their
collective bargaining representative regarding their employment or the terms and
conditions thereof, the operation of the Purchased Assets or matters necessarily
related thereto.
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5.6. Permits; Replacement Bonds; Insurance and Guarantees; Other Filings.
(a) At or prior to the Closing Date, Buyer shall: (i) secure, in
accordance with Law, irrevocable commitments to issue replacement bonds
and replacement sureties and guarantees or other financial security, if
applicable, for all Permits sufficient to cause the applicable
Governmental Authority to transfer the Permits to Buyer in accordance with
Law; and (ii) deliver copies of such documents to PCC.
(b) At or prior to the Closing Date, Buyer shall deliver copies to
PCC of all filings, each in a form that satisfies all requirements of the
applicable Governmental Authority and that are necessary to cause the
applicable Governmental Authority to transfer the Permits to Buyer in
accordance with Law.
(c) Promptly following the Closing Date through the application of
best efforts, Buyer shall make all filings with the appropriate
Governmental Authorities and shall, upon submitting such applications to
transfer such Permits, post replacement bonds necessary under Laws to
transfer the Permits to Buyer in accordance with Law.
(d) Following the Closing Date, PCC will cause each of the Permits
that is in its name or in the name of an Asset Sale Company to be retained
in its name or in the name of such Asset Sale Company, as appropriate,
until the applicable Governmental Authority transfers the Permits to
Buyer. Buyer may rely on any related bonds held or guaranteed by PCC or an
Affiliate of PCC; provided that Buyer reimburses PCC for bond premiums,
security, Office of Surface Mining fees, amounts required to be paid to
correct (and to pay fines or assessments with respect to) any violation
occurring after the Closing Date and any direct out-of-pocket costs
incurred by PCC or its Affiliates in connection with
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the maintenance of such Permits or the related bonds following the Closing
Date. Buyer agrees to use the same efforts to accomplish the transfer of
the Permits as soon as possible after the Closing that it would use to
obtain its own permits to commence immediate mining operations at any
site.
(e) To the extent allowed by and in accordance with applicable Law,
PCC shall cause each of the Asset Sale Companies to grant Buyer the right
to conduct Mining Activities on the properties included in the Purchased
Assets under each of the Permits; provided that if the appropriate
Governmental Authority has not transferred any Permit by the first
anniversary of the Closing Date, Buyer will deposit in escrow cash or a
letter of credit from a bank reasonably acceptable to PCC in an amount
equal to the face amount of any related outstanding surety bonds until
such Permit has been transferred.
(f) If PCC or one of the Asset Sale Companies receives a notice of
violation under any of the Permits following the Closing Date but before
the transfer of the Permit, PCC will give Buyer prompt notice thereof. If
PCC reasonably determines that Buyer will not cause such violation to be
cured in a timely fashion, PCC shall have the right to cure, or cause to
be cured, such violation itself and be reimbursed by Buyer for curing such
violation.
(g) At or prior to the Closing Date, Buyer shall have: (i) for
purposes other than the Permits, secured replacement bonds, replacement
sureties, guarantees or other financial security, if applicable,
sufficient to allow PCC and the Persons who will be its Affiliates after
the Closing Date to be relieved or released as of the Closing Date from
all financial commitments, guarantees, collateral agreements or similar
undertakings listed
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on Schedule 5.6; (ii) obtained property and liability insurance customary
for a company that is engaged in the Business or a business similar to the
Business to insure the Purchased Assets; and (iii) delivered copies of
such documents to PCC.
(h) On or prior to the Closing, Buyer shall deliver to PCC: (i) a
Certificate of Good Standing for self-insured status or evidence of
insurance coverage with respect to Buyer's Liabilities for workers'
compensation and federal black lung benefits that arise out of employment
by Buyer or any of its Affiliates of Employees on and after the Closing
Date, to the extent and in the amounts provided in applicable Laws; and
(ii) certification from the Department of Labor of approval of
self-insured status in the event Buyer is to be self-insured for federal
black lung claim liability.
5.7. Exclusivity.
PCC will not (nor will it cause or permit any of the Asset Sale
Companies to) (i) solicit, initiate or encourage the submission of any proposal
or offer from any Person relating directly or indirectly to the acquisition of
the Purchased Assets, or any portion thereof, or (ii) participate in any
discussions or negotiations regarding, furnish any information with respect to,
assist or participate in, or facilitate in any other manner, any effort or
attempt by any Person to do or seek any of the foregoing. PCC will notify Buyer
immediately if any Person makes any proposal, offer, inquiry or contact with
respect to any of the foregoing.
5.8. Access.
At or prior to the Closing Date, PCC will permit (and will cause
each of the Asset Sale Companies to permit) representatives of Buyer to have
full access at all reasonable times, and in a manner so as not to interfere with
the normal business operations of the Asset Sale
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Companies, to all premises, properties, personnel, books, records (including Tax
records), contracts and documents of or pertaining to each of the Asset Sale
Companies as related to the Purchased Assets. Copies of and access to accounting
records, ledgers and other pertinent documents or work papers related to the
Purchased Assets will be made available to Buyer at all reasonable times, and in
a manner so as not to interfere with the normal business operations of the Asset
Sale Companies, upon request.
5.9. Notice of Developments.
Each party will give prompt written notice to the other party of any
material adverse development causing a breach of any of its own representations
and warranties in Article III and Article IV above. No disclosure by any party
pursuant to this Section 5.9, however, shall be deemed to amend or supplement
the Schedules to such representations and warranties or to prevent or cure any
misrepresentation, breach of warranty or breach of covenant.
5.10. Benefits Provided by PCC.
To the extent permitted and subject to the provisions of the
Cooperation Agreement, PCC shall provide all benefits necessary to satisfy the
Liabilities retained by PCC pursuant to Section 1.95(k) through its Classified
Employee Retiree Medical Plans, or any successor thereto that may be negotiated
by the Asset Sale Signatory Company or any of its Affiliates.
5.11. Coal Inventory.
PCC shall use its commercially reasonable efforts to have 390,000
tons of Coal Inventory as of the Closing Date.
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5.12. Further Assurances.
The parties shall cooperate in a commercially reasonable manner with
each other and with their respective representatives in connection with any
steps required to be taken as part of their respective obligations under this
Agreement, and shall (a) furnish upon request to each other such further
information; (b) execute and deliver to each other such other documents; and (c)
do such other acts and things, all as the other party may reasonably request for
the purpose of carrying out the intent of this Agreement and the transactions
contemplated.
ARTICLE VI
CONDITIONS PRECEDENT TO CLOSING
6.1. Conditions Precedent to Each Party's Obligations.
The respective obligations of each party to consummate the
transactions contemplated by this Agreement are subject to the satisfaction at
or prior to the Closing Date of the following conditions precedent:
(a) no action, suit, proceeding, order, decree or injunction shall
have been commenced, threatened or entered by or before any Governmental
Authority that remains in force and that (i) prohibits, seeks to prohibit,
or imposes or seeks substantial damages in connection with, the
consummation of the transactions contemplated by this Agreement, (ii)
seeks or imposes relief that causes or would cause any of the transactions
contemplated by this Agreement to be rescinded following consummation,
(iii) affects adversely the right of Buyer to own the Purchased Assets or
to operate the Business on or after the Closing Date;
(b) PCC Parent, PCC, Buyer and Buyer's Ultimate Parent shall have
executed and delivered to each other party thereto the Administrative
Services Agreement, the
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Cooperation Agreement, the Indemnification and Guaranty Agreement, and the
D-R Service Agreement and any other documentation required in all
transactions contemplated or covered by all such agreements, all in form
and substance as set forth in Exhibits A, F, G and H attached hereto and
the same shall be in full force and effect;
(c) all other transactions pursuant to which Buyer or any of its
Affiliates acquire assets related to the Business shall have been
consummated prior to or simultaneously with the transactions contemplated
by this Agreement;
(d) PCC and Buyer shall have executed and delivered to each other
all such other documents or instruments necessary or appropriate to effect
the transactions contemplated by this Agreement, including the documents
provided in Section 5.6 hereof; and
(e) PCC shall have obtained, or caused to have been obtained, the
consents listed in Schedule 6.1(e)(i) and PCC shall have provided such
payments as may be reasonably required to obtain all such consents. Buyer
shall have obtained, or caused to have been obtained, the consents listed
in Schedule 6.1(e)(ii) and Buyer shall have provided such payments,
guarantees and/or assurances as may be reasonably required to obtain all
such consents.
6.2. Conditions Precedent to Obligations of Buyer.
The obligations of Buyer to consummate the transactions contemplated
by this Agreement are subject to the satisfaction or waiver at or prior to the
Closing Date of the following conditions precedent:
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(a) all of the representations and warranties of PCC set forth in
this Agreement or in any Exhibit, Schedule or document delivered pursuant
hereto, without regard to any qualification or limitation with respect to
materiality (whether by reference to "Material Adverse Effect" or
otherwise), shall be true and correct in all respects as of the date
hereof and at and as of the Closing Date with the same effect as though
such representations and warranties were made at and as of the Closing
unless the aggregate failure of such representations or warranties to be
true and correct does not have a Material Adverse Effect; provided that if
a representation or warranty is expressly made only as of a specific date,
it need only be true and correct in all respects as of such date;
provided, further, that revisions to Schedules 1.9V. (so long as such
revision relates to a settlement, mediation, arbitration or litigation of
employee grievances), 1.95(k)(1), 1.95(k)(3), 3.11(20 and 21) and 3.13(b)
prior to the Closing shall not constitute a breach of any representation
or warranty, and Buyer shall have received the PCC Closing Certificate
required by Section 6.2(g) below dated as of the Closing Date executed by
PCC to such effect;
(b) all of the covenants and obligations that PCC is required to
perform or to comply with pursuant to this Agreement at or prior to the
Closing Date shall have been duly performed and complied with in all
material respects;
(c) all proceedings and actions, corporate or other, to be taken by
PCC or the Asset Sale Companies in connection with the transactions
contemplated by this Agreement and all documents incident thereto,
including all actions necessary to authorize the execution, delivery and
performance of this Agreement and the transactions
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contemplated hereby, shall have been taken and shall be reasonably
satisfactory in form and substance to Buyer and Buyer's counsel;
(d) PCC shall have, and shall have caused the Asset Sale Companies
to have, executed and delivered the Bills of Sale, the Assignment and
Assumption Agreements, the Conveyance Deeds and such other documents as
may be necessary to convey to Buyer the Purchased Assets;
(e) between the date of this Agreement and the Closing Date, there
shall not have been a change, event or occurrence that, individually, or
together with any other change, event or occurrence, has had or could
reasonably be expected to have a Material Adverse Effect;
(f) Buyer shall have received an opinion of counsel to PCC addressed
to Buyer substantially in the form of Exhibit J; and
(g) Buyer shall have received an executed copy of the PCC Closing
Certificate.
6.3. Conditions Precedent to Obligations of PCC.
The obligation of PCC to consummate and cause the consummation of
the transactions contemplated by this Agreement is subject to the satisfaction
or waiver at or prior to the Closing Date of the following conditions precedent:
(a) all of the representations and warranties of Buyer set forth in
this Agreement or in any Exhibit, Schedule or document delivered pursuant
hereto, without regard to any qualification or limitation with respect to
materiality, shall be true and correct in all respects as of the date
hereof and at and as of the Closing Date with the same effect as
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though such representations and warranties were made at and as of the
Closing unless the aggregate failure of such representations or warranties
to be true and correct does not have a material adverse effect on Buyer's
ability to consummate the transactions contemplated by this Agreement or
fulfill its post-Closing obligations hereunder; provided that if a
representation or warranty is expressly made only as of a specific date,
it need only be true and correct in all respects as of such date, and PCC
shall have received Buyer's Closing Certificate required by Section 6.3(j)
below dated as of the Closing Date executed by Buyer to such effect;
(b) all of the covenants and obligations that Buyer is required to
perform or to comply with pursuant to this Agreement at or prior to the
Closing Date shall have been duly performed and complied with in all
material respects;
(c) all proceedings and actions, corporate or other, to be taken by
Buyer in connection with the transactions contemplated by this Agreement,
and all documents incident thereto, including all actions necessary to
authorize the execution, delivery and performance of this Agreement and
the transactions contemplated hereby, shall have been taken and shall be
reasonably satisfactory in form and substance to PCC and its counsel;
(d) PCC shall have received, on behalf of the Asset Sale Companies,
the Purchase Price by wire transfer of cash or other immediately available
funds and the execution and delivery by Buyer of the Promissory Note;
(e) Buyer shall have executed and delivered the Security Agreement;
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(f) Buyer shall have executed and delivered the Assignment and
Assumption Agreements and such other documents as may be necessary for
Buyer to assume all of the Assumed Liabilities;
(g) Buyer shall have delivered to PCC satisfactory evidence of
compliance with Sections 5.6(a), 5.6(g) and 5.6(h);
(h) between the date of this Agreement and the Closing Date, there
shall not have been a change, event or occurrence that, individually, or
together with any other change, event or occurrence, has had or could
reasonably be expected to have a Material Adverse Effect;
(i) PCC shall have received an opinion of counsel to Buyer addressed
to PCC substantially in the form of Exhibit K; and
(j) PCC shall have received an executed copy of Buyer's Closing
Certificate.
ARTICLE VII
CERTAIN TAX MATTERS
7.1. Property Taxes.
Property Taxes of the Asset Sale Companies with respect to the
Purchased Assets (including, without limitation, property Taxes payable as a
tenant or lessee under any lease) will be pro-rated as of the Closing Date and,
notwithstanding any other provision of this Agreement, the economic burden of
any such property Tax will be borne by (i) the Asset Sale Companies for all
Pre-Closing Periods and the portion of any Straddle Period through the Closing
Date and (ii) by Buyer for all Post-Closing Periods and the portion of any
Straddle Period after the Closing Date. Accordingly, notwithstanding any other
provision of this Agreement, (i) if any Asset Sale
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Company pays such a property Tax with respect to a Post-Closing Period or the
portion of Straddle Period after the Closing Date, Buyer will reimburse PCC on
behalf of such Asset Sale Company within 15 days after receiving from PCC
written demand for the amount of such property Tax, and (ii) if Buyer pays such
a property Tax with respect to a Pre-Closing Period or the portion of a Straddle
Period through the Closing Date, PCC on behalf of the Asset Sale Companies will
reimburse Buyer within 15 days after receiving from Buyer written demand for the
amount of such property Tax. For purposes of pro-rating property Taxes, the
amount of any property Tax attributable to the portion of a Straddle Period
through the Closing Date shall be deemed to be the amount of such property Taxes
for the entire Straddle Period multiplied by a fraction, the numerator of which
is the number of days in the Straddle Period through the Closing Date and the
denominator of which is the number of days in the entire Straddle Period. In
determining the Straddle Period for property Taxes, the Tax period as reflected
on the statement of Taxes due, property Tax xxxx, property "tax ticket," or any
other request for payment from a Governmental Authority will determine the
taxable period (e.g., a Virginia property Tax xxxx that indicates the tax year
as 2002 is for a Tax for the taxable period January 1, 2002 through December 31,
2002).
7.2. Sales and Use Taxes.
Buyer and PCC or the Asset Sale Companies hereby intend that the
transaction be an occasional sale within the meaning of Virginia Code Section
58.1-602 and regulations thereunder, and therefore exempt from Virginia sales
and use Tax pursuant to Virginia Code Section 58.1-609. PCC will be responsible
for sales and use Taxes payable as a result of the failure of this transaction
to qualify as an occasional sale or as an exempt transaction under any other
Virginia law; provided, however, that any use Tax payable as a result of this
transaction
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that would be payable regardless of whether the transaction qualifies as an
occasional sale or not shall be paid by Buyer.
7.3. Transfer Taxes.
All transfer, recording and similar Taxes arising in connection with
the transactions contemplated hereunder shall be borne equally by PCC and Buyer.
PCC and Buyer shall (and they shall cause their respective Affiliates to)
cooperate to comply with all Tax Return requirements for such Taxes and provide
such documentation and take such other actions as may be necessary to minimize
the amount of any such Taxes.
7.4. Access for Tax Returns.
Following the Closing Date, Buyer shall, at reasonable times, and in
a manner so as not to interfere with normal business operations, allow PCC (and
if requested by PCC, representatives of federal, state or local agencies) access
to the Purchased Assets for purposes of reviewing information pertinent to any
Tax Return filed by PCC Parent or any of its Affiliates, including the Asset
Sale Companies.
ARTICLE VIII
COVENANTS REGARDING EMPLOYEES
8.1. Employees.
(a) Subject to the requirements of applicable Laws, but no later
than immediately prior to the Closing, PCC will cause those Asset Sale
Companies set forth on Schedule 8.1 to terminate the employment of their
Employees with respect to the Purchased Assets.
(b) From time to time after the Closing Date, PCC and Buyer may
require information with respect to current or former Employees. Without
intending to limit the obligations of the parties in the exchange of
information with respect to any other matter
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or in accordance with the Cooperation Agreement, PCC and Buyer agree to
furnish such information to the other, if available, promptly after
receipt of a written request therefor.
8.2. Collective Bargaining Obligations.
Buyer acknowledges and agrees that the Asset Sale Signatory Company
is signatory to and bound by the Collective Bargaining Agreements, which
Collective Bargaining Agreements also pertain to assets other than the Purchased
Assets. Immediately after the Closing Date, Buyer further agrees to assume all
of the obligations arising after the Closing Date under the Collective
Bargaining Agreements, which pertain to, or arise out of the Asset Sale
Signatory Company's ownership of, the Purchased Assets.
ARTICLE IX
TERMINATION
9.1. Termination.
This Agreement may be terminated prior to the Closing Date only as
follows:
(a) by mutual written consent of PCC and Buyer;
(b) by either PCC or Buyer, if the Closing Date shall not have
occurred prior to the close of business on December 31, 2002 or such later
date as the parties may agree in writing (provided, that the right to
terminate this Agreement under this Section 9.1(b) shall not be available
to any party whose failure to fulfill any obligation under this Agreement
has been the cause, in whole or in part, of, or has resulted in, the
failure of the conditions in Article VI to be satisfied and the Closing
Date to occur on or before such date);
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(c) by PCC or Buyer if an action, suit, or proceeding, shall have
been commenced or threatened by or before any Governmental Authority, or
any order, decree or injunction shall have been entered therein, that (i)
prohibits, seeks to prohibit, or imposes or seeks substantial damages in
connection with, the consummation of the transactions contemplated by this
Agreement, (ii) seeks or imposes relief that causes or would cause any of
the transactions contemplated by this Agreement to be rescinded following
consummation, or (iii) affects adversely the right of Buyer to own the
Purchased Assets or to operate the Business;
(d) by Buyer if (i) the representations of PCC contained in this
Agreement are not true and correct in all material respects as if made at
and as of that time, except for failures to be true and correct that are
capable of being and are cured within fifteen (15) days after written
notice from Buyer to PCC of such failure; or (ii) PCC has failed to comply
materially with its respective obligations under this Agreement, except
for failures to comply that are capable of being and are cured within
fifteen (15) days after written notice from Buyer to PCC of such failure;
or
(e) by PCC if (i) the representations of Buyer contained in this
Agreement are not true and correct in all material respects as if made at
and as of that time, except for failures to be true and correct that are
capable of being and are cured within fifteen (15) days after written
notice from PCC to Buyer of such failure; or (ii) Buyer has failed to
comply materially with its obligations under this Agreement, except for
failures to comply that are capable of being and are cured within fifteen
(15) days after written notice from the PCC to Buyer of such failure.
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9.2. Effect of Termination.
If this Agreement is terminated pursuant to Section 9.1 hereof, all
further obligations of the parties under or pursuant to this Agreement shall
terminate without further Liability of either party to the other except: (a) as
set forth in Section 10.4; and (b) for breaches of representations, warranties,
or covenants or for fraud. PCC and Buyer hereby agree that the provisions of
this Section 9.2 and of Section 10.4 shall survive any termination of this
Agreement pursuant to the provisions of this Article IX.
ARTICLE X
MISCELLANEOUS
10.1. Entire Agreement.
This Agreement, the documents referred to herein and to be delivered
pursuant hereto and any other agreement entered into contemporaneously with this
Agreement among PCC, PCC Parent, Buyer and Buyer's Ultimate Parent or the
Affiliates of any of them constitute the entire agreement between the parties
pertaining to the subject matter hereof, and supersede all prior agreements,
understandings, negotiations and discussions of the parties, whether oral or
written, and there are no warranties, representations or other agreements
between the parties in connection with the subject matter hereof, except as
specifically set forth herein or therein.
10.2. Amendment.
This Agreement may be amended by an instrument in writing and signed
on behalf of all of the parties hereto at any time.
10.3. Extension; Waiver.
At any time prior to the Closing Date, the parties may (i) extend
the time for the performance of any of the obligations or other acts of the
other parties hereto, (ii) waive any
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inaccuracies in the representations and warranties contained herein or in any
document, certificate or writing delivered pursuant hereto or (iii) waive
compliance with any of the agreements or conditions contained herein, other than
the conditions contained in Section 6.1(a) hereof as it relates to the entry of
an order in any proceeding by or before a Governmental Authority. Any agreement
on the part of any party to any such extension or waiver shall be valid only if
set forth in an instrument in writing and signed on behalf of such party.
10.4. Expenses.
Whether or not the transactions contemplated by this Agreement are
consummated, each of the parties hereto shall pay the fees and expenses of their
respective counsel, investment bankers, financial advisors, accountants and
other experts and the other expenses incident to the negotiation and preparation
of this Agreement and consummation of the transactions contemplated hereby.
10.5. Bulk Sales Waiver.
Buyer hereby waives compliance with all applicable bulk sales Laws.
10.6. Governing Law.
This Agreement shall be construed and interpreted according to the
Laws of the Commonwealth of Virginia, without regard to the conflicts of Law
rules thereof.
10.7. Assignment.
This Agreement and each party's respective rights hereunder may not
be assigned at any time except as expressly set forth herein without the prior
written consent of the other party, provided that PCC may assign its rights
hereunder to any Affiliate of PCC after the Closing Date without the consent of
Buyer and Buyer may assign its rights hereunder to any Affiliate of Buyer prior
to, at or after the Closing Date without the consent of PCC and, further
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provided, that nothing in this Agreement shall prevent a successor in interest
to either party from enforcing the provisions of this Agreement.
10.8. Notices.
All communications, notices and disclosures required or permitted by
this Agreement shall be in writing and shall be deemed to have been given when
delivered personally or by messenger or by overnight delivery service, or within
five days of being mailed by registered or certified United States mail, postage
prepaid, return receipt requested, in all cases addressed to the person for whom
it is intended at his address set forth below or to such other address as a
party shall have designated by notice in writing to the other party in the
manner provided by this Section 10.8:
If to PCC: Pittston Coal Company
000 X.X. Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: President
With a copy to: Pittston Coal Company
c/o The Pittston Company
0000 Xxxxxxxx Xxxxx
X.X. Xxx 00000
Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: General Counsel
And a copy to: Hunton & Xxxxxxxx
Riverfront Plaza, East Tower
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Heuhsen, Esq.
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If to Buyer: Xxxxxxxxx-Xxxxxxx Coal Company, LLC
c/o Alpha Natural Resources, LLC
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Vice President
With a copy to: First Reserve Corporation
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
First Reserve Corporation
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Bartlit Xxxx Xxxxxx Xxxxxxxxx & Xxxxx
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
10.9. Counterparts; Headings.
This Agreement may be executed in several counterparts, each of
which shall be deemed an original, but such counterparts shall together
constitute but one and the same Agreement. The Table of Contents and Article and
Section headings in this Agreement are inserted for convenience of reference
only and shall not constitute a part hereof.
10.10. Interpretation; Construction.
(a) Unless the context requires otherwise, all words used in this
Agreement in the singular number shall extend to and include the plural,
all words in the plural number shall extend to and include the singular
and all words in any gender shall extend to and include all genders.
(b) This Agreement has been fully negotiated by the parties hereto
and shall not be construed by any Governmental Authority against either
party as the drafting party.
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10.11. Severability.
If any provision of this Agreement is held invalid or unenforceable
by any court of competent jurisdiction, the other provisions of this Agreement
will remain in full force and effect. Any provision of this Agreement held
invalid or unenforceable only in part or degree will remain in full force and
effect to the extent not held invalid or unenforceable.
10.12. No Reliance.
No third party is entitled to rely on any of the representations,
warranties and agreements contained in this Agreement and PCC and Buyer assume
no Liability to any third party because of any reliance on the representations,
warranties and agreements of PCC and Buyer contained in this Agreement, other
than Section 5.5 and Article VIII hereof, which are intended to be for the
benefit of the Persons expressly covered thereby and may be enforced by such
Persons.
10.13. Retention of and Access to Records.
After the Closing Date, Buyer shall retain for a period consistent
with Buyer's record retention policies and practices those books and records
relating to the Asset Sale Companies delivered to Buyer. Buyer also shall
provide to PCC and its Affiliates reasonable access thereto, during normal
business hours and on at least three days' prior written notice, to enable them
to prepare financial statements or Tax Returns or deal with Tax audits or
litigation. Buyer shall deliver to PCC at least thirty days written notice prior
to the destruction or other disposal of any such books and records. PCC and its
Affiliates may elect to take delivery of any such books and records that Buyer
intends to destroy or otherwise dispose of and to copy any such books and
records that Buyer intends to keep, all at their own expense.
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10.14. Arbitration.
Any dispute, controversy or claim arising out of or relating to this
Agreement (a "Dispute"), excluding any dispute or disagreement among the parties
concerning the determination of the Coal Inventory, which shall be resolved
pursuant to Section 2.11 and the allocation of Purchase Price and Assumed
Liabilities, which shall be resolved pursuant to Section 2.12, shall be decided
by binding arbitration in accordance with the commercial arbitration rules of
the American Arbitration Association. PCC and Buyer shall jointly select one
arbitrator. If the two parties shall fail to select an arbitrator within
fourteen calendar days after arbitration is requested, then such arbitrator
shall be selected by the American Arbitration Association or any successor
thereto upon application of either party. No Dispute shall be consolidated in
any arbitration with any dispute, claim or controversy of any other party. The
arbitration shall be conducted in Roanoke, Virginia, and any court having
jurisdiction thereof may immediately issue judgment on the arbitration award.
The parties agree that the arbitration provided for in this Section 10.14 shall
be the exclusive means to resolve all Disputes.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
PITTSTON COAL COMPANY
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Vice President - Development
and Technical Resources
XXXXXXXXX-XXXXXXX COAL COMPANY, LLC
By: /s/ Xxxxxxx XxXxxxxxxx
Name: Xxxxxxx XxXxxxxxxx
Title: President
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SCHEDULE 1.5
ASSET SALE COMPANIES
ASSET SALE SIGNATORY COMPANY
Clinchfield Coal Company, a Virginia corporation
ASSET SALE NON-SIGNATORY COMPANY
Pittston Coal Management Company, a Virginia corporation
PITTSTON COAL COMPANY
000 X. X. XXXX XXXXXX
XXXXXXX, XXXXXXXX 00000
December 13, 2002
Xxxxxxxxx-Xxxxxxx Coal Company, LLC
c/o Alpha Natural Resources, LLC
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to the Asset Purchase Agreement (the "Agreement"), dated
as of October 29, 2002, as amended to but not including the date hereof, by and
between Pittston Coal Company ("PCC") and Xxxxxxxxx-Xxxxxxx Coal Company, LLC
("Buyer"). Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Agreement.
PCC and Buyer desire to amend certain provisions of the Agreement and, in
consideration of the mutual covenants, conditions and agreements set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Section 1.87 of the Agreement is deleted in its entirety and
replaced with the following:
"1.87 Purchase Price.
"Purchase Price" shall mean the cash amount of $12,510,674
(which amount shall include $880,000 for the Parts, Fuel and Supplies
Inventory, $3,180,000 for the Coal Inventory and $110,000 for two
continuous miners), plus the Promissory Note."
2. A new Section 1.108 of the Agreement is inserted into the Agreement
as follows:
"1.108 Subleases.
"Subleases" shall have the meaning set forth in Section
2.13(a) hereof."
3. Notwithstanding anything in the Agreement to the contrary, each of
PCC and Buyer agree that for purposes of Sections 2.1 and 2.2 of the
Agreement only, none of the Equipment listed on Schedule 1.44(b)
attached to the Agreement shall constitute Purchased Assets.
4. Notwithstanding anything in the Agreement to the contrary, each of
PCC and Buyer agree that PCC shall have caused the applicable Asset
Sale Companies to purchase the Equipment specifically identified
under the heading "Transamerica Equipment" on Schedule 1.44(b) (the
"Transamerica Equipment").
Simultaneously with the Closing, PCC shall cause the applicable
Asset Sale Companies to transfer to Buyer, and Buyer shall acquire,
the Transamerica Equipment from such Asset Sale Companies pursuant
to a xxxx of sale. Each of PCC and Buyer agrees that the Purchase
Price set forth in Section 1.87 includes all amounts that Buyer owes
PCC or the Asset Sale Companies for the Transamerica Equipment upon
its purchase by the applicable Asset Sale Companies from
Transamerica, including one-half of the lease breakage fee. PCC
acknowledges its responsibility to pay $64,939.74 to Transamerica,
which is one-half of such lease breakage fee.
5. Each of PCC and Buyer agree that in satisfaction of Section 2.11 of
the Agreement, the face amount of the Promissory Note shall be fixed
at $5,784,442.
6. A new Section 2.13 of the Agreement is inserted into the Agreement
as follows:
2.13 Subleases.
(a) Each of PCC and Buyer agree that at the Closing, Buyer
shall sublease the Equipment set forth on Schedule 1.44(b) attached to the
Agreement (other than the Transamerica Equipment) from the applicable
Asset Sale Company pursuant to the subleases substantially in the forms
attached hereto as Exhibits X-0, X-0 and A-3 (the "Subleases").
(b) At the Closing, PCC shall cause the applicable Asset Sale
Company to, and Buyer shall execute and deliver the Subleases.
7. Sections 5.6(b) and (c) of the Agreement are deleted in their
entirety and replaced with the following:
"(b) Prior to the Closing Date: (i) Buyer shall deliver a copy
to PCC of the filing that is necessary to cause the applicable
Governmental Authority to transfer any one of the Permits (the "Initial
Filing") to Buyer in accordance with Law, in a form that satisfies all
requirements of the applicable Governmental Authority; and (ii) following
approval by PCC, Buyer shall file the Initial Filing with the appropriate
Governmental Authority.
(c) Promptly following the Closing Date through the
application of best efforts, and in any event no later than 30 days after
the Closing, Buyer shall make all filings other than the Initial Filing
with the appropriate Governmental Authorities necessary to transfer the
Permits to Buyer in accordance with Law and thereafter, as required by
Law, shall post replacement bonds."
8. PCC and Buyer agree that the completion of the actions set forth in
Sections 4 and 6 of this letter agreement that are required to be
completed by Buyer shall be deemed to satisfy all of Buyer's
obligations: (i) to obtain the consent of the applicable third party
lessor in accordance with Section 5.4 and Section 6.1(e) of the
Agreement; and (ii) with respect to such Equipment leases pursuant
to Section
5.6(g) of the Agreement (with the exception of the Equipment being
leased from Deere Credit, Inc. pursuant to leases expiring in 2004).
9. The Schedules to the Agreement are hereby amended and restated in
their entirety as attached hereto as Exhibit A.
10. Except as amended by this letter agreement, the Agreement shall
continue in full force and effect.
11. This letter agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. Any executed
counterpart of this letter agreement or other signature hereto
delivered by a party by facsimile shall be deemed for all purposes
as being good and valid execution and delivery of this letter
agreement by such party.
Sincerely,
PITTSTON COAL COMPANY
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Vice President - Development
and Technical Resources
ACKNOWLEDGED AND AGREED:
XXXXXXXXX-XXXXXXX COAL COMPANY, LLC
By: /s/ Xxxxxxx XxXxxxxxxx
Name: Xxxxxxx XxXxxxxxxx
Title: President
