Exhibit 10.2
SALES AGENCY AGREEMENT
AGREEMENT, executed as of April 4, 1997, among ARCH MINERAL CORPORATION, a
Delaware corporation ("Arch Mineral"), ASHLAND COAL, INC., a Delaware
corporation ("ACI") and CARBOEX S.A. (formerly known as SOCIEDAD ESPANOLA DE
CARBON EXTERIOR. S.A.), a company organized under the laws of Spain ("Carboex");
RECITALS. ACI and Carboex are parties to that certain Sales Agency
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Agreement (the "1982 Agency Agreement") dated as of February 27, 1982, a copy of
which is attached hereto as Exhibit A. ACI and Arch Mineral are parties to an
Agreement and Plan of Merger (the "Merger Agreement") dated as of April 4, 1997,
among ACI, Arch Mineral and AMC Merger Corporation providing for a business
combination of ACI and AMC and the conversion of Carboex International Ltd.'s
("CIL") Class C Preferred Stock of ACI to shares of Arch Mineral common stock as
of the Effective Time (as that term is defined in the Merger Agreement). CIL is
a wholly owned subsidiary of Carboex. In light of the transactions contemplated
in the Merger Agreement, ACI and Carboex wish to terminate the 1982 Agency
Agreement as of the Effective Time, and ACI is entering into this Agreement for
that purpose, and subject to and conditioned upon the consummation of the
transactions contemplated by the Merger Agreement, Arch Mineral and Carboex wish
to enter into this Sales Agency Agreement effective as of the Effective Time.
AGREEMENT. In consideration of the mutual agreements contained herein, the
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parties hereto agree as follows:
1. As used in this Agreement, "Customer" shall mean a company or any
subsidiaries and affiliates thereof, other than Carboex and its subsidiaries and
affiliates, which (i) consumes coal in Spain and/or Morocco, (ii) is owned
principally by Spanish and/or Moroccan interests, or (iii) is part of a business
enterprise whose controlling management is headquartered in Spain or Morocco.
2. Subject to and without limiting the terms of that certain Coal Sales
Agency Agreement dated as of April 4, 1997, among Arch Mineral, Carboex and
Saarbergwerke AG ("Saarberg") in respect of sales of metallurgical coal in
(among other countries) Morocco (the "Met Coal Agreement"), Arch Mineral hereby
appoints Carboex as the exclusive agent of Arch Mineral for the purpose of
selling, on behalf of Arch Mineral or its subsidiaries, coal to Customers for
consumption in Spain and/or Morocco, as the case may be.
3. Arch Mineral shall pay to Carboex, as compensation for the services of
Carboex under this Agreement, a commission (determined as specified in paragraph
4 of this Agreement) upon
each ton of coal which is sold by Arch Mineral or its subsidiary to a Customer
for consumption in Spain and/or Morocco, and which is delivered and paid for.
No commission shall be paid upon any coal not delivered and paid for,
irrespective of the reason for such non-delivery or non-payment. Carboex shall
not be entitled to payment for any expenses incurred in connection with its
services hereunder, it being understood that payment of the commission will be
full compensation to Carboex.
4. The commission payable to Carboex under paragraph 3 hereof shall be
two percent of the selling price of the coal FOB the mine, irrespective of
whether the actual selling price is on an FOB the mine basis. It is understood
that where coal is transported by rail to a barge loading facility, the price of
the coal FOB the mine means the price FOB the point of loading into the railcar.
It is further understood that where coal is trucked directly from the mine to a
barge loading facility, the price of the coal FOB the mine means the price FOB
the point of loading into the barge.
5. The commission shall be payable to Carboex within 10 days after the
receipt by Arch Mineral of payment for the coal.
6. Carboex shall use its best efforts to promote the sale of Arch Mineral
coal in Spain and Morocco to the maximum extent possible, subject, in the case
of Spain, to any limitation imposed by the government of Spain as to
diversification of sources of supply. Carboex shall keep Arch Mineral informed
as to Spanish and Moroccan markets. Except as otherwise agreed and subject to
paragraphs 7 and 8 hereof, it is the express understanding of the parties hereto
that Carboex, as Arch Mineral's exclusive agent hereunder, will be in charge of
all discussions with Customers as to coal for consumption in Spain and/or
Morocco.
7. Except as otherwise expressly agreed, neither Carboex nor its
affiliates shall have any authority to bind Arch Mineral or its subsidiaries in
any respect, to determine price or any other term of sale, to execute sales
contracts or to receive payments from the purchaser, including Customer. Such
contracts shall be made in the name of Arch Mineral or its subsidiaries.
8. In the event Carboex fails to use its best efforts to sell Arch
Mineral coal not otherwise subject to the Met Coal Agreement to Customers
located in Spain and/or Morocco, Arch Mineral may give Carboex written notice of
such failure, and if such failure is not cured within a period of six months
from receipt of such notice, then Arch Mineral shall have the right to use its
own sales force to sell to such Customers, but Carboex shall remain entitled to
its commission under paragraph 3 of this Agreement and, when and if Carboex
resumes best efforts to sell, as
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determined by Arch Mineral in its sole discretion, Arch Mineral shall withdraw
its sales force.
9. Carboex shall not assign this agreement without the prior written
consent of Arch Mineral. Arch Mineral hereby consents to an assignment to a
company in which Carboex has no less than a 51% ownership interest.
10. Arch Mineral shall have the right to terminate this Agreement whenever
(i) the ownership interest of Carboex in an assignee of this Agreement becomes
less than 51%, (ii) CIL and its affiliates no longer beneficially own at least
63% of shares of the capital stock of Arch Mineral obtained by CIL in the
conversion under the Merger Agreement at the Effective Time.
Carboex shall have the right to terminate this Agreement at any time upon two
years' prior written notice to Arch Mineral.
11. This Agreement shall become effective at the Effective Time as that
term is defined in the Merger Agreement.
12. It is the intent of the parties to this Agreement that, so long as
Carboex has "Unfilled Off-Take" as defined in that certain Coal Off-Take
Agreement dated April 4, 1997, between Arch Mineral and Carboex ("XXXX"), all
quantities of coal upon which Carboex is entitled to a commission under this
Agreement shall be deducted from Carboex's "Off-Take Tonnage" as defined in
XXXX. However, the parties also recognize that such deduction from Off-Take
Tonnage may not always be appropriate. Therefore, in all circumstances, the
parties hereto agree to review each contract subject to this paragraph 12 and
further agree not to make any such deduction without the prior written consent
of each party.
13. Each of ACI and Carboex acknowledge and agree that there are no
outstanding obligations of or claims by either of them under the 1982 Agency
Agreement as of the execution date of this Agreement, and each agrees that the
1982 Agency Agreement is terminated and that all rights and obligations
thereunder are extinguished, in each case as of the Effective Time.
Notwithstanding the foregoing, any claims or liabilities arising prior to such
termination shall survive such termination and the termination of this
Agreement, and all sales commitments entered into by ACI pursuant to the 1982
Agency Agreement in effect at the Effective Time shall continue in full force
and effect in accordance with their terms after the termination of this
Agreement.
14. This Agreement may be executed in several counterparts and by the
different parties hereto in separate counterparts, each
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of which shall be deemed to be an original, but all such counterparts together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
ARCH MINERAL CORPORATION
By: /s/ Xxxxxx X. Xxxx
Its: President & CEO
ASHLAND COAL, INC.
By: Xxxxxxx X. Xxxxx
Its: President
CARBOEX S.A.
By: /s/ Xxxx X. Xxxxxxxx
Its: Senior-Vice President
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EXHIBIT A
SALES AGENCY AGREEMENT
Sales Agency Agreement between Ashland Coal, Inc. and Sociedad Espanola De
Carbon Exterior, S.A., dated as of February 27, 1982, is incorporated herein by
reference(Exhibit 10.28 to Ashland Coal, Inc.'s Form 10-K for the year ended
December 31, 1995)