EXHIBIT 10.5
APPALACHIAN FUELS, LLC
ASSET PURCHASE AGREEMENT
This is an Asset Purchase Agreement dated as of November 26, 2004,
among NATIONAL COAL CORPORATION ("National"), a Tennessee corporation, 0000
Xxxxxx Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxx 00000 and APPALACHIAN FUELS, LLC
("Appalachian"), a Kentucky limited liability company, 0000 Xxxxx Xxx Xxx Xxxx,
Xxxxxxx, Xxxxxxxx 00000.
RECITALS
A. Appalachian is the owner of certain properties situated in
Xxxx, Xxxxxx and Xxxxxx Counties, Kentucky.
B. Subject to the terms and conditions of this Agreement,
National desires to purchase certain Appalachian assets, and Appalachian desires
to sell certain assets to National.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged by the parties, and in consideration of the mutual
covenants and agreements contained in this Agreement, the parties agree as
follows:
SECTION ONE - PURCHASE AND SALE
1.1 PURCHASE AND SALE. Appalachian agrees to sell,
assign, transfer and deliver to National (i) the coal mining permits described
on Exhibit A (the "Permits"), (ii) the real and personal property (the
"Properties") described on Exhibit B, (iii) the equipment listed on Exhibit C
(the "Equipment"), and (iv) the leases described on Exhibit D (the "Leases")
(collectively the "Assets").
National agrees to purchase the assets described on Exhibits A, B and C
upon the terms and conditions hereinafter set forth.
1.2 PAYMENT OF PURCHASE PRICE. In consideration of the
sale, transfer and delivery to National of the Assets described on Exhibits A,
B, C, and D, National agrees as follows:
a. National shall pay to Appalachian the sum of
Twelve Million Five Hundred Thousand Dollars ($12,500,000.00) less the xxxxxxx
money payment of Two Hundred Fifty Thousand Dollars ($250,000.00).
b. National shall assume all of the
responsibilities of Appalachian with respect to the Permits described on Exhibit
A, shall substitute for the Appalachian bonds relating to such Permits and
assume and timely discharge all reclamation liability with respect to said
Permits and the Properties.
c. National shall assume, keep and fully
perform in a timely manner all of the obligations of Appalachian under the
leases, subleases and agreements described on Exhibits B and D.
SECTION TWO - REPRESENTATIONS AND WARRANTIES OF APPALACHIAN
Appalachian represents and warrants to National as follows:
2.1 APPALACHIAN ORGANIZATION AND CORPORATE AUTHORITY.
Appalachian is a limited liability company duly organized, validly existing and
in good standing under the laws of the state of
Kentucky and has full corporate power and authority to own and lease its
properties as such properties are now owned and leased and to conduct its
business as and where its businesses are conducted. Appalachian is qualified to
do business and is in good standing In all jurisdictions in which the character
of the Properties owned or leased by it or the nature of the activities
conducted by it make such qualification necessary. Except as provided herein,
Appalachian is not a party to any agreement or instrument, or subject to any
charter or other corporate restriction or any judgment, decree, writ,
injunction, order, award, law, rule, regulation, code or ordinance which
adversely affects, or might reasonably be expected to adversely affect, the
Assets.
2.2 AUTHORITY. Appalachian has the full right, power,
authority and capacity to execute and deliver this Agreement and to perform the
obligations under this Agreement.
2.3 AUTHORIZATIONS. The execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby, and the
performance and fulfillment of the obligations and undertakings thereunder by
Appalachian will not (with or without the giving of notice of lapse of time or
both):
a. violate any provision of, or result in
breach of or accelerate or permit the acceleration of any performance required
by the terms of, any applicable law, ordinance, rule or regulation of any
governmental body, Appalachian's Articles of Organization or Operating Agreement
or any agreement or undertaking to which Appalachian as a party or by which it
may be bound, or of any judgment, decree, writ, injunction, order or award of
any arbitration panel, court or governmental authority applicable to it.
b. Result in the creation of any claim, lien,
charge or encumbrance upon the Assets.
c. Terminate or cancel or result in or permit
the termination or cancellation of any agreement or undertaking.
d. In any way affect or violate the terms or
conditions of, or result in the cancellation, modification, revocation or
suspension of, any of Appalachian's license, approvals, certificates, permits
(including the Permits) or authorizations.
2.4 CONTRACT. Except as listed in the Exhibits attached
hereto, the Assets shall not, upon closing, be bound or affected by any written
or oral contract, agreement or commitment of any kind whatsoever, including, but
not limited to, any (i) employment agreement, (ii) sales agency agreement or
promotion or advertisement agreement, (iii) bonuses, profit sharing, deferred
compensation, hospitalization, retirement, insurance, pension, welfare, stock
option or stock purchase plan, arrangement or agreement of any other plan,
arrangement or agreement providing for employee benefits or for the
remuneration, direct or indirect, of its Members, directors, officers or
employees, (iv) agreement with any Member or director or officer Appalachian,
(v) agreement containing covenants by Appalachian not to compete in any lines of
business or commerce, (vi) franchise or distributorship agreement, (vii) loan,
credit or financing agreement, including all agreements for any commitments for
future loans, creditors or financing, (viii) guaranty, (ix) mortgage or security
agreement, (x) requirements contracts, (xi) lease, (xii) coal supply or coal
purchase agreement.
2.5 LIENS, LITIGATION, AND PENDING PROCEEDINGS.
Appalachian is not a party to any material agreement or arrangement, or subject
to any order, judgment, writ or decree, that either restricts or purports to
restrict its ability to convey title (either fee simple or leasehold, as the
case may be) to National on or in respect of the subject properties. There are
no claims of any kind or any
actions, suits, proceedings, arbitrations or investigations pending or
threatened in any court or before any governmental agency or instrumentality or
arbitration panel or otherwise against, by or affecting Appalachian or the
Assets, or which would prevent the performance of this Agreement or any of the
transactions contemplated thereby or declare the same unlawful or cause the
rescission thereof. Appalachian has not been charged with, nor is it threatened
with or under an investigation with respect to any charge concerning any
violation of any provision of any federal, state or local law, regulation,
ordinance, rule or order (whether executive, judicial, legislative or
administrative) or any order, writ, injunction or decree of any court, agency or
instrumentality.
2.6. PROPERTY AND ASSETS.
a. The real property owned or leased by
Appalachian is described on Exhibits B and D. The tangible personal property
owned by Appalachian is described on Exhibit C. With respect to the property
described in Exhibits B, C. and D, Appalachian owns and has good, marketable and
indefeasible title to or valid leasehold interest in the coal leases, the real
property and all other material properties, assets and other rights which it
purports to own or lease or which are reflected as owned or leased on its books
and records, free and clear of all mortgages, liens, encumbrances security
interests, charges, equities, options, or restrictions whatsoever except
excepted liens, and subject to the terms and conditions of the applicable
leases. No litigation or claims are currently pending, or to the best knowledge
of Appalachian, threatened which would question Appalachian's title to the
subject properties.
b. All leases and agreements described in
Exhibits B and D and delivered in connection with this Asset Purchase Agreement
are valid and subsisting, in full force and effect and there exists no default
or event or circumstance which with the giving of notice or the passage of time
or both would give rise to a default under any such lease or leases, which would
affect in any material respect the conduct of the business of National.
c. The subject property presently owned, leased
or licensed by Appalachian, all of which is described in Exhibits B, C, and D,
including, without limitation, all mineral, surface and access rights, easements
and rights of way, is all of the subject property necessary to permit National
to conduct its business in all material respects in the manner as would a
prudent operator and neither Appalachian nor National will be required to
acquire any material assets to continue the current operations of the subject
properties other than the replacement of equipment in the ordinary course of
business, and no default has occurred or is existing with respect to any such
rights that could reasonably be expected to cause the loss of such rights or to
otherwise impact the ability of National to conduct its business.
d. All improvements and personal property
included in the subject properties are sold as is, where is, without warranty.
e. Appalachian owns, or is licensed to use, all
trademarks, trade names, copyrights, patents and other intellectual property
material to its business, and the use thereof by Appalachian does not, or by
National will not, infringe upon the rights of any other person. Appalachian
either owns or has valid licenses or other rights to use all databases,
geological data, geophysical data, engineering data. seismic data, maps,
interpretations and other technical Information used in its business as
presently conducted, subject to the limitations contained in the agreements
governing use of the same, which limitations are customary for companies engaged
in the business of the mining and production of coal.
f. Except as could not reasonably be expected
to have a material adverse. effect, Appalachian has the right to sell, convey,
transfer and assign its rights in and to the property which is the subject
matter of this Agreement.
2.7 RESTRICTIONS ON PROPERTY USE. Except as provided in
this section, there are no restrictions of record which would preclude the use
of the Property in the mariner in which it has heretofore been used by
Appalachian.
2.8 PERMITS, LICENSES, ETC. Appalachian has all licenses,
approvals, certificates, permits or authorizations of any federal, state or
local government or regulatory body required in order to permit it to carry on
its coal mining, hauling, and shipping business as presently conducted, all of
which are in full force and effect. No action or claim is pending or threatened
to revoke or terminate any of the rights listed above or declare any of them
invalid in any respect. Appalachian has the ability and authority transfer to
National all of the regulatory permits issued for the mining of coal that relate
to all or any portion of the property being conveyed pursuant hereto (whether by
deed or by lease assignment), or any seam thereunder, and being all of the
permits transferred to Appalachian by that order and amended order entered
January 23, 2004, in Case No. 02-14261 of the United States Bankruptcy Court for
the Eastern District of Kentucky, Ashland Divisions, in the matter of Horizon
Natural Resources Company, et al., Chapter 11, and the related real property
transfer dated January 26, 2004, in that case.
a. National shall reimburse Appalachian for all
costs and expenses, including payment of bond premiums associated with the
transferred permits incurred by Appalachian during the permit transfer. All
permits and bonds shall be transferred or replaced within eighteen (18) months
of the closing.
2.9 DISCLOSURE. No statement, schedule, annex,
certificate, information, representation or warranty of Appalachian contained in
this Agreement, to be furnished by Appalachian pursuant to this Agreement, or in
connection with the transactions contemplated by this Agreement, contains or
will contain any untrue statement of material fact or omits will omit a material
fact necessary to make the statements contained therein not misleading.
Appalachian has disclosed all known material facts with respect to this
Agreement
2.10 ENVIRONMENTAL MATTERS. Appalachian has not stored or
disposed of any hazardous substance (as that term is defined in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended 42 U.S.C. Subsection 9601 ET SEQ.) or waste, on or under any real
property or has not used any hazardous substances or wastes in any manner,
including, without limitation on, from or affecting Appalachian's property or
other assets, which violates federal, state or local laws, ordinances, rules,
regulations or policies governing the use, storage, treatment, transplantation,
manufacture, refinement, handling, production or disposal of hazardous
substances or wastes. National shall incur no liability for hazardous substances
or wastes which were generated on or from Appalachian's property on or prior to
the date of this Agreement. Further, except as is set forth in this Section
below:
a. Neither Appalachian nor any of its
contractors or assigns nor the operations conducted thereon Appalachian violate
any order or requirement of any court or Governmental Authority or any
Environmental Laws.
b. None of the subject property nor the
operations currently conducted thereon by Appalachian or, to the knowledge or
Appalachian, by any prior owner or operator of such property or operation, are
in violation of or subject to any existing, pending or threatened action, suit,
investigation, inquiry or proceeding by or before any court or Governmental
Authority or any remedial obligations under Environmental Laws.
c. All notices, permits, licenses, exemptions,
approvals or similar authorizations, if any, required to be obtained or filed in
connection with the operation or use of any and all of the subject property by
Appalachian, including, without limitation, past or present treatment, storage,
disposal or release of a hazardous substance, oil and gas waste or solid waste
in the environment, have been duly obtained or filed, and Appalachian, its
contactors and assignees are in compliance with the terms and conditions of all
such notices, permits, licenses and similar authorizations.
d. To the best of Appalachian's knowledge,
during Appalachian's ownership of the property, all hazardous substances, solid
waste and oil and gas waste, if any, generated at the subject property have in
the past been transported, treated and disposed of in accordance with
Environmental Laws and so as not to impose an imminent and substantial
endangerment to public health or welfare or the environment, and, to the
knowledge of Appalachian, all such transport carriers and treatment and disposal
facilities have been and are operating in compliance with Environmental Laws and
so as not to pose an imminent and substantial endangerment to public health or
welfare or the environment, and are not the subject of any existing, pending or
threatened action, investigation or inquiry any Governmental Authority in
connection with any Environmental Laws.
e. Appalachian has no knowledge of hazardous
substances, solid waste or oil and gas waste that have been disposed of or
otherwise released and there has been no threatened release of any hazardous
substances, solid waste or oil and gas waste on or to the subject property
except in compliance with Environmental Laws and so as not to pose an imminent
and substantial endangerment to public health or welfare or the environment
f. To the extent applicable, the subject
property currently satisfies all design, operation, and equipment requirements
imposed by the SMCRA, and Appalachian does not have any reason to believe that
such property, to the extent subject to the SMCRA, will not be able to maintain
compliance with the SMCRA requirements during the term of this Agreement.
g. To the best of its knowledge, neither
Appalachian or any of its contractors has any known contingent liability or
Remedial Work in connection with any release or threatened release any hazardous
substance, solid waste or oil and gas waste into the environment that would
result in a Material Adverse effect.
h. To the best of its knowledge, neither
Appalachian's nor its contractors' coal operations or Appalachian's coal
properties will be subject to any environmental assessment requirements under
the National Environmental Policy Act or any analogous Governmental Regulation
or any other environmental review or assessment requirements in excess of
environmental review and assessment requirements required in connection with
Appalachian or National obtaining any permits or other required items in
connection with the coal properties.
2.11 COMPLIANCE WITH LAWS:
a. Appalachian and all of its contractors are
in substantial compliance with all Governmental Requirements applicable to
Appalachian and/or Appalachian's property and all agreements and other
instruments binding upon it or its property, and possesses all licenses,
permits, franchises, exemptions, approvals and other governmental authorizations
necessary for the ownership of its property and the conduct of its business.
b. To the best of its knowledge, Appalachian is
not in default nor has any event or circumstance occurred that, but for the
expiration of any applicable grace period or the giving of notice, or both,
would constitute a default or would require Appalachian to redeem or make any
offer to redeem under any indenture, note, credit agreement or instrument
pursuant to which any Material Indebtedness is outstanding or by which any of
Appalachian's properties is bound.
c. No Default has occurred and is continuing.
d. Appalachian and its contract miner are
current on all reclamation work required under the permits described in Exhibit
A.
2.12 TAXES: Appalachian has timely filed or caused to be
filed all tax returns and reports required to have been filed and has paid or
caused to be paid all taxes required to have been paid by it, except taxes that
are being contested in good faith by appropriate proceedings and for which
Appalachian, has set aside adequate reserves in accordance with generally
accepted accounting procedures in an account controlled by National or its
lender. The charges, accruals and reserves on the books of Appalachian in
respect of taxes and other governmental charges are, in the reasonable opinion
of Appalachian, adequate. No tax lien has been filed and, to the knowledge of
Appalachian, no claim is being asserted with respect to any such tax or other
such governmental charge.
2.13 DISCLOSURE; NO MATERIAL MISSTATEMENTS. No written
information, statement, exhibit, certificate, document or report furnished to
National Appalachian or any of its affiliates in connection with the negotiation
of this Agreement contained any material misstatement of fact or omitted to
state a material fact or any fact necessary to make the statement contained
therein not materially misleading in the light of the circumstances in which
made and with respect to Appalachian and its affiliates taken as a whole. There
is no fact peculiar to Appalachian or any of its affiliates which has a material
adverse effect or in the future is reasonably likely to have (so far as
Appalachian can now foresee) a material adverse effect and which has not been
set forth in this Agreement or the other documents, certificates and statements
furnished to National by or on behalf of Appalachian or its Affiliates prior to,
or on, the effective date in connection with the transactions contemplated
hereby. There are no statements or conclusions in any Reserve Report that are
based upon or include misleading information or fail take into account material
information regarding the matters reported therein.
SECTION THREE -- REPRESENTATIONS AND WARRANTIES OF NATIONAL
National represents and warrants to Appalachian as follows:
3.1 ORGANIZATION. National is a corporation duly
organized, validly existing, and in good standing under the laws of the state of
Tennessee.
3.2 AUTHORITY. National has full right, power, authority
and capacity to execute and deliver this Agreement and to perform its
obligations under this Agreement.
3.3 AUTHORIZATIONS. The execution and delivery of this
Agreement, the consummation of the transactions contemplated thereby, and the
fulfillment by National of its obligations and undertakings thereunder will not
violate any provision of any applicable law, ordinance, rule or regulation of
any governmental body, National's Articles of Incorporation or By-laws, or any
judgment, decree, writ, injunction, order or award of any arbitration panel,
court or governmental authority applicable to Appalachian. The execution and
delivery of this Agreement, and the performance and consummation of the
transactions contemplated thereby, have been duly authorized by all requisite
corporate action of National.
3.4 COMPLETENESS OF STATEMENTS. No statement, Schedule,
Annex, certificate, information, representation or warranty National contained
in this Agreement or furnished by or on behalf of National to Appalachian or its
agents pursuant thereto or in connection with the transactions contemplated
hereby contains or shall contain any untrue statements of material fact omits or
shall omit to state a material fact necessary in order to make the statements
contained therein not misleading.
SECTION FOUR - NON-ASSUMPTION LIABILITIES OF APPALACHIAN
Except described in the Exhibits, or with respect to the contracts and
leases assigned to National (with respect to obligations or liabilities arising
from and after the date hereof, except with respect to liabilities for
reclamation activities associated with the coal properties being assigned
hereby) or as otherwise explicitly provided herein, National does not assume,
agree to perform or discharge, or otherwise have any responsibility for, any
liabilities or contractual obligations of Appalachian. Appalachian agrees to
retain and satisfy or discharge in full, and to indemnify and hold National
harmless from all liabilities and all claims incurred, arising or accruing prior
to the closing, including:
a. Liabilities or other obligations of or
incurred by Appalachian in connection with the transactions contemplated by this
Agreement, or any liability or other obligation of Appalachian, including legal
and accounting fees and liabilities to any broker, finder, consultant or other
Intermediaries;
b. Liabilities resulting from Appalachian's
failure to possess all licenses and permits necessary for the conduct of its
business in the manner and fashion now being or in the past having been
conducted Appalachian;
c. Liabilities resulting from Appalachian's
failure to comply in full with all laws, rules, regulations, or other official
requirements applicable to the conduct of the past and present business of
Appalachian, including without limitation, those concerning labor relations,
mine safety and health and the environment;
d. Liabilities of Appalachian for unpaid
accounts or notes payable, whether disclosed or undisclosed;
e. Liabilities for expenses, contract
cancellations, unpaid rents, unpaid past due royalties or invoices and accounts
payable;
f. Liabilities arising out of any breach or
default by Appalachian in the performance of any lease or contract, including,
but not limited to, contracts regarding use of the tipple and other post
-removal facilities; and
g. Any and all other liabilities of Appalachian
of any nature.
SECTION FIVE -- CLOSING
The closing of the purchase and sale provided for herein shall take
place on November 26, 2004 at _____ o'clock p.m. local time at the offices of
Appalachian Fuels, LLC, Big Run Road, Ashland, Kentucky or at such earlier time
and place as the parties may hereto mutually agree.
5.1 APPALACHIAN CLOSING DOCUMENTS. At closing Appalachian
shall execute and deliver to National:
a. an enforceable and recordable instrument of
assignment and transfer assigning to National the mining permits described on
Exhibit A;
b. valid and recordable assignments
transferring to National all of the right, title and interest of Appalachian in
the leasehold estates and property interests described on Exhibit B, including
appropriate back references to the immediately preceding document(s) for each
assigned lease granting the leasehold title therefore to Appalachian;
c. valid consents with respect to all such
leases being assigned for which the respective consents of the lessors are
required. Provided, however, that in the event the Appalachian is unable to
deliver all of said consents at closing, then and in that event, the parties
hereto will cooperate in obtaining all necessary consents, time being of the
essence;
d. a Xxxx of Sale for the equipment described
in Exhibit C;
e. deed(s) conveying by Special Warranty the
real properties to National, including appropriate back reference(s) to the
immediately preceding document(s) granting title of each tract to Appalachian;
f. such other Instruments as may be necessary
or appropriate to consummate the transaction herein contemplated, including
consents from third parties needed to assign or transfer the Assets to National;
g. a certified copy of a resolution duly
adopted by the Board of Directors of Appalachian authorizing and approving the
execution of this Agreement and the consummation of the transaction provided for
in this Agreement
5.2 NATIONAL CLOSING DOCUMENTS. At closing, National
shall deliver to Appalachian:
a. a certified copy of a resolution duly
adopted the Board of Directors of National authorizing the execution of this
Agreement and the consummation of the transaction provided for herein:
b. a duly executed lease, leasing Appalachian
the Hazard Number 4A coal reserves contained within the Pine Mountain Reserves
(a description of which is attached as Exhibit D), upon the following terms and
conditions, inter alla, to wit:
i. Said lease shall also include the use by
Appalachian of the Pine Mountain Preparation Plant
and throughput rights of Appalachian at the Xxxxx
Loadout.
ii. Appalachian shall pay National a
production royalty of 8% of the gross sales price or
$3.00 per ton, whichever is greater, for all coal
mined and removed from the reserves.
iii. Appalachian will pay National a minimum
recoupable annual royalty of $50,000.00 for the
primary term of 3 years and $100,000 per year
thereafter,
iv. In the event that Appalachian does not
commence mining operations of the Hazard No. 4A
reserves within three (3) years of the Closing
Date and maintain such operations to mine a minimum
of 10,000 tons per month thereafter, its Lease rights
shall terminate and the Lease shall be null and void.
v. Notwithstanding anything else contained
herein, Assignor reserves and retains such rights
(including but not limited to rights of entry) as may
be necessary to maintain the effectiveness of any
mining permits (and any operator designations
thereunder) or licenses issued by any state or
federal regulatory agency (including but not limited
to permits Issued by the Kentucky Department of
Surface Mining Reclamation and Enforcement) pending
transfer or reissuance of such permits and licenses
to Assignee or its designee. Assignor shall not
exercise any such retained rights in a manner
inconsistent with (i) the rights granted Assignee
hereunder, or (ii) the Asset Purchase Agreement of
even date between the parties. Upon transfer or
reissuance of such mining permits and licenses to
Assignee or its designee, the rights retained by
Assignor hereunder shall automatically terminate and
be of no further force and effect.
c. a certified check or wire transfer for the
sum of Twelve Million Five Hundred Thousand Dollars ($12,500,000.00) less the
xxxxxxx payment of Two Hundred Fifty Thousand Dollars ($250,000.00).
SECTION SIX - SURVIVAL REPRESENTATIONS AND WARRANTIES - INDEMNIFICATION
6.1 SURVIVAL. The representations, warranties and
covenants and agreements of Appalachian and National contained in this Agreement
shall survive the closing notwithstanding any examination or investigation made
by or on behalf of any party at any time.
6.2 INDEMNITY BY APPALACHIAN. Appalachian shall indemnify
and hold National harmless from and against, and shall pay to National, the full
amount of any loss, claim, damage, liability or expense, including reasonable
attorney's fees, resulting to National, either directly or indirectly, from:
a. any material breach of or inaccuracy in the
representations and warranties of Appalachian contained in this Agreement;
b. the material breach, non-fulfillment or
default in the performance of any of the covenants and agreements of Appalachian
contained in this Agreement;
c. any material inaccuracy in any certificate,
Exhibit, Annex or other document delivered by Appalachian to National pursuant
to any of the provisions of, or in connection with, this Agreement;
d. any and all pre-closing liabilities or
obligations of Appalachian not assumed under this Agreement, and
e. Any and all liabilities of Appalachian
and/or its contract miner for reclamation work required to be done prior to
closing.
6.3 INDEMNITY BY NATIONAL. At and after Closing,
National, its successors and assigns, shall assume the sole and complete
responsibility and premises liability for the Properties, including, without
limitation, reclamation and clean-up liabilities under federal and state
environmental laws or under common law or under the leases. National shall
indemnify, defend and hold harmless Appalachian, its Members, directors,
officers, agents, affiliates and insurers from and against any and
all cost, loss, expense (including, but no limited to, attorney's fees and
expert witness' fees), claim, liability, investigation, enforcement, action or
demand whatsoever arising from the ownership or operations of the Properties
after Closing.
In addition, National shall indemnify and hold Appalachian harmless
from and against, and shall pay to Appalachian, the full amount of any loss,
claim, damage, liability or expense, including reasonable attorneys' fees,
resulting to Appalachian, either directly or indirectly from:
a. any material breach of or inaccuracy in the
representations and warranties of National contained in this agreement.
b. the material breach, non-fulfillment or
default in the performance of any of the covenants and agreements of National
contained in this Agreement; or
c. any material inaccuracy in any certificate,
schedule, annex or other document delivered by National pursuant to any of the
provisions of, or in connection with, this Agreement.
SECTION SEVEN -- MISCELLANEOUS
7.1 ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement of the parties with respect to the subject matter hereof, and
supersedes all prior understandings with respect to the subject matter hereof.
No change, modification, addition or termination of this Agreement shall be
enforceable unless in writing and signed by the party against whom enforcement
is sought.
7.2 BENEFIT. This Agreement shall be binding upon and
inure to the benefit of:
a. National, its successors and assigns; and
b. Appalachian, its successors and assigns.
7.3 NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed by registered mail, return receipt requested, postage prepaid to the
addresses set forth below to or such other addresses of which a party has given
the other parties written notice.
Appalachian Fuels, LLC
0000 Xxxxx Xxx Xxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
ATTN: Xxxx Xxxxx. President
With a copy to:
Xxxxxx X. Xxxxxxxx
0000 Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
National Coal Corporation
0000 Xxxxxx Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
ATTN: President
7.4 BROKERS. Neither Appalachian nor National has
employed any broker or other agent in connection with the negotiation or
consummation of the transactions contemplated by this Agreement and no person is
entitled to any brokerage or other commission relating to this Agreement or the
transactions contemplated hereby. If any person asserts that any person is
entitled to such a brokerage or other commission, the party or parties who
invited or caused or allegedly invited or caused that person's intervention
relating to this Agreement shall indemnify and hold all other parties harmless
from and against any liability or expense (including reasonable attorneys' fees)
as a result of or arising out of the claim for such brokerage or other
commission.
7.5 FEES AND EXPENSES. Neither Appalachian nor National
shall pay any of the expenses of the other party, including, but not limited to,
legal and accounting expenses incurred in connection with this Agreement or the
transactions contemplated thereby.
7.6 HEADINGS. The headings used in this Agreement have
been included solely for each of reference and shall not be considered in the
interpretation or construction of this Agreement.
7.7 MULTIPLE COUNTERPARTS. This Agreement may executed in
two or more counterparts, each of which shall deemed an original, and it shall
not be necessary in making proof of this Agreement or the terms hereof to
produce or account for more than one of such counterparts.
7.8 SEVERABILITY. If any provision of this Agreement or
its application shall be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of all other applications of that
provision and of all other provisions and applications hereof shall not in any
way be affected or impaired.
7.9 GOVERNING LAW. This Agreement shall be governed and
construed in accordance with the laws of the Commonwealth of Kentucky.
7.10 ANNEXES AND EXHIBITS. All Schedules, Annexes or other
attachments to this Agreement are incorporated into this Agreement as if set out
in full at the first place in this Agreement that reference is made thereto.
7.11 POST CLOSING COOPERATION. From time to time at
National's request (whether at or after the closing, and without further
consideration) Appalachian will execute and deliver such further instruments of
conveyance, assignment and transfer and take such other action as National may
reasonably request in order to more effectively convey and transfer the Assets
and to effect the objects and Intents of the parties in this Agreement.
7.12 National acknowledges the debt of Calvary Coal
Company to Appalachian in the amount of Two Hundred Fifty-Nine Thousand Seven
Hundred Eighty-Four Dollars and 00/100 ($259,784.00), and, upon receipt of the
prior written consent of Xxxxxxx Coal Company to be obtained by Appalachian,
National agrees that Appalachian may receive payment of the debt with recoupment
from Calvary production royalties at the rate of One Dollar ($1.00) per ton for
each ton of coal mined by Calvary from the property.
Executed this 25th day of November, 2004.
APPALACHIAN FUELS, LLC
By: /s/ Xxxx X. Xxxxx, Xx.
-------------------------------
Xxxx X. Xxxxx, Xx.
President
NATIONAL COAL CORPORATION
By: /s/ Xxxxxxx X. Xxxx
-------------------------------
Xxxxxxx X. Xxxx
Title: Senior Vice President
EXHIBIT A
National Coal Corporation - Appalachian Fuels, LLC
Asset Purchase Agreement
Permits
STRAIGHT CREEK --PERMITS
----------------------------- ------------------------- ------------------------
PERMIT NO. ACRES BOND AMOUNT
----------------------------- ------------------------- ------------------------
000-0000 000.53 $524,300
----------------------------- ------------------------- ------------------------
866-5047 10.00 $30,700
----------------------------- ------------------------- ------------------------
000-0000 0000.00 $10,000
----------------------------- ------------------------- ------------------------
00-000-00 Misc. $50,000
----------------------------- ------------------------- ------------------------
Pine Mt. Util $86,000
----------------------------- ------------------------- ------------------------
00-0000-00 Misc. $75,000
----------------------------- ------------------------- ------------------------
407-0008 94.60 $94,600
----------------------------- ------------------------- ------------------------
000-0000 000.00 $201,900
----------------------------- ------------------------- ------------------------
407-8003 81.00 $273,300
----------------------------- ------------------------- ------------------------
000-0000 000.45 $827,600
----------------------------- ------------------------- ------------------------
407-8010 29.00 $81,100
----------------------------- ------------------------- ------------------------
666-0250 58.00 $58,000
----------------------------- ------------------------- ------------------------
000-0000 000.35 $388,900
----------------------------- ------------------------- ------------------------
507-5014 25.00 $112,100
----------------------------- ------------------------- ------------------------
807-0097(1) 286.00 $400,000
----------------------------- ------------------------- ------------------------
807-0097(2) 316.00 $1,219,700
----------------------------- ------------------------- ------------------------
807-0097(3) 181.00 $171,200
----------------------------- ------------------------- ------------------------
807-0097(4) 220.00 $289,600
----------------------------- ------------------------- ------------------------
807-0097(5) 173.00 $131,500
----------------------------- ------------------------- ------------------------
000-0000 000.00 $207,800
----------------------------- ------------------------- ------------------------
000-0000 000.00 $376,000
----------------------------- ------------------------- ------------------------
000-0000 000.60 $187,400
----------------------------- ------------------------- ------------------------
000-0000 000.40 $160,328
----------------------------- ------------------------- ------------------------
000-0000 000.00 $159,100
----------------------------- ------------------------- ------------------------
$6,116,128
EXHIBIT B
NATIONAL COAL CORPORATION - APPALACHIAN FUELS, LLC
ASSET PURCHASE AGREEMENT
1. All mineral ownership in Xxxx, Xxxxxx and Xxxxxx Counties, Kentucky.
These properties are known as the Straight Creek and Pine Mountain
Projects, which were from Horizon Natural Resources.
2. The M.B. Britain Preparation Plant located in Xxxx County.
3. The Xxxxx Railroad Loading Facility located on the CSX Railroad in Xxxx
County.
4. The Pine Mountain Preparation Plant located in Xxxxxx County.
5. The office and maintenance complex located near the Xxxxx Loadout in
Xxxx County.
6. Miscellaneous coal leases and mining related agreements located in
Xxxx, Xxxxxx and Xxxxxx Counties.
7. Miscellaneous office equipment.
EXHIBIT C
NATIONAL COAL CORPORATION - APPALACHIAN FUELS, LLC
EQUIPMENT
1. Caterpillar (1990) D9N Tractor - 1JD02299
2. Caterpillar (1984) D9L Tractor - 14Y02394
3. Caterpillar (1981) D9L Tractor - 14Y01104
4. Caterpillar (1992) D8N Tractor - 9TC06475
5. Caterpillar (1993) 777C End Dump - 4XJ00253
6. Caterpillar (1980) 777 End Dump - 84A00738
7. Caterpillar (1979) 14G Motor Grader - 96U03470
8. Caterpillar (1981) 988B Loader - 50W05674
EXHIBIT D
NATIONAL COAL CORPORATION - APPALACHIAN FUELS, LLC
LEASE
APPALACHIAN FUELS, LLC
RECORDING AND ASSIGNMENT INFORMATOIN
REAL PROPERTY ACQUIRD FROM STRAIGHT CREEK COAL RESOURCES COMPANY AND APPALACHIAN REALTY COMPANY
IN ASSIGNMENT OF REAL PROPERTY AGREEMENTS DATED 1/26/04
LEGACY ACREAGE RECORDING INFO
CONTRACT NO. TYPE AREA LESSOR SURFACE MINERAL BOOK/PAGE DATE
-------------------- -------------- ---------------- ------------------------------ ----------- ---------- ------------ ------------
300043 SUBLEASE STRAIGHT CREEK XXXXX-XXXXX CO., INC. (SMEPA) 475 475
500026 FEE DEED STRAIGHT CREEK AMCA COAL LEASING, INC. 233.24 233.24 308/121 12/22/1993
300063 OVERRIDING LAND MANAGEMENT RAG AMERICAN COAL 0 0
AGREEMENT
AR1-101060 FEE LEASE PETER'S KNOB XXXXX XXXXXXXX HEIRS 20 20 42/128 11/27/2001
AR1-101052 COAL LEASE PINE MOUNTAIN HEIRS OF XXXXX X. XXXXXX 229 229 2/284 7/22/1999
(SUBLEASED TO INFINITY)
AR1-101063 COAL LEASE PINE MOUNTAIN HEIRS OF XXXXXX X. XXXXXX 165 165
(DECEASED)
AR1-101054D FEE DEED XXXXXXXX XXXXX XXXXXX, XXXXXX XX 000 000 337/727 9/21/1998
AR1-101673 FEE LEASE PETER'S KNOB XXXXXX X. X. HEIRS 30 30 40/590 2/17/2000
AR1-101076 COAL LEASE PINE MOUNTAIN XXXXXXX, XXXXX HEIRS 50 50 39/567 7/14/1999
(SUBLEASED TO INFINITY)
AR1-101077 FEE LEASE PINE MOUNTAIN COLTHROW, XXXXX ET AL. 3.4 3.4 39/563 6/16/1999
AR1-101078 FEE LEASE PETER'S KNOB XXXXXX XXXXXX HEIRS 204 204 57/486 5/8/2000
AR1-101051 FEE LEASE PETER'S KNOB XXXXXX XXXXXX HEIRS 123.5 123.5
AR1-101052 COAL LEASE PETER'S KNOB BLC PROPERTIES LLC (WPP, LLC) 0 279 42/211 12/28/2001
CCC-001-0082-0000 COAL LEASE PINE MOUNTAIN MERKIE XXX XXXXXXXX 0 0 58/411 6/29/2000
CCC-003-0378-0000 MSC AGREEMENT PINE MOUNTAIN BLC PROPERTIES LLC (WPP, LLC) 0 0
CCC-003-0050-0000 PROCESSING PINE MOUNTAIN XXXXXXX, XXXX ET AL 426 0 107/332 9/17/1938
AGREEMENT
CCC-003-0051-0000 WHEELAGE PINE MOUNTAIN XXXXXX, XXXXX ET AL 4 0
AGREEMENT
CCC-003-0052-0000 FEE DEED PINE MOUNTAIN X. X. XXXXX COPR. 200 200 107/235 8/14/1936
CCC-003-0053-0000 OPTION LEASE STRAIGHT CREE XXXXXXX, XXXXXX 235 38/744 1013/1998
(XXXXXXXX/XXXXX)
CCC-003-0055-0000 FEE DEED PINE MOUNTAIN PEABODY COAL COMPANY 4555.11 5623.21 222/583 3/20/1976
(XXXXXX CO)
CCC-003-0055-0000 FEE DEED PINE MOUNTAIN PEABODY COAL COMPANY 223.8 223.8 222/583 5/20/1976
(XXXXXX CO)
CCC-003-0059-0000 FEE DEED PINE MOUNTAIN PEABODY COAL COMPANY 1653.38 1778.08 63/304 5/20/1976
(XXXXXX CO)
CCC-003-0113-0000 COAL LEASE PINE MOUNTAIN XXXXXX, XXXXX ET UX 0 35
CCC-003-0118-0000 COAL LEASE PINE MOUNTAIN KENTUCY RIVER COAL CORP. 0 873.8 39/288 3/4/1999
CCC-003-0119-0000 COAL LEASE PINE MOUNTAIN XXXXXX BRANCH - TVA Tr No. 0 1653 35/442; 1/29/1998
XEKCR-39L 52/467
CCC-003-0122-0000 COAL LEASE PINE MOUNTAIN XXXXX, XXXXX CLAIRE 0 76 42/70 9/13/2001
CCC-005-0090-0000 MISC LEASE STRAIGHT CREEK NAMI RESOURCES CO., LLC 0 0 62/87 6/24/2002
XXXXXX PROPERITES, LLC/XXXXX
CCC-005-0091-0000 FEE LEASE STRAIGHT CREEK X. XXX COAL & LAUREL MINING 8700 8662.54 23/757-A 6/32/1975
CO.
CCC-005-0103-0000 SUBLEASE STRAIGHT CREEK GEORGIA POWER CO. 12000 12000 38/768 11/24/1998
CCC-005-0107-0000 FEE DEED STRAIGHT CREEK XXXXXXXX, XXXXXX 50 50 240.65 9/7/1979
CCC-005-0108-0000 FEE DEED STRAIGHT CREEK XXXXXX PROPERTIES, LLC/XXXXX 87 87 214/634 6/31/1975
XXX COAL & LAUREL MINING CO.
XXXXXX PROPERTIES, LLC/XXX,
CCC-005-0125-0000 FEE LEASE STRAIGHT CREEK XXXXX X. ET UX. (GREEN) 600 600 57/632 5/24/2000
(__ tracts)
CCC-005-0131-RW01 EASEMENT/ STRAIGHT CREEK PENNVA RESOURCES 0 0
RIGHT OF WAY
CCC-005-0132-0000 FEE DEED PINE MOUNTAIN XXXXXX, XXXXX & HARLEY 54.95 54.95 243.666 6/27/1980
CCC-005-0135-0000 COAL LEASE STRAIGHT CREEK TENNESSEE VALLEY AUTHORITY 0 784 40/732 5/15/1995
CCC-005-0145-0000 COAL LEASE STRAIGHT CREEK XXXXX X. XXXXXX ET AL 0 362.15 39/300 4/14/1999
CCC-005-0147-0000 COAL LEASE STRAIGHT CREEK XXXXX-XXXXXX HEIRS 0 100
CCC-005-0146-0000 FEE LEASE STRAIGHT CREEK CHARLIE SHORT HEIRS 120 120 61/59 10/25/2001
CCC-005-0147-0000 EASEMENT/ STRAIGHT CREEK CSX TRANSPORTATION 0 0 7/21 4/15/1976
RIGHT OF WAY
CCC-005-0148-0000 EASEMENT/ STRAIGHT CREEK CSX TRANSPORTATION 0 0
RIGHT OF WAY
CCC-005-0149-0000 EASEMENT/ STRAIGHT CREEK CSX TRANSPORTATION 0 0 15/58 11/16/1980
RIGHT OF WAY
CCC-005-0150-0000 EASEMENT/ STRAIGHT CREEK CSX TRANSPORTATION 0 0
RIGHT OF WAY
CCC-005-0151-0000 EASEMENT/ STRAIGHT CREEK CSX TRANSPORTATION 0 0
RIGHT OF WAY
CCC-005-0152-0000 EASEMENT/ STRAIGHT CREEK CSX TRANSPORTATION 0 0
RIGHT OF WAY
LA-131-012 COAL LEASE STRAIGHT CREEK XXXXXX XXXXXXXX (ESTATE) 11 11 34/664 5/18/1954
LEGACY CONSENT
CONTRACT NO. COUNTY REQUIRED
-------------------- ----------- ---------
300043 Xxxx Y
(various)
500026
300063 Xxxxxx/Xxxxx Y
AR1-101060 Harlan
AR1-101052 Harlan Y
AR1-101063 Harlan Y
AR1-101054D Harlan
AR1-101673 Harlan
AR1-101076 Harlan Y
AR1-101077 Xxxxxx Y
AR1-101078 Xxxxxx Y
AR1-101051 Xxxxxx
AR1-101052 Xxxxxx
CCC-001-0082-0000 Xxxxxx Y
CCC-003-0378-0000 Xxxxxx Y
CCC-003-0050-0000 Xxxxxx Y
CCC-003-0051-0000 Xxxxxx
CCC-003-0052-0000 Xxxxxx
CCC-003-0053-0000 Xxxxxx
CCC-003-0055-0000 Xxxxxx
CCC-003-0055-0000 Xxxxxx
CCC-003-0059-0000 Xxxxxx
CCC-003-0113-0000 Xxxxxx
CCC-003-0118-0000 Xxxxxx Y
CCC-003-0119-0000 Xxxxxx/Xxxxxx Y
CCC-003-0122-0000 Xxxxxx Y
CCC-005-0090-0000 Xxxx
CCC-005-0091-0000 Be;;
CCC-005-0103-0000 Harlan
CCC-005-0107-0000 Xxxxxx
CCC-005-0108-0000 Xxxx
CCC-005-0125-0000 Xxxxxx
CCC-005-0131-RW01 Xxxx
CCC-005-0132-0000 Xxxx
CCC-005-0135-0000 Xxxx
CCC-005-0145-0000 Harlan
CCC-005-0147-0000 Xxxxxx
CCC-005-0146-0000 Xxxxxx Y
CCC-005-0147-0000 Xxxx Y
CCC-005-0148-0000 Xxxx Y
CCC-005-0149-0000 Xxxxxx Y
CCC-005-0150-0000 Xxxx Y
CCC-005-0151-0000 Xxxx Y
CCC-005-0152-0000 Xxxx Y
LA-131-012 Xxxxxx Y
