Exhibit 2.13
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
XXXXX ENTERPRISES, INC.
AND
AMFIRE MINING COMPANY, LLC
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS.................................................................................................. 4
ARTICLE II - PURCHASE AND SALE OF ASSETS................................................................................. 16
2.1. Assets to be Acquired.................................................................................. 16
2.2 Excluded Assets........................................................................................ 17
2.3 Assumed Liabilities.................................................................................... 18
2.4 Retained Liabilities................................................................................... 18
2.5 Consideration.......................................................................................... 18
2.7 Parts, Fuel and Supplies Inventory Adjustment.......................................................... 19
2.6 Coal Inventory Adjustment.............................................................................. 19
2.8 Bills of Sale, Assignment and Assumption Agreements, Conveyance Deeds
and Other Documents.................................................................................... 20
2.9 Assumption of Liabilities.............................................................................. 20
2.10 Proration of Liabilities............................................................................... 20
2.11 Additional Documents................................................................................... 20
2.12 Allocation of Purchase Price........................................................................... 21
2.13 Closing................................................................................................ 21
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF SELLER REGARDING THE TRANSACTION......................................... 21
3.1 Organization of the Seller............................................................................. 22
3.2 Authorization of Transaction........................................................................... 22
3.3 Noncontravention....................................................................................... 22
3.4 Brokers' Fees.......................................................................................... 23
3.5 Buyer's Breach of Representation or Warranty........................................................... 23
3.6 Disclosure............................................................................................. 23
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF THE BUYER REGARDING THE TRANSACTION....................................... 23
4.1 Organization........................................................................................... 23
4.2 Authorization of Transaction........................................................................... 23
4.3 Noncontravention....................................................................................... 24
4.4 Brokers' Fees.......................................................................................... 24
4.5 Disclosure............................................................................................. 24
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF SELLER REGARDING THE ASSETS................................................ 24
5.1 Absence of Changes..................................................................................... 25
5.2 Financial Statements................................................................................... 26
5.3 Real Property.......................................................................................... 26
5.4 Sufficiency of the Assets; Title of the Assets......................................................... 27
5.5 Intellectual Property.................................................................................. 28
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5.6 Permits and Environmental Compliance................................................................... 28
5.7 Reclamation Bonds...................................................................................... 30
5.8 Contracts.............................................................................................. 31
5.9 Litigation............................................................................................. 31
5.10. Employee Benefits...................................................................................... 32
5.11 Taxes.................................................................................................. 34
5.12 Employment Matters..................................................................................... 35
5.13 Health and Safety Requirements......................................................................... 35
5.14 Restrictions on Business Activities.................................................................... 35
5.15 Powers of Attorney..................................................................................... 35
5.16 Absence of Certain Payments............................................................................ 35
5.17 Insurance.............................................................................................. 36
5.18 Undisclosed Liabilities................................................................................ 36
5.19 Parts, Fuel and Supplies Inventory..................................................................... 36
ARTICLE VI - COVENANTS OF THE PARTIES.................................................................................... 36
6.1 Operation in Ordinary Course........................................................................... 36
6.2 Compliance with Law.................................................................................... 37
6.3 Cooperation............................................................................................ 37
6.4 Notices and Consents................................................................................... 37
6.5 Publicity.............................................................................................. 37
6.6 Permits; Replacement Bonds; Insurance and Guarantees; Other Filings.................................... 38
6.7 Exclusivity............................................................................................ 39
6.8 Access................................................................................................. 39
6.9 Notice of Developments................................................................................. 40
6.10 Further Assurances..................................................................................... 40
6.11 Cooperation on Financial Information................................................................... 40
6.12 Payment of Liabilities................................................................................. 41
6.13 Post-Closing Matters................................................................................... 41
ARTICLE VII - CONDITIONS PRECEDENT....................................................................................... 42
7.1 Conditions Precedent to Each Party's Obligations....................................................... 42
7.2 Conditions Precedent to Obligations of the Buyer....................................................... 42
7.3 Conditions Precedent to Obligations of the Seller...................................................... 44
ARTICLE VIII - REMEDIES FOR BREACHES OF AGREEMENT........................................................................ 45
8.1 Survival of Representations, Warranties and Certain Covenants.......................................... 45
8.2 Indemnification Provisions for Benefit of the Buyer.................................................... 45
8.3 Indemnification Provisions for Benefit of the Seller................................................... 46
8.4 Matters Involving Third Parties........................................................................ 47
8.5 Tax Treatment of Indemnity Payments.................................................................... 48
8.6 Subrogation and Insurance Proceeds..................................................................... 48
8.7 Escrow Claims Not Exclusive............................................................................ 48
8.8 Determination of Amount of Adverse Consequences........................................................ 48
ARTICLE IX - CERTAIN TAX MATTERS......................................................................................... 49
9.1 Property Taxes......................................................................................... 49
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9.2 Transfer Taxes......................................................................................... 49
9.3 Access for Tax Returns................................................................................. 49
ARTICLE X - COVENANTS REGARDING EMPLOYEES................................................................................ 50
10.1 Employees.............................................................................................. 50
ARTICLE XI - TERMINATION................................................................................................. 50
11.1. Termination............................................................................................ 50
11.2 Effect of Termination.................................................................................. 51
ARTICLE XII - MISCELLANEOUS.............................................................................................. 51
12.1 Entire Agreement....................................................................................... 51
12.2 Amendment.............................................................................................. 52
12.3 Extension; Waiver...................................................................................... 52
12.4 Expenses............................................................................................... 52
12.5 Bulk Sales Waiver...................................................................................... 52
12.6 Governing Law.......................................................................................... 52
12.7 Assignment............................................................................................. 52
12.8 Notices................................................................................................ 52
12.9 Counterparts; Headings................................................................................. 54
12.10 Interpretation; Construction........................................................................... 54
12.11 Severability........................................................................................... 54
12.12 No Reliance or Third Party Beneficiaries............................................................... 54
12.13 Arbitration............................................................................................ 54
12.15 Right to Specific Performance.......................................................................... 55
12.16 Further Actions........................................................................................ 55
12.17 Time................................................................................................... 55
12.18 Certain Damages........................................................................................ 55
12.19 Seller Representative.................................................................................. 55
EXHIBIT A BUYER CLOSING CERTIFICATE
EXHIBIT B EMPLOYMENT AGREEMENT
EXHIBIT C ESCROW AGREEMENT
EXHIBIT D SELLER CLOSING CERTIFICATE
EXHIBIT E NON-COMPETITION AGREEMENT
EXHIBIT F OPINION OF COUNSEL OF THE SELLER
EXHIBIT G OPINION OF COUNSEL OF THE BUYER
DISCLOSURE SCHEDULE
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is dated October 29,
2003, by and between Xxxxx Enterprises, Inc., a Pennsylvania corporation
("Seller"); and AMFIRE Mining Company, LLC, a Delaware limited liability company
(the "Buyer").
NOW THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements herein contained, the
parties hereto, intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the following terms and variations thereof
have the meanings specified or referred to in this ARTICLE I.
"Adverse Consequences" means, without duplication, all actions,
suits, proceedings, hearings, investigations, charges, complaints, claims,
demands, injunctions, judgments, orders, decrees, rulings, damages, dues,
penalties, fines, costs, amounts paid in settlement, Liabilities, obligations,
Taxes, liens, losses, expenses, and fees, including court costs and reasonable
attorneys' fees and expenses.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such Person. For purposes of this definition, the term "controls," "is
controlled by," or "is under common control with" means the power to direct or
cause the direction of the management and policies of a Person or entity,
whether through the ownership of voting securities, by contract or otherwise.
"Assets" has the meaning set forth in SECTION 2.1.
"Assumed Liabilities" has the meaning set forth in SECTION 2.3.
"Audited Closing Date Financial Statements" has the meaning set
forth in SECTION 6.11(a).
"Basis" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or would be reasonably likely
to form the foundation for any specified consequence.
"Books and Records" means the original or true and complete copies
of all of the books and records of the Seller, including, but not limited to,
customer lists, employee records
for those Employees hired by the Buyer 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, production
reports, any records required by any Laws, including, without limitation, any
mining Laws, advertising and marketing materials, equipment logs, engineering
data, equipment maintenance records and all other general correspondence,
records, books and files owned by the Seller, but excluding any and all Tax
Returns, books and records relating to the Retained Liabilities and corporate
records of the Seller.
"Business" means the mining, processing and sale of coal and coal
related products produced by Seller using the Assets in the Commonwealth of
Pennsylvania.
"Business Day" means any day other than a Saturday, a Sunday or a
United States federal or Pennsylvania banking holiday.
"Buyer Closing Certificate" means the certificate of the Buyer
substantially in the form of EXHIBIT A attached to this Agreement.
"Buyer Indemnitees" means, collectively, the Buyer and its
Affiliates, and the officers, directors, employees and agents of the Buyer and
its Affiliates.
"CERCLA" has the meaning set forth in the definition of
"Environmental Laws."
"CERCLIS" has the meaning set forth in SECTION 5.6(g).
"Claim Notice" has the meaning set forth in SECTION 8.4.
"Closing" means the closing of the transactions contemplated by this
Agreement.
"Closing Date" means the date of the Closing.
"Coal Inventory" means the stockpiles of clean and raw coal owned by
the Seller and located on the tipple and preparation plant portion of the Real
Property.
"Coal Inventory Adjustment" has the meaning set forth in SECTION
2.7(a).
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of
1986, as amended.
"Code" means the Internal Revenue Code of 1986, and the rules and
regulations promulgated thereunder, as amended, and any reference to a section
of the Code shall include any successor section or provision of the Code.
"Contaminated" or "Contamination" means 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 customary use
of the Real Property owned by the Seller or included in the Assets; or (v)
create any Liability to fund the clean up of the Real Property.
"Contracts" shall mean all of the contracts or agreements, written
and oral, of the Seller relating to the Assets or the Business.
"Decree" means any injunction, judgment, order, decree or ruling of
any applicable Governmental Authority.
"Disclosure Schedule" means the disclosure schedules delivered by
the Seller to the Buyer and by the Buyer to the Seller, as the case may be,
concurrently with the execution and delivery of this Agreement. The information
contained in the Disclosure Schedule constitutes (i) exceptions to particular
representations, warranties, covenants and obligations of the Seller as set
forth in this Agreement, or (ii) descriptions or lists of assets and liabilities
and other items referred to in this Agreement. The Disclosure Schedule shall be
arranged in paragraphs corresponding to the lettered and numbered Sections
contained in this Agreement and statements in the Disclosure Schedule, and those
in any supplement thereto, relate only to the provisions on the Section of this
Agreement to which they expressly relate and not to any other provision in this
Agreement.
"Dispute" has the meaning set forth in SECTION 12.13.
"DLR" means together DLR Coal Co., a Pennsylvania general
partnership, and DLR Mining Inc., a Pennsylvania corporation.
"DLR Purchase Agreement" means that certain asset purchase agreement
between DLR and Buyer of even date herewith pursuant to which Buyer will acquire
certain assets of DLR.
"Employee" means any Person (i) employed by and rendering personal
services for the Seller, (ii) receiving short-term or long-term disability
benefits from the Seller under an Employee Benefit Plan, (iii) on vacation or an
approved leave of absence, or (iv) off work and receiving or eligible to receive
benefits under a Workers' Compensation Act. The term "current and former
Employees" means any Persons who fall within the term Employee at any time prior
to the Closing.
"Employee Benefit Plans" shall have the meaning set forth in SECTION
5.10(a).
"Employment Agreement" means that certain employment agreement by
and between the Buyer and Xxxxx Xxxxx, the form of which is attached to this
Agreement as EXHIBIT B.
"Encumbrances" means any charge, claim, community or other marital
property interest, right of way, easement, encroachment, servitude, right of
first option, right of first refusal, restriction on use, mortgage, pledge,
lien, encumbrance, receipt of income, charge, restriction on transfer, other
security or equity interest, or defect in title.
"Environment" means surface or ground water, water supply, soil or
the ambient air.
"Environmental Laws" means collectively, all Laws that relate to (a)
the prevention, abatement or elimination of pollution, or the protection of the
Environment, or of natural resources, including, without limitation, (i) Laws
applicable to Mining Activities or related activities; and (ii) all Reclamation
Laws, (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 Comprehensive
Environmental Response Compensation and Liability Act, 42 U.S.C. Sections 9601
et. Seq. ("CERCLA") or Section 103 of the Pennsylvania Hazardous Sites Cleanup
Act, Pa. Stat. Xxx. tit. 35 ` 6020.103, 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. and the Emergency Planning and Community
Right to Know Act, 42 U.S.C. Sections 11001 et. seq or Section 103 of the
Pennsylvania Solid Waste Management Act, Pa. Stat. Xxx. tit. 35 ` 6018.103; or
regulated under the Pennsylvania Clean Streams Law, Pa. Stat. Xxx. tit. 35 `
691.1 - 691.1001.
"Environmental Matter" means any assertion of a violation, claim,
Decree 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 the Business or any
predecessor or the ownership, use or operation at or on any Real Property,
Assets or other assets owned, operated or leased by the Seller 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, Assets or
assets currently or formerly owned, operated or leased by the Seller or any
activities on or operations thereof.
"Environmental or Response Action" means 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 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 the Seller
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; or (v) for the purpose of environmental protection of
any Real Property currently or formerly owned, operated or leased by the Seller.
"EPA" has the meaning set forth in SECTION 5.6(d).
"Equipment" means the material tangible machinery, vehicles,
equipment, office equipment, computer hardware, supplies, materials, furniture,
fixtures, furnishings, trailers, tools, parts and other personal property of
every kind owned or leased by the Seller (wherever located and whether or not
carried on the Seller's books), together with any express or implied warranty by
the manufacturers or Seller or lessors of any item or component part thereof and
all maintenance records and other documents relating thereto.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate" means 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, any of the
Seller, within the meaning of Sections 414(b), (c), (m) or (o) of the Code.
"Escrow Agent" shall mean a national banking association acceptable
to the Seller and the Buyer selected as escrow agent pursuant to the Escrow
Agreement.
"Escrow Agreement" shall mean the Escrow Agreement among the Seller,
S&M, DLR, the Buyer and the Escrow Agent, which shall be substantially in the
form of EXHIBIT C.
"Escrowed Amount" has the meaning set forth in SECTION 2.5(b).
"Excluded Assets" has the meaning set forth in SECTION 2.2.
"Final Allocation Schedule" has the meaning set forth in SECTION
2.12.
"Financial Statements" has the meaning set forth in SECTION 5.2.
"GAAP" means United States generally accepted accounting principles
as in effect from time to time, consistently applied.
"Governmental Authority" means any agency, authority, board, bureau,
commission, court, tribunal, department, office or instrumentality of any nature
whatsoever or
any governmental unit, whether federal, state, county, district, city, other
political subdivision, or taxing district, foreign or otherwise, and whether now
or hereafter in existence, or any officer or official thereof acting in an
official capacity.
"Hazardous Substances" means 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 mine drainage, 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, condensate, or derivatives or byproducts thereof or oil and petroleum
products or by products and constituents thereof.
"Health and Safety Requirements" means 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.
"HIPAA" means the Health Insurance Portability and Accountability
Act of 1996, as amended, and all rules and regulations thereunder.
"Indemnifying Party" has the meaning set forth in SECTION 8.4.
"Independent Surveyor" has the meaning set forth in SECTION 2.8(b).
"Initial Filing" has the meaning set forth in SECTION 6.6(b).
"Insurance Policies" means those policies of insurance, including
any arrangements for self-insurance, that the Seller or any of its Affiliates
maintained with respect to the Business and the Assets for periods on or prior
to Closing.
"Intellectual Property" means all of the Seller's names, assumed
fictitious business names, tradenames, registered and unregistered trademarks,
service marks, patents and copyrights (including any registrations,
applications, licenses or rights relating to any of the foregoing) technology,
logos, trade secrets, confidential information related to the Contributed
Interests, 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 Seller.
"Knowledge" shall mean the following:
An individual will be deemed to have "Knowledge" of a
particular fact or other matter if: (a) that individual is actually
aware of that fact or matter; or (b) a
prudent individual could be expected to discovery or otherwise
become aware of that fact or matter in the course of conducting a
reasonably comprehensive investigation regarding the accuracy of any
representation or warranty contained in this Agreement.
A Person (other than an individual) will be deemed to have
"Knowledge" of a particular fact or other matter if any individual
who is serving, or who has at any time served, as a director,
officer, partner, executor or trustee of that Person (or in any
similar capacity) has, or at any time had, Knowledge of that fact or
other matter (as set forth in (a) and (b) above), and any such
individual will be deemed to have conducted a reasonably
comprehensive investigation regarding the accuracy of the
representations and warranties made herein by that Person or
individual.
"Law" means any statute, code, ordinance or regulation of any
applicable Governmental Authority.
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including, without limitation, any liability for Taxes.
"Material Adverse Effect" means any event, change or occurrence that
individually, or together with any other event, change or occurrence, has a
material adverse impact on the Business, Assets, financial condition or results
of operations, taken as a whole, without regard to the duration of such material
adverse impact.
"MD&A Disclosure" means any "Management's Discussion and Analysis of
Financial Condition and Results of Operations" disclosure (required by Item 303
of Regulation S-K promulgated by the SEC (or any successor rule or regulation of
the SEC)) to be prepared for the fiscal years covered by the audited Financial
Statements and the period covered by the Audited Closing Date Financial
Statements.
"Xxxxx Enterprises" means Xxxxx Enterprises, Inc., a Pennsylvania
corporation.
"Mining Activities" means those activities of the Seller related to
the Assets that involve surface mining, underground mining and auger mining,
processing, sale or transporting of coal and coal by-products. For the purpose
of this definition, "Mining Activities" shall include, without limitation, any
activities defined under the Surface Mining Control and Reclamation Act of 1977,
as amended, as "surface coal mining operations" and any activities defined under
Pennsylvania Surface Mining Conservation and Reclamation Act, as amended, as
"surface coal mining operations".
"Most Recent Financial Statements" has the meaning set forth in
SECTION 5.2.
"Most Recent Fiscal Month End" has the meaning set forth in SECTION
5.2.
"Most Recent Fiscal Year End" has the meaning set forth in SECTION
5.2.
"MSHA" has the meaning set forth in SECTION 5.6(d).
"Multiemployer Plan" has the meaning set forth in SECTION 5.10(a).
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Organizational Documents" means the articles of incorporation,
certificate of incorporation, charter, bylaws, articles or certificate of
formation, regulations, operating agreement, partnership agreement, and all
other similar documents, instruments or certificates executed, adopted, or filed
in connection with the creation, formation, or organization of a Person,
including any amendments thereto.
"PADEP" has the meaning set forth in SECTION 5.6(d).
"Parts, Fuel and Supplies Inventory" means all inventories of Seller
(except Coal Inventory), wherever located, including all parts, fuel, supplies
and materials to be used or consumed by the Seller.
"Pension Plans" has the meaning set forth in SECTION 5.10(a).
"Permits" means the written permits, consents, licenses, orders,
certificates, registrations, approvals and similar rights issued by a
Governmental Authority and held by the Seller.
"Permitted Encumbrances" means any of the following with regard to
the Real Property: (a) building and use restrictions and provisions of record
affecting the Real Property; (b) applicable laws, statutes, ordinances,
regulations, and waterway restrictions; (c) vehicular or pedestrian easements of
record; and (d) water, sewer, gas, electric, cable television and telephone
lines or easements therefor of record.
"Person" means any individual, general partnership, limited
partnership, limited liability company, corporation, joint venture, trust,
business trust, Governmental Authority, cooperative, association or any foreign
trust or foreign business organization or any other entity of any kind
whatsoever, as well as the heirs, executors, administrators, legal
representatives, successors and assigns of such "person" where the context so
requires.
"Post-Closing Period" means any taxable period beginning after the
Closing Date.
"Pre-Closing Period" means any taxable period ending on or before
the Closing Date.
"Purchase Price" has the meaning set forth in SECTION 2.5.
"Qualified Plan" has the meaning set forth in SECTION 5.10(a).
"RCRA" has the meaning set forth in the definition of "Environmental
Laws."
"Real Property" means the real property rights and interests owned,
leased or subleased by the Seller and any improvements, fixtures, easements,
rights of way, and other appurtenants thereto (such as appurtenant rights in and
to public streets).
"Reclamation Laws" means all Laws, as now or hereafter in effect,
relating to reclamation Mining Activities or reclamation Liabilities including,
without limitation, the Surface Mining Control and Reclamation Act of 1977, as
amended, and the Pennsylvania Surface Mining Conservation and Reclamation Act,
as amended.
"Release" shall mean any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, dumping or disposing into
the Environment of Hazardous Substances.
"Retained Debt" means all obligations for borrowed money or
indebtedness owed by any Seller to any Person.
"Retained Liabilities" means all of the Liabilities of the Seller,
other than the Assumed Liabilities, including without limitation the following:
(i) all Liabilities arising under applicable Workers'
Compensation Acts for or based upon the employment (a) the current and former
Employees who are not hired by the Buyer or one of the Buyer's Affiliates to
work at the Assets, and (b) the current and former Employees who are hired by
the Buyer or one of the Buyer's Affiliates to work at the Assets, but only with
respect to claims where the date of injury or the last injurious increment of
exposure needed to give rise to the claim occurred before such Employees began
working for the Buyer or one of the Buyer's Affiliates;
(ii) all Liabilities arising under the federal black lung Laws
for or based upon the employment (a) the current and former Employees who are
not hired by the Buyer or one of the Buyer's Affiliates to work at the Assets,
and (b) the current and former Employees who are hired by the Buyer or one of
the Buyer's Affiliates to work at the Assets, but only with respect to claims
where the date of injury or the last injurious increment of exposure
needed to give rise to the claim occurred before such Employees began working
for Buyer or one of Buyer's Affiliates;
(iii) all Liabilities arising under COBRA, HIPAA and other
similar 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 an Employee Benefit Plan;
(iv) all Liabilities arising under or based upon the Employee
Benefit Plans, including all Liabilities arising from or related to the funding
of or contributions to, the termination of, withdrawal from, and benefits due
under any such Employee Benefit Plans;
(v) all Liabilities for non-pension retiree benefits under the
Employee Benefit Plans or otherwise, including, but not limited to, retiree
medical benefits;
(vi) all Liabilities of an ERISA Affiliate for the termination of
a pension plan or withdrawal from a multiemployer plan (as those terms are
defined in Sections 3(2) and (37) of ERISA);
(vii) all Liabilities for salaries, wages, bonuses, overtime
payments, vacation days, personal days and similar forms of leave or
compensation for or based upon the employment of (a) the current and former
Employees who are not hired by the Buyer or one of the Buyer's Affiliates to
work at the Assets, and (b) the current and former Employees who are hired by
the Buyer or one of the Buyer's Affiliates to work at the Assets, but only to
the extent they are accrued, due, or earned before such Employees began working
for Buyer or one of its Affiliates;
(viii) all Liabilities for accounts payable and related notes,
trade payables and earned royalties incurred by the Seller;
(ix) all Liabilities for claims of any current or former
Employees pursuant to the WARN Act arising out of acts or omissions of the
Seller prior to and including the Closing Date;
(x) all Liabilities arising out of compliance with Laws relating
to equal employment opportunity, employment, leaves of absence, or labor
relations for or based upon the rejection, employment, or termination, or any
other action taken or not taken with respect to (a) applicants for employment,
(b) the current and former Employees who are not hired by the Buyer or one of
the Buyer's Affiliates to work at the Assets, and (c) the current and former
Employees who are hired by the Buyer or one of the Buyer's Affiliates to work at
the Assets, but only with respect to periods before such Employees began working
for Buyer or one of its Affiliates;
(xi) all Liabilities relating to assets held in trust under any
Qualified Plan sponsored or maintained by, on behalf of or for the benefit of
the Seller or their current or former Employees or in which the Seller
participated before the Closing;
(xii) all Liabilities relating to any promissory notes, notes,
payables, debt, or other indebtedness by and between or among any of the Seller;
(xiii) all Liabilities arising out of or in connection with
compliance prior to the Closing with Health and Safety Requirements pertaining
to the Assets;
(xiv) all Liabilities for the claims, legal actions, suits,
litigation, arbitrations, grievances, disputes or investigations involving the
Seller;
(xv) all Liabilities of any Seller 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;
(xvi) all Liabilities of any of the Seller for the unpaid Taxes
of any Person 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;
(xvii) all Liabilities for any Environmental Matter or
Environmental or Response Action to the extent such Liability relates to or
arises from (a) the ownership of the Real Property or the Assets; or (b) any
activity on or through the use of the Real Property or the Assets; provided,
however, in either case, only to the extent any such Liabilities are
attributable to acts or omissions occurring, or circumstances existing, at, on
or prior to the Closing;
(xviii) all Liabilities for any Environmental Matter or
Environmental or Response Action related to real property or any other asset
owned, operated or leased by the Seller or any of its Affiliates that is not
Real Property or an Asset;
(xix) all Liabilities related to Retained Debt;
(xx) all Liabilities to third parties for personal injury or
damage to property (other than Liabilities for Environmental Matters or
Environmental or Response Actions) attributable to or arising out of the
ownership or operation of the Assets or the Business at or prior to the Closing;
(xxi) all Liabilities related to the Permits attributable to acts
or omissions occurring at, on or prior to the Closing; and
(xxii) all Liabilities relating to or arising from any Excluded
Assets.
"S&M" means together S&M Mining, a Pennsylvania general partnership,
and S&M Mining, Inc., a Pennsylvania corporation.
"S&M Purchase Agreement" means that certain asset purchase agreement
between S&M and Buyer of even date herewith pursuant to which Buyer will acquire
certain assets of S&M.
"SEC" has the meaning set forth in SECTION 6.11(a).
"Seller Closing Certificate" means the certificate of the Seller
substantially in the form of EXHIBIT D attached to this Agreement.
"Seller Indemnitees" means, collectively, the Seller and its
Affiliates, and the officers, directors, employees, agents and representatives
of the Seller and its Affiliates.
"Seller Representative" means Xxxxx Xxxxx.
"Straddle Period" means a Tax period or year commencing before and
ending after the Closing Date.
"Straddle Return" means a Tax Return for a Straddle Period.
"Subsidiary" means with respect to any relevant Person, any
Affiliate that is (directly or indirectly) controlled by such Person.
"Tax" or "Taxes" means 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, or other tax of any kind whatsoever, whether computed on a
separate or consolidated, unitary or combined basis or in any other manner,
including any interest, penalty, or addition thereto, whether disputed or not
and including any obligation to indemnify or otherwise assume or succeed to the
Tax liability of any other Person.
"Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Third Party Claim" has the meaning set forth in SECTION 8.4.
"Welfare Plans" has the meaning set forth in SECTION 5.10(a).
"Workers' Compensation Acts" means 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 Assets to be Acquired. Upon the terms and subject to the conditions
set forth in this Agreement, at the Closing, Seller shall sell, convey, assign,
transfer and deliver to the Buyer, and the Buyer shall purchase and acquire from
the Seller, free and clear of any Encumbrances other than Permitted
Encumbrances, all of the Seller's right, title and interest in and to all of the
Seller's property and assets, real, personal or mixed, tangible and intangible,
of every kind and description, wherever located, including, without limitation,
the following (but only excluding the Excluded Assets):
(a) all Real Property, including all of the Seller's owned Real
Property identified in SECTION 5.3(a)(i) of the Disclosure Schedule and all of
the Seller's leased or subleased Real Property identified in SECTION 5.3(a)(ii)
of the Disclosure Schedule;
(b) all Equipment, including all of the Seller's owned Equipment
identified in SECTION 2.1(b)(i) of the Disclosure Schedule and all of the
Seller's leased Equipment identified in SECTION 2.1(b)(ii) of the Disclosure
Schedule;
(c) all Parts, Fuel and Supplies Inventory, including all items
identified in SECTION 2.1(c) of the Disclosure Schedule;
(d) all Coal Inventory;
(e) all Contracts, including those listed in SECTIONS 2.1(e) and 5.8
of the Disclosure Schedule, and all outstanding offers or solicitations made by
or to the Seller to enter into any Contract;
(f) all Permits and all pending applications therefore or renewals
thereof, in each case to the extent transferable to the Buyer, including those
identified in SECTION 5.6(b) of the Disclosure Schedule;
(g) all Books and Records;
(h) all intangible rights and property of the Seller, including the
Intellectual Property identified in SECTION 2.1(h) of the Disclosure Schedule,
going concern value, goodwill, telephone, telecopy and email addresses, but
excluding rights to the use of the name Xxxxx Enterprises;
(i) all insurance benefits, including rights and proceeds, arising
from or relating to the Assets or the Assumed Liabilities prior to the Closing
Date;
(j) all claims of the Seller against third parties relating to the
Assets or the Business; and
(k) all rights of the Seller relating to deposits and prepaid
expenses, claims for refunds and rights to offset.
All of the property and assets to be transferred to the Buyer hereunder are
herein referred to collectively as the "Assets."
The right of the Buyer to all insurance benefits, as set forth in SECTION
2.1(i) above, under the Insurance Policies with respect to pre-Closing
occurrences shall not be in any way adversely affected by the transactions
contemplated in this Agreement. The Seller shall not modify the Insurance
Policies prior to the Closing Date in a manner that would adversely affect the
protection afforded for pre-Closing occurrences and the Seller shall use its
reasonable commercial efforts so that, on and after the Closing, the Insurance
Policies will continue to protect the Business and Assets with respect to
pre-Closing occurrences to the same extent as the Insurance Policies applied to
the Business and Assets prior to the Closing. If any claims are made or losses
occur prior to the Closing Date that relate solely to the Business and Assets of
the Seller and such claims, or the claims associated with such losses, properly
may be made against the policies retained by the Seller or its Affiliates or
under policies otherwise retained by the Seller or its Affiliates after the
Closing, then, subject to any limitations under the insurance policies
(including without limitation time restrictions on "claims made" policies), the
Seller shall use reasonable commercial efforts so that the Buyer can file,
notice, and otherwise continue to pursue these claims pursuant to the terms of
such policies. The Buyer acknowledges and agrees that, following the Closing,
the Insurance Policies shall be terminated or modified by the Seller or its
Affiliates to the extent necessary to exclude coverage of any occurrences
related to the Business and Assets that occur after the Closing.
Notwithstanding the foregoing, the transfer of the Assets pursuant to this
Agreement shall not include the assumption of any Liability related to the
Assets or the Business unless the Buyer expressly assumes that Liability
pursuant to SECTION 2.3.
2.2 Excluded Assets. Notwithstanding anything to the contrary contained in
SECTION 2.1 or elsewhere in this Agreement, the following assets of the Seller
(collectively, the "Excluded Assets") are not part of the sale and purchase
contemplated hereunder, are excluded from the Assets and shall remain the
property of the Seller after the Closing:
(a) all cash balances;
(b) all accounts receivable of the Seller at the Closing determined
in accordance with GAAP;
(c) all of the Seller's Contracts identified in SECTION 2.2(c) of
the Disclosure Schedule; and
(d) the assets, properties and rights identified in SECTION 2.2(d)
of the Disclosure Schedule.
2.3 Assumed Liabilities. On the Closing Date, Buyer shall assume only the
following Liabilities of the Seller (the "Assumed Liabilities"):
(a) any Liability arising after the Closing Date under any Contract
acquired pursuant to this Agreement (other than any Liability arising out of or
relating to a breach that occurred prior to the Closing Date); and
(b) any Liability of the Seller described in SECTION 2.3 of the
Disclosure Schedule.
2.4 Retained Liabilities. The Retained Liabilities shall remain the sole
responsibility of and shall be retained, paid, performed and discharged solely
by the Seller.
2.5 Consideration. The cash portion of the Purchase Price, prior to making
the Parts, Fuel and Supplies Inventory Adjustment and the Coal Inventory
Adjustment, shall be delivered by the Buyer as follows:
(a) One Million Five Hundred Thousand Dollars ($1,500,000) by wire
transfer to the Seller at the Closing. The cash Purchase Price shall be
deposited into the account designated by the Seller to the Buyer, with such
designation to occur at least two Business Days prior to the Closing Date;
(b) Two Million Dollars ($2,000,000) (the "Escrowed Amount")
deposited into an escrow account with the Escrow Agent and held for the benefit
of the Seller, S&M and DLR pursuant to terms of the Escrow Agreement. The
Escrowed Amount shall be held in escrow until the second anniversary of the
Closing Date, at which time any remaining Escrowed Amount shall be released in
accordance with the provisions of paragraph 5 of the Escrow Agreement (provided
all requirements of paragraph 5 of the Escrow Agreement are satisfied). The
Escrowed Amount shall be applied individually, collectively, jointly and
severally to satisfy the obligations of (a) the Seller under Article VIII of
this Agreement, (b) S&M under Article VIII of the S&M Purchase Agreement, and
(c) DLR under Article VIII of the DLR Purchase Agreement, provided; however,
that the Buyer Indemnities' remedies hereunder shall in no way be limited to the
Escrowed Amount;
(c) One Million Dollars ($1,000,000) by wire transfer when and if
Buyer obtains the approval from the Indiana County Commissioners within the time
period and in the manner referred to in SECTION 6.13;
For purposes of clarification, in no event shall the amounts set forth in
SECTION 2.5(c) be paid to the Seller if the applicable approval is not obtained
within the time period and the manner referred to in SECTION 6.13(a).
2.6 Parts, Fuel and Supplies Inventory Adjustment.
(a) In accordance with the provisions of this SECTION 2.6, the Buyer
shall pay the Seller the amount, if any, by which the value of the Parts, Fuel
and Supplies Inventory is determined to be greater than Three Hundred Forty Two
Thousand One Hundred Seventy Three Dollars ($345,673), and the Seller shall pay
to Buyer the amount, if any, by which the value of the Parts, Fuel and Supplies
Inventory is determined to be less than Three Hundred Forty Two Thousand One
Hundred Seventy Three Dollars ($345,673). In no event will the adjustment to the
Purchase Price be greater or less than Eighty Six Thousand Four Hundred Eighteen
Dollars and Twenty Five Cents ($86,418.25) Such payment shall constitute an
adjustment to the Purchase Price.
(b) The Buyer and the Seller shall cause Xxxxx and Associates, Deep
Creek, Maryland, (the "Inventory Reviewer") to perform a physical count of all
Parts, Fuel and Supplies Inventory of the Seller as of the Closing Date (the
"Closing Date Parts, Fuel and Supplies Inventory") which shall be completed no
later than two (2) Business Days prior to the Closing Date, Such physical count
shall be valued on a cost basis for new items and on a fair market value basis
for all other items, taking into consideration the age, condition and usefulness
of the item. Seller and Buyer shall cooperate with and make available any
information reasonably requested by the Inventory Reviewer in its preparation of
its physical count. All determinations made by the Inventory Reviewer in its
physical count of the Closing Parts, Fuel and Supplies Inventory shall be final,
binding and conclusive on the parties. Seller and Buyer shall each bear fifty
percent of the fees and costs of the Inventory Reviewer and any other third
party incurred in connection with the calculation of the Closing Parts, Fuel and
Supplies Inventory pursuant to this SECTION 2.6(b).
2.7 Coal Inventory Adjustment.
(a) In accordance with the provisions of this SECTION 2.7, if the
value of the Coal Inventory is less than Two Hundred Eighty Thousand Dollars
($280,000), the Seller shall pay the Buyer the difference (such adjustment
referred to as the "Coal Inventory Adjustment"). Such payment shall constitute
an adjustment to the Purchase Price.
(b) No later than two (2) Business Days prior to the Closing Date,
the Seller and the Buyer shall cause ___________________ (the "Independent
Surveyor") to prepare and
deliver to each of them a survey of all Coal Inventory of the Seller 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
SECTION 2.7(b) of the Disclosure Schedule and shall include the density of the
various stockpiles that constitute the Coal Inventory. Such Coal Inventory shall
be valued at the lower of cost or market. The Seller and the Buyer shall
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. The Seller and
the 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 2.7(b).
(c) Seller will be responsible for the federal black lung excise
tax, severance taxes, OSM reclamation fees, and any other Taxes due as a result
of the sale of the Coal Inventory to Buyer.
2.8 Bills of Sale, Assignment and Assumption Agreements, Conveyance Deeds
and Other Documents. At the Closing, Seller shall: (i) execute and deliver to
the Buyer the Bills of Sale, the Assignment and Assumption Agreements, the Deeds
and such other documents as may be necessary to convey to the Buyer the Assets;
(ii) perform its obligations under this Agreement to be performed at or before
the Closing; (iii) execute and deliver the Escrow Agreement; (iv) cause Xxxxx
Xxxxx to execute and deliver the Employment Agreement; (iv) execute and deliver
the Seller Closing Certificate; and (v) execute and deliver the Non-Competition
Agreement identified in SECTION 7.2(e). At the Closing, the Buyer shall: (i) pay
the portion of the Purchase Price set forth in SECTION 2.5(a) by wire transfer
to the Seller in immediately available funds; (ii) deposit the Escrowed Amount
pursuant to the terms of the Escrow Agreement, (iii) execute and deliver to the
Seller the Buyer Closing Certificate; (iv) perform its obligations under this
Agreement to be performed at or before the Closing; (v) execute and deliver the
Employment Agreement; (vi) execute and deliver the Escrow Agreement; and (vii)
execute and deliver the Non-Competition Agreement identified in SECTION 7.2(e).
2.9 Assumption of Liabilities. At the Closing, Buyer shall execute and
deliver to the Seller the Assignment and Assumption Agreements and such other
documents and instruments as may be reasonably necessary for the Buyer to assume
all of the Assumed Liabilities.
2.10 Proration of Liabilities. Seller 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.
2.11 Additional Documents. At the closing, Seller and Buyer shall execute
and deliver all such other documents or instruments necessary or appropriate to
effect the transactions contemplated by this Agreement.
2.12 Allocation of Purchase Price and Assumed Liabilities. The Purchase
Price and Assumed Liabilities (to the extent it constitutes part of the amount
realized for federal income Tax purposes) shall be allocated among the Assets
and the Non-Competition Agreement in accordance with the estimated allocation
schedule (the "Estimated Allocation Schedule") attached hereto as SECTION 2.12
of the Disclosure Schedule. Buyer shall prepare a final allocation schedule (the
"Final Allocation Schedule") and deliver it to the Seller upon a date to be
agreed upon between the parties, which date shall be no later than thirty (30)
days after the Audited Closing Date Financial Statements are completed. The
Final Allocation Schedule will not be materially different from the Estimated
Allocation Schedule. Such Final Allocation Schedule shall be final and binding
on the Buyer and the Seller and shall provide the Basis for Buyer and Seller to
complete IRS Form 8594. The allocation to the Assets and Non-Compete Agreement
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, such allocation schedule shall be adjusted only if and to the
extent necessary to comply with such requirements of Section 1060. Buyer and
Seller 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 Assets and Non-Competition Agreement; provided, however, that (i) the
Buyer's cost for the 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 Seller may differ from the total amount allocated
hereunder to reflect transaction costs that reduce the amount realized for
federal income Tax purposes.
2.13 Closing. The purchase and sale provided for in this Agreement (the
"Closing") will take place at the offices at Buyer's counsel in Pittsburgh,
Pennsylvania, commencing at 10:00 A.M. EST on November 14, 2003, or if all of
the conditions to the obligations of the parties to consummate the transactions
contemplated hereby have not been satisfied in full or waived by such date, on
such mutually agreeable later date as soon as practicable (but in no event more
than three (3) Business Days) after the first date on which the conditions to
the obligations of the parties to consummate the transactions contemplated
hereby have been satisfied or waived.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF SELLER REGARDING THE TRANSACTION
For the purpose of inducing the Buyer to enter into and perform this
Agreement, the Seller represents and warrants to the Buyer that the statements
contained in this ARTICLE III are true, correct and complete as of the date of
this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date of
this Agreement throughout this ARTICLE III).
3.1 Organization of the Seller. Seller is a corporation that is duly
organized, validly existing and in good standing under the Laws of the
Commonwealth of Pennsylvania. Seller has full power and authority to conduct the
Business as it is now being conducted, to own or use the Assets and other
properties it purports to own and to perform all of its obligations under the
Contracts. Seller is duly qualified to do business as a corporation and is in
good standing under the laws of each state or other jurisdiction in which either
the ownership or use of the Assets and other properties owned or used by it, or
the nature of the activities conducted by it, requires such qualification.
Seller has no Subsidiary. Seller owns no shares of capital stock, partnership
interests or other securities of any other Person.
3.2 Authorization of Transaction. Seller has full power and authority
(including, where applicable, full power and authority as an organization) to
execute, deliver and perform its obligations under this Agreement and Seller has
full power and authority (including, where applicable, full power and authority
as an organization) to execute and deliver each agreement, document or
instrument to which it is a party in connection with this Agreement and to
perform its obligations thereunder. The Seller's execution, delivery and
performance of this Agreement and the execution, delivery and performance of all
other agreements, documents and instruments by Seller in connection with this
Agreement and the transactions contemplated under this Agreement have been duly
authorized by all requisite organizational or other action on the part of the
Seller. This Agreement and all other agreements, documents or instruments
executed and delivered by Seller in connection with this Agreement have been
duly executed and delivered by the Seller. This Agreement and all other
agreements or instruments executed and delivered by Seller pursuant to this
Agreement constitute the legal, valid and binding obligation of the Seller,
enforceable in accordance with their respective terms and conditions, subject,
however, to the effects of bankruptcy, insolvency and reorganization. Except as
set forth on SECTION 3.2 of the Disclosure Schedule, no notices to, filings
with, authorizations, consents, or approvals of any Governmental Authorities or
any other third party or Person is required to be made or obtained in order to
consummate the transactions contemplated by this Agreement or by any other
agreements, documents or instruments to be executed and delivered in connection
with this Agreement.
3.3 Noncontravention. Neither the execution, delivery or performance of
this Agreement by Seller nor the execution, delivery or performance by Seller of
each other agreement, document or instrument to which it is a party executed in
connection with this Agreement or delivered pursuant to this Agreement, nor the
consummation of the transactions contemplated hereby or thereby, will (i)
violate any Law to which the Seller is subject or any provision of its
Organizational Documents, (ii) 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
material authorization or Permit issued by a Governmental Authority that is held
by the Seller or that otherwise relates to the Assets, or (iii) give any
Governmental Authority or other Person the right to challenge any portion of the
transactions contemplated under this Agreement or exercise any remedy or obtain
any relief that is material to the Assets under any Law to which the Seller is
subject, or (iv) conflict with, result
in a breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, cancel or
exercise any remedy or loss of rights, or result in the creation of any
Encumbrance, or require any notice (in all such cases with or without the giving
of notice and/or the passage of time) under any Contract, lease, agreement,
document, instrument or other arrangement to which the Seller is a party or by
which it is bound or to which any of its assets is subject.
3.4 Brokers' Fees. Seller has no Liability or obligation to pay any fees
or commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which Buyer could become liable or obligated.
3.5 Buyer's Breach of Representation or Warranty. To the Knowledge of the
Seller, (a) none of the representations and warranties made by Buyer pursuant to
this Agreement is inaccurate or incomplete; and (b) no breach of any such
representation or warranty has occurred or is occurring. The Seller has not
failed to disclose to the Buyer the fact that an inaccurate or incomplete
representation or warranty has been made by the Buyer, or that a breach has
occurred.
3.6 Disclosure. No representation or warranty or other statement made by
the Seller contains any untrue statement or omits to state a material fact
necessary to make any of them, in light of the circumstances in which it was
made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE BUYER REGARDING THE TRANSACTION
For the purpose of inducing the Seller to enter into and perform this
Agreement, the Buyer represents and warrants to the Seller that the statements
contained in this ARTICLE IV are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this ARTICLE IV).
4.1 Organization. Buyer is a limited liability company duly organized,
validly existing, and in good standing under the Laws of the State of Delaware.
4.2 Authorization of Transaction. Buyer has full power and authority
(including full power and authority as an organization) to execute, deliver and
perform its obligations under this Agreement and each other agreement, document
or instrument to which it is a party in connection with this Agreement. The
Buyer's execution, delivery and performance of this Agreement and all other
agreements, documents and instruments in connection with this Agreement and the
transactions contemplated under this Agreement have been duly authorized by all
requisite action on the part of the Buyer. This Agreement and all other
agreements, documents or instruments executed and delivered by the Buyer in
connection with this Agreement have been duly executed and delivered by the
Buyer. This Agreement and all other agreements, documents or instruments
executed and delivered by the Buyer pursuant to this Agreement constitute the
legal, valid and binding obligation of the Buyer, enforceable in accordance with
their terms and conditions, subject, however, to the effects of bankruptcy,
insolvency and reorganization. Except as set forth in SECTION 4.2 of the
Disclosure Schedule, no notices to, filings with, authorizations, consents, or
approvals of any Governmental Authorities or any other third party or Person
required to be made or obtained in order to consummate the transactions
contemplated by this Agreement.
4.3 Noncontravention. Neither the execution, delivery or performance of
this Agreement by the Buyer nor the execution, delivery or performance by the
Buyer of each other agreement or instrument to which it is a party executed in
connection with this Agreement or delivered pursuant to this Agreement, nor the
consummation of the transactions contemplated hereby or thereby, will (i)
violate any Law to which the Buyer is subject or any provision of its
Organizational Documents, (ii) contravene, conflict with or result in a material
violation of any of the terms or requirements of, or give any Governmental
Authority the right to revoke, withdraw, suspend, cancel or terminate any
material authorization or Permit issued by a Governmental Authority that is held
by the Buyer, (iii) give any Governmental Authority or other Person the right to
challenge any material portion of the transactions contemplated under this
Agreement or exercise any material remedy or obtain any relief under any Law to
which the Buyer is subject, or (iv) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any Party
the right to accelerate, terminate, modify, or cancel or exercise any material
remedy or loss of rights, or result in the creation of any Encumbrance, or
require any notice (in all such cases with or without the giving of notice
and/or the passage of time) under any material agreement, contract, lease,
license, instrument, or other arrangement to which the Buyer is a party or by
which it is bound or to which any of its assets is subject.
4.4 Brokers' Fees. The Buyer has no Liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Seller could become
liable or obligated.
4.5 Disclosure. No representation or warranty or other statement made by
Buyer contains any untrue statement or omits to state a material fact necessary
to make any of them, in light of the circumstances in which it was made, not
misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF SELLER REGARDING THE ASSETS
For the purpose of inducing the Buyer to enter into and perform this
Agreement, Seller represents and warrants to the Buyer that the statements
contained in this ARTICLE V are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this ARTICLE V).
5.1 Absence of Changes. Since March 31, 2003, Seller has not with respect
to the Assets and/or the Business:
(a) borrowed or agreed to borrow any funds or incurred, or become
subject to, any Liability for borrowed money, 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 One Hundred Thousand Dollars ($100,000);
(b) paid any Liability other than Liabilities in the Ordinary Course
of Business;
(c) except as shown on SECTION 2.2(d) of the Disclosure Schedules,
sold, transferred or otherwise disposed of, or agreed to sell, transfer or
otherwise dispose of any of Real Property, Equipment or any other Assets, or
cancelled 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, 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;
(e) merged or consolidated with any other Person;
(f) mortgaged, pledged or subjected to any Encumbrance any of the
Assets or any other assets or properties of the Seller;
(g) made any capital expenditure (or series of related capital
expenditures) either (x) involving more than One Hundred Thousand Dollars
($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);
(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) involving more than One Hundred
Thousand Dollars ($100,000);
(k) except for contracts of employment at will, entered into any
employment contract or collective bargaining agreement, written or oral, or
modified the terms of any existing such contract;
(l) except in the Ordinary Course of Business, adopted, amended,
modified or terminated any bonus, profit-sharing, incentive, severance or other
compensatory plan, contract or commitment for the benefit of any of the
directors, officers and Employees of the Seller, or taken any such action with
respect to any other Employee Benefit Plan;
(m) made any other change in employment terms for any of the
directors, officers and Employees of the Seller outside the Ordinary Course of
Business;
(n) 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;
(o) implemented or adopted any change in its accounting methods or
principles or the application thereof;
(p) amended any of its Organizational Documents;
(q) received notice of any termination of any Contract to which
Seller is a party; or
(r) entered into any agreement, arrangement or understanding with
respect to any of the foregoing.
5.2 Financial Statements. SECTION 5.2 of the Disclosure Schedule sets
forth the complete and correct copies of the following financial statements
(collectively, the "Financial Statements"): (i) unaudited fiscal year balance
sheets and statements of income, changes in stockholders' equity and cash flows
for Seller and its Subsidiaries as of and for the fiscal year ending 2001; (ii)
unaudited consolidated fiscal year balance sheets and statements of income,
changes in stockholders' equity and cash flows for Seller and its Subsidiaries
as of and for the fiscal year ending 2002 (the "Most Recent Fiscal Year End")..
The Financial Statements (including the notes thereto) present fairly the
financial condition of Seller as of such dates and the results of operations of
Seller for such periods. The Financial Statements have been prepared from and
are in accordance with the accounting Books and Records, and the Federal income
tax basis of accounting using the accrual method to recognize revenues and
expenses..
5.3 Real Property.
(a) SECTION 5.3(a)(i) of the Disclosure Schedule contains a correct
legal description, address and tax parcel identification number of all tracts,
parcels and lots in which the Seller has an ownership interest. SECTION
5.3(a)(ii) of the Disclosure Schedule contains a
correct legal description, address and tax parcel identification number of all
tracts, parcels and lots in which the Seller has a leasehold interest and an
accurate description (by location, name, lessor, date of lease and term expiry
date) of all Real Property leases. The Real Property identification in SECTIONS
5.3(a)(i) and (ii) of the Disclosure Schedule constitutes all real property
necessary or required to operate the Business in the manner currently conducted.
(b) Seller has received no written notice alleging that Seller is in
default under any lease. Seller is not in default under any lease relating to
the Real Property.
(c) Each of the leases in SECTION 5.3(a)(ii) of the Disclosure
Schedule is, and, subject to obtaining any requisite third party consents, all
of which are specified in SECTION 3.2 of the Disclosure Schedule, will be on and
immediately following the Closing, valid and enforceable against the lessor or
other parties thereto in accordance with its terms. There are no unwritten or
oral modifications to such leases or any course of dealing or business
operations that can be construed as a modification to such leases.
(d) Seller has not received (and Seller has no Basis or Knowledge
that it will receive) any notice of claims that it has mined any coal that it
did not have the right to mine or mined any coal in such reckless and imprudent
fashion as to give rise to any claims for loss, waste or trespass.
(e) No condemnation or eminent domain proceeding against any Real
Property is pending or, to the Knowledge of the Seller, threatened.
(f) Seller has made available to the Buyer geological data, reserve
data, material existing mine maps, surveys, title insurance policies, title
insurance, abstracts and other evidence of title, 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 Books
and Records, information, maps, reports and data in the possession of Seller and
relating to or affecting the Real Property, including the coal reserves, coal
ownership, coal leases to Seller, coal leases from Seller to third parties,
mining conditions, mines, and mining plans of Seller as prepared and utilized by
Seller in its day-to-day Mining Activities. Notwithstanding anything in this
Agreement to the contrary, the Buyer accepts the 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 Seller (whether such reserves are owned or leased by the
Seller) are not subject to any mining rights of any other Person with respect to
such coal reserves.
5.4 Sufficiency of the Assets; Title of the Assets.
(a) Except for the Excluded Assets, the Assets (i) constitute all of
the assets, tangible and intangible, of any nature whatsoever, used or useful in
the operation of the Business
in the manner presently operated by the Seller, and (ii) include all of the
operating assets of the Seller.
(b) The Seller (i) has good and marketable title to all of the
Assets, free and clear of any Encumbrance (except Permitted Encumbrances), or
(ii) lease, if applicable, such Assets under valid and enforceable leases
(subject to any applicable bankruptcy, insolvency and reorganization). No rights
of the Seller under such leases have been assigned or otherwise transferred as
security for any obligation of Seller.
(c) Except as noted on SECTION 5.4(c) of the Disclosure Schedule,
all Equipment is in good repair and operating condition and has been maintained
in accordance with normal industry practice and is suitable for the purposes for
which Seller is presently using such Equipment, normal wear and tear excepted.
No item of Equipment is in need of repair or replacement other than as part of
routine maintenance in the Ordinary Course of Business. All of the Equipment is
in the possession of the Seller.
(d) At the Closing, title to the coal portion of the Real Property
shall be conveyed from the Seller to the Buyer by a Special Warranty Deed, and
title to the surface portion of the Real Property shall be conveyed from the
Seller to the Buyer by a General Warranty Deed.
5.5 Intellectual Property. No third party has asserted any interest in the
Intellectual Property, nor has any third party alleged that Seller has infringed
on any Intellectual Property of any third party. To the Knowledge of the Seller,
Seller has not interfered with, infringed upon, misappropriated, or otherwise
come into conflict with, any Intellectual Property rights of third parties as a
result of the continued operation of the Business as presently conducted.
5.6 Permits and Environmental Compliance.
(a) Except as shown on SECTION 5.6(a) of the Disclosure Schedule,
Seller is in compliance with all Environmental Laws. Seller is not in violation
of any Environmental Laws applicable to Mining Activities, including any
investigatory, remedial or corrective obligations, that would result in (i)
closure, suspension or restriction of any Mining Activities; (ii) revocation or
suspension of any Permits; or (iii) exposure of the Buyer to the imposition of
any fines or other civil or criminal monetary penalty in excess of Five Thousand
Dollars ($5,000). Seller has not received any notification from any Governmental
Authority or any other Person alleging, claiming or notifying that Seller is in
violation of any Environmental Laws, and no Basis exists for Seller to receive
such notification.
(b) SECTION 5.6(b) of the Disclosure Schedule sets forth all Permits
necessary and required to conduct the Mining Activities as currently conducted
by Seller, and Seller is in compliance with all such Permits. No such Permit is
the subject of any proceeding by or in front
of any Governmental Authority, and no such proceeding is pending or, to the
Knowledge of the Seller, threatened.
(c) The Seller has made available to the Buyer true, correct and
complete copies of (i) the Permits, (ii) all of the mining permits and other
permits held by Seller pertaining to the 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 Seller
pertaining to the Assets, as amended, supplemented and modified through the date
of this Agreement, and (iv) any and all pending applications for additional
mining permits and other licenses and authorizations that have been submitted to
any Governmental Authority by Seller pertaining to the Assets or are in the
process of development either in-house or through consultants.
(d) SECTION 5.6(d) of the Disclosure Schedule includes a true,
correct and complete list of all of the citations, notices of non-compliance and
notices of violation received by Seller since January 1, 2001, with respect to
the Assets from applicable Governmental Authorities, including, without
limitation, the federal Environmental Protection Agency ("EPA"), the federal
Office of Surface Mining ("OSM"), the Federal Mine Safety and Health
Administration ("MSHA") and the Pennsylvania Department of Environmental
Protection (the "PADEP"). Seller is not subject to any cessation orders, cease
and desist orders, closure orders or show cause orders issued by PADEP, EPA,
OSM, MSHA, or any other Governmental Authority with respect to the Assets.
(e) Seller is in 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, the Pennsylvania Surface Mining
Conservation and Reclamation Act, as amended, and all similar statutes of the
Commonwealth of Pennsylvania, and all rules and regulations promulgated under
the aforementioned Acts and statutes by PADEP, EPA, OSM, MSHA, applicable state
permitting authorities, and any other Governmental Authority. With respect to
the Assets, Seller has not been subjected to any bond forfeiture, permit
suspension or revocation, or similar effort and proceedings or investigation
instituted by OSM or PADEP, applicable state permitting authorities or any other
Governmental Authority.
(f) To the Knowledge of the Seller, after the Closing, the Buyer
will not be liable for any fines, penalties, fees, Taxes or other governmental
charges assessed under Environmental Laws 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 Assets. Neither
this Agreement nor the consummation of the transactions that are the subject of
this Agreement will result in any Liabilities being imposed on the Buyer for
site investigation or cleanup, or notification to or consent of any Governmental
Authority 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 matters for
which the
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.
(g) None of the 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 the Seller, the Real Property is not Contaminated
with any Hazardous Substance.
(h) (A) None of the 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 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, located at, on,
in or under the Assets; (C) there is no asbestos-containing material in any form
or condition located at, on, in or under the Assets; (D) there are no materials
or equipment containing polychlorinated biphenyls located at, on, in or under
the Assets; (E) there are no landfills or other areas located at, on, in or
under the Assets where Hazardous Substances have been disposed; and (F) Seller
has not 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;
and (G) there are no above-ground storage tanks located at or on the Assets,
except as shown on SECTION 5.6(h) of the Disclosure Schedule.
(i) Seller has neither 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.
(j) To the Knowledge of the Seller, no conditions exist relating to
the Assets or the Mining Activities that will prevent or hinder the Buyer's
compliance with Environmental Laws, require the Buyer to undertake any
investigatory, remedial or corrective actions pursuant to Environmental Laws or
impose upon the 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.
(k) The operation of the coal mining and processing operations and
the state of reclamation with respect to the Permits are in compliance with all
applicable mining, reclamation, health and safety and all other applicable Laws
and in accordance with reclamation plans submitted with respect to the Permits.
5.7 Reclamation Bonds. SECTION 5.7 of the Disclosure Schedule 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 Seller to secure the performance of its respective
reclamation or other Liabilities pursuant to, in connection with or as a
condition of, the Permits (collectively, the "the Seller's Bonds"). The Seller's
Bonds are sufficient to permit Seller to conduct the Mining Activities being
conducted by it in compliance with Laws and are in full force and effect.
5.8 Contracts.
(a) SECTION 5.8 of the Disclosure Schedule lists and, Seller has
made available to the Buyer copies of, all Contracts and commitments, written or
oral, including all amendments, modifications, waivers and elections applicable
thereto, (i) providing for receipt or payment, contingent or otherwise, of Fifty
Thousand Dollars ($50,000) or more and which are not terminable on 30 days'
notice; (ii) relating to indebtedness or guarantee obligations of the Seller;
(iii) affecting the ownership of, leasing of title to, use of any Assets; (iv)
relating to labor union contracts or any employment contracts with any Person;
(v) relating to any service contracts, subcontractor relationships; (vi)
relating to commission payments, equity grants, stock options, and relationship
deal with sharing of profits, losses, costs or Liabilities; (vii) restricting
Seller's ability to engage in any line of business or to compete with any
Person; and (viii) that are otherwise necessary to the operation of the Business
or that are entered into other than in the Ordinary Course of Business (the
"Material Contracts").
(b) As to Seller: (i) the Material Contracts are valid and binding,
enforceable in accordance with their respective terms (subject to any applicable
bankruptcy, insolvency and reorganization), and are in full force and effect;
(ii) if not identified as an Excluded Asset, the Material Contracts will
continue to be legal, valid, binding, enforceable and in full force and effect
on identical terms following the consummation of the transactions contemplated
hereby; (iii) Seller has performed all material obligations required to be
performed by it to date under the Material Contracts; (iv) to the Knowledge of
Seller, no other party is in default under any material obligation of any such
Material Contracts and, to the Knowledge of Seller, no event has occurred which
with notice or lapse of time would constitute a breach or default, or permit
termination, modification, or acceleration, under the Material Contracts; and
(v) Seller, nor to the Knowledge of Seller, any other party has repudiated any
material provision of the Material Contracts.
5.9 Litigation.
(a) SECTION 5.9(a) of the Disclosure Schedule lists all claims,
legal actions, suits, litigation, arbitrations, disputes, investigations,
proceedings and Decrees by or before any court or Governmental Authority now
pending or in effect or, to the Knowledge of Seller, threatened or contemplated,
against or affecting the Seller, the Assets, the Business or the consummation of
the transactions contemplated by this Agreement.
(b) Except as shown on SECTION 5.9(a) of the Disclosure Schedule,
there are no existing claims by or disputes between Seller and Persons owning or
occupying lands or realty
adjoining or near any of the Real Property regarding Mining Activities by the
Seller 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.
(c) To the Knowledge of the Seller, no event has occurred or
circumstances exist that is reasonably likely to give rise to or serve as a
Basis for the commencement of any claim, legal action, suit, litigation,
arbitration, dispute, investigation, or proceeding. None of the items identified
in SECTION 5.9(a) of the Disclosure Schedule will have a Material Adverse Effect
on the Seller, the Business or upon the Assets.
5.10 Employee Benefits.
(a) SECTION 5.10(a) of the Disclosure Schedule 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, 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
current or former Employees are entitled to participate by reason of their
employment with Seller, or its respective ERISA Affiliates, whether or not any
of the foregoing is funded, whether insured or self-funded, and with respect to
which Seller is a party or a sponsor or a fiduciary thereof or by which Seller
is bound; or (ii) with respect to which Seller may have, as of the Closing Date,
any direct or indirect Liability (the "Employee Benefit Plans"). SECTION 5.10(a)
of the Disclosure Schedule identifies: (i) each Employee Benefit Plan that is a
pension plan (as defined in Section 3(2) of ERISA) (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 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").
(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. To the Knowledge of the Seller,
there are no facts or circumstances that would jeopardize or adversely affect
the qualification under Code Section 401(a) of any Qualified Plan. The Seller
does not maintain or is not required to contribute to or otherwise participate
in any plan, program or arrangement subject to Title IV of ERISA.
(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 is required to be made by Seller under
ERISA or the Code for any period ending on or before
the Closing Date, including contributions that are not yet due as of the Closing
Date, have been paid to each Employee Benefit Plan or accrued in accordance with
the past custom and practice of Seller. All premiums that are due on or before
the Closing Date have been paid with respect to each 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. 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.
(i) Each Employee Benefit Plan has been administered
substantially in accordance with its terms;
(ii) each Employee Benefit Plan 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; and 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 the Seller;
(iii) other than routine claims for benefits, no Encumbrances,
lawsuits or complaints to or by any Person or Governmental Authority have been
filed or, to the Knowledge of the Seller, are contemplated or threatened.
(e) Seller has never participated in or contributed to any
Multiemployer Plan and Seller is not subject to any Liability related to any
Multiemployer Plan in which any other Person participates or contributes to..
(f) The consummation of the transactions contemplated by this
Agreement will not (i) entitle any Person to severance pay or other payments for
which the Buyer will be liable after the 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 the
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(C) 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 the Seller or its
respective ERISA Affiliates.
(h) Neither the Seller, 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 Seller are allocated to or held in a "rabbi trust"
or similar funding vehicle.
(k) Neither the Seller nor any of its 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), has been terminated (within the meaning of Title IV
of ERISA), or has assessed any withdrawal liability (within the meaning of Title
VI of ERISA) against Seller or any ERISA Affiliate, and to the Knowledge of the
Seller, no Multiemployer Plan is reasonably expected to be in reorganization,
insolvent, terminated, or assessing any withdrawal liability against Seller or
any ERISA Affiliate.
(l) No Welfare Plan is a "multiple employer welfare arrangement" as
defined in Section 3(40) of ERISA.
(m) Seller is and has been in compliance with COBRA and HIPPA.
5.11 Taxes. Except as set forth in SECTION 5.11 of the Disclosure
Schedule: (a) all Tax Returns required to be filed by Seller have been filed on
a timely basis with the appropriate Governmental Authorities in all
jurisdictions in which such returns and reports are required to be filed and all
such returns, statements, and reports were true and correct when filed; (b) all
Taxes (including interest and penalties) due from Seller, have been fully and
timely paid or, to the extent not yet due and payable, have been adequately
provided for by Seller; (c) there are no Encumbrances existing, threatened or
pending with respect to any Asset relating to any Taxes described in (b) above;
(d) no issues have been raised with any representative or employee of Seller
(and are currently pending) by any taxing authority in connection with any of
the returns and reports referred to in the foregoing clause (a); and (e) no
waivers of any statute of limitations have been given or requested with respect
to Seller or any of its partners in connection with any Tax Returns covering
Seller or with respect to any Taxes payable by it. SECTION 5.11 of the
Disclosure Statement lists all Tax Returns of, or covering, Seller which have
been examined or which are currently under examination by any taxing
authorities, or with respect to which the applicable statute of limitations
(including all extensions and tolling periods) has not yet run and all
deficiencies asserted or assessments made as a result of such examinations and
an indication of whether amounts are paid or unpaid.
5.12 Employment Matters. Seller 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 Seller 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 Seller. There has not been during the five years prior to the date
of this Agreement and there is not any existing or, to the Knowledge of the
Seller, any threatened, union organizational campaigns or representation
proceedings underway or threatened with respect to any Employees of Seller, 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 Seller. Seller is and has been and is in compliance with
all applicable Laws respecting employment and employment practices, terms and
conditions of employment, leaves of absence, and wages and hours. None of the
current or past officers, directors, employees or applicants for employment of
Seller has a pending or has, to the Seller's Knowledge, any threatened claim
against the Seller. All of the Seller's Employees are employed at will, meaning
they can quit at any time or be terminated at any time. Seller is and has been
in compliance with all Workers Compensation Acts and black lung Laws.
5.13 Health and Safety Requirements. Seller is in compliance with all
applicable Health and Safety Requirements and no action, suit or proceeding is
currently pending against any of them alleging any failure to so comply.
5.14 Restrictions on Business Activities. Except for this Agreement, there
is no agreement, judgment, injunction, order or decree binding upon the Seller
that has or would reasonably be expected to have the effect of prohibiting the
conduct of the Business or would result in a Material Adverse Effect.
5.15 Powers of Attorney. There are no outstanding powers of attorney
executed on behalf of Seller.
5.16 Absence of Certain Payments. During the five (5) year period prior to
the date of this Agreement, to the Knowledge of Seller, Seller has not (nor has
any director, partner, officer, agent, or employee of Seller) directly or
indirectly (a) used any of Seller's funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity; (b)
made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from Seller's
funds; (c) violated any provision of the Foreign Corrupt Practices Act of 1977
applicable to Seller; (d) established or maintained any unlawful or unrecorded
fund of Seller's monies or other assets; (e) made any false or fictitious entry
on the books or records of Seller; or (f) 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 Seller, or to pay for
favorable treatment for business secured or for special concessions already
obtained for Seller.
5.17 Insurance. Each Insurance Policy is set forth in SECTION 5.17 of the
Disclosure Schedule.
5.18 Undisclosed Liabilities. The Seller has no Liability (and, to the
Knowledge of the Seller, there is no Basis for any present or future action,
suit, proceeding, hearing, investigation, charge, complaint, claim, or demand
against it giving rise to any Liability), except for (i) Liabilities set forth
in the Most Recent Financial Statements or in any notes thereto, (ii)
Liabilities which have arisen after the respective balance sheet dates for the
Seller in the Most Recent Financial Statements in the Ordinary Course of
Business, and (iii) any undisclosed Liabilities which do not exceed One Hundred
Thousand Dollars ($100,000) in the aggregate; provided, however, that this
representation shall not be deemed to have been breached with respect to a
matter specifically covered by another representation where such other
representation was not breached.
5.19 Parts, Fuel and Supplies Inventory. Seller is not in possession of
any inventory not owned by the Seller. The quantities of each item of Parts,
Fuel and Supplies Inventory are reasonable in the present circumstances of the
Seller.
ARTICLE VI
COVENANTS OF THE PARTIES
6.1 Operation in Ordinary Course. Except as provided in this Agreement,
between the date of this Agreement and the earlier of the termination of this
Agreement pursuant to ARTICLE XI and the Closing, the Seller, in relation to the
Assets, will: (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 Real Property until the Closing Date, and
maintain the relations and good will with its suppliers, customers, landlords,
creditors, agents, and other Persons having business relationships with Seller;
(iii) not enter into any contract or other obligation binding upon Seller
involving its Employees, or an expenditure, purchase, sale, cost or commitment
(unless such contract is entered into the Ordinary Course of Business and
cancelable in ninety or fewer days, involves less than Fifty Thousand Dollars
($50,000), or is for consumable purchases) without the prior written consent of
the Buyer; (iv) report regularly to the Buyer concerning the status of the
Business, Mining Activities and finances of the Seller and (v) not take any of
the actions described in SECTION 5.1 of this Agreement without the prior written
consent of the Buyer.
6.2 Compliance with Law. Between the date of this Agreement and the
Closing, Seller shall comply with all applicable Laws and all orders of any
Governmental Authority.
6.3 Cooperation. On the terms and subject to the conditions in this
Agreement, Seller 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 applicable 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, the Seller and the Buyer will execute any
additional instruments reasonably necessary to consummate the transactions
contemplated hereby. Seller shall make available to the Buyer, at reasonable
times, and in a manner so as not to interfere with the normal business
operations of the Seller, all documents, maps and other Books and Records
necessary to transfer all Permits to the Buyer in accordance with Law.
6.4 Notices and Consents. Seller will use its 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. Seller 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 all
required and necessary consents, including, without limitation, those consents
listed in SECTION 3.2 of the Disclosure Schedule.
6.5 Publicity. All general notices, releases, statements and
communications to any Employees, suppliers, distributors and customers of Seller
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 the Seller and the Buyer; provided, however, that either
party to this Agreement 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 to this Agreement of its intention to make such public announcement;
provided that failure to comment by the close of business on the business day
after receipt of such notice shall be deemed a waiver of the opportunity to
comment and provided, further, that nothing in this SECTION 6.5 shall operate to
prohibit the Seller or the Buyer from communicating with its employees after the
Closing Date regarding their employment or the terms and conditions thereof, the
operation of the Assets or matters necessarily related thereto.
6.6 Permits; Replacement Bonds; Insurance and Guarantees; Other Filings.
(a) At or prior to the Closing Date, the Buyer shall, at Buyer's
expense: (i) cause to be secured, 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 the Buyer in
accordance with Law; and (ii) deliver copies of such documents to the Seller.
(b) Promptly following the Closing Date through the application of
commercially reasonable efforts, and in any event no later than 30 days after
the Closing, the Buyer shall make all filings other than the Initial Filing with
the appropriate Governmental Authorities necessary to transfer the Permits to
the Buyer in accordance with Law and thereafter, as required by Law, shall post
replacement bonds.
(c) Following the Closing Date, Seller shall cause each Permit that
is in its name to be retained in its name, until the applicable Governmental
Authority transfers the Permits to the Buyer. The Buyer may rely on any related
bonds held or guaranteed by the Seller; provided that the Buyer reimburses the
Seller for bond premiums, security, OSM 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
the applicable Seller in connection with the maintenance of such Permits or the
related bonds following the Closing Date. The Buyer shall accomplish the
transfer of the Permits as soon as possible after the Closing.
(d) To the extent allowed by and in accordance with applicable Law,
Seller shall grant the Buyer the right to conduct Mining Activities on the
properties included in the 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, the Buyer will deposit in escrow cash or
a letter of credit from a bank reasonably acceptable to the Seller in an amount
equal to the face amount of any related outstanding surety bonds until such
Permit has been transferred.
(e) If Seller receives a notice of violation under any of the
Permits following the Closing Date but before the transfer of the Permit, the
Seller will give the Buyer prompt notice thereof. If the Seller reasonably
determines that the Buyer will not cause such violation to be cured in a timely
fashion, the Seller shall have the right to cure, or cause to be cured, such
violation itself and be reimbursed by the Buyer for curing such violation.
(f) At or prior to the Closing Date, the 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 Seller to be relieved or released as of the Closing Date from all
financial commitments, guarantees, collateral agreements or similar undertakings
listed in SECTION 6.6 of the Disclosure Schedule; (ii) obtained property and
liability insurance customary for a Buyer that is engaged in the Business or a
business similar to the Business to insure the Assets; and (iii) delivered
copies of such documents to the Seller.
(g) On or prior to the Closing, the Buyer shall deliver to the
Seller: (i) a Certificate of Good Standing for self-insured status or evidence
of insurance coverage with respect to the Buyer's Liabilities for workers'
compensation and federal black lung benefits that arise out of employment by the
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 the Buyer is to be self-insured for federal black lung claim
liability.
(h) After the Closing, Seller shall maintain or cause to be
maintained any existing workers' compensation insurance policies covering the
current and former Employees of the Seller who are hired by the Buyer or one of
the Buyer's Affiliates with respect to claims where the date of injury or the
last injurious increment of exposure needed to give rise to the claim occurred
before such Employees began working for the Buyer or one of the Buyer's
Affiliates.
6.7 Exclusivity. Seller will not permit any of its officers, directors,
employees or agents 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 Assets, or any portion thereof, or the acquisition of stock
or partnership interest of Seller or any other business combination such as a
merger, or consolidation; 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. The Seller will notify the Buyer immediately if any
Person makes any proposal, offer, inquiry or contact with respect to any of the
foregoing.
6.8 Access. At or prior to the Closing Date, Seller will permit the Buyer
and its representatives to have full access at all reasonable times, and in a
manner so as not to interfere with the normal business operations of the Seller,
to all premises, properties, personnel, books,
records (including Tax Records), contracts, documents and any other Books and
Records of or pertaining to the Seller, the Business and/or the Assets.
6.9 Notice of Developments. Each party will give prompt written notice to
the other party of any development causing a breach of any of its own
representations and warranties in ARTICLES III, IV and V above. No disclosure by
any party pursuant to this SECTION 6.9, 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.
6.10 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.
6.11 Cooperation on Financial Information.
(a) After the Closing Date, the Seller will furnish, or cause to be
furnished to the Buyer, its accountants and auditors, upon request of the Buyer
and as promptly as practicable (with any related out-of-pocket costs being for
the account of the Buyer), such information and assistance as is reasonably
necessary for the Buyer to cause to be prepared, at Buyer's expense, audited
combined balance sheets, statements of income, cash flow and stockholders'
equity for the enterprise represented by the Assets [and the assets acquired
pursuant to the S&M Purchase Agreement and the DLR Purchase Agreement] as of the
Closing Date and for the period beginning on the day immediately following the
last day of the Most Recent Fiscal Year End and ending on the Closing Date (the
"Audited Closing Date Financial Statements") in conformity with GAAP and with
Regulations S-K and S-X promulgated by the Securities and Exchange Commission
(the "SEC"), applied on a consistent basis throughout the period covered thereby
and in a manner consistent with the significant accounting policies as are
disclosed in the footnotes to the Financial Statements.
(b) With respect to any registration statement or other filings with
the SEC that the Buyer shall determine to make in the future, the Seller shall
use commercially reasonable efforts with the out-of-pocket costs for which being
for the account of the Buyer to timely furnish, or cause to be timely furnished
to the Buyer, its accountants and auditors, upon request of the Buyer, the
following: (i) consents of the Seller's independent public accountants with
respect to the audited Financial Statements as required by SEC Regulation S-X,
(ii) such information, assistance and cooperation (including information,
assistance and cooperation from the Seller's independent auditors) as is
reasonably necessary for the Buyer to: (A) address and resolve any SEC comments
related to the Financial Statements or the Audited Closing Date Financial
Statements (including any required modification of such financial statements or
footnotes thereto) and (B) prepare any MD&A Disclosure required in connection
with a filing with the SEC and address and resolve any SEC comments related to
such MD&A Disclosure (including any required modification to such MD&A
Disclosure), (iii) such information, assistance and cooperation reasonably
necessary for the Buyer to prepare any unaudited pro forma balance sheets or
income statements required to be included in any such registration statement or
other SEC filing and (iv) such information, assistance and cooperation
reasonably necessary for the Buyer to accumulate five years of historical
unaudited financial information of the enterprise represented by the Assets for
inclusion in any such registration statement or other filing with the SEC.
(c) The Seller shall reasonably cooperate with the Buyer, its
accountants and auditors in the conduct of the actions described in the
preceding paragraph and shall allow the Buyer, its accountants and auditors to
have access at all reasonable times and upon reasonable advance notice, and in a
manner so as not to interfere with the normal business operations of the Seller,
to all premises, properties, books, records, contracts, and documents of or
pertaining to the Buyer's audit of the Audited Closing Date Financial
Statements. In addition, the Seller will provide access to the Seller's
employees, including, without limitation, making employees available to provide
additional information and explanation of any materials reviewed by the Buyer,
its accountants and auditors; provided, however, the Buyer's use of such
employees shall not unreasonably interfere with such employee's duties to his or
her employer.
(d) For avoidance of doubt, the Seller's provision of assistance of
its employees in accordance with this SECTION 6.11(d) shall not include any
obligation to retain any of its existing employees; provided that the Seller
shall secure the services of such employees or contractors as are necessary to
discharge the Seller's obligations under this SECTION 6.11(d). Furthermore, it
shall not include the obligation to make such other arrangements to secure the
services of such employees that the Buyer deems are necessary to complete the
preparation of the Financial Statements or the Audited Closing Date Financial
Statements and the MD&A Disclosures.
6.12 Payment of Liabilities. Between the date of this Agreement and the
Closing, the Seller shall pay or otherwise satisfy in the Ordinary Course of
Business all of its Liabilities.
6.13 Post-Closing Matters. The Seller has represented to the Buyer that
DLR, with the assistance of the Seller, will be able to obtain approval by no
later than January 1, 2004, from the County Commissioners of Indiana County,
Pennsylvania, to mine coal at DLR's Nolo Mine within and under the area
designated in the Zoning Ordinance of Indiana County as the Yellow Creek
Conservation/Buffer Area ("Conservation Area Matter");
ARTICLE VII
CONDITIONS PRECEDENT
7.1 Conditions Precedent to Each Party's Obligations. The respective
obligations of the Seller, on the one hand, and the Buyer, on the other hand, 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 claim, legal action, suit, litigation, arbitration, dispute,
investigation, proceeding or Decree 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 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 the Buyer to own the Assets and to operate the
Business on or after the Closing Date;
(b) the Company, the Seller and the 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; and
(c) the Seller shall have obtained, or caused to have been obtained,
the consents listed in SECTION 3.2 of the Disclosure Schedule and the Seller
shall have provided such payments as may be reasonably required to obtain all
such consents. If Seller is unable to obtain the consents listed on SECTION 3.2
of the Disclosure Schedule after having met its obligations under this SECTION
7.1(c) and under SECTIONS 3.2 and 6.4, Buyer's sole recourse will be termination
of this Agreement pursuant to ARTICLE XI.
7.2 Conditions Precedent to Obligations of the Buyer. The obligations of
the 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:
(a) all of the representations and warranties of the Seller set
forth in this Agreement or in any Exhibit, Schedule, or document delivered
pursuant to this Agreement shall be true and correct in all respects as of the
date of this Agreement 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,
and the Buyer shall have received the Seller's Closing Certificate dated as of
the Closing Date executed by the Seller to such effect;
(b) all of the covenants and obligations that the Seller 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, and the Buyer
shall have received the Seller's Closing Certificate dated as of the Closing
Date executed by the Seller to such effect;
(c) all proceedings and actions, corporate or other, to be taken by
Seller 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, delivered to the Buyer, and shall be
reasonably satisfactory in form and substance to the Buyer and the Buyer's
counsel;
(d) the Seller shall have executed and delivered the (i) Bills of
Sale; (ii) the Assignment and Assumption Agreements; (iii) the Deeds; (iv) the
Escrow Agreement; and (v) and all such other documents as may be necessary or
required to convey the Assets to the Buyer;
(e) the Seller shall have entered into a Non-Competition Agreement,
the form of which is attached to this Agreement as EXHIBIT E, it being
acknowledge that the Seller shall be restricted for a period of two (2) years
from after the Closing Date from (i) working for or owning, directly or
indirectly, any business in competition with the Buyer; (ii) soliciting any of
the Buyer's customers, suppliers or employees; or (iii) hiring any Employee of
Buyer or convincing any Employee of the Buyer to leave the employ of the Buyer;
(f) the Seller shall have received all releases of all Encumbrances
(except Permitted Encumbrances) on the Assets;
(g) the Buyer shall have received an opinion of counsel to the
Seller addressed to the Buyer substantially in the form of EXHIBIT F;
(h) the Buyer shall have received from Seller a certificate of good
standing from the Pennsylvania Department of State, dated reasonably close to
the Closing Date;
(i) the Buyer shall have received from Seller copies of its Articles
of Incorporation certified by the Pennsylvania Department of State;
(j) the Buyer shall have received an incumbency certificate from
Seller in a form and substance reasonably satisfactory to the Buyer;
(k) the Buyer shall have received from Seller a tax lien certificate
from the Pennsylvania Department of Revenue, dated reasonably close to the
Closing Date;
(l) Seller shall have furnished to the Buyer a copy of the required
pre-sale notice with proof of mailing to the Department of Revenue and the
Pennsylvania Department of Labor;
(m) substantially all of the Seller's Employees shall be available
for hiring by the Buyer, in its sole discretion, on and as of the Closing Date;
(n) all other transactions contemplated by the DLR Purchase
Agreement and the S&M Purchase Agreement shall have been consummated prior to or
simultaneously with the transactions contemplated by this Agreement;
(o) the completion of a Phase I environmental review at Buyer's
expense, the results of which shall be satisfactory to the Buyer in its sole
discretion; and
(p) 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 would reasonably
be expected to have a Material Adverse Effect.
7.3 Conditions Precedent to Obligations of the Seller. The obligations of
the Seller to consummate and cause the consummation of 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:
(a) all of the representations and warranties of the Buyer set forth
in this Agreement or in any Exhibit, Schedule or document delivered pursuant to
this Agreement shall be true and correct in all respects as of the date of this
Agreement 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, and Seller
shall have received the Buyer Closing Certificate dated as of the Closing Date
executed by the Buyer to such effect;
(b) all of the covenants and obligations that the 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, and the Seller
shall have received the Buyer Closing Certificate executed by the Buyer to such
effect;
(c) all proceedings and actions, corporate or other, to be taken by
the 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 the Seller's counsel;
(d) the Buyer shall have paid the cash portion of the Purchase Price
by wire transfer to the Seller of immediately available funds;
(e) the Buyer or subsidiaries of the Buyer shall have executed and
delivered the Assignment and Assumption Agreements and such other documents as
may be necessary for the Buyer to assume all of the Assumed Liabilities;
(f) the Seller shall have received an opinion of counsel to the
Buyer addressed to the Seller substantially in the form of EXHIBIT G;
(g) the Buyer shall have delivered to the Seller satisfactory
evidence of compliance with SECTIONS 6.6(a), (g) and (h); and
(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.
ARTICLE VIII
REMEDIES FOR BREACHES OF AGREEMENT
8.1 Survival of Representations, Warranties and Certain Covenants. All of
the representations and warranties of Seller contained in ARTICLES III and V
shall survive the Closing under this Agreement for a period of three (3) years
after the Closing Date, except for (a) the representations and warranties in
SECTIONS 5.11 and 5.12 which shall survive the Closing with respect to any given
claim that would constitute a breach of such representation or warranty until
the sixtieth (60th) day after the expiration of the statute of limitations
(after giving effect to any extension thereof) applicable to the underlying
matter giving rise to that claim, (b) the representations and warranties in
SECTION 5.6 which shall survive the Closing for a period of seven (7) years and
(c) the representations and warranties in SECTIONS 3.1, 3.2, 3.4, 3.5, 5.4(b)
and 5.9 shall survive the Closing forever. The representations and warranties of
the Buyer contained in ARTICLE IV shall survive the Closing for a period of
three (3) years after the Closing Date; provided that the representations and
warranties in SECTIONS 4.1, 4.2, and 4.4 shall survive the Closing forever.
Except as otherwise provided in this Agreement, the covenants contained in this
Agreement to be performed before the Closing shall not survive the Closing and
the covenants contained in this Agreement to be performed at or after the
Closing shall survive the Closing indefinitely.
8.2 Indemnification Provisions for Benefit of the Buyer.
(a) General Indemnity. Seller shall and will indemnify and hold
harmless Buyer Indemnities from and against the entirety of any Adverse
Consequences arising from, relating to, or in connection with:
(i) any breach of any representation made by Seller in this
Agreement (so long as the applicable survival period set forth in SECTION 8.1
has not expired), the Disclosure Schedule, the supplements to the Disclosure
Schedule, the Seller's Closing Certificate, any transfer instrument, and any
other certificate, document, agreement, writing or instrument delivered by
Seller pursuant to this Agreement;
(ii) any breach of any covenant or obligation of Seller in this
Agreement (so long as the applicable survival period set forth in SECTION 8.1
has not expired), the Disclosure Schedule, the supplements to this Disclosure
Schedule, the Seller's Closing Certificates, any transfer instrument, and any
other certificate, document, agreement, writing or instrument delivered by
Seller pursuant to this Agreement;
(iii) any Liability arising out of the ownership or operation of
the Assets and the Business prior to the Closing Date (other than the Assumed
Liabilities);
(iv) any non-compliance with any bulk sales laws or fraudulent
transfer law in respect of the transactions contemplated by this Agreement;
(v) any matters involving fraud or willful misconduct; or
(vi) any Retained Liabilities.
(b) Written Claims. The Buyer may make a claim (not involving a
Third Party Claim) in any amount to which they may be entitled under this
Agreement by providing a written claim for indemnification against the Seller
within any applicable survival period promptly after the Buyer has notice of any
Adverse Consequence which may give rise to a claim for indemnification;
provided, however, that no delay on the part of the Buyer in notifying Seller
shall relieve Seller from any obligation hereunder unless (and then solely to
the extent) Seller is prejudiced by such delay.
8.3 Indemnification Provisions for Benefit of the Seller.
(a) General Indemnity. The Buyer shall and will indemnify and hold
harmless Seller Indemnitees from and against the entirety of any Adverse
Consequences arising from or relating to or in connection with:
(i) any breach of any representations made by the Buyer in this
Agreement (so long as the applicable survival period set forth in SECTION 8.1
has not expired), the Disclosure Schedule, the supplements to the Disclosure
Schedule, the Buyer Closing Certificate, any transfer, instrument, and any other
certificate, document, agreement, writing or instrument delivered by the Buyer
pursuant to this Agreement;
(ii) any breach of any covenant or obligation of the Buyer in
this Agreement (so long as the applicable survival period set forth in SECTION
8.1 has not expired), the Disclosure Schedule, the Buyer Closing Certificate,
any transfer instrument, and any other certificate, document, agreement, writing
or instrument delivered by the Buyer pursuant to this Agreement;
(iii) any matters involving fraud or willful misconduct; or (iv)
any Assumed Liabilities.
(b) Written Claims. The Seller may make a claim (not involving a
Third Party Claim) in any amount to which they may be entitled under this
Agreement by providing a written claim for indemnification against the Buyer
within any applicable survival period promptly after such Indemnified Party has
notice of any Adverse Consequence which may give rise to a claim for
indemnification; provided, however, that no delay on the part of the Seller in
notifying the Buyer shall relieve the Buyer from any obligation hereunder unless
(and then solely to the extent) the Buyer is prejudiced by such delay.
8.4 Matters Involving Third Parties. If any third party shall notify any
party (the "Indemnified Party") with respect to any matter (a "Third Party
Claim") that may give rise to a right to claim for indemnification against any
other party (the "Indemnifying Party") under SECTION 8.2 or SECTION 8.3, then
the Indemnified Party shall promptly (and in any event within five business days
after receiving notice of the Third Party Claim) notify the Indemnifying Party
thereof in writing (the "Claim Notice"); provided, however, that no delay on the
part of the Indemnified Party in notifying the Indemnifying Party shall relieve
the Indemnifying Party from any obligation hereunder unless (and then solely to
the extent) the Indemnifying Party is adversely affected in its ability to
defend against such Claim or is otherwise prejudiced thereby.
The Indemnifying Party will have the right to assume and thereafter
conduct the defense of the Third Party Claim with counsel of its choice
reasonably satisfactory to the Indemnified Party so long as (i) the Indemnifying
Party notifies the Indemnified Party in writing (within twenty (20) days after
the Indemnified Party has given the Claim Notice) that the Indemnifying Party
will fulfill its indemnification obligations hereunder and provides the
Indemnified Party with evidence reasonably acceptable to the Indemnified Party
that the Indemnifying Party will have the financial resources to defend against
the Third Party Claim and fulfill its indemnification obligations hereunder,
(ii) the Third Party Claim involves only money damages and does not seek an
injunction or other equitable relief, and (iii) the Indemnifying Party conducts
the defense of the Third Party Claim actively and diligently.
So long as the Indemnifying Party is conducting the defense of the
Third Party Claim in accordance with this SECTION 8.4, (i) the Indemnified Party
may retain separate co-counsel at its sole cost and expense and participate in
the defense of the Third Party Claim, (ii) the Indemnified Party will not
consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of the
Indemnifying Party (not to be withheld unreasonably), and (iii) the Indemnifying
Party will not consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of the
Indemnified Party, except in the cases involving only money damages which are
not likely to establish a precedential custom or practice adverse to the
continuing business interests of the Indemnified Party.
In the event any of the conditions in this SECTION 8.4 is or becomes
unsatisfied, however, (i) the Indemnified Party may defend against, and consent
to the entry of any judgment or enter into any settlement with respect to, the
Third Party Claim only with consent from the Indemnifying Party (not to be
unreasonably withheld), (ii) the Indemnifying Party will reimburse the
Indemnified Party promptly and periodically for the costs of defending against
the Third Party Claim (including reasonable attorneys' fees and expenses if the
Indemnified Party delivers an undertaking to repay if not ultimately entitled to
indemnification), and (iii) the Indemnifying Parties will remain responsible,
subject to the terms and limitations set forth in this ARTICLE VIII, for any
Adverse Consequences the Indemnified Party may suffer resulting from, arising
out of, relating to, in the nature of, or caused by the Third Party Claim to the
fullest extent provided in this Agreement.
8.5 Tax Treatment of Indemnity Payments. All indemnification payments made
under this Agreement, including any payment made under ARTICLE IX, shall be
treated as Purchase Price adjustments for Tax purposes.
8.6 Subrogation and Insurance Proceeds. Upon making payment for an
indemnification claim pursuant to this ARTICLE VIII, the Indemnifying Party
shall be subrogated, to the extent of such payment, to any rights which the
Indemnified Party may have against any other Person or the Escrow Amount or
deposit with respect to the subject matter underlying such indemnification
claim. If the Buyer, on the one hand, or the Seller, on the other hand, shall
receive the benefit of insurance and indemnity proceeds in excess of the amount
taken into consideration in the computation of Adverse Consequences, the
recipient shall promptly remit such excess proceeds to the Seller, in the case
of proceeds received by the Buyer, or to the Buyer, as the case may be, in the
case of proceeds received by the Seller.
8.7 Escrow Claims Not Exclusive. Neither the exercise of, nor the failure
to give a notice of a claim under the Escrow Agreement will constitute an
election of remedies or limit the Buyer in any manner in the enforcement of any
other remedies that may be available to it.
8.8 Determination of Amount of Adverse Consequences. Adverse Consequences
shall include all Adverse Consequences suffered through and after the date of
the claim for indemnification (including any Adverse Consequences suffered after
the end of any applicable survival period.)
ARTICLE IX
CERTAIN TAX MATTERS
9.1 Property Taxes. Property Taxes of the Seller with respect to the
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 Seller for all Pre-Closing
Periods and the portion of any Straddle Period through the Closing Date; and
(ii) by the 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 Seller 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 Seller within 15 days after receiving from Seller 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, Seller 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.
9.2 Transfer Taxes. All of the Sellers' portion of the transfer, recording
and similar Taxes arising in connection with the transactions contemplated
hereunder shall be borne equally by the Seller and the Buyer up to $50,000 each.
All transfer, recording and similar taxes that exceed $50,000 shall be borne by
Buyer. The Seller and the Buyer shall cooperate to provide such documentation
and take such other actions as may be necessary to minimize the amount of any
such Taxes.
9.3 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 Seller (and if requested by Seller, representatives of
federal, state or local agencies) access to the Assets for purposes of reviewing
information pertinent to any Tax Return filed by Seller.
9.4 Sales and Use Taxes. Buyer and Seller intend that the transactions
contemplated hereunder shall be exempt from sales and use taxes (except for
registered and licensed vehicles) either as an isolated sale or under exemptions
afforded the mining industry in Pennsylvania.
ARTICLE X
COVENANTS REGARDING EMPLOYEES
10.1 Employees.
(a) Subject to the requirements of applicable Laws, but no later
than immediately prior to the Closing, Seller will terminate its Employees with
respect to the Assets. Some or all of Seller's Employees who are terminated in
accordance with the preceding sentence may, in Buyer's sole discretion, be
offered employment by the Buyer or Affiliates of the Buyer on the Closing Date
on terms and conditions of the Buyer's or said Affiliate's choosing; provided
that the Buyer or said Affiliate shall not have any obligation to continue
employing any such Employee for any length of time, or to offer employment to
any such Employee on a basis other than an employee-at-will basis, meaning that
the individual can quit or be terminated for any reason and at any time.
(b) From time to time after the Closing Date, the Seller and the
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, Seller and the Buyer agree to
furnish such information to the other, if available, promptly after receipt of a
written request therefor.
ARTICLE XI
TERMINATION
11.1 Termination.
This Agreement may be terminated prior to the Closing Date only as
follows:
(a) by mutual written consent of Seller and Buyer;
(b) by either the Seller or the Buyer, if the Closing Date shall not
have occurred prior to the close of business on December 12, 2003, or such later
date as the parties may agree in writing (provided, that the right to terminate
this Agreement under this SECTION 11.1(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 VII to be satisfied and the Closing Date to occur on or before such
date);
(c) by the Seller or the Buyer if a claim, legal action, suit,
litigation, arbitration, dispute, investigation 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 Assets or to operate the
Business;
(d) by Buyer, if (i) the representations of Seller contained in this
Agreement are not true and correct in all 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 Seller of
such failure; or (ii) Seller has failed to comply with its respective covenants,
obligations or agreements 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 Buyer to the Seller of such failure; or
(e) by Seller, if (i) the representations of the Buyer contained in
this Agreement are not true and correct in all 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 the Seller to
the Buyer of such failure; or (ii) the Buyer has failed to comply with its
covenants, obligations or agreements 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 Seller to the Buyer of such failure.
11.2 Effect of Termination.
Each party's right of termination under this ARTICLE XI is in
addition to any other rights it may have under this Agreement or otherwise, and
the exercise of such right of termination will not be an election of remedies.
If this Agreement is terminated pursuant to SECTION 11.1 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 for breaches of
representations, warranties, or covenants or for fraud or willful misconduct.
The Seller and the Buyer hereby agree that the provisions of this SECTION 11.2
and of ARTICLE XII (except SECTION 12.15) shall survive any termination of this
Agreement pursuant to the provisions of this ARTICLE XI.
ARTICLE XII
MISCELLANEOUS
12.1 Entire Agreement. This Agreement, the documents referred to in this
Agreement and to be delivered pursuant to this Agreement and any other agreement
entered into contemporaneously with this Agreement between the Seller and the
Buyer constitutes the entire agreement between the parties pertaining to the
subject matter of this Agreement, 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 of this Agreement,
except as specifically set forth in this Agreement or therein.
12.2 Amendment. This Agreement may be amended by an instrument in writing
and signed on behalf of all of the parties to this Agreement at any time.
12.3 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 to this Agreement, (ii) waive any inaccuracies in the
representations and warranties contained in this Agreement or in any document,
certificate or writing delivered pursuant to this Agreement or (iii) waive
compliance with any of the agreements or conditions contained in this Agreement.
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. The failure of any Party to enforce any right arising under this
Agreement on one or more occasions will not operate as a waiver of that or any
other right on that or any other occasion.
12.4 Expenses. If the transactions contemplated by this Agreement are not
consummated, each of the parties to this Agreement 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.
12.5 Bulk Sales Waiver. Except for the Seller's requirement to provide the
required pre-sale notice with proof of mailing to the Pennsylvania Department of
Revenue and the Pennsylvania Department of Labor, the Buyer hereby waives
compliance with all applicable bulk sales Laws.
12.6 Governing Law. This Agreement shall be construed and interpreted
according to the Laws of the Commonwealth of Pennsylvania, without regard to the
conflicts of law rules thereof.
12.7 Assignment. This Agreement and each party's respective rights
hereunder may not be assigned at any time except as expressly set forth in this
Agreement without the prior written consent of the other party, provided that
the Buyer may assign its rights, but not its obligations, under this Agreement
to any Affiliate of the Buyer prior to, at or after the Closing Date without the
consent of the Seller and, further, provided that nothing in this Agreement
shall prevent a successor-in-interest to either party from enforcing the
provisions of this Agreement.
12.8 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, by overnight delivery service
or by facsimile, 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 12.8:
If to the Seller or the Seller Representative:
Xxxxx Enterprises, Inc.
X.X. Xxx 000
Xxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxx, Seller Representative
Telephone: (____) _____________________
Facsimile: (____) _____________________
With copies to:
Xxxxxxxxx, Xxxxx & Xxxxxxxxx
000 Xxxxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Xx., Esquire
Telephone: (000) 000-0000
Facsimile: (000) 000-0000_______________
If to the Buyer:
AMFIRE Mining Company, LLC
Xxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx, President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With copies to:
Alpha Natural Resources, LLC
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx, General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
12.9 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 of this Agreement.
12.10 Interpretation; Construction. 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. This Agreement has been fully negotiated by the parties to this
Agreement and shall not be construed by any Governmental Authority against
either party as the drafting party. Numerical or alphabetic references to
Recitals, Articles, Sections, paragraphs, Schedules, exhibits and appendices in
this Agreement are to Recitals, Articles, Sections, paragraphs, Schedules,
exhibits, Appendices of this Agreement. Terms used with initial capital letters
will have the meanings specified, applicable to both singular and plural forms,
for all purposes of this Agreement. The word "include" and derivatives of that
word are used in this Agreement in an illustrative sense rather than limiting
sense.
12.11 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.
12.12 No Reliance or Third Party Beneficiaries. No third party is entitled
to rely on any of the representations, warranties and agreements contained in
this Agreement and the Seller and the Buyer assume no Liability to any third
party because of any reliance on the representations, warranties and agreements
of the Seller and the Buyer contained in this Agreement. This Agreement shall
not confer any rights or remedies upon any Person other than the Parties and
their respective successors and permitted assigns.
12.13 Arbitration. Any dispute, controversy or claim arising out of or
relating to this Agreement, excluding any dispute or disagreement for which a
dispute resolution process is provided elsewhere in this Agreement (a
"Dispute"), shall be decided by binding arbitration in accordance with the
commercial arbitration rules of the American Arbitration Association. The Seller
and the 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
Pittsburgh, Pennsylvania 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 12.13 shall be the exclusive means to
resolve all Disputes.
12.14 Right to Specific Performance. Each of the Buyer and the Seller
acknowledges that the unique nature of the Assets to be acquired by the Buyer
pursuant to this Agreement renders money damages an inadequate remedy for a
breach by either party of its obligations under this Agreement, and each of the
Buyer and the Seller agree that in the event of such breach, the Buyer or the
Seller, as the case may be, will upon proper action instituted by it, be
entitled to a decree of specific performance of this Agreement in addition to
any other remedies at law or in equity including, without limitation, money
damages that may be sought.
12.15 Further Actions. The Parties will execute and deliver, from time to
time at or after the Closing, for no additional consideration and at no
additional cost to the requesting party, such further assignments, certificates,
instruments, records, or other documents, assurances or things as may be
reasonably necessary to give full effect to this Agreement and to allow each
Party fully to enjoy and exercise the rights accorded and acquired by it under
this Agreement.
12.16 Time. Time is of the essence under this Agreement. If the last day
permitted for the giving of any notice or the performance of any act required or
permitted under this Agreement falls on a day which is not a Business Day, the
time for the giving of such notice or the performance of such act will be
extended to the next succeeding Business Day.
12.17 Certain Damages. Each party hereby waives any right to assert
punitive, lost profits, exemplary, special or consequential damages against any
other party in connection with the transactions contemplated in this Agreement
(except to the extent any such remedies are included in the Third Party Claim by
a non-Affiliate of the Indemnified Party, for which such Indemnified Party is
otherwise entitled to indemnification under this Agreement).
12.18 Seller Representative. By the execution and delivery of this
Agreement, Seller hereby constitutes and appoints the Seller Representative as
the true and lawful agent and attorney-in-fact of Seller with full power of
substitution to act in the name, place and stead of Seller and to act on behalf
of Seller in any litigation or arbitration involving this Agreement, do or
refrain from doing all such further acts and things, and execute all such
documents as the Seller Representative shall deem necessary or appropriate in
connection with the transactions contemplated by this Agreement including,
without limitation, the power:
(a) to act for Seller with regard to matters pertaining to
indemnification referred to in this Agreement, including the power to compromise
any indemnity claim on behalf of Seller and to transact matters of litigation;
(b) to execute and deliver all waivers under and amendments to this
Agreement, ancillary agreements, certificates and documents that the Seller
Representative deems necessary or appropriate in connection with the
consummation of the transactions contemplated by this Agreement;
(c) to receive funds and make payments of funds;
(d) to do or refrain from doing any further act or deed on behalf of
Seller that the Seller Representative deems necessary or appropriate in its sole
discretion relating to the subject matter of this Agreement as fully and
completely as Seller could do if personally present.
The Buyer and any other Person may conclusively and absolutely rely,
without inquiry, upon any action of the Seller Representative in all matters
referred to herein. All notices required to be made or delivered by the Buyer to
the Seller shall be made to the Seller Representative for the benefit of the
Seller and shall discharge in full all notice requirements of the Buyer to the
Seller with respect thereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
THE BUYER:
AMFIRE MINING COMPANY, LLC
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: President
THE SELLER:
XXXXX ENTERPRISES, INC.
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: President
FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT
THIS FIRST AMENDMENT ("First Amendment") to the ASSET PURCHASE AGREEMENT
dated October 29, 2003, is made and entered into as of November 17, 2003 (the
"Agreement"), by and between Xxxxx Enterprises, Inc., a Pennsylvania corporation
(the "Seller") and AMFIRE Mining Company, LLC, a Delaware limited liability
company (the "Buyer"). Capitalized terms used but not defined herein have the
meanings set forth in the Agreement.
WHEREAS, the Seller and Buyer desire to amend the Agreement as herein set
forth.
NOW THEREFORE, in consideration of the mutual promises and agreement set
forth herein, and intending to be legally bound hereby, Seller and Buyer agree
as follows:
1. Amendments.
1.1 Employees. Section 10.1 of the Agreement is revised by adding the
following new paragraph:
(c) Notwithstanding anything in this Agreement to the contrary,
Seller shall provide and pay for health benefits coverage for the
employees it terminates in accordance with subsection (a), above, for the
month of November 2003. In addition, Seller shall offer COBRA continuation
coverage benefits to all of the employees it terminates in accordance with
subsection (a), above; however, Buyer shall pay the cost for any such
COBRA continuation coverage that is elected by the employees it hires for
the month of December 2003.
1.2 Closing. Section 2.13 of the Agreement is deleted and replaced with
the following:
2.13 Closing. The purchase and sale provided for in this Agreement (the
"Closing") will take place at the offices at Buyer in Latrobe,
Pennsylvania, commencing at 10:00 A.M. EST on November 17, 2003, effective
as of 12:01 A.M. EST, or if all of the conditions to the obligations of
the parties to consummate the transactions contemplated hereby have not
been satisfied in full or waived by such date, on such mutually agreeable
later date as soon as practicable (but in no event more than three (3)
Business Days) after the first date on which the conditions to the
obligations of the parties to consummate the transactions contemplated
hereby have been satisfied or waived.
1.3 Change to Definitions. Section 1.1 of the Agreement is amended by
deleting the definition "Initial Filing."
1.4 Consideration. Section 2.5 of the Agreement is deleted and replaced
with the following:
2.5 Consideration. The cash portion of the Purchase Price, prior to making
the Parts, Fuel and Supplies Inventory Adjustment, shall be delivered by
the Buyer as follows:
(a) One Million Dollars ($1,000,000) by wire transfer to the Seller
at the Closing. The cash Purchase Price shall be deposited into the
account designated by the Seller to the Buyer, with such designation to
occur at least two Business Days prior to the Closing Date;
(b) One Million Dollars ($1,000,000) (the "Escrowed Amount")
deposited into an escrow account with the Escrow Agent and held for the
benefit of the Seller, S&M and DLR pursuant to terms of the Escrow
Agreement. The Escrowed Amount shall be held in escrow until the second
anniversary of the Closing Date, at which time any remaining Escrowed
Amount shall be released in accordance with the provisions of paragraph 5
of the Escrow Agreement (provided all requirements of paragraph 5 of the
Escrow Agreement are satisfied). The Escrowed Amount shall be applied
individually, collectively, jointly and severally to satisfy the
obligations of (a) the Seller under Article VIII of this Agreement, (b)
S&M under Article VIII of the S&M Purchase Agreement, and (c) DLR under
Article VIII of the DLR Purchase Agreement, provided; however, that the
Buyer Indemnities' remedies hereunder shall in no way be limited to the
Escrowed Amount;
(c) One Million Dollars ($1,000,000) by wire transfer when and if
Buyer obtains the approval from the Indiana County Commissioners within
the time period and in the manner referred to in SECTION 6.13 (a);
(d) Up to One Million Five Hundred Thousand Dollars ($1,500,000) by
wire transfer when, if and to the extent that the Pennsylvania Department
of Environmental Protection permits mining within the Northwest Extension
identified in SECTION 6.13 (b).
For purposes of clarification, in no event shall the amounts set
forth in SECTION 2.5(c) or SECTION 2.5 (d) be paid to the Seller if the
applicable approval is not obtained within the time period and the manner
referred to in SECTION 6.13(a) or SECTION 6.13 (b).
1.5 Coal Inventory Adjustment.Section 2.7 (a) of the Agreement is revised
by adding a new sentence at the end to read:
Payment shall be made within three (3) days following the receipt of
analysis of the Coal Inventory.
1.6 Post-Closing Matters. Section 6.13 of the Agreement is deleted and
replaced with the following:
6.13 Post-Closing Matters.
(a) The Seller has represented to the Buyer that DLR, with the assistance
of the Seller, will be able to obtain approval by no later than January 1,
2004, from the County Commissioners of Indiana County, Pennsylvania, to
mine coal at DLR's Nolo Mine within and under the area designated in the
Zoning Ordinance of Indiana County as the Yellow Creek Conservation/Buffer
Area ("Conservation Area Matter").
(b) DLR has applied to the Pennsylvania Department of Environmental
Protection ("DEP) for a 915 acre extension ("North and West Extension"),
of Permit No. 32991301 ("Nolo Permit"), as a result of which DLR expected
that all of the coal within the North and West Extension would be
recoverable using fifty percent extraction methods ("Recoverable Ton").
The DEP has indicated that it will not permit mining of all of the coal in
the North and West Extension, resulting in an expected minimum loss of
approximately 850,000 tons of Recoverable Coal ("Lost Coal"), valued at
$1,500,000. In addition, the DEP has indicated that it will not permit
mining under the Nolo Permit above an elevation of 1,395 feet ("Elevation
Limit"). Buyer agrees that it will make a diligent effort, either through
negotiations or litigation with the DEP, as appropriate, to add some or
all of the Lost Coal to the North and West Extension and to mine above the
Elevation Limit. Buyer will pay to Seller the sum of $1.76 per Recoverable
Ton containing at least 13,000 as received Btu's and no greater than 2.5%
sulfur, for (i) Lost Coal as it is added to the North and West Extension
and (ii) coal that is permitted to be mined above the Elevation Limit, up
to a maximum aggregate amount of $1,500,000.
1.7 Permits; Replacement Bonds; Insurance and Guarantees; Other Filings.
Section 6.6 of the Agreement is revised by removing the words "other than the
Initial Filing" from paragraph (b).
1.8 Amendments of Seller Disclosure Schedules. Sections 2.1 (e), 3.2, 5.3
(a) (i), 5.3 (a)(ii), and 5.8 of the Seller Disclosure Schedules which are
attached to the Agreement are deleted and replaced with the contents of Annex A
to this First Amendment.
2. Headings. The headings used for the sections herein are for convenience and
reference purposes only and shall in no way affect the meaning or interpretation
of the provisions of this First Amendment.
3. Counterparts. This Amendment may be executed in several counterparts, each of
which is an original and all of which constitute one and the same instrument.
4. Effect of Amendment. Except as amended by this First Amendment, the Agreement
shall remain in full force and effect.
THE BUYER:
AMFIRE MINING COMPANY, LLC
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: President
THE SELLER:
XXXXX ENTERPRISES, INC.
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: President
