EXHIBIT 2.2
SHARE PURCHASE AGREEMENT
among
RAG COAL INTERNATIONAL XX
XXXXXXX ENERGY CORPORATION
and
PEABODY ENERGY AUSTRALIA PTY LIMITED
dated as of
February 29, 2004
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS........................................................................................... 1
1.1 Certain Defined Terms......................................................................... 1
1.2 Other Interpretive Provisions................................................................. 13
ARTICLE II PURCHASE AND SALE.................................................................................... 13
2.1 Purchase and Sale of the Shares............................................................... 13
2.2 Consideration; Estimated Purchase Price Adjustment............................................ 13
2.3 The Closing................................................................................... 14
2.4 Deliveries at the Closing..................................................................... 14
2.5 Closing Board Meeting......................................................................... 15
2.6 Period after Closing.......................................................................... 16
2.7 Closing Payment Adjustment.................................................................... 16
2.8 Payments On or Before Closing................................................................. 18
2.9 Form of Payments.............................................................................. 18
2.10 Allocation of Purchase Price.................................................................. 18
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER............................................................ 18
3.1 Organization.................................................................................. 18
3.2 Authorization; Enforceability................................................................. 19
3.3 Capital Stock................................................................................. 19
3.4 Ownership; No Liabilities of RAG Trading...................................................... 19
3.5 Subsidiaries.................................................................................. 20
3.6 Associated Companies.......................................................................... 20
3.7 Joint Ventures................................................................................ 21
3.8 Audited Financial Statements; Superannuation.................................................. 21
3.9 Absence of Undisclosed Liabilities............................................................ 21
3.10 No Conflicts or Approvals..................................................................... 21
3.11 Governmental Authorization.................................................................... 22
3.12 Compliance with Law; Mining Authorities; Occupational Health and
Safety Laws; Performance Bonds.......................................................... 22
3.13 Proceedings................................................................................... 24
3.14 Absence of Certain Changes.................................................................... 24
3.15 Tax Matters................................................................................... 25
3.16 Employee Benefits............................................................................. 28
3.17 Labor and Employee Relations.................................................................. 30
3.18 Intellectual Property......................................................................... 31
3.19 Contracts..................................................................................... 31
3.20 Environmental Matters......................................................................... 33
3.21 Insurance..................................................................................... 35
3.22 Personal Property Assets...................................................................... 35
3.23 Real Property................................................................................. 36
3.24 Records and Constituent Documents............................................................. 37
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3.25 Intercompany Accounts......................................................................... 37
3.26 No Brokers' or Other Fees..................................................................... 38
3.27 Entire Business; Condition of Assets.......................................................... 38
3.28 Solvency...................................................................................... 38
3.29 Grants and Allowances......................................................................... 38
3.30 Illegal Acts.................................................................................. 38
3.31 Offers........................................................................................ 38
3.32 Security Interests............................................................................ 38
3.33 Forecasts..................................................................................... 39
3.34 No Other Representations or Warranties........................................................ 39
3.35 Native Title Matters.......................................................................... 39
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PEABODY AND BUYER.................................................. 39
4.1 Organization.................................................................................. 39
4.2 Authorization; Enforceability................................................................. 40
4.3 No Conflicts or Approvals..................................................................... 40
4.4 Governmental Authorization.................................................................... 40
4.5 No Brokers' or Other Fees..................................................................... 40
4.6 Financing..................................................................................... 41
4.7 No Other Representations or Warranties........................................................ 41
ARTICLE V COVENANTS AND AGREEMENTS.............................................................................. 41
5.1 Conduct of Business Prior to the Closing...................................................... 41
5.2 Access to Books, Records and Properties; Reports; Cooperation................................. 44
5.3 Tax Matters................................................................................... 45
5.4 Employees; Benefit Plans...................................................................... 51
5.5 Labor Matters................................................................................. 51
5.6 Further Actions............................................................................... 52
5.7 Further Assurances............................................................................ 52
5.8 Closing Balance Sheet......................................................................... 52
5.9 Noncompetition; Interference; Nonsolicitation................................................. 52
5.10 Competing Transaction; Return of Confidential Information..................................... 54
5.11 Intercompany Accounts; Affiliate Agreements................................................... 54
5.12 Intercompany Insurance........................................................................ 55
5.13 Name Changes.................................................................................. 55
5.14 Seller Guarantees Provided to the Company..................................................... 55
5.15 Tax Consolidation............................................................................. 56
5.16 Confidentiality............................................................................... 56
5.17 Cooperation in Financing...................................................................... 58
5.18 Company Restructuring Matters................................................................. 58
ARTICLE VI CONDITIONS TO SELLER's OBLIGATIONS................................................................... 59
6.1 Representations and Warranties................................................................ 59
6.2 Performance................................................................................... 59
6.3 Officer's Certificates........................................................................ 59
6.4 Governmental Approvals........................................................................ 59
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6.5 Injunctions................................................................................... 59
6.6 Closing Deliveries............................................................................ 59
6.7 Colorado Transaction.......................................................................... 60
ARTICLE VII CONDITIONS TO PEABODY'S AND BUYER's OBLIGATIONS..................................................... 60
7.1 Representations and Warranties................................................................ 60
7.2 Performance................................................................................... 60
7.3 Officer's Certificate......................................................................... 60
7.4 Governmental Approvals........................................................................ 60
7.5 Third Party Approvals......................................................................... 60
7.6 Injunctions................................................................................... 60
7.7 Intercompany Accounts; Affiliate Agreements................................................... 61
7.8 Absence of Company Material Adverse Effect.................................................... 61
7.9 Closing Deliveries............................................................................ 61
7.10 Company and Subsidiary Board Meetings......................................................... 61
7.11 North Goonyella Longwall...................................................................... 61
7.12 Colorado Transaction.......................................................................... 61
ARTICLE VIII TERMINATION........................................................................................ 61
8.1 Termination................................................................................... 61
8.2 Procedure and Effect of Termination........................................................... 62
ARTICLE IX INDEMNIFICATION...................................................................................... 62
9.1 Indemnification............................................................................... 62
9.2 Specific Indemnification...................................................................... 66
9.3 Treatment of Indemnification Payments......................................................... 67
ARTICLE X GOODS & SERVICES TAX.................................................................................. 67
10.1 Imposition of GST............................................................................. 67
10.2 Payment....................................................................................... 67
10.3 Reimbursements and Indemnities................................................................ 67
10.4 Interpretation................................................................................ 67
ARTICLE XI MISCELLANEOUS........................................................................................ 68
11.1 Fees and Expenses............................................................................. 68
11.2 Governing Law................................................................................. 68
11.3 Amendment..................................................................................... 68
11.4 Assignment.................................................................................... 68
11.5 Waiver........................................................................................ 68
11.6 Notices....................................................................................... 69
11.7 Complete Agreement............................................................................ 70
11.8 Counterparts.................................................................................. 70
11.9 Publicity..................................................................................... 70
11.10 Headings...................................................................................... 70
11.11 Severability.................................................................................. 70
11.12 Third Parties................................................................................. 71
11.13 Consent to Jurisdiction; Waiver of Jury Trial................................................. 71
11.14 Specific Performance; Rescission.............................................................. 71
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SHARE PURCHASE AGREEMENT
This SHARE PURCHASE AGREEMENT, dated as of February 29, 2004,
between RAG Coal International AG, a company incorporated under the laws of
Germany ("Seller"), Peabody Energy Australia Pty Ltd (ACN 096 909 410), a
company incorporated in New South Wales, Australia ("Buyer"), and Peabody Energy
Corporation, a company incorporated under the laws of the U.S. State of Delaware
("Peabody").
WHEREAS, Seller owns (i) 1,500 Ordinary Shares (the "Ordinary
Shares") of RAG Australia Coal Pty Limited (ACN 001 401 663), a company
incorporated in New South Wales, Australia (the "Company"), and (ii) 65,000,000
Redeemable Preference Shares (the "Preference Shares" and, together with the
Ordinary Shares, the "Shares") of the Company;
WHEREAS, Seller desires to sell, and Buyer desires to
purchase, the Shares, upon the terms and subject to the conditions set forth in
this Agreement; and
WHEREAS, the parties intend for the Company Restructuring (as
defined below) to occur prior to the Closing.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained and
intending to be legally bound hereby, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"AASB" shall mean the Australian Accounting Standards Board.
"Additional Amount" shall have the meaning set forth in
Section 10.1.
"Affiliate" shall mean, with respect to any specified Person,
any other Person that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with,
such specified Person.
"Affiliate Agreement" shall have the meaning set forth in
Section 3.19 (a)(xiii).
"Agreement" shall mean this Share Purchase Agreement
(including the Schedules), as amended, modified or supplemented from time to
time.
"Amount Incurred" shall have the meaning set forth in Section
10.3.
"Assessment" includes a notice, statement, letter, account or
other document or an amended or deemed assessment (including a notice of
adjustment of a loss claimed by a company) that relates to, requires or imposes
a liability for Tax or deprives, reduces, grants or increases any credit,
rebate, refund, relief, allowance or deduction claimed or allowed.
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"Associated Company" shall have the meaning set forth in
Section 3.6.
"ATO" shall have the meaning set forth in Section 10.1.
"Audited Balance Sheet" shall have the meaning set forth in
Section 2.7(a).
"Audited Financial Statements" shall have the meaning set
forth in Section 3.8(a).
"Australian Accounting Standards" shall mean in relation to
the Audited Financial Statements:
(i) the accounting standards required under the
Australian Corporations Act; and
(ii) if no accounting standard applies under the
Australian Corporations Act in relation to an
accounting practice, the standards acceptable to the
AASB, including; in order of preference:
(a) The requirements and guidance in other
Accounting Standards or other authoritative
pronouncements of the AASB and/or the
Australia Public Sector Accounting Standards
Board dealing with similar or related
issues.
(b) The requirements and guidance in UIG
Consensus Views dealing with similar or
related issues.
(c) The definitions and recognition criteria for
assets, liabilities, equity, revenues and
expenses set out in Statement of Accounting
Concepts SAC 4 "Definition and Recognition
of the Elements of Financial Statements".
(d) International Accounting Standards and
Interpretations of the Standing
Interpretations Committee of the
International Accounting Standards Committee
(only to the extent that these are
consistent with (a), (b) and (c) of this
paragraph).
(e) The pronouncements of other national
accounting standard setting bodies and
accepted industry practices (only to the
extent that these are consistent with (a),
(b) and (c) of this paragraph).
"Australian Corporations Act" shall mean the Xxxxxxxxxx
Xxxxxxxxxxxx Xxx 0000 (Cth).
"Benefit Period" shall have the meaning set forth in Section
9.1(c).
"Xxxxxx Sub" shall have the meaning set forth in Section
3.19(c).
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"Business Day" shall mean any day that is not a Saturday, a
Sunday or other day on which banks are required or authorized by law to be
closed in the City of New York.
"Buyer" shall have the meaning set forth in the first sentence
of this Agreement.
"Buyer Indemnitees" shall have the meaning set forth in
Section 9.1(a).
"Buyer Loan" shall have the meaning set forth in Section
5.18(b)(iii).
"Buyer Representative" shall have the meaning set forth in
Section 5.16(b).
"Capital Expenditure Budget" shall have the meaning set forth
in Section 5.1(a).
"Cash" shall mean the sum of cash, cash equivalents (as
determined under Australian Accounting Standards) and accounts receivable
arising from loans or advances to Affiliates.
"Cash Shortfall Amount" shall have the meaning set forth in
Section 5.18(a).
"Closing" shall have the meaning set forth in Section 2.3.
"Closing Balance Sheet" shall have the meaning set forth in
Section 2.7(a).
"Closing Date" shall have the meaning set forth in Section
2.3.
"Closing Payment" shall have the meaning set forth in Section
2.2(a).
"Closing Total Company Adjusted Net Assets Statement" shall
have the meaning set forth in Section 2.7(a).
"Colorado Agreement" shall have the meaning set forth in
Section 6.7.
"Company" shall have the meaning set forth in the recitals to
this Agreement.
"Company Bank Debt" shall have the meaning set forth in
Section 5.18(b)(i).
"Company Bank Debt Amount" shall have the meaning set forth in
Section 5.18(b)(ii).
"Company Bank Debt Repayment" shall have the meaning set forth
in Section 5.18(b)(iii).
"Company Benefit Plan" shall have the meaning set forth in
Section 3.16(a).
"Company Dividend" shall have the meaning set forth in Section
5.18(a).
"Company Employees" shall have the meaning set forth in
Section 3.16(a).
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"Company Material Adverse Effect" shall mean any change,
occurrence or development that has a material adverse effect on the business,
assets, Liabilities, results of operations or financial condition of the Company
and its Subsidiaries, taken as a whole, but shall exclude any effect (i)
resulting from changes in general economic and political conditions (including,
without limitation, changes in commodity prices, interest rates, currency
exchange rates, applicable Law and/or Australian Accounting Standards) that do
not disproportionately affect the Company and its Subsidiaries or (ii) resulting
from changes affecting companies in the Australian coal mining industry
generally that do not disproportionately affect the Company and its
Subsidiaries.
"Company Restructuring" shall have the meaning set forth in
Section 5.18(b)(iii).
"Company Securities" shall have the meaning set forth in
Section 3.3.
"Company Surety Bonds" shall have the meaning set forth in
Section 3.12(e).
"Competing Transaction" shall have the meaning set forth in
Section 5.10(a).
"Competition/Investment Law" shall mean any Law that is
designed or intended to prohibit, restrict or regulate (a) foreign investment in
Australia or (b) antitrust, monopolization, restraint of trade or competition in
Australia, including, without limitation, the Australian Foreign Acquisitions
and Takeovers Act of 1975 (Cth) and the Australian Trade Practices Act 1974
(Cth).
"Competition Restraint Area" shall mean the greater
geographical area of the following to the extent permitted by Law: (A)
Australia; (B) New South Wales, Queensland and Victoria; or (C) a radius of 500
kilometers from any site of current operation of the business of the Company or
any of its Subsidiaries.
"Competition Restraint Period for Noncompetition/Interference"
shall mean the greater of the following to the extent permitted by Law: (A) 3
years; (B) 2 years; or (C) 1 year, from the Closing Date.
"Competition Restraint Period for Nonsolicitation" shall mean
the greater of the following to the extent permitted by Law: (A) 2 years or (B)
1 year from the Closing Date.
"Confidential Information" shall have the meaning set forth in
Section 5.16(a).
"Confidentiality Agreement" shall mean the confidentiality
agreement between Seller and Peabody, dated October 10, 2003, as amended by that
certain Amended and Restated Heads of Agreement, dated December 22, 2003,
between Seller and Peabody.
"Consent" shall mean any consent, approval, authorization,
consultation, waiver, permit, grant, agreement, license, certificate, exemption,
order, registration, declaration, filing or notice of, with or to any Person, in
each case required to permit the consummation of any of the transactions
contemplated hereby.
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"control" (including the terms "controlled by" and "under
common control with"), with respect to the relationship between or among two or
more Persons, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the affairs or management of a Person, whether
through the ownership of voting securities, by contract or otherwise, including
the ownership, directly or indirectly, of securities having the power to elect a
majority of the board of directors or similar body governing the affairs of such
Person.
"Debt" shall, as applied to any Person, mean, without
duplication:
(a) all indebtedness for borrowed money, including, without
limitation, all obligations evidenced by a note, bond, debenture, letter of
credit, draft or similar instrument;
(b) that portion of obligations with respect to capital leases
that is properly classified as a Liability on a balance sheet in conformity with
Australian Accounting Standards;
(c) Liabilities for interest rate swaps; and
(d) all indebtedness and obligations of the types described in
the foregoing clauses (a) through (c) to the extent secured by any Encumbrance,
other than Permitted Encumbrances, on any property or asset owned or held by
that Person, regardless of whether the indebtedness secured thereby shall have
been incurred or assumed by that Person or is otherwise nonrecourse to the
credit of that Person.
"Duty" shall mean any stamp, transaction or registration duty
or similar charge imposed by any Governmental Authority and includes, but is not
limited to, any interest, fine, penalty, charge or other amount imposed in
respect of the above, but excludes any Tax calculated by reference to any
income, profits, gains or other similar measure.
"Encumbrance" shall mean any security interest, pledge,
mortgage, lien, charge, option to purchase or lease or otherwise acquire any
interest, conditional sales agreement, claim, restriction, covenant, easement,
right of way, title defect, retention of title, adverse claim of ownership or
use, interest created under any xxxx of sale, trust or power or other
encumbrance of any kind.
"Environmental Claim" shall mean any notice or Proceeding by
any Person alleging Liability or potential Liability (including Liability or
potential Liability for investigatory costs, cleanup costs, governmental
response costs, natural resource damages, fines or penalties) relating to any
Environmental Losses or in respect of any Environmental Laws.
"Environmental Law" shall mean any applicable Law relating to
remediation, restoration or protection of the environment, contamination of the
environment or other environmental matters including licensing of activities
that harm the environment, including such Laws relating to storage, treatment,
management, generation, transportation, land use, development, pollution, waste
disposal, toxic materials, conservation of natural resources and resource
allocation (including any Law relating to development or exploitation of any
natural resource) or use or disposal of Hazardous Materials, including
applicable Governmental Approvals pursuant to Environmental Laws; provided,
however, Environmental Law shall not include any Law concerning cultural
heritage or Native Title matters.
5
"Environmental Losses" shall mean Losses arising from a
Release of Hazardous Materials or noncompliance with or Liability under any
Environmental Law or noncompliance with any Environmental Permits.
"Environmental Permits" shall mean any consent, approval,
authorization, permit, license, certificate or exemption which any Environmental
Law requires any of the Company, its Subsidiaries or the Associated Companies to
hold in order to develop and operate their assets and conduct their business,
other than any Permit concerning cultural heritage or Native Title matters.
"Estimated Closing Total Company Adjusted Net Assets" shall
have the meaning set forth in Section 2.2(b).
"Estimated Closing Total Company Adjusted Net Assets
Statement" shall have the meaning set forth in Section 2.2(b).
"Expert" shall mean a person with over ten years experience in
Tax agreed by Buyer, Seller and Peabody, or if they do not agree on the person
to be appointed within 5 days of one party requesting appointment, a person with
the same expertise appointed by the President of the Australian Institute of
Chartered Accountants at the request of Buyer, Seller and Peabody.
"Final Closing Balance Sheet" shall have the meaning set forth
in Section 2.7(c).
"Final Closing Total Company Adjusted Net Assets Statement"
shall have the meaning set forth in Section 2.7(c).
"FIRB Approval" shall mean: (A) Buyer receives written advice
from or on behalf of the Treasurer of the Commonwealth of Australia stating or
to the effect that the Commonwealth Government of Australia does not object to
Buyer and Seller entering into and completing the transactions the subject of
this Agreement, being advice that is either unconditional or does not include a
condition that the Buyer, acting reasonably, considers unacceptable; or (B) the
Treasurer of the Commonwealth of Australia becomes precluded from making an
order in respect of the acquisition of the Shares under the Australian Foreign
Acquisitions and Takeovers Xxx 0000 (Cth).
"Governmental Approval" shall mean any Consent of, with or to
any Governmental Authority, including, without limitation, FIRB Approval.
"Governmental Authority" shall mean any Australian or other
federal, state, provincial or local government or other political subdivision
thereof, any entity, authority, industrial relations commission, tribunal,
agency or body exercising executive, legislative, judicial, regulatory, fiscal
or administrative functions of any such government or political subdivision, and
any supranational organization of sovereign states exercising such functions for
such sovereign states.
"Governmental Order" shall mean, with respect to any Person,
any judgment, order, writ, injunction, decree, stipulation, agreement,
determination or award entered or issued by or with any Governmental Authority
and binding on such Person.
6
"GST" has the same meaning as in the A New Tax System (Goods &
Services Tax) Xxx 0000 (Cth).
"Hazardous Materials" shall mean any substance or preparation
defined as a "contaminant", "hazardous contaminant", "hazardous substance,"
"toxic substance," "hazardous waste," "dangerous preparation" or "dangerous
substance" or any other term of similar import under any Environmental Law as in
effect as of the date of the Closing or any other materials which are regulated
or give rise to liability under Environmental Laws as in effect as of the date
of the Closing, including petroleum (including crude oil or any fraction
thereof), asbestos and asbestos-containing materials, radiation and radioactive
materials, leaded paints, molds and other harmful biologic agents, and
polychlorinated biphenyls.
"Indemnified Party" shall have the meaning set forth in
Section 9.1(d).
"Indemnifying Party" shall have the meaning set forth in
Section 9.1(d).
"Indemnity Termination Date" shall have the meaning set forth
in Section 9.1(c).
"Intellectual Property" shall mean all (i) patents, (ii)
inventions, discoveries, processes, formulae, designs, models, industrial
designs, know-how, confidential information, proprietary information and trade
secrets, whether or not patented or patentable, (iii) trademarks, service marks,
trade names, brand names, trade dress, slogans, logos and internet domain names,
(iv) copyrights and other copyrightable works and works in progress, databases
and software, (v) all other intellectual property rights and foreign equivalent
or counterpart rights and forms of protection of a similar or analogous nature
or having similar effect in any jurisdiction throughout the world, (vi) any
renewals, extensions, continuations, divisionals, reexaminations or reissues or
equivalent or counterpart of any of the foregoing in any jurisdiction throughout
the world, and (vii) all registrations and applications for registration of any
of the foregoing.
"Intercompany Account" shall have the meaning set forth in
Section 3.25.
"Joint Venture" shall have the meaning set forth in Section
3.7.
"Joint Venture Agreement" shall have the meaning set forth in
Section 3.7.
"Knowledge of Seller" shall mean matters actually known after
reasonable investigation by any of the Persons listed on Schedule 1.1(A).
"Law" shall mean any applicable Governmental Order or any
applicable provision of any constitution, law (including principles of the
common law), legally binding directive, treaty, statute, rule, regulation or
order of any Governmental Authority.
"Leased Real Property" shall have the meaning set forth in
Section 3.23(a).
"Liabilities" shall mean any and all liabilities and
obligations of every kind and description whatsoever, whether such liabilities
or obligations are known or unknown, disclosed or undisclosed, matured or
unmatured, accrued, absolute, contingent or otherwise.
7
"Losses" shall mean any and all claims, Liabilities, losses,
damages, fines, penalties and costs (in each case including reasonable
out-of-pocket expenses (including reasonable attorneys', accountants', technical
consultants', engineers' and experts' fees and expenses)).
"Material Contracts" shall have the meaning set forth in
Section 3.19(a).
"Material Environmental Applications" shall have the meaning
set forth in Section 3.20(a)(vii).
"Material Mining Applications" shall have the meaning set
forth in Section 3.12(c)(ii).
"Material Permits" shall mean all Permits that are material to
the Company, any of its Subsidiaries or any Associated Company.
"Mining Authorization" shall mean the mining leases, licenses,
permits and other mining authorities held by any of the Company, its
Subsidiaries or the Associated Companies, and which are listed on Schedule
1.1(B).
"Native Title" shall mean a right, interest or entitlement to
the occupation or use of land by indigenous persons or their descendants in
accordance with the laws and customs recognized by statute or common law from
time to time (including in respect of cultural heritage).
"Net Debt" shall mean, as of any date, the result of Debt
minus Cash of the Company and its Subsidiaries.
"Neutral Auditor" shall have the meaning set forth in Section
2.7(c).
"ordinary course of business" shall mean, the usual, regular
and ordinary course of a business consistent with the past practice thereof.
"Ordinary Shares" shall have the meaning set forth in the
recitals to this Agreement.
"organizational document" shall mean, as to any Person, its
constitution, certificate or articles of incorporation, its regulations or
by-laws or any equivalent documents under the law of such Person's jurisdiction
of incorporation or organization.
"Owned Real Property" shall have the meaning set forth in
Section 3.23(b).
"Peabody" shall have the meaning set forth in the first
sentence of this Agreement.
"Permits" shall mean any consent, approval, authorization,
permit, license, certificate or exemption which the Law requires the Company,
any of its Subsidiaries or any
8
Associated Company to hold in order to develop and operate its respective assets
and conduct its respective business.
"Permitted Encumbrance" shall mean, (i) liens for Taxes,
Assessments and other charges of Governmental Authorities not yet due and
payable or being contested in good faith by appropriate proceedings during which
collection or enforcement against the property is stayed, (ii) mechanics',
workmen's, repairmen's, warehousemen's, carriers' or other like liens arising or
incurred in the ordinary course of business or by operation of law if the
underlying obligations are not delinquent, (iii) any conditions that may be
shown by a current, accurate survey, (iv) easements, encroachments,
restrictions, rights of way and any other non-monetary title defects, and (v)
zoning, building and other similar restrictions; provided none of the foregoing
described shall individually or in the aggregate impair the continued use and
operation or materially impair the value of the property to which they relate in
the ordinary course of business of the Company and its Subsidiaries, as
applicable.
"Permitted Restructuring Tax Costs" shall mean any liability
for Tax and any related advisory costs that the Company or any of its
Subsidiaries incurs to the extent that such liability or costs would not have
arisen or been incurred had the Company or any of its Subsidiaries not
undertaken the Company Restructuring.
"Person" shall mean any individual, partnership, firm,
corporation, association, trust, unincorporated organization, joint venture,
limited liability company, Governmental Authority or other entity.
"Post-Closing Filing Return" shall have the meaning set forth
in Section 5.3(b)(ii).
"Post-Closing Tax Period" shall mean all taxable periods
beginning after the Closing Date.
"Pre-Closing Tax Period" shall mean all taxable periods ending
on or before the Closing Date.
"Preference Shares" shall have the meaning set forth in the
recitals to this Agreement.
"Proceeding" shall mean any action, claim, matter, dispute,
demand, suit, proceeding, conciliation, arbitration, citation, summons,
subpoena, inquiry or investigation of any nature, civil, criminal, regulatory or
otherwise, in law or in equity, by or before any Governmental Authority.
"Purchase Price" shall have the meaning set forth in Section
2.2(a).
"Recipient" shall have the meaning set forth in Section 10.1.
"RAG Trading" shall have the meaning set forth in Section
3.4(b).
9
"Release" shall mean any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping, or
disposing of Hazardous Materials into any occupied structure or the environment,
including, surface water, ground water, a drinking water supply, land surface or
subsurface strata or ambient air (including the abandonment or discarding of
barrels, containers, and other closed receptacles containing any Hazardous
Material).
"Resolution Period" shall have the meaning set forth in
Section 2.7(b).
"Ruhrkohle" shall have the meaning set forth in Section
9.1(a).
"Seller" shall have the meaning set forth in the first
sentence of this Agreement.
"Seller Confidential Information" shall have the meaning set
forth in Section 5.16(b).
"Seller Guarantees" shall mean all guarantees, indemnities,
letters of credit, letters of comfort and similar credit obligations set forth
on Schedule 1.1(C).
"Seller Indemnitees" shall have the meaning set forth in
Section 9.1(b).
"Seller Insurance Policies" shall have the meaning set forth
in Section 5.12.
"Seller Representatives" shall have the meaning set forth in
Section 5.16(a).
"Shares" shall have the meaning set forth in the recitals to
this Agreement.
"Straddle Indemnification Period" shall have the meaning set
forth in Section 5.3(e).
"Straddle Period" shall have the meaning set forth in Section
5.3(e).
"Subject Claims" shall have the meaning set forth in Section
5.12.
"Subject Liabilities" shall have the meaning set forth in
Section 5.12.
"subsidiaries" shall mean any and all corporations,
partnerships, limited liability companies and other entities with respect to
which a company, directly or indirectly, owns securities having the power to
elect a majority of the board of directors or similar body governing the affairs
of such entity.
"Subsidiaries" shall have the meaning given in the Australian
Corporations Act; provided, however, that for purposes of Sections 3.15,
5.1(b)(ix) and 5.3 "Subsidiaries" shall mean any entities which are controlled
by a parent entity, where control means the capacity to dominate decision
making, directly or indirectly, in relation to the financial and operating
policies of another entity so as to enable that other entity to operate with it
in pursuing the objectivities of the parent entity. For the purpose of this
definition "control" shall not be deemed to exist where 50% or less of the
issued capital is held
10
"Subsidiary Securities" shall have the meaning set forth in
Section 3.5.
"Supplier" shall have the meaning set forth in Section 10.1.
"Target Total Company Equity" shall have the meaning set forth
in Section 2.2(b).
"Tax" or "Taxes" shall mean any taxes of any kind, including
but not limited to:
(a) income tax, capital gains tax, franking deficits tax, land
tax, Duty, fringe benefits tax, superannuation guarantee levy, GST, training
guarantee levy, PAYE or PAYG withholding tax, other withholding taxes, land tax,
import or customs duty, excise, municipal and council rates;
(b) those measured on, measured by or referred to as, income,
alternative or add-on minimum, gross receipts, escheat, capital, capital gains,
sales, use, ad valorem, franchise, profits, license, privilege, transfer,
withholding, payroll, employment, social, excise, severance, stamp, occupation,
premium, value added, goods and services, property, environmental or windfall
profits taxes, customs, duties or similar fees, Assessments or charges of any
kind whatsoever; and
(c) any contractual obligation to indemnify another Person for
Taxes;
together with any interest and any penalties, additions to tax or additional
amounts imposed by any Governmental Authority.
"Tax Act" shall mean the Income Tax Assessment Xxx 0000 (Cth)
or the Income Tax Assessment Act 1997 (Cth), as the case may be, as in force
from time to time.
"Tax Amendment Period" shall mean the last date by which the
relevant Governmental Authority may review, audit, amend or cause to be amended
a Tax Return or Assessment of the relevant Person relating to or arising in
respect of a period occurring on or before Closing or a Straddle Period,
provided that no extension or waiver of the Tax Amendment Period applicable to
any Tax or Tax Return has been agreed for the relevant period. Notwithstanding
the foregoing, the last date of any Tax Amendment Period shall not be later than
8 years from the date of assessment or deemed assessment pursuant to a Tax Law.
"Tax Benefit" shall have the meaning set forth in Section
9.1(c).
"Tax Claim" shall have the meaning set forth in Section
5.3(h).
"Tax Law" shall mean any Law relating to Tax.
"Tax Loss" shall have the meaning set forth in Section
5.3(f)(vi).
"tax reserve" shall have the meaning set forth in Section
5.3(g).
11
"Tax Return" shall mean any return, report, declaration, form,
election letter, statement or other information or document required by any Tax
Law to be or prepared by a Person, filed with any Governmental Authority or kept
by the Person with respect to Taxes, including, but not limited to, an income
tax return, a GST return and any schedule or attachment thereto or amendment
thereof.
"Taxing Authority" shall mean, with respect to any Tax, the
Governmental Authority thereof that imposes such Tax and the agency, court or
other body (if any) charged with the interpretation, administration or
collection of such Tax for such Governmental Authority.
"Tenure Defect" shall mean any potential defect in a Material
Mining Application caused by the background tenure of a prospecting permit, an
exploration permit or a mineral development license granted by the Queensland
Department of Natural Resources and Mines and which background tenure was
subject to a condition that excluded land subject to Native Title from the
permit area.
"Termination Nonsolicitation Period" shall mean the greater of
the following to the extent permitted by Law: (A) 2 years or (B) 1 year from the
date of termination of this Agreement in accordance with its terms.
"Xxxxxx" shall have the meaning set forth in Section 3.19(c).
"Xxxxxx Operating Agreement" shall have the meaning set forth
in Section 3.19(c).
"Third Parties" shall have the meaning set forth in Section
5.10(a).
"Third-Party Claim" shall have the meaning set forth in
Section 9.1(d).
"Total Company Equity" shall mean, with respect to a specific
date, the total company equity set forth on the Company's statement of financial
position as of such date, as determined in accordance with Australian Accounting
Standards, consistently applied.
"Total Company Adjusted Net Assets" shall mean, with respect
to a specific date, (i) Total Company Equity minus (ii) Net Debt as calculated
based on amounts set forth on the Company's statement of financial position as
of such date, as determined in accordance with Australian Accounting Standards,
consistently applied; provided that for any determination as of the Closing
Date, Total Company Equity shall be adjusted by the addition of the amount of
the after-tax cost to the Company of payments made pursuant to the last sentence
of Section 11.1 of this Agreement; and, provided further that for any
determination as of the Closing Date, the amount of the Company Dividend shall
be deemed to be Cash for purposes of the calculation of Net Debt to the extent
such amount has been deducted in calculating Total Company Equity.
"Water Permits" shall mean any Consent under the Xxxxxxxxx
Xxxxx Xxx 0000 (Qld) (the "Water Act") or Australia Integrated Planning Act 1994
(Qld) required by the Company or any of its Subsidiaries to take or use water or
to construct works for the taking, use
12
or inference with water or the construction of a dam in order to develop and
operate their respective assets and conduct their respective businesses.
1.2 Other Interpretive Provisions. (a) The words
"hereof," "herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole (including any Schedules
hereto) and not to any particular provision of this Agreement, and all Article,
Section, Schedule and Exhibit references are to this Agreement unless otherwise
specified. The words "include," "includes" and "including" shall be deemed to be
followed by the phrase "without limitation." The meanings given to terms defined
herein shall be equally applicable to both the singular and plural forms of such
terms. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. Except as otherwise
expressly provided herein, all references to "U.S. dollars" or "US$" shall be
deemed references to the lawful money of the United States of America, and all
references to "Australian dollars" or "A$" shall be deemed references to the
lawful money of Australia.
(b) The disclosure of any matter on a Schedule shall not
be deemed to be an admission or representation as to the materiality of the
matter so disclosed. Any matter disclosed on a Schedule pursuant to any Section
of this Agreement shall be deemed to have been disclosed for purposes of another
Section or Sections of this Agreement if the relevance or applicability of such
disclosure to the subject matter of such other Section or Sections is clear and
apparent on the face of such disclosure.
ARTICLE II
PURCHASE AND SALE
2.1 Purchase and Sale of the Shares. (a) On the Closing
Date and subject to the terms and conditions set forth in this Agreement, Seller
will sell, convey, assign and transfer to Buyer, and Buyer will purchase and
acquire, all of such Seller's right, title and interest in and to the Shares,
free and clear of all Encumbrances.
2.2 Consideration; Estimated Purchase Price Adjustment.
(a) On the Closing Date and subject to the terms and conditions set forth in
this Agreement, in reliance on the representations, warranties, covenants and
agreements of the parties contained herein and in consideration of the sale,
assignment and transfer of the Shares, Buyer will (and Peabody will cause Buyer
to) pay to Seller Two Hundred Fifty Million U.S. Dollars (US$250,000,000), as
adjusted in accordance with Section 2.2(b) hereof (the "Closing Payment"; and
the Closing Payment, as adjusted in accordance with Section 2.7, the "Purchase
Price").
(b) Not later than three (3) business days prior to the
Closing Date, Seller shall deliver to Buyer a statement (the "Estimated Closing
Total Company Adjusted Net Assets Statement") setting forth Sellers' good faith
estimate of the Total Company Adjusted Net Assets of the Company and its
consolidated entities in Australian Dollars as of the Closing Date, giving
effect to the Company Restructuring (the "Estimated Closing Total Company
Adjusted Net Assets"). At the Closing, the amount of the Closing Payment that
Buyer shall pay shall be adjusted by the difference between (i) the Estimated
Closing Total Company Adjusted Net Assets and (ii) A$253,765,000 (the "Target
Total Company Equity"). If the Estimated Closing
13
Total Company Adjusted Net Assets exceeds the Target Total Company Equity, the
amount of the Closing Payment paid at the Closing shall be increased
dollar-for-dollar by the amount of such excess (after converting the amount of
such excess to U.S. dollars in accordance with Section 2.9); and if the
Estimated Closing Total Company Adjusted Net Assets is less than the Target
Total Company Equity, the amount of the Closing Payment paid at the Closing
shall be decreased dollar-for-dollar by such shortfall (after converting the
amount of such shortfall to U.S. dollars in accordance with Section 2.9). The
Closing Payment shall thereafter be subject to further adjustment as provided in
Section 2.7.
2.3 The Closing. Unless this Agreement shall have been
terminated pursuant to ARTICLE VIII, subject to the satisfaction or waiver of
the conditions set forth in ARTICLES VI and VII, the closing (the "Closing") of
the transactions contemplated by this Agreement shall take place at the offices
of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, on the later of (i) five (5) Business Days following the satisfaction or
waiver of the conditions set forth in Article VI and Article VII occurs and (ii)
April 15, 2004 (the later of (i) and (ii), the "Closing Date"), or at such other
place and time as may be agreed upon by Seller, Peabody and Buyer. Except as may
otherwise be agreed to by the parties, the Closing shall be deemed effective for
all purposes under this Agreement as of 11:59 p.m., Eastern Standard Time, on
the Closing Date.
2.4 Deliveries at the Closing. (a) At or prior to the
Closing, Seller shall deliver or cause to be delivered, to Buyer (provided that
in the case of the documents referred to in paragraphs (vii) to (xi) below such
documents shall be deemed to have been delivered to Buyer if at the Closing they
are located at any premises owned or controlled by the Company or any of its
Subsidiaries):
(i) share certificates for the Shares accompanied by
share transfer forms duly executed by Seller;
(ii) a receipt from Seller for the Closing Payment;
(iii) copies of the resolutions (or local equivalent) of
the board of directors and, where required, the shareholders of Seller,
authorizing and approving this Agreement and the transactions
contemplated hereby, certified by the corporate secretary or other
senior officer or officers of Seller reasonably acceptable to Buyer to
be true and complete and in full force and effect and unmodified as of
the Closing Date;
(iv) the Consents listed on Schedule 2.4(a)(iv);
(v) the certificate required by Section 7.3;
(vi) the written resignations of all directors and
officers of the Company and each of its Subsidiaries, including, the
secretary of the Company and each of its Subsidiaries, and the auditors
of the Company and each of its Subsidiaries; each resignation to be
effective on the appointment of the directors, officers, secretaries
and auditors to be appointed at the board meeting to be convened under
Section 2.5;
14
(vii) the certificate of registration, common seal (to the
extent the Company and each Subsidiary has one); all statutory, minute
and other record books and share certificate books of the Company and
each Subsidiary and all unused share certificates;
(viii) all ledgers and books of account of the Company and
each Subsidiary;
(ix) all check books and a list of all bank accounts
maintained by the Company and each Subsidiary;
(x) all documents in the possession of the Company and
each Subsidiary relating to the Owned Real Property and the Leased Real
Property; and
(xi) a form of proxy as contemplated by Section 2.6(i) to
appoint a nominee of Buyer as sole proxy of Seller to attend all
shareholder meetings and exercise the votes attached to the Shares.
(b) At or prior to the Closing, Buyer shall (and Peabody
shall cause Buyer to) deliver or cause to be delivered to Seller the following:
(i) the Closing Payment by wire transfer of immediately
available funds;
(ii) a receipt from Buyer for the Shares;
(iii) copies of the resolutions of the board of directors
of Peabody and Buyer authorizing and approving this Agreement and all
other transactions and agreements contemplated hereby, certified by the
corporate secretary of Peabody and Buyer, as applicable, to be true and
complete and in full force and effect and unmodified as of the Closing
Date; and
(iv) the certificate required by Section 6.3.
2.5 Closing Board Meeting.
At the Closing, Seller shall ensure that a meeting of the
directors of the Company and each of its Subsidiaries is convened and the
following business is conducted at the meeting:
(i) approval of the registration of Buyer as the holder
of the Shares on the books of the Company, subject to the payment of
applicable Duty on those Shares;
(ii) appointment of the nominees of the Buyer as
directors, secretary, or auditors of the Company and each of its
Subsidiaries;
(iii) alteration of the registered office of the Company to
that of the registered office of Buyer; and
(iv) revocation of all existing powers of attorney,
signing authorities and mandates for the operation of bank accounts of
the Company and each of its Subsidiaries
15
and approval of new mandates in favour of the officers of the Company
and each of its Subsidiaries nominated by Buyer.
2.6 Period after Closing. From the Closing Date, until
the Shares are registered in the name of Buyer, Seller shall, at the cost of the
Buyer: (i) appoint the nominees of Buyer as sole proxy of Seller to attend
shareholders meetings and exercise the votes attached to the Shares; (ii) not
itself attend or vote at those meetings; and (iii) take all other actions in the
capacity of a registered holder of the Shares as Buyer directs.
2.7 Closing Payment Adjustment. (a) Within thirty-five
(35) calendar days after the Closing Date, Seller, at its expense, will prepare,
or cause to be prepared, and will deliver to Buyer, a statement of financial
position of the Company and its Subsidiaries as of the Closing Date (the
"Closing Balance Sheet"). The Closing Balance Sheet shall be prepared on a
consolidated basis in accordance with Australian Accounting Standards, applied
on a basis consistent with the audited statement of financial position of the
Company and its consolidated entities as at December 31, 2003 included in the
Audited Financial Statements (the "Audited Balance Sheet") and shall be
attested, in accordance with Australian Auditing Standards, by KPMG. At the same
time, Seller, at its expense, will prepare or cause to be prepared, and will
deliver to Buyer, a statement of Total Company Adjusted Net Assets of the
Company and its consolidated entities in Australian Dollars as of the Closing
Date (the "Closing Total Company Adjusted Net Assets Statement"). The Closing
Total Company Adjusted Net Assets Statement shall be prepared in accordance with
the definition of Total Company Adjusted Net Assets and on a consolidated basis
in accordance with Australian Accounting Standards, applied on a basis
consistent with the Audited Balance Sheet and shall be attested, in accordance
with Australian Auditing Standards, by KPMG. Peabody and Buyer will assist and
cooperate with Seller in the preparation of each of the Closing Balance Sheet
and the Closing Total Company Adjusted Net Assets Statement, including by
providing Seller and KPMG with reasonable access to the books and records of the
Company and to any other information reasonably necessary to prepare the Closing
Balance Sheet and the Closing Total Company Adjusted Net Assets Statement.
(b) Peabody and Buyer shall, within twenty-one (21)
calendar days after the delivery by Seller of the Closing Balance Sheet and the
Closing Total Company Adjusted Net Assets Statement, complete its review of the
Closing Balance Sheet and the Closing Total Company Adjusted Net Assets
Statement. Peabody and Buyer and their accountants shall be provided with
reasonable access to the workpapers of KPMG in connection with such review
subject to Buyer's compliance with procedures requested by KPMG that are
reasonable and customary under the circumstances. In the event that Buyer
determines that either of the Closing Balance Sheet or the Closing Total Company
Adjusted Net Assets Statement has not been prepared on a basis consistent with
the requirements of Section 2.7(a), Buyer shall deliver notice to Seller on or
prior to the twenty-first (21st) day after receipt of the Closing Balance Sheet
and the Closing Total Company Adjusted Net Assets Statement specifying in
reasonable detail all disputed items and the basis therefor. If Buyer so
notifies Seller of any objections to the Closing Balance Sheet or the Closing
Total Company Adjusted Net Assets Statement, Peabody, Buyer and Seller shall,
within thirty (30) days following the date of such notice (the "Resolution
Period"), attempt to resolve their differences and any written resolution by
them as to any disputed amount shall be final, binding, conclusive and
nonappealable for all purposes under this Agreement.
16
(c) If at the conclusion of the Resolution Period
Peabody, Buyer and Seller have not reached an agreement on Buyer's objections,
then all amounts and issues remaining in dispute shall be submitted by Seller,
Peabody and Buyer to PricewaterhouseCoopers LLP or to another mutually
acceptable nationally recognized independent accounting firm in Australia (the
"Neutral Auditor") for a determination resolving such amounts and issues. Each
party agrees to execute, if requested by the Neutral Auditor, a reasonable
engagement letter with respect to the determination to be made by the Neutral
Auditor. All fees and expenses relating to the work, if any, to be performed by
the Neutral Auditor shall be borne one-half by Seller, on the one hand, and
one-half by Peabody and Buyer, on the other hand. Except as provided in the
preceding sentence, all other costs and expenses incurred by Peabody, Buyer and
Seller in connection with resolving any dispute hereunder before the Neutral
Auditor shall be borne by the party incurring such cost and expense. The Neutral
Auditor shall determine only those issues still in dispute at the end of the
Resolution Period and the Neutral Auditor's determination shall be based upon
and be consistent with the terms and conditions of this Agreement. The
determination by the Neutral Auditor may be based on presentations with respect
to such disputed items by Peabody, Buyer and Seller to the Neutral Auditor. Each
of Peabody, Buyer and Seller shall use its reasonable best efforts to make its
presentation as promptly as practicable following submission to the Neutral
Auditor of the disputed items, and each such party shall be entitled, as part of
its presentation, to respond to the presentation of the other party and any
questions and requests of the Neutral Auditor. In deciding any matter, the
Neutral Auditor (i) shall be bound by the provisions of this Section 2.7(c) and
(ii) may not assign a value to any item greater than the greatest value for such
item claimed by Peabody, Buyer or Seller or less than the smallest value for
such item claimed by Peabody, Buyer or Seller. The Neutral Auditor's
determination shall be made within forty-five (45) days after its engagement
(which engagement shall be made no later than five (5) Business Days after the
end of the Resolution Period), or as soon thereafter as possible, shall be set
forth in a written statement delivered to Seller, Peabody and Buyer and shall be
final, conclusive, nonappealable and binding for all purposes hereunder, absent
manifest error. The term "Final Closing Balance Sheet" shall mean the definitive
Closing Balance Sheet agreed to by Seller, Peabody and Buyer in accordance with
Section 2.7(b) or the definitive Closing Balance Sheet resulting from the
determination made by the Neutral Auditor in accordance with this Section
2.7(c). The term "Final Closing Total Company Adjusted Net Assets Statement"
shall mean the definitive Closing Total Company Adjusted Net Assets Statement
agreed to by Seller, Peabody and Buyer in accordance with Section 2.7(b) or the
definitive Closing Total Company Adjusted Net Assets Statement resulting from
the determination made by the Neutral Auditor in accordance with this Section
2.7(c).
(d) If the calculation of the Total Company Adjusted Net
Assets contained in the Final Closing Total Company Adjusted Net Assets
Statement is less than the Total Company Adjusted Net Assets contained in the
Estimated Closing Total Company Adjusted Net Assets Statement, Seller shall pay
to Buyer an amount in cash equal to the amount of such deficiency (after
converting such deficiency amount to U.S. dollars in accordance with Section
2.9). If the calculation of the Total Company Adjusted Net Assets contained in
the Final Closing Total Company Adjusted Net Assets Statement is greater than
the Total Company Adjusted Net Assets contained in the Estimated Closing Total
Company Adjusted Net Assets Statement, Buyer shall pay to Seller an amount in
cash equal to the amount of such excess (after converting such excess amount to
U.S. dollars in accordance with Section 2.9).
17
(e) All amounts payable by Buyer or Seller, as the case
may be, pursuant to Section 2.7(d), shall be (i) paid within three (3) Business
Days after the ultimate determination of the Final Closing Total Company
Adjusted Net Assets Statement as provided in Section 2.7(c).
(f) Notwithstanding anything to the contrary in this
Agreement, the amount of any adjustment made pursuant to this Section 2.7 in
respect of any item shall not be recoverable more than once by the party to whom
such amount was paid or credited, whether pursuant to this Section 2.7, Section
9.1 or otherwise.
2.8 Payments On or Before Closing. In accordance with
Section 11.1 hereof, Seller shall pay on or before the Closing all amounts
payable for investment banking fees and legal and other similar fees and
expenses of the Company and the Company's Subsidiaries (or for which the Company
or any of its Subsidiaries may be liable) related to the transactions
contemplated in this Agreement, and none of the Company or any of its
Subsidiaries shall have any liability in respect thereof after the Closing.
2.9 Form of Payments. All payments hereunder shall be
made by delivery to the recipient by depositing, by bank wire transfer, the
required amount in U.S. dollars (in immediately available funds) to an account
of the recipient, which account shall be designated by the recipient in writing
at least three (3) Business Days prior to the date of the required payment. Any
amounts described in Australian dollars required to be paid pursuant to Section
2.2(b) or Section 2.7(d) shall be converted to U.S. dollars to comply with this
Section 2.9, using the rate of exchange between Australian dollars and U.S.
dollars as reported by Bloomberg, L.P. as of the close of business in New York,
New York on the Business Day immediately prior to the Closing Date.
2.10 Allocation of Purchase Price. The parties agree to
allocate the Purchase Price among the Shares in accordance with Schedule 2.10.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Peabody and Buyer as
follows:
3.1 Organization. Each of Seller, the Company and its
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the Laws of its jurisdiction of incorporation, formation or
organization. Each of Seller, the Company and its Subsidiaries has the requisite
corporate power and authority to own, lease and operate its assets and to carry
on its business as now being conducted and is duly qualified or licensed to do
business and is in good standing in the jurisdictions in which the ownership of
its property or the conduct of its business requires such qualification or
license, except where the failure to be so qualified or licensed (i) would not
reasonably be expected, individually or in the aggregate, to have a material
adverse effect on the ability of Seller to consummate the transactions
contemplated by this Agreement or (ii) would not reasonably be expected,
individually or in the aggregate, to have a Company Material Adverse Effect.
Schedule 3.1 sets forth the jurisdictions where the Company and each of its
Subsidiaries is qualified or licensed to do business. Seller
18
has heretofore provided to Buyer a complete and correct copy of the
organizational documents of the Company and each of its Subsidiaries, as
currently in effect.
3.2 Authorization; Enforceability. Seller has the
requisite corporate power and authority to execute and deliver this Agreement
and to perform its obligations hereunder. The execution and delivery of this
Agreement by Seller, and the performance of its obligations hereunder, has been
duly authorized by all necessary corporate action on the part of such party,
and, upon such authorization, no other corporate or shareholder proceedings or
actions are necessary to authorize and consummate this Agreement or the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Seller, and, assuming due authorization, execution and delivery by
Peabody and Buyer, constitutes a valid and binding agreement of Seller and,
subject to any necessary stamping and registration, is enforceable against
Seller in accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar Laws relating to or affecting creditors' rights generally and
general equitable principles (whether considered in a proceeding in equity or at
law).
3.3 Capital Stock. The entire issued share capital of the
Company consists of (i) 1,500 Ordinary Shares and (ii) 65,000,000 Redeemable
Preference Shares. All of such issued shares have been validly issued, are fully
paid (and no money or other obligation is owing in respect of them), and have
not been issued in violation of any preemptive or similar rights. Except for the
Shares, there are no outstanding (i) shares or voting securities of the Company,
(ii) securities of the Company convertible into or exercisable or exchangeable
for shares or voting securities of the Company, (iii) options or other rights or
agreements to acquire from the Company, or other obligations of the Company to
issue, transfer or sell any shares, voting securities or securities convertible
into or exercisable or exchangeable for shares or voting securities of the
Company (the items in clauses (i), (ii) and (iii) being referred to collectively
as "Company Securities"). Neither the Company nor any of its Subsidiaries is
obligated to repurchase, redeem or otherwise acquire any Company Securities.
There are no voting trusts, proxies or other agreements or understandings with
respect to or concerning Company Securities.
3.4 Ownership; No Liabilities of RAG Trading. (a) Seller
is the registered, legal and beneficial owner of, and has good and valid title
to, all of the issued and outstanding Shares and, as of the Closing, will be the
registered, legal and beneficial owner of all of the issued and outstanding
Shares, in each case, free and clear of any Encumbrances (or any agreement,
obligation or commitment to give or create such Encumbrance), and will transfer
and deliver to Buyer at the Closing good and valid title to such Shares, free
and clear of any Encumbrances or third party interests or rights, subject to any
necessary stamping and registration requirements.
(b) Since December 31, 2001, ACN 003 181 217 Pty Limited
(formerly known as RAG Trading Asia Pacific Pty Limited (ABN 55 033 181 217))
("RAG Trading"), (i) has had no assets, material Liabilities, including, without
limitation, contractual obligations to third parties, (except for the net loss
of A$343,542 reported in the Company's statement of financial performance for
the year ended December 31, 2001, attached to the Company's
19
Director's Report for the year ended December 31, 2001), no operations and no
employees, and (ii) has not conducted any business in any manner whatsoever.
3.5 Subsidiaries. Schedule 3.5(i) sets forth the names,
jurisdictions of incorporation, formation or organization and the issued share
capital and beneficial ownership, of all Subsidiaries of the Company. Except as
set forth on Schedules 3.5(i), 3.6(i) and 3.7(i), none of the Company or any of
its Subsidiaries, directly or indirectly, owns any voting, equity or other
ownership interest in any corporation, partnership or other Person or entity.
Except as set forth on Schedule 3.5(ii), all the issued share capital,
partnership interests, membership interests or other equity interests, as
applicable, of each such Subsidiary are validly issued, fully paid (and no money
or other obligation is owing in respect of them), have not been issued in
violation of any preemptive or similar rights, and are registered as being
owned, legally and beneficially, by the Company or one of its Subsidiaries free
and clear of any Encumbrances, or any agreement, obligation or commitment to
give or create such Encumbrance, and other third party interests or rights.
Except as set forth in Schedule 3.5(iii), there are no outstanding (i) shares or
voting securities of any Subsidiary of the Company, (ii) securities of the
Company or any of its Subsidiaries convertible into or exercisable or
exchangeable for shares or voting securities of any of the Company's
Subsidiaries, (iii) options or other rights or agreements to acquire from the
Company or any of its Subsidiaries, or other obligations of the Company or any
of its Subsidiaries to issue, transfer or sell any shares, voting securities or
securities convertible into or exercisable or exchangeable for shares or voting
securities of any Subsidiary of the Company (the items in clauses (i), (ii) and
(iii) being referred to collectively as "Subsidiary Securities"). There are no
(A) outstanding obligations of the Company or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any Subsidiary Securities or (B) voting
trusts, proxies or other agreements or understandings with respect to or
concerning Subsidiary Securities.
3.6 Associated Companies. Schedule 3.6(i) sets forth the
names, jurisdictions of incorporation, formation or organization and the issued
share capital and beneficial ownership, of entities (each, an "Associated
Company") in which the Company or any one of its Subsidiaries has an interest
other than those entities described in Schedules 3.5(i) and 3.7(i). Except as
set forth on Schedule 3.6(ii), all the issued share capital, partnership
interests, membership interests or other equity interests, as applicable, of
each Associated Company held by Seller are validly issued, fully paid (and no
money or other obligation is owing in respect of them), have not been issued in
violation of any preemptive or similar rights, and are registered as being
owned, legally and beneficially, as set forth on Schedule 3.6(i), free and clear
of any Encumbrances, or any agreement, obligation or commitment to give or
create such Encumbrance, and other third party interests or rights; and, to the
Knowledge of Seller, all the issued share capital, partnership interests,
membership interests or other equity interests, as applicable, of each
Associated Company held by persons other than Seller are validly issued, fully
paid (and no money or other obligation is owing in respect of them), have not
been issued in violation of any preemptive or similar rights, and are registered
as being owned, legally and beneficially, as set forth on Schedule 3.6(i), free
and clear of any Encumbrances, or any agreement, obligation or commitment to
give or create such Encumbrance, and other third party interests or rights.
Except as set forth in Schedule 3.6(iii), Seller is not a party to any (A)
outstanding obligations of any Associated Company to repurchase, redeem or
otherwise acquire any shares or voting securities of (or securities convertible
into or exercisable or exchangeable for, or options or other rights or
agreements to acquire, shares or voting securities of) any
20
Associated Company or (B) voting trusts, proxies or other agreements or
understandings with respect to or concerning any shares or voting securities of
(or securities convertible into or exercisable or exchangeable for, or options
or other rights or agreements to acquire, shares or voting securities of) any
Associated Company.
3.7 Joint Ventures. Schedule 3.7(i) sets forth the names,
jurisdictions of incorporation, formation or organization and the issued share
capital and beneficial ownership, of all joint ventures and partnership
arrangements (each, a "Joint Venture") in which the Company or any one of it
Subsidiaries has an interest other than those entities described in Schedules
3.5(i) and 3.6(i). Except as set forth on Schedule 3.7(ii), there is no
agreement or commitment entered into by or imposed on the Company or any of its
Subsidiaries which calls for the creation or transfer of any ownership interest
in any Joint Venture (or any other agreements entered into by the Company or
such Subsidiary in connection therewith) (each, a "Joint Venture Agreement").
Except as set forth on Schedule 3.7(iii), the interests set forth on Schedule
3.7(i) are free of all Encumbrances and other third party interests or rights
other than those arising under or in connection with any Joint Venture
Agreement. Other than as set out in the Joint Venture Agreements, there is no
agreement, obligation or commitment entered into by or imposed on the Company or
any of its Subsidiaries to give or create any Encumbrance or third party
interest or right in any Joint Venture.
3.8 Audited Financial Statements; Superannuation. (a)
Schedule 3.8 sets forth the audited consolidated statements of financial
position of the Company and its consolidated entities as at December 31, 2002
and 2003 and the related audited consolidated statements of financial
performance and cash flows for the years ended December 31, 2001, 2002 and 2003
(together, the "Audited Financial Statements"). Each of the statements of
financial position and statements of financial performance and cash flows
included in the Audited Financial Statements (i) has been prepared in accordance
with Australian Accounting Standards applied on a consistent basis during the
periods involved and (ii) fairly presents the consolidated financial position of
the Company and its consolidated entities as of the dates thereof and their
consolidated performance for the periods then ended.
(b) Each of the Company and its Subsidiaries have
satisfied all their superannuation obligations under the Australian
Superannuation Guarantee (Administration) Xxx 0000 (Cth).
3.9 Absence of Undisclosed Liabilities(a) . (a) None of
the Company or its Subsidiaries has any Liabilities, other than Liabilities (i)
reflected or reserved against in the Audited Balance Sheet or not required by
Australian Accounting Standards to be so reflected, reserved or disclosed, (ii)
incurred in the ordinary course of business not in breach of Section 5.1 of this
Agreement since the date of the Audited Balance Sheet (and, if incurred prior to
the date hereof, would not have been in breach of Section 5.1 of this Agreement
if this Agreement was in full force and effect at such time) or (iii) disclosed
on Schedule 3.9.
3.10 No Conflicts or Approvals. Except as set forth on
Schedule 3.10, the execution, delivery and performance by Seller of this
Agreement and the consummation by Seller of the transactions contemplated hereby
does not and will not (i) violate, conflict with or result in a breach by
Seller, the Company or any of the Company's Subsidiaries of their
21
respective organizational documents, (ii) violate, conflict with or result in a
breach of, or constitute a default by any of Seller, the Company or the
Company's Subsidiaries (or create an event which, with notice or lapse of time
or both, would constitute a default) under, or require any consent or other
action by any Person under, or give rise to any penalty right of termination,
cancellation or acceleration or loss of a material benefit under, any note,
bond, mortgage, indenture, deed of trust, license, franchise, permit, lease,
contract, agreement or other instrument to which any of Seller, the Company or
the Company's Subsidiaries or any of their respective properties or assets may
be bound, (iii) violate or result in a breach of any Governmental Order or Law
applicable to any of Seller, the Company or the Company's Subsidiaries or any of
their respective properties or assets or (iv) result in the creation of any
Encumbrance, other than Permitted Encumbrances, upon any of the properties or
assets of Seller, the Company or any of the Company's Subsidiaries, except, with
respect to the foregoing clauses (ii), (iii) and (iv) above, as would not be
material to the Company or its Subsidiaries taken as a whole and would not
materially adversely affect the ability of Seller to consummate the transactions
contemplated by this Agreement.
3.11 Governmental Authorization. The execution, delivery
and performance by Seller of this Agreement and the consummation of the
transactions contemplated hereby, require no action by or in respect of, or any
Consent from, any Governmental Authority, except with any applicable
requirements of the actions and filings listed on Schedule 3.11 and any such
action or filing as to which the failure to make or obtain would not be material
to the Company and its Subsidiaries taken as a whole or materially adversely
affect the ability of Seller to consummate the transactions contemplated hereby.
3.12 Compliance with Law; Mining Authorities; Occupational
Health and Safety Laws; Performance Bonds. (a) Except as set forth on Schedule
3.12, each of the Company and its Subsidiaries have conducted their respective
businesses and developed and operated their assets in compliance with all Laws
(except for Laws covered by the representations set forth in Section 3.12(d) and
(e)) and all Permits, except where noncompliance would not interfere in any
material respect with the ability of the Company and its Subsidiaries, taken as
a whole, to continue to operate their assets and conduct their businesses as
currently conducted, and would not materially adversely affect the ability of
Seller to consummate the transactions contemplated by this Agreement. In
furtherance of the foregoing, none of the Company, any of its Subsidiaries, or
any of their respective employees is a party to any agreement, contract,
arrangement or understanding, whether legally enforceable or not, which is in
breach of any restrictive trade practices legislation or which is registerable,
unenforceable or void pursuant to that legislation and none of the Company or
any of its Subsidiaries has engaged in any conduct or practice in breach of that
legislation; and none of the Company or any of its Subsidiaries is as of the
date hereof subject to formal investigation by any Government Authority under
any restrictive trade practices legislation.
(b) Each of the Company, its Subsidiaries and, to the
Knowledge of Seller, the Associated Companies, possesses all Permits necessary
to own, lease, develop and operate its assets and conduct their businesses in
all material respects as currently conducted. None of the Company or any of its
Subsidiaries has received any communication alleging or threatening that any
such Permit may be modified, suspended or revoked and, to the Knowledge of
Seller, there are no circumstances or conditions providing valid grounds for the
same, except where any such
22
modification, suspension or revocation would not interfere in any material
respect with the ability of the Company and its Subsidiaries, taken as a whole,
to continue to operate their assets and conduct their businesses as currently
conducted, and would not materially adversely affect the ability of Seller to
consummate the transactions contemplated by this Agreement.
(c) (i) There are no material mining leases, licenses,
permits or other mining authorities owned by the Company or any of its
Subsidiaries other than the Mining Authorizations. The Company or one of its
Subsidiaries holds the legal or beneficial title to the interest in each of the
Mining Authorizations.
(ii) To the Knowledge of Seller, there are no material
applications for mining leases, licenses, permits and other mining
authorities in the name of the Company or any of its Subsidiaries other
than those set forth on Schedule 3.12(c)(ii)(A) (the "Material Mining
Applications"); and the Company or one of its Subsidiaries will, on
grant of any of such applications, hold legal or beneficial title to
the interest in each such application as set forth on Schedule
3.12(c)(ii)(A). Each of the Material Mining Applications has been made
in accordance with applicable Laws. Except as set forth on Schedule
3.12(c)(ii)(B), none of Seller, the Company or any of its Subsidiaries
has received any written communication that indicates that any of the
Material Mining Applications will not be granted; and, to the Knowledge
of Seller, none of Seller, the Company or any of its Subsidiaries has
received any other communication that indicates that any of the
Material Mining Applications will not be granted.
(iii) Except as set forth on Schedule 3.12(c)(iii)(A), each
of the Company and its Subsidiaries has complied in all material
respects with the terms and conditions of the Mining Authorizations.
Except as set forth on Schedule 3.12(c)(iii)(B), none of the Company or
any of its Subsidiaries has received any notice of any written, or to
the Knowledge of Seller, threatened claims that could adversely affect
the title of the Company or any of its Subsidiaries to any Mining
Authorization or that could adversely affect the use of the Mining
Authorizations for the purposes of the business of the Company and its
Subsidiaries and in accordance with their terms, which are material to
the business of the Company and its Subsidiaries taken as a whole.
(iv) Other than Material Mining Applications MLA 70256 and
MLA 70257, none of the Material Mining Applications is subject to a
Tenure Defect.
(d) Each of the Company and its Subsidiaries has operated
its business in compliance with all applicable human health Laws, employee
health and planning Laws and occupational health and safety Laws and mining Laws
binding on such company or affecting such business, including making all
relevant appointments under such Laws, except where noncompliance would not (i)
have a material adverse effect on the business, assets, Liabilities, results of
operations or financial condition of the Company or any of its Subsidiaries,
taken as a whole (ii) interfere in any material respect with the ability of the
Company or any of its Subsidiaries, taken as a whole, to continue to operate
their assets and conduct their businesses as currently conducted, or (iii)
materially adversely affect the ability of Seller to consummate the transactions
contemplated by this Agreement. None of the Company or any of its Subsidiaries
has received any written notice of any material, current or, to the Knowledge of
Seller,
23
threatened, claims, investigations, judgments, directives or other proceedings
which are outstanding, as of the date hereof, or involving the Company or any of
its Subsidiaries by any Governmental Authority, union, former or current Company
Employees (including union and non-union Company Employees) under any relevant
occupational health and safety Laws binding on the Company or any of its
Subsidiaries or affecting their respective businesses.
(e) Each of the Company and its Subsidiaries has posted
all deposits, letters of credit, trust funds, bid bonds, performance bonds,
reclamation bonds and surety bonds (and all such similar undertakings) required
to be posted in connection with their operations. All deposits, letters of
credit, trust funds, bid bonds, performance bonds, reclamation bonds and surety
bonds (and all such similar undertakings) posted by each of the Company and its
Subsidiaries in connection with its respective operations are listed on Schedule
3.12(e) (collectively, the "Company Surety Bonds"). Except as disclosed on
Schedule 3.12(e): (A) each of the Company and its Subsidiaries is in compliance
in all material respects with all Company Surety Bonds applicable to it; and (B)
the operation of each of the Company's and its Subsidiaries' coal mining and
processing operations and the state of reclamation with respect to the Company
Surety Bonds are "current" or in "deferred status" regarding reclamation
obligations and otherwise are in compliance with all applicable mining,
reclamation and other applicable Laws except where noncompliance would not (i)
have a material adverse effect on the business, assets, Liabilities, results of
operations or financial condition of the Company and its Subsidiaries, taken as
a whole, (ii) interfere in any material respect with the ability of the Company
and its Subsidiaries, taken as a whole, to continue to operate their assets and
conduct their businesses as currently conducted, or (iii) materially adversely
affect the ability of Seller to consummate the transactions contemplated by this
Agreement.
3.13 Proceedings. Except as set forth on Schedule 3.13,
there are no Proceedings pending or, to the Knowledge of Seller threatened,
involving Seller, the Company or any of the Company's Subsidiaries or any of
their respective properties or any of their respective directors or officers in
their capacities as such that (i) involves or, if adversely determined, would
reasonably be expected to involve an award of damages in the excess of
US$100,000 against the Company or any of its Subsidiaries or seeks to materially
restrict the operation of the Company or any of its Subsidiaries in any material
respect, (ii) in any manner challenges or seeks to prevent, enjoin, alter or
materially delay the transactions contemplated by this Agreement or (iii) are in
respect of any Mining Authorizations. There is no judgment, decree, injunction
or order of a Governmental Authority outstanding against any of the Company or
any of its Subsidiaries or in respect of the Mining Authorizations. None of the
Company or any of its Subsidiaries has received any written notification that
any such investigation or inquiry is being conducted by any Governmental
Authority in respect of the business or affairs of the Company or any of its
Subsidiaries; and, to the Knowledge of Seller, none of the Company or any of its
Subsidiaries has received any other notification that any investigation or
inquiry is being conducted by any Governmental Authority in respect of the
business or affairs of the Company or any of its Subsidiaries; furthermore, to
the Knowledge of Seller, there is no basis for any such investigation or inquiry
that if determined adversely to the Company or any of its Subsidiaries would be
material to the Company or any of its Subsidiaries.
3.14 Absence of Certain Changes. Except as disclosed in
Schedule 3.14, since December 31, 2003: (i) there has not been any condition,
change or event which has had, or
24
would reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect; (ii) the business of the each of Company and
its Subsidiaries has been conducted only in the ordinary course of business; and
(iii) there has not been any action taken by the Company or any of its
Subsidiaries that would have been prohibited under Section 5.1 if such action
had been taken by the Company or any of its Subsidiaries after the date hereof.
3.15 Tax Matters. Except as set forth in Schedule 3.15:
(a) All Tax Returns required to be filed by or on behalf
of the Company and each of its Subsidiaries prior to the Closing Date
(separately or as part of a consolidated, or combined group) have been or shall
be timely filed (subject to permitted extensions applicable to such filing) and
all such Tax Returns were true and correct in all material respects. To the
Knowledge of Seller no claim has ever been made by a Taxing Authority in a
jurisdiction where the Company or any of its Subsidiaries does not file Tax
Returns that any of the Company or its Subsidiaries is or may be subject to
taxation by that jurisdiction. Each of the Company and its Subsidiaries has
maintained proper and adequate records to enable it to comply with its
obligations to (i) prepare and submit any Tax Returns and pay any Taxes, (ii)
prepare any accounts necessary for compliance with any Tax Law, and (iii) retain
necessary records as required by any Tax Law. The Company has delivered to Buyer
or Peabody true and correct copies of all material Tax Returns (including all
relevant workpapers and supporting information), examination reports, and
statements of deficiencies assessed against or agreed to by the Company and its
Subsidiaries where the Tax Amendment Period has not yet expired.
(b) All Taxes of the Company and each of its Subsidiaries
due on or prior to Closing have been paid. Any Taxes that will not be due for
payment on or prior to Closing but relate to the whole or part of any period or
periods ending on or prior to Closing or relate to or are in respect of income,
profits or gains derived, or transactions, acts or events occurring on or prior
to Closing will be provided for and recognized in the Final Closing Balance
Sheet.
(c) There are no Encumbrances other than Permitted
Encumbrances relating to Taxes encumbering any of the Shares, or any assets or
properties of the Company or any of its Subsidiaries.
(d) There has not been any audit of any Tax Return filed,
by the Company or any of its Subsidiaries for any taxable period. There are no
(i) examinations, reviews, audits, Proceedings or disputes currently under way
or in process or that are pending or, to the Knowledge of Seller, threatened by
any Taxing Authority against the Company or any of its Subsidiaries, (ii) claims
for Taxes asserted or, to the Knowledge of Seller, threatened to be asserted by
any Taxing Authority against the Company or any of its Subsidiaries, or (iii)
unresolved claims in competent authority pursuant to any income tax, trade tax
or social insurance tax treaty, against the Company or any of its Subsidiaries
that, in each case, would reasonably be expected to result in Taxes of the
Company or any of its Subsidiaries for any taxable period (or portion thereof)
ending on or before the Closing Date.
(e) None of the Company or any of its Subsidiaries has
taken any action that does, or might, adversely affect an arrangement or
agreement in respect of Taxes entered into with a Governmental Authority, or a
ruling or determination from a Governmental Authority.
25
(f) None of the Company or any of its Subsidiaries is
currently a beneficiary of any extension of time within which to file any Tax
Return or pay any Tax which is not generally available to taxpayers.
(g) All Taxes that the Company or any of its Subsidiaries
is or was required by Law to withhold or collect, including without limitation
interest, dividend and royalty withholding taxes and PAYG and PAYE taxes, have
been duly withheld or collected and, to the extent required, have been paid to
the proper Governmental Authority by the date that such payment was due.
(h) None of the Company or any of its Subsidiaries has
granted any extension or waiver of the Tax Amendment Period applicable to any
Tax or Tax Return, or agreed to any extension of time with respect to an
Assessment or deficiency, which period (after giving effect to such extension or
waiver) has not yet expired.
(i) The Company:
(i) has not made and will not make a choice on or before
Closing in accordance with section 703-50 of the Tax Act to form a
consolidated group;
(ii) and/or any of its Subsidiaries, alone or together,
have not at any time and will not at any time form part of a
consolidated group during a period ending on or prior to Closing; and
(iii) and/or any of its Subsidiaries have not paid an
unfranked or partly franked dividend on or prior to Closing that may
impact on the tax cost setting amount of an asset available to the
Buyer by virtue of the application of section 705-50 of the Tax Act.
(j) None of the Company or any of its Subsidiaries
constitutes a prescribed dual resident or dual resident investment company, as
these expressions are defined in the Tax Act.
(k) All Duty (other than nominal Duty) payable by the
Company or any of its Subsidiaries on documents and transactions to which the
Company or any of its Subsidiaries is a party has been duly paid (together with
any interest and penalties thereon). There is no impediment to the
enforceability of any such document or transaction because of a failure to pay
Duty (other than nominal Duty).
(l) Each of the Company and its Subsidiaries have
complied in all respects with all Laws, contracts, agreements or arrangements
binding on it relating to GST and, where the Company or one of its Subsidiaries
has the right to require another party to such agreement or arrangement to pay
to the Company or such Subsidiary an amount of GST, the Company or such
Subsidiary has enforced that right.
(m) None of the Company or any of its Subsidiaries is the
supplier under a contract, agreement or arrangement binding on it in respect of
or in relation to which the supplies are or may become taxable in circumstances
where there is no express entitlement in writing to
26
recover or be paid an amount or additional amount on account of GST. Without
limitation, this would include an agreement that does not contain a GST gross up
clause.
(n) None of the Company or any of its Subsidiaries:
(i) is, or has been, part of a GST Group; and
(ii) will apply to become a member of, or for approval of,
a GST Group on or prior to Closing.
(o) None of the Company or any of its Subsidiaries is or
will be party to any transaction in respect of land-holdings (as that expression
is defined in the Duties Xxx 0000 (Qld)) that has not been completed by
September 30, 2003.
(p) Each of the Company and its Subsidiaries has at all
times on or prior to Closing accurately maintained its respective franking
accounts and none of the Company or any of its Subsidiaries has underfranked or
overfranked any dividend paid on or prior to Closing.
(q) As at Closing, the balance of the franking account of
each of the Company and its Subsidiaries will be nil or in credit.
(r) As at Closing, the share capital account of each of
the Company and its Subsidiaries will not be tainted for the purposes of section
160ARDM of the Tax Act.
(s) No debt or other liability owing by the Company or
any of its Subsidiaries has been or will have been forgiven or otherwise dealt
with on or before Closing in a manner that would reasonably be expected to
attract the operation of the Commercial Debt Forgiveness provisions contained in
Schedule 2C or the Limited Recourse Debt provisions contained in Division 243 of
the Tax Act.
(t) None of the Company or any of its Subsidiaries has
entered into any agreement or arrangement with another Person under which the
Company or any of its Subsidiaries is liable or may become liable to pay,
reimburse or indemnify that Person in respect of any Tax that is or may become
at some future stage payable by that Person or its Affiliates.
(u) Without limiting the generality of the other
warranties in this Section 3.15, the Seller represents and warrants that, as at
Closing:
(i) no Tax is payable by the Company or any of its
Subsidiaries by virtue of Closing by reason of the application of any
provision of a Tax Law that applies to or is triggered by any agreement
(including this Agreement), transaction, event, act or omission in
circumstances where a gain, profit or other amount attributable to or
arising as a consequence of an earlier agreement, transaction, event,
act or omission had not been recognized as assessable, or had been
deferred, including without limitation under section 160ZZOA or
subdivision 104-J of the Tax Act;
(ii) no Duty is payable by the Company or any of its
Subsidiaries by reason of the application of any provision of a Tax Law
that imposes Duty on the basis of the
27
interests held by the Company or any of its Subsidiaries in land,
including without limitation Part 1 of Chapter 3 of the Duties Act 2001
(Qld) and similar provisions in the other States and Territories of
Australia, in relation to any agreement, transaction, event, act or
omission, other than this Agreement and the transactions contemplated
herein, occurring prior to Closing; and
(iii) no Duty is or will be payable by the Company or any
of its Subsidiaries by reason of this Agreement causing the withdrawal
or claw-back of Duty relief previously granted in respect of any
agreement, transaction, event, act or omission occurring prior to
Closing.
(v) Any term or expression that is used in this Section
3.15 but not defined in this Agreement has the meaning given to such
term or expression under the relevant Tax Law.
3.16 Employee Benefits. (a) Schedule 3.16(a) sets forth a
true and complete list of (i) each employee benefit plan, (ii) all other
(whether written or unwritten) severance, termination, retrenchment, salary
continuation, change in control, employment, incentive, bonus, commission,
superannuation, stock option, stock purchase, restricted stock, retirement,
pension, redundancy, profit sharing, fringe benefit, collective bargaining,
employee loan or deferred compensation plans, programs, agreements or policies,
any of which could reasonably be expected to give rise to aggregate annual
Liabilities in the amount of US$100,000 or more for the Company or any of its
Subsidiaries and (iii) all other employee benefit plans, programs, agreements,
policies or other arrangements (whether qualified or nonqualified, funded or
unfunded, foreign or domestic) and any trust or similar agreement related
thereto, whether or not funded, (I) contributed to, sponsored or maintained by
any of the Company, its Subsidiaries, Seller or any of their respective
Affiliates, in which any current or former employee, director or consultant of
the Company or any of its Subsidiaries (collectively, the "Company Employees")
has any present or future right to benefits or (II) with respect to which the
Company or any of its Subsidiaries has had or has any present or future
liability (each, a "Company Benefit Plan").
(b) Copies of the following materials, to the extent
applicable to the Company and its Subsidiaries, have been delivered to Buyer
with respect to each Company Benefit Plan: (i) current, accurate and complete
plan documents (or, to the extent no such copy exists, a current, accurate and
complete description), (ii) the most recent determination letter or equivalent
document from any Australian federal, state or local taxing or other
Governmental Authority having jurisdiction over such plan, (iii) the most recent
summary plan description, summary of material modifications to the extent not
included in the summary plan description, in each case, distributed to Company
Employees, and any other written communications (and a description of any oral
communications that, to the Knowledge of Seller, have been made to or with
employees, and that would give rise to rights different from those set forth in
the Company Benefit Plan) by any of Seller, the Company, the Company's
Subsidiaries or any of their respective Affiliates concerning the extent of
benefits provided under a Company Benefit Plan, (iv) current agreements and
other documents relating to the funding or payment of benefits, (v) a summary of
any proposed amendments or changes anticipated to be made to any Company Benefit
Plan at any time within the twelve months immediately following the date hereof,
and (vi) the most recent actuarial valuation report and audited financial
statements.
28
(c) The Company Benefit Plans have been established and
administered in accordance with their terms and are in compliance in all
material respects with applicable Law. No event has occurred and no condition
exists that would subject the Company or any of its Subsidiaries, either
directly or by reason of their affiliation with any Affiliate, to any tax, fine,
lien, penalty or other liability imposed by applicable Law. All Company Benefit
Plans that are required to be funded are fully funded, and with respect to all
other Company Benefit Plans, adequate reserves therefor have been established on
the accounting statements of the Company and its Subsidiaries, as applicable.
(d) Except as set forth in Schedule 3.16(d), there are no
pending or, to the Knowledge of Seller, threatened Proceedings with respect to
any Company Benefit Plans, other than routine claims for benefits by
participants and beneficiaries. No administrative investigation, audit or other
administrative proceeding by any Governmental Authority is pending, in progress
or, to the Knowledge of Seller, threatened. With respect to any Company Benefit
Plan, all contributions, payments or expenses relating to pre-Closing service of
the participating Company Employees have, to the extent required by Law or the
applicable Company Benefit Plan, been paid or accrued for on the Audited Balance
Sheet.
(e) Except as disclosed on Schedule 3.16(e) no Company
Benefit Plan exists that, as a result of the execution of this Agreement or the
transactions contemplated by this Agreement (whether alone or in connection with
any subsequent event(s)), could result in (i) the payment to any Company
Employee of any money or other property, (ii) the provision of any benefits or
other rights of any Company Employee or (iii) the increase, acceleration or
provision of any payments, benefits or other rights to any Company Employee.
(f) Except as set forth in Schedule 3.16(f), none of the
Company or any of its Subsidiaries maintains or is obligated to provide benefits
under any superannuation, life, medical or health plan which provides benefits
to retirees or other terminated employees.
(g) Except as set forth in Schedule 3.16(g) no contractor
or consultant has been engaged by the Company or any of its Subsidiaries to whom
annual payments could reasonably be expected to exceed US$100,000 in the
aggregate with respect to any individual contractor or consultant. To the
Knowledge of Seller, (i) no contractor or consultancy arrangements, if any,
between the Company or any of its Subsidiaries, on the one hand, and any Person,
on the other hand, who is not employed by the Company or any of its Subsidiaries
will be deemed to be, under any Law, an employment agreement between the Company
or any of its Subsidiaries, on the one hand, and the contractor or consultant,
on the other hand, and (ii) no contractor or consultant has or may be deemed,
under any Law, to have, an employee status or request to be recognized as an
employee of the Company or any of its Subsidiaries, in case of each of clause
(i) or (ii) above except as would not reasonably be expected to result in a
Company Material Adverse Effect.
(h) Except as otherwise provided in the agreements listed
in Schedule 3.16(h), the contracts of employment of the Company Employees may be
terminated by the employer without damages or compensation (other than that
required by Law) by the giving of not more than six months' notice at any time.
29
(i) Except as set forth in Schedule 3.16(i), there are no
other superannuation schemes in operation in respect of the Company Employees.
(j) Except as set forth in Schedule 3.16(j), each of
Seller, the Company and its Subsidiaries has complied in all material respects
with all employment related laws and obligations; provided, however, that the
representation set forth in this Section 3.16(j) is not intended to refer to the
matters listed in Section 3.12(d) or (e), which are addressed solely in such
Sections.
(k) Schedule 3.16(k) sets out a complete list of
employees of the Company and each of its Subsidiaries as of December 31, 2003
and an accurate statement of their accrued annual leave, long service leave and
sick leave entitlements.
3.17 Labor and Employee Relations. Except as set forth in
Schedule 3.17 or as otherwise permitted pursuant to this Agreement, (i) none of
the Company or any of its Subsidiaries is a party to any written or, to the
Knowledge of Seller, unwritten commitment or agreement with any union or
industrial organization or other collective bargaining or other industrial
agreement or instruments in respect of the Company Employees, any contractors
engaged by the Company or any of its Subsidiaries, or work done, being done or
to be done in the future at any of their respective mines (other than as set
forth on Schedule 3.19), that is being negotiated or, to the Knowledge of
Seller, contemplated, (ii) there is no unfair labor practice charge or
comparable or analogous complaint pending before any Governmental Authority or,
to the Knowledge of Seller, threatened against the Company or any of its
Subsidiaries, (iii) there is no grievance, order, dispute, conciliation,
arbitration hearing, or arbitration award pending or, to the Knowledge of
Seller, threatened against the Company or any of its Subsidiaries, (iv) none of
the Company or its Subsidiaries is in breach of any order by a Governmental
Authority, relating to the Company Employees, (v) within the past year, there
has been no industrial action, labor ban, labor strike, slowdown, work stoppage,
or lockout in effect, or, to the Knowledge of Seller, threatened against or
otherwise affecting any of the Company, its Subsidiaries or the Company
Employees, (vi) none of the Company or its Subsidiaries is a party to, or
otherwise bound by, any order, award, direction, decision, with, or citation by,
any Governmental Authority relating to employees or employment practices, (vii)
none of the Company, its Subsidiaries or the operators of the mines have any
collective or other redundancy policy, custom, practice or procedure, registered
or unregistered, in place at the date hereof, no such custom, practice, policy
or procedure is, to the Knowledge of Seller, currently being prepared and all
financial undertakings under any such policies and procedures as specified on
Schedule 3.17 have been or are being complied with, (viii) each of the Company
and its Subsidiaries are in compliance with all notification and bargaining
obligations arising under any industrial instrument or collective bargaining
agreement, statute or otherwise, (ix) there is no actual or, to the Knowledge of
Seller, alleged breach of the terms of any legal or contractual obligations
governing the employment of the Company Employees which would reasonably be
likely to lead to the interference in any material respect with the conduct of
the business of the Company or any of its Subsidiaries as currently conducted,
(x) there is no dispute involving any member of the Company or any of its
Subsidiaries with any trade union, works council or similar organization not
otherwise arising in the ordinary course of business, current or unresolved, or
to the Knowledge of Seller, threatened or pending which would reasonably be
likely to lead to the interference in any material respect with the conduct of
the business of the Company or any of its Subsidiaries as currently
30
conducted, and (xi) to the Knowledge of Seller, as of the date hereof there is
no effort to organize Company Employees which is pending or threatened.
3.18 Intellectual Property. Except (a) as set forth in
Schedule 3.18; or (b) as would not interfere in any material respect with the
conduct of the business of the Company or any of its Subsidiaries as currently
conducted, (i) one or more of the Company or its Subsidiaries legally or
beneficially owns or has the sole, exclusive and enforceable right to use,
transfer and license all Intellectual Property necessary for the conduct of the
business of the Company and each of its Subsidiaries as it is currently
conducted, free from (A) any Encumbrances other than Permitted Encumbrances, and
(B) any requirement of royalty payments or other license fees or payments and
(ii) to the Knowledge of Seller, (A) the operation of the business of none of
the Company or its Subsidiaries infringes or otherwise violates any Intellectual
Property of any other Person (including Seller and its Affiliates) and (B) none
of the Intellectual Property owned by the Company or any of its Subsidiaries is
being infringed by any other Person.
3.19 Contracts. (a) Schedule 3.19 sets forth a complete
list of each of the following contracts to which any of the Company or its
Subsidiaries is a party or by which any of them is bound as of the date of this
Agreement (collectively, the "Material Contracts"):
(i) any option, purchase and sale contract or lease
(whether real or personal property) providing for annual payments of
US$100,000 or more or that cannot be terminated on not more than ninety
(90) days' notice without payment by the Company or any of its
Subsidiaries of any penalty;
(ii) any agreement with respect to any hedging, swap,
forward, future or derivative transaction or option or similar
agreement involving, or settled by reference to, one or more rates,
currencies, commodities, equity or debt instruments or securities, or
economic, financial or pricing indices or measures of economic,
financial or pricing risk or value or any similar transaction or any
combination of these transactions;
(iii) contracts involving the expenditure by the Company or
any of its Subsidiaries of more than US$100,000 in any instance for the
purchase of materials, goods, supplies, equipment or services,
excluding any such contracts that are terminable by the Company and its
Subsidiaries without penalty on not more than ninety (90) days' notice;
(iv) contracts providing for payments to the Company or
any of its Subsidiaries of more than US$100,000 in any instance for the
sale of materials, goods, supplies, equipment or services, excluding
any such contracts that are terminable by the Company or its
Subsidiaries without penalty on not more than ninety (90) days' notice;
(v) indemnities and guarantees of the obligations of
other Persons (other than the Company or any of its Subsidiaries)
involving the potential expenditure by the Company or any of its
Subsidiaries after the date of this Agreement of more than US$100,000
in any instance;
(vi) any agreement relating to indebtedness for borrowed
money (whether incurred, assumed, guaranteed or secured by any asset),
including indentures, mortgages,
31
loan agreements, capital leases, security agreements, or other
agreements for the incurrence of Debt, other than (A) trade accounts
payable incurred in the ordinary course of business, (B) any such
agreement with an aggregate outstanding principal amount not exceeding
US$500,000 and (C) any such agreement relating to indebtedness owed to
Seller or any of its Affiliates to be repaid on or before the Closing
Date or owed to the Company or any of its Subsidiaries;
(vii) agreements under which any of the Company or its
Subsidiaries has licensed material Intellectual Property to or from any
other Person (including Affiliates of Seller);
(viii) partnership, limited liability company, joint venture
agreements or other agreements involving a sharing of profits or
expenses by the Company or any of its Subsidiaries;
(ix) contracts that restrict the Company or any of its
Subsidiaries after the date of this Agreement from engaging in any line
of business in any geographic area or competing with any Person;
(x) any agreement relating to the acquisition or
disposition of any business (whether by merger, sale of stock, sale of
assets or otherwise), including any contract under which the Company or
any of its Subsidiaries will have Liabilities after the date of this
Agreement relating to the acquisition or sale of any business
enterprise;
(xi) exclusive distributor, dealer, sales agency or
similar contracts under which the Company or any of its Subsidiaries is
obligated to pay after the date of this Agreement an amount in excess
of US$100,000 during any calendar year; and
(xii) any contract providing that the Company or any of its
Subsidiaries will receive future payments aggregating more than
US$100,000 per annum or US$250,000 in the aggregate prior the
expiration of such contract.
(xiii) any agreement with (A) Seller or any of its
Affiliates (excluding the Company and its Subsidiaries) or (B) any
director or executive officer of Seller or any of its Affiliates
(excluding the Company and its Subsidiaries), or any Person who is an
immediate relative of any such Person, or any combination of such
Persons (each such agreement described in clauses (A) and (B), an
"Affiliate Agreement");
(xiv) any outstanding power-of-attorney empowering any
Person to act on behalf of the Company or any of its Subsidiaries;
(xv) any industrial instrument or collective bargaining
agreement registered or unregistered, with any labor union or employees
covering former, current or future employees of the Company or any of
its Subsidiaries or work done, being done or to be done in the future
by the Company or any of its Subsidiaries;
(xvi) mining and exploration leases, Material Permits and
tenements and applications therefor;
32
(xvii) any compensation agreements for the valid grant of
the mining leases forming part of the Mining Authorizations; and
(xviii) any other material agreement, commitment, arrangement
or plan not made in the ordinary course of business.
(b) Each Material Contract is in full force and effect,
and is a valid and binding agreement of the Company or its Subsidiaries and, to
the Knowledge of Seller, each of the other parties thereto, enforceable by or
against such Company or Subsidiary and, to the Knowledge of Seller, each of such
other parties thereto in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar Laws relating to or
affecting creditors' rights generally and general equitable principles (whether
considered in a Proceeding in equity or at law). No condition exists or event
has occurred that (whether with or without notice or lapse of time or both)
would constitute a default, an event of default (however described), breach, or
breach of covenant or undertaking in any material respect by (x) any of the
Company or its Subsidiaries under any Material Contract or (y) to the Knowledge
of Seller, any other party to any Material Contract. Seller has heretofore
delivered to Buyer true and complete copies of all such Material Contracts,
including all amendments, modifications, waivers and consents applicable
thereto.
(c) That certain Xxxxxx Coal Project Expansion Mine
Operations Contract, dated as of December 21, 1997, between Xxxxxx Coal Pty Ltd
("Xxxxxx Sub") and Xxxxxx Contractors Pty Limited, ("Xxxxxx") as amended by that
certain the Letter Agreement, dated January 23, 2004, and as amended by that
certain Letter Agreement, dated February 11, 2004 (as amended, the "Xxxxxx
Operating Agreement") is in full force and effect, and is a valid and binding
agreement of Xxxxxx Sub and, to the Knowledge of Seller, each of the other
parties thereto, enforceable by or against Xxxxxx Sub and, to the Knowledge of
Seller, each of such other parties thereto in accordance with their terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
Laws relating to or affecting creditors' rights generally and general equitable
principles (whether considered in a Proceeding in equity or at law). No
condition exists or event has occurred that (whether with or without notice or
lapse of time or both) would constitute a default, an event of default (however
described), breach, or breach of covenant or undertaking by Xxxxxx Sub or, to
the Knowledge of Seller, any other party to the Xxxxxx Operating Agreement.
Seller has heretofore provided a true and complete copy of the Xxxxxx Operating
Agreement to Seller (as amended to the date of this Agreement).
3.20 Environmental Matters. (a) Except as set forth on
Schedule 3.20:
(i) each of the Company and its Subsidiaries is and at
all prior times has been in compliance in all material respects with
all Environmental Laws and all Environmental Permits;
(ii) none of the Company or any of its Subsidiaries has
received any Environmental Claim, written notice of any threatened
Environmental Claim or, to the Knowledge of Seller, any other notice of
any threatened Environmental Claim, in each
33
case that would be material to the Company and its Subsidiaries taken
as a whole, regarding or resulting from activities of the business of
the Company or any of its Subsidiaries or any property or assets
currently or formerly owned, operated or used by the Company or any of
its Subsidiaries;
(iii) none of the Company or its Subsidiaries has entered
into, has agreed to, or is subject to, any Governmental Order under any
Environmental Law or the common law relating to environmental matters
arising from contract or tort regarding the Company or any of its
Subsidiaries or any property or assets currently or formerly owned,
operated or used by the Company or any of its Subsidiaries, in any case
that would interfere in any material respect with the respective
ability of the Company and its Subsidiaries to continue to operate
their respective assets and conduct their respective businesses as
currently conducted;
(iv) none of the Company or its Subsidiaries has Released
any Hazardous Materials in violation of Environmental Law or
Environmental Permits or in a manner that would reasonably be expected
to result in material Liability under Environmental Law or the common
law relating to environmental matters arising from contract or tort,
and, to the Knowledge of Seller, no other Person has caused a Release
of any Hazardous Materials at any property currently or formerly owned
or operated by the Company or any of its Subsidiaries in violation of
Environmental Law, or Environmental Permits or in a manner that would
reasonably be expected to result in material Liability to any of the
Company or its Subsidiaries under Environmental Law or the common law
relating to environmental matters arising from contract or tort;
(v) no property currently owned or operated by the
Company or any of its Subsidiaries: (i) is listed or, to the Knowledge
of Seller, proposed for listing on any Governmental Authority's list of
sites at which remedial action is or may be necessary or (ii) is or
would reasonably be expected to be required by Environmental Law to be
listed on a Governmental Authority's list of sites at which remedial
action is or may be necessary or (iii) contains asbestos or
asbestos-containing materials, in either case in a condition
constituting a violation of Environmental Law and as would reasonably
be expected to result in material Liability under Environmental Law;
(vi) None of the Company or its Subsidiaries has disposed
of, or arranged to dispose of, any Hazardous Materials in a manner, or
to a location that would reasonably be expected to result in a material
Liability to any of the Company or its Subsidiaries under Environmental
Law; and
(vii) To the Knowledge of Seller, (A) there are no material
applications for Environmental Permits in the name of the Company or
any of its Subsidiaries other than those set forth on Schedule
3.20(a)(vii) (the "Material Environmental Applications"); and (B) the
Company or one of its Subsidiaries will, on grant of any of such
applications, hold legal or beneficial title to the interest in each
such application as set forth on Schedule 3.20(a)(vii). Each of the
Material Environmental Applications has been made in accordance with
applicable Laws. None of Seller, the Company or any of its Subsidiaries
has received any written communication that indicates that any of the
Material
34
Environmental Applications will not be granted; and, to the Knowledge
of Seller, none of Seller, the Company or any of its Subsidiaries has
received any other communication that indicates that any of the
Material Environmental Applications will not be granted.
(b) To the Knowledge of Seller, as of the date hereof,
none of the Company or any of its Subsidiaries will require a capital
expenditure of more than US$500,000 or an increase in annual operating expenses
of more than US$500,000 during any of the next five fiscal years in order to
achieve or maintain compliance with Environmental Laws or Environmental Permits
as such Environmental Laws and Environmental Permits are in effect and are
interpreted by the relevant regulatory authorities as of the date hereof, in
excess of the amounts set forth on the Capital Expenditure Budget or the Annual
Operating Expenses Budget each attached hereto as Schedule 3.20(b), as
applicable, for such year.
(c) For the avoidance of doubt, the parties acknowledge
their understanding that for purposes of this Agreement no representations other
than those set forth in Sections 3.20(a) and (b) above shall be deemed to be
made with regard to compliance with Environmental Laws.
3.21 Insurance. Schedule 3.21 lists all insurance policies
held in the names of the Company or any of its Subsidiaries covering the assets
and operations of any of the Company, its Subsidiaries and any Company Employees
as of the date hereof, specifying the insurer, amount of coverage and type of
insurance. All such policies are in full force and effect, all premiums due
thereon have been paid and, where applicable, each of the Company and its
Subsidiaries have complied in all material respects with the provisions of such
policies and have not received any notice from any of its insurance brokers or
carriers that such broker or carrier has cancelled or terminated coverage or
will not be willing or able to renew their existing coverage. All insurance
policies not held in the names of the Company or any of its Subsidiaries but
which cover the assets and operations of the business of any of the Company, its
Subsidiaries and the Company Employees are in full force and effect (subject to
changes made in the ordinary course of business that will not materially reduce
the coverage thereunder) and will remain in full force and effect until the
Closing, at which time, coverage thereunder will be discontinued with respect to
the Company, its Subsidiaries and the business of the Company and its
Subsidiaries. To the Knowledge of Seller, as at the date hereof, there are no
claims outstanding under any insurance policy described in this Section 3.21 and
relating to the business of the Company or any of its Subsidiaries in excess of
US$1,000,000, and no event has occurred which might give rise to any such claim.
3.22 Personal Property Assets. (a) Schedule 3.22 sets
forth a true and complete list of all material items of machinery, equipment,
vehicles, and other tangible personal property now owned by the Company and each
of its Subsidiaries as of January 31, 2004. Except as set forth on Schedule
3.22, each of the Company and its Subsidiaries have good and marketable title
to, or hold by a valid and existing lease or license, all the tangible personal
property assets reflected as assets on the Audited Balance Sheet or acquired
after December 31, 2003, except with respect to assets disposed of in the
ordinary course of business since such date, free and clear of all Encumbrances,
except for Permitted Encumbrances.
35
(b) Except to the extent reserved for in the Audited
Balance Sheet, the accounts receivable of each of the Company and its
Subsidiaries (i) are valid and genuine, (ii) have arisen solely out of bona fide
sales and deliveries of goods, performances of services and other business
transactions in the ordinary course of business and (iii) are not subject to
valid defenses, setoffs or counterclaims.
3.23 Real Property. (a) Leased Properties. Schedule
3.23(a) lists all real property and water rights, and other material interests
in land, including coal, mining and surface rights, easements, rights of way and
options, leased or subleased by any of the Company or its Subsidiaries (the
"Leased Real Property"). Seller has heretofore delivered to Buyer true and
complete copies of the leases and subleases covering the Leased Real Property
(as amended to the date of this Agreement). With respect to each lease and
sublease, and except as otherwise specified on Schedule 3.23(a) or where the
failure of any of the following to be true and correct would not reasonably be
expected to interfere in any material respect with the respective abilities of
the Company and its Subsidiaries to continue to operate their respective assets
and conduct their respective businesses as currently conducted:
(i) such lease or sublease is, to the Knowledge of
Seller, in full force and effect in all respects and enforceable in
accordance with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar Laws relating to or
affecting creditors' rights generally and general equitable principles
(whether considered in a Proceeding in equity or at law);
(ii) (A) none of the Company or its Subsidiaries is in
default under any such lease or sublease and, to the Knowledge of
Seller no event has occurred which, with the passage of time or
expiration of any grace period would constitute a default of the
Company's or any of its Subsidiary's obligations under such lease or
sublease, (B) to the Knowledge of Seller, no other party to any such
lease or sublease is in default thereunder and (C) none of the Company
or its Subsidiaries has received a written or, to the Knowledge of
Seller, other notice of default with respect to such lease or sublease;
(iii) no such lease or sublease has been mortgaged, deeded
in trust or subjected to an Encumbrance by the Company or any of its
Subsidiaries; and
(iv) there are no written, or to the Knowledge of Seller,
threatened claims that would adversely affect the rights of the Company
or any of its Subsidiaries to the Leased Real Property.
(b) Owned Properties. Schedule 3.23(b) lists all real
property and water rights, and other material interests in land, including coal,
mining and surface rights, easements, rights of way and options, owned by any of
the Company or its Subsidiaries (the "Owned Real Property"). With respect to
each such parcel of the Owned Real Property, except as otherwise specified on
Schedule 3.23(b) or where the failure of any of the following to be true and
correct would not reasonably be expected to be materially adverse to the use of
such Owned Real Property:
36
(i) the identified owner has good and marketable fee
simple title to the parcel of the Owned Real Property, free and clear
of any Encumbrances, except for Permitted Encumbrances;
(ii) there are no pending or, to the Knowledge of Seller,
threatened condemnation Proceedings; and
(iii) there are no there are no written, or to the
Knowledge of Seller, threatened claims that would adversely affect the
title of the Company or any of its Subsidiaries to the Owned Real
Property.
(c) Occupation; Cultural Heritage. Other than in relation
to claims listed on or ascertainable from the public records of the Native Title
Tribunal or from the cultural heritage register, no written claim has been
notified to the Company or any of the Subsidiaries and, to the Knowledge of
Seller, there are no claims (A) asserting a right of occupation of either the
Owned Real Property or the Leased Real Property in favor of any third party,
which right would be material to the Company and its Subsidiaries taken as a
whole or (B) asserting a Native Title right relating to either the Owned Real
Property or the Leased Real Property that would prevent or restrict the
development or operation of the assets and the business of the Company or any of
its Subsidiaries as currently being conducted in a way which would be material
to the Company and its Subsidiaries taken as a whole.
(d) Water Rights. Except as set forth in Schedule
3.23(d): (i) each of the Company and its Subsidiaries is and at all prior times
has been in compliance in all material respects with the Water Act and all Water
Permits; (ii) none of the Company or any of its Subsidiaries has received any
written or, to the Knowledge of the Seller, other notice of a claim or to the
Knowledge of the Seller, any threatened claim, in relation to a breach or
potential breach of the Water Act or, Water Permits regarding or resulting from
activities of the Company or any of its Subsidiaries; and (iii) none of the
Company or its Subsidiaries has entered into any agreement or contract (whether
oral or written) in breach of the Water Act or Water Permits or that would
interfere in any material respect with the ability of the Company and its
Subsidiaries, taken as a whole, to continue to operate their assets and conduct
their businesses.
3.24 Records and Constituent Documents. All returns and
particulars, resolutions and other documents which each of the Company and its
Subsidiaries are required by Law to file with or deliver to the registrar of
companies, the Australian Securities and Investments Commission or other
equivalent office have been filed or delivered. All of the Company's and each of
its Subsidiaries' accounts, books, ledgers, employee and payroll records and
financial and other records (i) have been properly maintained in accordance with
applicable Australian Accounting Standards and (ii) are in the possession or
under the control of the Company or one of its Subsidiaries.
3.25 Intercompany Accounts. Schedule 3.25 contains a
complete list of all intercompany balances as of the date hereof between Seller
or any of its Affiliates (excluding the Company and its Subsidiaries, but
including the Associated Companies), on one hand, and the Company or any of its
Subsidiaries, on the other hand (each such account, an "Intercompany Account").
37
3.26 No Brokers' or Other Fees. Except for Deutsche Bank
AG and for Xx. Xxxxxxxxx+Partner GmbH, whose fees and expenses will be paid by
Seller, no Person has acted directly or indirectly as a broker, finder,
investment banker or financial advisor in connection with the transactions
contemplated hereby, and no Person is entitled to any fee or commission or like
payment in connection with the transactions contemplated hereby based upon any
agreement, arrangement or other understanding made by or on behalf of Seller.
3.27 Entire Business; Condition of Assets. Each of the
Company and its Subsidiaries owns, or has valid leasehold interests in, all the
assets (real or personal) necessary for the conduct of the business of the
Company and such Subsidiary, as currently conducted, and all such assets are in
reasonably good maintenance, operating condition and repair, normal wear and
tear excepted, are suitable for the purposes for which they are presently
utilized.
3.28 Solvency. None of the Company or any of its
Subsidiaries has stopped or suspended payment of their debts, become unable to
pay their debts as they become due, or otherwise become insolvent in any
jurisdiction. None of the Company or any of its Subsidiaries has gone into
liquidation, insolvency, administration or passed a winding-up resolution or
received a deregistration notice under section 601AB or applied for
deregistration under section 601AA of the Australian Corporations Act or the
equivalent provisions under any other applicable Law. No petition or other
process for winding-up has been presented against the Company or any of its
Subsidiaries. No writ of execution has issued against the Company or against any
of its Subsidiaries or the property of the Company or any of its Subsidiaries.
No receiver, receiver and manager, administrator or similar person has been
appointed to any part of the undertaking or assets of the Company or any of its
Subsidiaries.
3.29 Grants and Allowances. None of the Company or any of
its Subsidiaries has received any grant, allowance, aid or subsidy from any
Governmental Authority during the last six years which, to the Knowledge of
Seller, is currently due and owing as a result of any act or failure to act by
the Company or which would become due and owing as a result of the sale of the
Shares to Buyer and, in such case, would reasonably be expected to result in an
aggregate Liability to the Company or any of its Subsidiaries (or loss of grant,
allowance, aid and/or subsidy) in excess of US$100,000.
3.30 Illegal Acts. To the Knowledge of Seller, none of the
Company nor any of its Subsidiaries has committed any criminal or illegal act
which would reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect.
3.31 Offers. Each offer, tender or quotation made by the
Company or, to the Knowledge of Seller, any of its Subsidiaries in respect of
the business of the Company and its Subsidiaries, which is outstanding and
capable of acceptance by a third party, was made in the ordinary course of
business, and all such offers, tenders or quotations that provide for annual
payments of US$100,000 or more in the aggregate as of the date set forth in
Schedule 3.31 are set forth on Schedule 3.31.
3.32 Security Interests. None of the Company or any of its
Subsidiaries, to the Knowledge of Seller, has granted or created, or agreed to
grant or create, any Encumbrances
38
other than Permitted Encumbrances and any Encumbrances disclosed in the Audited
Financial Statements.
3.33 Forecasts. All forecasts, projections, models,
budgets or estimates heretofore delivered to Buyer by Seller and its Affiliates
and their respective representatives and advisers have been prepared in good
faith, and without any intention to mislead, on the basis of the information
available at the time of their preparation.
3.34 No Other Representations or Warranties. Except for
the representations and warranties of Seller contained in this Agreement and
Seller's Schedules, Seller makes no other express or implied representation or
warranty to Peabody or Buyer.
3.35 Native Title Matters. Notwithstanding any other
provision of this Agreement, other than Section 3.23(c) and Section 3.12(c)(iv),
no warranty or representation is given by the Seller in connection with the
existence of Native Title and its impact on any of the assets, property or the
current or future business of the Company and its Subsidiaries (or part
thereof). The susceptibility of the assets, property or business of the Company
and its Subsidiaries (or any part thereof) to any claim for Native Title, the
likelihood of success of any such claim if made, or the consequences for the
title to, use, or the enjoyment of any of the assets or property (or any part
thereof), or any compensation payable in relation the grant or use of any such
asset, property or business, should Native Title be found to exist in relation
to them is a risk to be borne by the Buyer and for which the Seller will not be
responsible. For the avoidance of doubt, and notwithstanding this Section 3.35,
a claim may be brought by Peabody or the Buyer for a breach of Section 3.23(c)
or Section 3.12(c)(iv) notwithstanding that this Section 3.35 may be pleaded in
bar to claims under any other Section of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PEABODY AND BUYER
Peabody and Buyer, jointly and severally, hereby represent and
warrant to Seller as follows:
4.1 Organization. Each of Peabody and Buyer is a
corporation duly incorporated, validly existing and in good standing under the
Laws of its jurisdiction of incorporation, formation or organization. Each of
Peabody and Buyer has the requisite corporate power and authority to own, lease
and operate its assets and to carry on its business as now being conducted and
is duly qualified or licensed to do business and is in good standing in the
jurisdictions in which the ownership of its property or the conduct of its
business requires such qualification or license, except where the failure to be
so qualified or licensed would not reasonably be expected, individually or in
the aggregate, to have (i) a material adverse effect on the ability of Peabody
or Buyer to consummate the transactions contemplated by this Agreement or (ii) a
material adverse effect on the business, assets, Liabilities, results of
operations or financial condition of Peabody and its subsidiaries, taken as a
whole (excluding any effect (i) resulting from general economic conditions that
do not disproportionately affect Peabody and its subsidiaries or (ii) affecting
companies in the coal mining industry generally that do not disproportionately
affect Peabody and its subsidiaries).
39
4.2 Authorization; Enforceability. Each of Peabody and
Buyer has the requisite corporate power and authority to execute and deliver
this Agreement and to perform its obligations hereunder. The execution and
delivery of this Agreement by each of Peabody and Buyer and the performance of
their respective obligations hereunder has been duly authorized by all necessary
corporate action on the part of such party and, upon such authorization, no
other corporate or shareholder proceedings or actions are necessary to authorize
or consummate this Agreement, or the transactions contemplated hereby. This
Agreement has been duly executed and delivered by each of Peabody and Buyer and,
assuming due authorization, execution and delivery by Seller, constitutes a
valid and binding agreement of each of Peabody and Buyer and, subject to any
necessary stamping and registration, is enforceable against each of Peabody and
Buyer in accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar Laws relating to or affecting creditors' rights generally and
general equitable principles (whether considered in a proceeding in equity or at
law).
4.3 No Conflicts or Approvals. (a) The execution,
delivery and performance by each of Peabody and Buyer of this Agreement and the
consummation by Peabody and Buyer of the transactions contemplated hereby does
not (i) violate, conflict with or result in a breach by Peabody or Buyer of its
organizational documents, (ii) violate, conflict with or result in a breach of,
or constitute a default by Peabody or Buyer (or create an event which, with
notice or lapse of time or both, would constitute a default under,) or require
any consent or other action by any Person under, or give rise to any right of
termination, cancellation or acceleration under, any note, bond, mortgage,
indenture, deed of trust, license, franchise, permit, lease, contract, agreement
or other instrument to which Peabody or Buyer or any of its properties or assets
may be bound, (iii) violate or result in a breach of any Governmental Order or
Law applicable to Peabody or Buyer or any of their respective properties or
assets or (iv) result in the creation of any Encumbrance, other than Permitted
Encumbrances, upon any of the properties or assets of Peabody or Buyer, except,
with respect to the foregoing clauses (ii), (iii) and (iv) above, as would not
be material to Peabody and its subsidiaries taken as a whole and would not
materially adversely affect Peabody's or Buyer's ability to consummate the
transactions contemplated by this Agreement.
4.4 Governmental Authorization. The execution, delivery
and performance by each of Peabody and Buyer of this Agreement and the
consummation of the transactions contemplated hereby, require no action by or in
respect of, or any Consent from, any Governmental Authority, except with any
applicable requirements of the actions and filings listed on Schedule 4.4 and
any such action or filing as to which the failure to make or obtain would not be
material to Peabody and its subsidiaries taken as whole or materially adversely
affect the ability of Peabody or Buyer to consummate the transactions
contemplated hereby.
4.5 No Brokers' or Other Fees. Except for Xxxxxx Xxxxxxx,
whose fees and expenses will be paid by Peabody, no Person has acted directly or
indirectly as a broker, finder, investment banker or financial advisor in
connection with the transactions contemplated hereby, and no Person is entitled
to any fee or commission or like payment in connection with the transactions
contemplated hereby based upon any agreement, arrangement or other understanding
made by or on behalf of Peabody or Buyer.
40
4.6 Financing. As of the Closing Date, Buyer shall have
available to it funds sufficient to enable it to deliver the Buyer Loan and the
Closing Payment.
4.7 No Other Representations or Warranties. Except for
the representations and warranties of Peabody and Buyer contained in this
Agreement and Peabody's and Buyer's Schedules, neither Peabody nor Buyer makes
any other express or implied representation or warranty to Seller.
ARTICLE V
COVENANTS AND AGREEMENTS
5.1 Conduct of Business Prior to the Closing. (a) Seller
covenants and agrees that, except (i) as expressly contemplated by this
Agreement, (ii) as disclosed in Schedule 5.1 or (iii) with the prior written
consent of Buyer, from the date hereof to Closing, (A) the business of each of
the Company and its Subsidiaries (and the maintenance of their respective books,
accounts and records, inventory levels) shall be conducted only in the ordinary
course of business and in compliance with all Laws, Environmental Laws, Permits
and Environmental Permits, (B) the obligations of each of the Company and its
Subsidiaries shall be paid or performed when due, (C) to use its commercially
reasonable efforts to cause the present business organization and business
relationships and customer relationships of each of the Company and its
Subsidiaries to be preserved and their respective rights and operations to be
maintained, (D) each of the Company and its Subsidiaries shall continue to make
such capital expenditures pertaining to the business of the Company and its
Subsidiaries as are reasonably consistent with the capital expenditure budget of
the Company and its Subsidiaries attached hereto as Schedule 5.1(a)(D) (the
"Capital Expenditure Budget") and the past practice of the Company, (E) each of
the Company and its Subsidiaries shall use reasonable efforts to retain the
services of their respective officers and key employees and maintain
relationships with their respective officers and key employees, (F) each of the
Company and its Subsidiaries shall use reasonable efforts to maintain and keep
their properties and assets in as good repair and condition as at present,
ordinary wear and tear excepted, (G) each of the Company and its Subsidiaries
shall use reasonable efforts to keep in full force and effect insurance
comparable in amount and scope of coverage to that currently maintained and (H)
each of the Company and its Subsidiaries shall collect their receivables only in
the ordinary course of business and in the same manner as previously collected.
(b) (i) None of the Company or any of its Subsidiaries
shall amend its organizational documents;
(ii) None of the Company or any of its Subsidiaries shall
(A) declare, set aside, make or pay any dividend or other distribution
payable in cash, shares or property with respect to the Company's share
capital or that of its Subsidiaries, except that a Subsidiary of the
Company may declare and pay a dividend or make advances to the company
that directly wholly owns such Subsidiary (provided that such company
that directly wholly owns such Subsidiary is directly wholly-owned by a
Subsidiary of the Company) or the Company (and, provided, however, that
the Company and any of its Subsidiaries shall have the right to make
dividends to Seller as set forth in Schedule 5.1(b)(ii)); (B) redeem,
purchase or otherwise acquire directly or indirectly any of the
41
Company's or any of its Subsidiaries' shares (including the Shares) or
other ownership interests of the Company or any of its Subsidiaries;
(C) issue, transfer, sell, pledge, dispose of or encumber any shares
(including the Shares) or other ownership interests of, or securities
convertible into or exchangeable for, or options, warrants, calls,
commitments or rights of any kind to acquire, any shares (including the
Shares) or other ownership interests of shares of any class of the
Company or any of its Subsidiaries; or (D) split, recapitalize, combine
or reclassify the capitalization of the Company or any of its
Subsidiaries;
(iii) None of Seller, the Company, any of the Company's
Subsidiaries or any of their respective Affiliates shall (A) adopt,
establish, enter into any new employee benefit plan, agreement,
program, policy, trust, fund or other arrangement that would be a
Company Benefit Plan if it were in existence on the date of this
Agreement or amend or terminate any Company Benefit Plan, except for
changes required by applicable Law, (B) increase or introduce any
compensation, bonus, incentive or fringe benefit of, or enter into or
amend any employment, severance, retrenchment, redundancy, termination
or similar agreement or arrangement with any of its former, present or
future employees, officers, directors or consultants, except for normal
increases in base salary in the ordinary course of business and the
payment of cash bonuses to employees pursuant to and consistent with
existing plans or programs to the extent such increases or bonuses are
accrued and set forth in Schedule 5.1(b)(iii); (C) loan or advance any
money or other property to any present or former director, officer,
employee or consultant, or (D) grant any equity or equity-based awards;
(iv) None of the Company or any of its Subsidiaries shall
acquire, sell, lease or dispose of any material assets of the Company
or any of its Subsidiaries, except as may be expressly contemplated by
this Agreement and except for the purchase and sale of inventory in the
ordinary course of business;
(v) None of the Company or any of its Subsidiaries (as
applicable) shall: (i) incur or assume any long-term or short-term debt
or issue any debt securities except for borrowings under existing lines
of credit in the ordinary course of business consistent with past
practice; (ii) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the
obligations of any other Person except in the ordinary and usual course
of business consistent with past practice in an immaterial amount;
(iii) make any loans, advances or capital contributions to, or
investments in, any other Person other than in the ordinary and usual
course of business consistent with past practice and that shall not
exceed US$100,000 individually or US$500,000 in the aggregate; or (iv)
mortgage, pledge sell, transfer, dispose of or otherwise subject to any
Encumbrance any of its material assets, tangible or intangible, or
create any Encumbrance of any kind with respect to any such asset;
provided, however, that notwithstanding anything to the contrary set
forth herein, each of the Company and its Subsidiaries shall have the
right to repay or obtain forgiveness of the debt obligations set forth
in Schedule 5.1(b)(v);
(vi) None of the Company or any of its Subsidiaries shall
acquire (by merger, consolidation or acquisition of stock or assets)
any corporation, partnership or other
42
business organization or division thereof or any equity interest
therein or extend any credit to or purchase any debt obligation of any
Person;
(vii) None of the Company or any of its Subsidiaries shall
adopt a plan of complete or partial liquidation or resolutions
providing for or authorizing such liquidation or a dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization;
(viii) None of the Company or any of its Subsidiaries shall
change any of the accounting methods, policies or practices used by it
unless in the determination of the Company's independent accountants
such change is required by Australian Accounting Standards;
(ix) Except with the prior written consent of the Buyer or
Peabody, which consent shall not be unreasonably withheld or delayed,
none of the Company or any of its Subsidiaries shall (A) elect to form
a consolidated group for income tax purposes or a GST group, (B) make
any Tax election or take any position on any Tax Return filed on or
after the date of this Agreement or adopt any method therein that is
materially inconsistent with elections made, positions taken or methods
used in preparing or filing similar returns in prior periods and
provided that if Seller reasonably determines that it is required by
Law to prepare any Tax Return in a manner inconsistent with the last
previous similar Tax Return, then Seller shall so notify Peabody and
Buyer and Seller shall be entitled to take such inconsistent position,
unless Peabody or Buyer disagrees with Seller's determination of the
application of the Law and to adopt Seller's determination could have
an adverse effect on Peabody, Buyer, the Company or any of its
Subsidiaries in respect of a period ending after Closing, in which
case, Seller may refer the matter to an Expert to make a decision on
the disagreement as soon as practicable after receiving any submissions
from Buyer and Seller, and the decision of the Expert will be
conclusive and binding on both Parties in the absence of manifest
error, (C) enter into any settlement or compromise of any Tax liability
to the extent there could be an adverse effect to Peabody, Buyer, the
Company or any of their Subsidiaries, (D) file any amended Tax Return
with respect to any Tax to the extent there could be an adverse effect
to Peabody, Buyer, the Company or any of their Subsidiaries, (E) change
any annual Tax accounting period, (F) enter into any closing agreement
relating to any Tax to the extent there could be an adverse effect to
Peabody, Buyer, the Company or any of their Subsidiaries or (G)
surrender any right to claim a Tax refund to the extent there could be
an adverse effect to Peabody, Buyer, the Company or any of their
Subsidiaries (and for the purposes of this paragraph (ix) an adverse
effect will be deemed to include a situation where the Company or any
of its Subsidiaries becomes liable for Tax in respect of a Pre-Closing
Tax Period or Straddle Period for which Peabody or Buyer is not wholly
indemnified under Section 5.3);
(x) Except with the prior written consent of the Buyer,
which consent shall not be unreasonably withheld, none of the Company
or any of its Subsidiaries shall enter into any contract, agreement or
understanding that, if in existence on the date hereof, would
constitute a Material Contract or change, waive or otherwise modify or
terminate any Material Contract; provided that the Company and its
Subsidiaries shall be permitted
43
to enter into new contracts for the supply of coal or agree to changes
or modifications to existing agreements for the supply of coal to the
extent such new contracts are made, or such changes or modifications
are of a nature that are in, the ordinary course of business and are
not materially adverse to the Company or any of its Subsidiaries;
(xi) None of the Company or any of its Subsidiaries shall
(A) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise) or
(B) waive, release or transfer any rights of material value, in each
case of (A) or (B), other than in the ordinary course of business;
(xii) None of the Company or any of its Subsidiaries shall
settle or compromise any action, claim, case, litigation, proceeding or
investigation by or before any Governmental Authority or arbitration
tribunal (whether or not commenced prior to the date of this Agreement)
other than any settlement or compromise relating to any matter (other
than a matter relating to or affecting Tax) that involves a
non-material monetary payment or a non-monetary obligation or
restriction that does not restrict or adversely affect in any manner
the conduct of the business or operation of the Company or any of its
Subsidiaries;
(xiii) None of the Company or any of its Subsidiaries shall
enter into any new line of business in which the Company and its
Subsidiaries is not engaged as of the date hereof;
(xiv) None of the Company or any of its Subsidiaries shall
enter into any transaction, agreement or arrangement with Seller or any
of Seller's Affiliates (other than the Company or any of its
Subsidiaries);
(xv) Except (i) with the prior written consent of the
Buyer, which consent shall not be unreasonably withheld, or (ii) where
such expenditure is required in the best interest of the Company (in
the reasonable judgment of Seller) in cases where time is of the
essence in order to respond to events adversely affecting the Company's
operations not foreseen in the Capital Expenditure Budget, and which
such expenditures do not exceed US$100,000 individually or US$500,000
in the aggregate, and prompt notice of such expenditure is given to
Buyer, none of the Company or any of its Subsidiaries shall incur or
commit to make capital expenditures, other than in accordance with the
Capital Expenditure Budget; and
(xvi) None of the Company or any of its Subsidiaries shall
authorize or enter into an agreement or commitment to do any of the
foregoing.
5.2 Access to Books, Records and Properties; Reports;
Cooperation. Seller shall cause each of the Company and its Subsidiaries to
afford Peabody's and Buyer's officers, employees, accountants, counsel and other
authorized representatives, including representatives of any Persons providing
financing to Peabody or Buyer in connection with the transactions contemplated
hereby, access during normal business hours throughout the period from the date
hereof to the Closing or the date of termination of this Agreement, (A) to it
and its properties, contracts, commitments, books and records (including but not
limited to Tax Returns) and to
44
cause its representatives to furnish promptly to Buyer such additional financial
and operating data and other existing information as to its business and
properties as Buyer or its duly authorized representatives may from time to time
reasonably request and (B) to meet with any party to a Joint Venture Agreement
on reasonable notice and to the extent that it is within the control of Seller.
Between the date hereof and the Closing, Peabody and Buyer shall be permitted to
maintain, at Peabody's expense, a representative on site at the North Goonyella
mine site, which Person shall be permitted access to the properties and offices
at such mine site, including, without limitation, for purposes of monitoring the
performance of Longwall 4-North and the geological and operational conditions at
such mine site. Between the date hereof and the Closing, Peabody and Buyer shall
be permitted to arrange for an independent geologist mutually acceptable to
Buyer and Seller to review, at Peabody's expense, the geological conditions at
the North Goonyella mine site and to assess the expected geological conditions
over the next twelve (12) months at the North Goonyella mine site. Between the
date hereof and the Closing, Seller shall provide to the Buyer daily production
reports for the North Goonyella mine (by email or fax) with commentary on any
unusual material items that may have occurred or affected production during the
relevant day. In the event that Seller determines that disclosure of any such
information would be in violation of applicable Laws or the provisions of any
confidentiality agreement to which either Seller or the Company is a party,
Seller, Peabody and Buyer will use their best efforts to institute appropriate
substitute disclosure arrangements that do not violate any such Laws or
confidentiality obligations, to the extent reasonable under the circumstances.
Unless otherwise required by Law and until the Closing Date, Peabody and Buyer
will hold any such information which is nonpublic in confidence in accordance
with the provisions of the Confidentiality Agreement.
5.3 Tax Matters. (a) Cooperation. Peabody, Buyer and
Seller agree to furnish or cause to be furnished to each other, upon request, as
promptly as practicable, such information and assistance (including, at the
expense of the requesting party, reasonable access to the other party's Tax
Return preparer, provided that such other party may limit such access as is it
deems necessary to protect confidential or privileged information) relating to
the Company and each of its Subsidiaries (including access to books and records,
employees, contractors and representatives) as is reasonably necessary for the
filing of all Tax Returns, the making of any election related to Taxes, the
preparation for any audit by any Taxing Authority, and the prosecution or
defense of any claim, suit or proceeding relating to any Tax Return or
Assessment. Seller agrees that it shall (i) consult with Peabody and Buyer prior
to taking any position or settling any claim with respect to Taxes and obtain
the prior written consent of Peabody or Buyer and (ii) not take any action with
respect to Taxes that would legally bind Peabody, Buyer, the Company or any of
its Subsidiaries without the prior written consent of Peabody or Buyer if such
position, settlement or action could have a material adverse effect to Peabody,
Buyer, the Company or any of its Subsidiaries. If Peabody or Buyer do not
provide the relevant consent under this Section 5.3(a), no claim under this
Agreement can be made by Peabody or Buyer against Seller in respect of any Taxes
or Losses arising directly in respect of Seller failing to take the proposed
position or settlement of claim with respect to such Taxes unless consenting to
such action or settlement of the claim could reasonably be expected to have a
material adverse effect on Peabody, Buyer, the Company or any of its
Subsidiaries in respect of a period ending after Closing. Peabody, Buyer and
Seller shall retain all books and records with respect to Taxes which are
indemnifiable under this Section 5.3 and pertain to the Company until the
expiration of the relevant Tax Amendment Periods (and, to the extent notified by
Peabody,
45
Buyer and Seller, any extensions thereof). At the end of such period, each party
shall provide the other with at least ten (10) Business Days' prior written
notice before destroying any such books and records, during which period the
party receiving such notice can elect to take possession, at its own expense, of
such books and records.
(b) Preparation of Pre-Closing Tax Returns. (i) Except as
set forth in Section 5.3(b)(ii), Seller shall prepare and timely file, or cause
to be prepared and timely filed, all Tax Returns in respect of the Company and
each of its Subsidiaries in respect of any Pre-Closing Tax Period and Seller, in
respect of a Tax payment due prior to Closing Date, shall procure that the
relevant company or companies pay all Taxes due on such Tax Returns or any
applicable Assessment. All such Tax Returns shall be prepared on a basis
consistent with the last previous similar Tax Return and in accordance with Tax
Law. (ii) In respect of a Tax Return due after the Closing Date for a
Pre-Closing Tax Period (a "Post-Closing Filing Return"), Seller shall provide
Buyer with a copy of each Post-Closing Filing Return for Buyer's review and
filing at least thirty (30) days prior to the due date for the filing of the
relevant Post-Closing Filing Return and all such Post-Closing Filing Returns
shall be prepared on a basis consistent with the last previous similar Tax
Return and in accordance with Tax Law.
(c) GST Tax Returns. In respect of a Tax Return that is a
return relating to GST, Section 5.3(b) shall apply as if any references to
"thirty (30) days" shall be read as if the references were to "ten (10) days".
(d) Duties. The Buyer shall (and Peabody shall cause
Buyer to) pay all Duty arising in connection with this Agreement and any
transaction contemplated by this Agreement, other than Duty arising in
connection with the Company Restructuring. The Seller shall pay all Duty and
prepare all filings arising in connection with the Company Restructuring.
(e) Straddle Period Taxes. In the case of any taxable
period that includes (but does not end on) the Closing Date (a "Straddle
Period"), for the purposes of determining the liability of Seller under Section
5.3(f) for Taxes of the Company and each of its Subsidiaries in respect of the
portion of the Straddle Period beginning prior to the Closing Date and ending on
the Closing Date (the "Straddle Indemnification Period"), the Taxes of the
Company and each of its Subsidiaries (other than Duties imposed in connection
with the sale of the Shares or otherwise in connection with this Agreement with
the exception of any Duties arising in connection with or as a consequence of
the Company Restructuring) shall be computed as if the period ended as of the
Closing Date and, for this purpose, the Taxes referable to such a period will
include any Tax referable to that period pursuant to a Tax Law that arises in
respect of or by virtue of an act, transaction or event that occurred on or
prior to Closing even though the Tax may not become due or payable until after
Closing.
For any Straddle Period of Company or any of its Subsidiaries,
Buyer shall (and Peabody shall cause Buyer to) timely prepare and file with the
appropriate Taxing Authorities all Tax Returns required to be filed and shall
pay all Taxes due with respect to such Tax Returns; provided, that no such Tax
Return shall be filed without the prior written consent of Seller (which consent
shall not be unreasonably withheld, conditioned or delayed). Buyer and Seller
agree to cause each Company to file all Tax Returns for any Straddle Period, to
the extent permissible under applicable Law, on the basis that the relevant
taxable period ended as of the
46
Closing Date, unless the relevant Taxing Authority will not accept a Tax Return
filed on that basis.
If Peabody, Buyer and Seller cannot agree on a position taken
in respect of a Straddle Period Tax Return within 30 days of the Buyer providing
a copy of the relevant Tax Return to the Seller, or within such further time as
may be agreed between them, then Buyer may refer the matter to an Expert to
request that the Expert make a decision on the disagreement as soon as
practicable after receiving any submission from the Buyer and Seller. The
decision of Expert is to be conclusive and binding on the parties in the absence
of manifest error. The Expert is appointed as an expert and not arbitrator. The
procedures for determination are to be decided by the Expert in its absolute
discretion. Unless the Expert makes a determination regarding costs, the Buyer
and Seller each agree to pay one half of the Expert's costs and expenses in
connection with the reference.
(f) Tax Indemnity. (A) Notwithstanding any other
provision in this Agreement and any disclosures made in the Schedules, Seller
shall indemnify Peabody and Buyer and their respective Affiliates (including the
Company and each of its Subsidiaries) and each of their respective officers,
directors, employees, stockholders, agents and other representatives and hold
them harmless from (i) all liability for Taxes of the Company and each of its
Subsidiaries for the Pre-Closing Tax Period and Taxes referable to the Straddle
Indemnification Period, as allocated to Seller in accordance with Section
5.3(e), (ii) all liability for Taxes of Seller or any other Person (other than
the Company or any of its Subsidiaries) which is or has ever been affiliated
with the Company or any of its Subsidiaries for which the Company or any
Subsidiary becomes liable for the Pre-Closing Tax Period and Taxes referable to
the Straddle Indemnification Period, as allocated to Seller in accordance with
Section 5.3(e), (iii) all liability for Taxes of any Person (other than the
Company or any of its Subsidiaries) imposed on the Company or any of its
Subsidiaries as a transferee or successor, by contract or pursuant to any law,
rule or regulation for the Pre-Closing Tax Period and Taxes referable to the
Straddle Indemnification Period, as allocated to Seller in accordance with
Section 5.3(e), (iv) any loss, liability, claim, damage or expense attributable
to any breach of any warranty or representation contained in Section 3.15
(relating to Taxes), without regard to any materiality qualifiers, or any breach
by Seller or any of their respective Affiliates (other than, after the Closing,
the Company or any of its Subsidiaries) of any covenant contained in Section
5.1(b)(ix) of this Agreement (relating to Taxes), (v) subject to section 5.3(d)
all liability for Taxes arising (directly or indirectly) as a result of the sale
of the Shares or the other transactions contemplated herein (including the
Company Restructuring), (vi) all liability for reasonable legal, accounting,
appraisal, consulting or similar fees and expenses attributable to any item in
clause (i), (ii), (iii), (iv) or (v) above (each a "Tax Loss"); provided,
however, that in the case of clauses (i), (ii), (iii), (iv), (v) or (vi) above,
Seller shall be liable only to the extent that such Taxes (and other related
amounts), are in excess of the amount, if any, reserved for such Taxes or
reflected as an accrued Tax liability on the Final Closing Balance Sheet (other
than an accrued Tax liability with respect to deferred taxes); provided,
further, that if, in the Tax year the Tax Loss occurred (or within the two
subsequent Tax years), a Tax Benefit (as defined in Section 9.1(c)) is actually
realized by Buyer or Peabody or any Affiliate thereof as a result of such Tax
Loss, then after the Indemnified Party files a Tax Return claiming such Tax Loss
and realizes that Tax Benefit, Buyer will pay to Seller the Tax Benefit;
provided, however, that such payment will not be made prior to the payment in
full for such Tax Loss by Seller; provided, further, that to the extent that
such Tax
47
Benefit is denied by a Taxing Authority, Seller shall pay over to Buyer the
amount of such Tax Benefit previously made to Seller under this Section 5.3(f).
Notwithstanding the foregoing, this indemnity shall not extend
to any Tax or other amount to the extent that it arises as a direct result of
one or more of the following: (i) any representation or warranty by any of Buyer
or Peabody under this Agreement being incorrect in any material respect, (ii)
the failure by any of Peabody or Buyer (or any Affiliate thereof) to perform or
observe in any material respect its obligations under, or any covenant or
condition in, this Agreement, or (iii) the willful gross misconduct or the gross
negligence of any of Peabody, Buyer or any Affiliate thereof.
(B) Notwithstanding any other provision in this
Agreement, Peabody and Buyer, jointly and severally, shall, and after the
Closing shall cause the Company and its Subsidiaries to, indemnify Seller and
its Affiliates and each of their respective officers, directors, employees,
stockholders, agents and other representatives and hold them harmless from all
liability for Taxes of the Company or any of its Subsidiaries for any tax period
ending after the Closing Date (except that in the case of a Straddle Period,
Peabody's and Buyer's indemnity will cover only such Taxes that are allocated to
the portion of the Straddle Period beginning after the Closing Date pursuant to
Section 5.3(e) above) and all liability for reasonable legal, accounting,
appraisal, consulting or similar fees and expenses) attributable to such Taxes.
(g) Refunds. The amount or economic benefit of any
refunds, credits or offsets of Taxes received by the Company or any of its
Subsidiaries (or any of their respective Affiliates before or after the Closing,
including Peabody and Buyer), or with respect to which the Company (or any of
their respective Affiliates before or after the Closing, including Peabody and
Buyer) realizes a benefit that relates to any Pre-Closing Tax Period of the
Company or any of its Subsidiaries shall be for the account of Seller to the
extent the amount of such refund, offset or credit has not been accrued on the
Final Closing Balance Sheet; provided, however, that to the extent any such
refund is payable to a customer of the Company or any of its Subsidiaries and
such refund is not booked as a liability on the Final Closing Balance Sheet,
then such refund instead shall be paid to such customer. To the extent a refund
that relates to any Pre-Closing Tax Period has been accrued on the Final Closing
Balance Sheet, such refund shall be for the account of Buyer. The amount or
economic benefit of any refunds, credits or offsets of Taxes received by the
Company or any of its Subsidiaries (or any of their respective Affiliates before
or after the Closing, including Peabody and Buyer), or with respect to which the
Company (or any of their respective Affiliates before or after the Closing,
including Peabody and Buyer) realizes a benefit that relates to any Post-Closing
Tax Period of the Company or any of its Subsidiaries shall be for the account of
Buyer. The amount or economic benefit of any refunds, credits or offsets of
Taxes received by the Company or any of its Subsidiaries (or any of their
respective Affiliates before or after the Closing, including Peabody and Buyer),
or with respect to which the Company (or any of their respective Affiliates
before or after the Closing, including Peabody and Buyer) realizes a benefit
that relates to any Straddle Period of the Company or any of its Subsidiaries
shall be equitably apportioned between Seller and Buyer in a manner similar to
the method described in Section 5.3(e); provided, that, with respect to refunds
allocated to a Pre-Closing Period, such refunds shall be for the account of the
Seller only to the extent such refunds have not been accrued on the Final
Closing Balance Sheet; provided, however, that to the extent any such refund is
(i) allocated to Seller, (ii) payable to a customer of the Company or any of its
48
Subsidiaries and (iii) is not booked as a liability on the Final Closing Balance
Sheet, then such refund instead shall be paid to such customer. Each party shall
forward, and shall cause its Affiliates to forward, to the party (or to the
customer, as the case may be) entitled to receive the amount or economic benefit
of a refund, credit or offset to Tax the amount of such refund, or the economic
benefit of such credit or offset to Tax, within 30 days after such refund is
received or after such credit or offset is allowed or applied against another
Tax liability, as the case may be. Notwithstanding anything herein to the
contrary, in respect of each refund, credit, or offset of Taxes accrued on the
Final Closing Balance Sheet, Buyer shall be entitled to receive from Seller
(promptly upon notice to Seller by Buyers) the amount by which such refund,
credit, or offset of Taxes is, after the Closing Date, (i) reduced or denied by
an applicable Taxing Authority (x) by way of an Assessment or (y) by Seller's
failure, within thirty (30) Business Days after the indemnified person's notice
is given, to assume the defense of such Tax Claim, if notice is given to the
Seller of the assertion of any Tax Claim with respect to such refund, credit or
offset and if Seller is entitled to control the defense of such Tax Claim under
Section 5.3(h)(ii), (ii) reduced by application of such refund to actually
offset and reduce a liability for Taxes of the Company or any of its
Subsidiaries for the Pre-Closing Tax Period or for the portion of the Straddle
Period beginning prior to the Closing Date and ending on the Closing Date, as
allocated to Seller in accordance with Section 5.3(e) hereto, to the extent that
such liability for Taxes was not accrued on the Final Closing Balance Sheet, or
(iii) not realized by the Company, and of its Subsidiaries, Buyer or Peabody (or
any Affiliate of any of the foregoing) due to the amount being payable to a
customer of the Company or any of its Subsidiaries or owed to a Person pursuant
to a Tax sharing or reimbursement agreement between such Person and such Company
entered into on or prior to Closing, to the extent that such liability to the
customer or such Person was not accrued on the Final Closing Balance Sheet, upon
the payment of such amount to the customer or such Person. For purposes of this
Section 5.3(g), a refund shall include any interest thereon. For the avoidance
of doubt, to the extent Seller has reimbursed (pursuant to the second preceding
sentence) Buyer for a refund that has been accrued on the Final Closing Balance
Sheet and Buyer subsequently receives such refund (or any portion thereof) from
the relevant Taxing Authority, Buyer shall pay over to Seller such refund (or
portion thereof) to the extent Seller has reimbursed or indemnified Buyer
pursuant to this Section 5.3(g).
Notwithstanding anything herein to the contrary, in respect of
any amount reserved for Taxes or accrued as a liability for Taxes (other than
any accruals for deferred income Taxes) on the Final Closing Balance Sheet ("tax
reserve"), Seller shall be entitled to receive from Buyer or Peabody the amount
by which any such tax reserve is in excess of the Tax liability (if any) for
which such tax reserve was recognized or accrued, upon lodgement of the
applicable Tax Return and payment of the related Tax liability. Buyer or Peabody
shall pay such excess amount to Seller upon obtaining notice from Seller
claiming an entitlement to such an amount but in no case will such a payment of
the excess be required to be made within 30 days after the date of lodgement of
the applicable Tax Return and payment of the related Tax.
(h) Tax Claims.
(i) If a claim shall be made by any Taxing Authority,
which, if successful, might result in an indemnity payment to an
indemnified party, one of its Affiliates or any of their respective
officers, directors, employees, stockholders, agents or representatives
pursuant to Section 5.3 (a "Tax Claim"), then such indemnified party
shall promptly give
49
notice to the indemnifying party in writing of such claim and of any
counterclaim the indemnified party proposes to assert, provided,
however, that the failure to give such notice shall not affect the
indemnification provided hereunder except to the extent the
indemnifying party has been actually prejudiced as a result of such
failure.
(ii) With respect to any Tax Claim relating to a
Pre-Closing Tax Period, Seller shall control all proceedings and may
make all decisions taken in connection with such Tax Claim (including
selection of counsel) and, without limiting the foregoing, may in its
sole discretion pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with any Taxing Authority with
respect thereto and settle or compromise any such Tax Claim, and may,
in its sole discretion, either pay the Tax claimed and xxx for a refund
where applicable law permits such refund suits or contest the Tax Claim
in any permissible manner; provided, however, that Seller shall provide
Buyer with a timely and reasonably detailed account of each stage of
the proceedings related to such Tax Claim, and provided further that
Seller shall not settle, compromise or abandon any such Tax Claim in a
manner that would adversely affect Buyer or its Affiliates after the
Closing Date without obtaining the prior written consent of Peabody and
Buyer, which consent shall not be unreasonably withheld, conditioned or
delayed and Peabody and Buyer, and counsel of their choosing, shall
have the right to participate fully in all aspects of the prosecution
or defense of such Tax Claim.
(iii) Seller, on the one hand, and Peabody and Buyer, on
the other hand, shall jointly control and participate in all
proceedings taken in connection with any Tax Claim relating to Taxes of
the Company or any of its Subsidiaries for a Straddle Period. None of
Seller, Peabody or Buyer shall settle, compromise or abandon any such
Tax Claim without the prior written consent of the other, which consent
shall not be unreasonably withheld, conditioned or delayed.
(iv) Peabody and Buyer shall control all proceedings with
respect to any Tax Claim relating to a Tax Period ending after the
Closing Date, and shall (a) defend against such Tax Claim diligently
and in good faith, (b) provide the Seller with a timely and reasonably
detailed account of each stage of the proceedings related to such Tax
Claim, (c) provide Seller with the right to reasonably participate in
the defense of such Tax Claim at its expense, and (d) not settle,
compromise or abandon any such Tax Claim that would adversely affect
Seller or any of its Affiliates without obtaining the prior written
consent of Seller, which consent shall not be unreasonably withheld,
conditioned or delayed.
(v) Peabody, Buyer, the Company and each of its
Subsidiaries, and each of their respective Affiliates on the one hand,
and Seller and its respective Affiliates on the other hand, shall (and
Peabody and Buyer shall cause each Company to) reasonably cooperate in
contesting any Tax Claim, which cooperation shall include the retention
and, upon request, the provision to the requesting person of records
and information which are reasonably relevant to such Tax Claim, and
making employees available on a mutually convenient basis to provide
additional information or explanation of any material provided
hereunder or to testify at proceedings relating to such Tax Claim.
50
(i) Exclusivity. Notwithstanding any other provision in
this Agreement, any matter relating to Taxes shall be governed solely by
Sections 3.15, 5.1(b)(ix) and 5.3.
(j) Timing of Payment. Any payment by Seller pursuant to
this Section 5.3 shall be made not later than 30 days after receipt by Seller of
written notice from Buyer stating that any Tax has been paid by Buyer, or
effective upon the Closing, the Company or any of its Subsidiaries, the amount
of Tax thereof and of the amount of indemnity payment requested.
(k) Survival. Notwithstanding anything herein to the
contrary, the representations and warranties provided in Section 3.15, the
covenants provided in Section 5.1(b)(ix) and all claims under this Section 5.3
shall not expire until ninety (90) days after the expiration of the applicable
Tax Amendment Period.
5.4 Employees; Benefit Plans. (a) All bonus, severance,
termination, retrenchment or redundancy payments that are the responsibility of
the Company for employees of the Company, any of its Subsidiaries or any of
their respective Affiliates whose employment will cease as of or prior to
Closing shall be paid in full by Seller on or prior to Closing. As among the
parties hereto, none of Peabody, Buyer or any of their Affiliates (including the
Company and its Subsidiaries after the Closing) shall be liable for any such
payments or amounts due to any such Person under any industrial or employment
agreement or contract, collective bargaining or other industrial agreement or
instrument (registered or unregistered), retention agreements or other such
arrangements put in place by the Company or any of its Subsidiaries on or prior
to the Closing regardless of when any such payments or amounts may be due or
paid (and such payments and amounts due under such agreements and other such
arrangements are listed on Schedule 5.4(a)); and liability for all such payments
and amounts due shall be borne by Seller.
(b) Employees of the Company who continue to be employed
by Buyer, the Company, any of the Company's Subsidiaries or any of their
Affiliates following the Closing will be given full credit for their years of
service, including for the purposes of accrued long service leave, sick leave
and annual leave, with the Company and its Subsidiaries before the Closing for
purposes of vesting and eligibility to participate in benefit plans, short term
absence or leave programs as available at Law and as Buyer determines to make
available to such employees after the Closing other than the benefit plans of
Company which may be continued by Buyer after the Closing; provided, however,
such employees were entitled to such credit under the benefit plans as of the
Closing Date, and provided, further, that in no event shall such service result
in a duplication of benefits or rights to any such employee.
5.5 Labor Matters. Seller, Peabody and Buyer shall
reasonably cooperate in connection with any required notification to, or any
required consultation with, or the provision of documents, notifications and
information to, the employees, employee representatives, work councils, unions,
labor boards and relevant Governmental Authorities and governmental officials
concerning the transactions contemplated by this Agreement with respect to the
Company Employees, so that such Persons may render advice as required in
accordance with Law, or as otherwise reasonably requested by the Buyer.
51
5.6 Further Actions. (a) Peabody, Buyer and Seller shall
use their respective commercially reasonable efforts to take, or cause to be
taken, all appropriate action, and do, or cause to be done, all things
necessary, proper or advisable under applicable Laws or otherwise to consummate
and make effective the transactions contemplated by this Agreement as promptly
as practicable, and cooperate with each other to do so, including, without
limitation, obtaining as promptly as practicable all Consents necessary in order
to consummate the transactions contemplated by this Agreement.
(b) Seller, Peabody and Buyer shall (i) take all actions
necessary to file as soon as practicable all notifications, filings and other
documents required to obtain all governmental authorizations, approvals,
consents or waivers, including, without limitation, under the
Competition/Investment Laws, (ii) respond as promptly as practicable to any
inquiries received from the Treasurer of the Commonwealth of Australia and any
other Governmental Authority for additional information or documentation under
the Competition/Investment Laws and (iii) respond as promptly as practicable to
all inquiries and requests received from any Governmental Authority with
jurisdiction over the transactions contemplated hereby (or any part thereof) in
connection therewith. Seller, Peabody and Buyer shall use their reasonable best
efforts to resolve such objections, if any, as maybe asserted with respect to
the sale and purchase of the Shares contemplated hereby under any
Competition/Investment Laws by any Governmental Authorities with regulatory
jurisdiction over the enforcement of such Competition/Investment Laws; provided
that in no event shall Peabody, Buyer or any of their respective Affiliates have
any obligation to dispose of, hold separate or otherwise restrict its enjoyment
of any of their respective assets or properties (including the Company and its
Subsidiaries following the Closing).
(c) Seller shall give prompt written notice to Peabody
and Buyer of the occurrence of any Company Material Adverse Effect. At all times
prior to the Closing, (i) Seller will promptly notify Peabody and Buyer in
writing of any fact, condition, event or occurrence that will result in the
failure of any of the conditions contained in ARTICLE VII to be satisfied,
promptly upon any of them becoming aware of the same and (ii) Peabody and Buyer
will promptly notify Seller in writing of any fact, condition, event or
occurrence that will result in the failure of any of the conditions contained in
ARTICLE VI to be satisfied, promptly upon any of them becoming aware of the
same.
5.7 Further Assurances. Following the Closing, Seller,
Peabody and Buyer will from time to time, execute and deliver such additional
instruments, documents, conveyances or assurances and take such other actions as
shall be necessary, or otherwise reasonably requested by Seller, on the one
hand, or Peabody and Buyer, on the other hand, as applicable, to confirm and
assure the rights and obligations provided for in this Agreement and render
effective the consummation of the transactions contemplated hereby and thereby.
5.8 Closing Balance Sheet(a) . The Closing Balance Sheet
to be delivered by Seller shall reflect, reserve or disclose all Liabilities of
the Company and its Subsidiaries required by Australian Accounting Standards to
be so reflected, reserved or disclosed.
5.9 Noncompetition; Interference; Nonsolicitation. (a)
Seller agrees that during the Competition Restraint Period for
Noncompetition/Interference, it shall not, and it shall
52
cause its Affiliates not to, directly or indirectly, engage in any business or
control or own any business that is engaged directly or indirectly in mining
coal in the Competition Restraint Area; provided, however, that Seller or any
Affiliate of Seller may own up to ten percent (10%) of the equity interests of a
business in the ordinary course of business that is engaged in mining coal in
the Competition Restraint Area, so long as none of Seller or its Affiliates,
acting individually or together, has, directly or indirectly, the right or
ability to (i) appoint a representative to the board of directors (or similar
governing body) of such business, (ii) appoint any senior officers of such
business or (iii) participate, control or veto decisions relating to the
management, operations, investments or acquisitions of such business; and
provided, further however, that this Section 5.9(a) shall in no way be deemed to
limit the activities of Seller in respect of any activity involving coal or coal
products (including without limitation the trading or processing of coal or coal
products, the provision of equipment and/or services to the coal mining
industry, or related activities) other than mining.
(b) Seller agrees that during the Competition Restraint
Period for Noncompetition/Interference, it shall not, and it shall cause its
Affiliates not to, directly or indirectly, (i) raid, solicit, encourage, entice
or induce any customer, client, supplier or other Person having a business
relationship with the Company and/or any of its Subsidiaries to terminate or
alter such relationship, (ii) raid, solicit, encourage, entice or induce any
Person not to enter into a business relationship with the Company and/or any of
its Subsidiaries or (iii) impair or attempt to impair any relationships between
any of the Company or its Subsidiaries and any of their customers, clients,
suppliers or other Persons with whom any of the Company or its Subsidiaries has
business relationships; provided, however, that this Section 5.9(b) shall in no
way be deemed to limit the activities of Seller in respect of any activity
involving coal or coal products (including without limitation the trading or
processing of coal or coal products, the provision of equipment and/or services
to the coal mining industry, or related activities) other than mining.
(c) Seller agrees that during the Competition Restraint
Period for Nonsolicitation, it will not, and will cause each of its controlled
Affiliates not to, (a) entice, induce, induce or attempt to cause (other than
pursuant to general advertising not directed to such employees), any executive,
officer or other key employee of the Company or any of its Subsidiaries to
terminate his or her employment with the Company of any of its Subsidiaries or
(b) employ any, executive officer or other key employee of the Company or any of
its Subsidiaries; provided, however, that the foregoing restrictions shall not
be applicable with respect to any Person whose employment with Peabody, Buyer or
their subsidiaries (including, after the Closing, the Company or any of its
Subsidiaries) has been terminated by Peabody, Buyer or their subsidiaries
(including after the Closing, the Company or any of its Subsidiaries) prior to
such solicitation or employment.
(d) If and only if this Agreement is terminated prior to
Closing, each of Seller and Peabody agree that it shall not, and it shall cause
its Affiliates not to, during the Termination Nonsolicitation Period, (i)
entice, induce, induce or attempt to cause (other than pursuant to general
advertising not directed to such employees), any executive, officer or other key
employee of the other party or any of such other party's Affiliates to terminate
his or her employment with such other party or (ii) employ any, executive
officer or other key employee of such other party or any of such other party's
Affiliates; provided, however, that the foregoing
53
restrictions shall not be applicable with respect to any Person whose employment
with such other party has been terminated by such other party prior to such
solicitation or employment.
(e) Seller hereby agrees that any remedy at law for any
breach by it or its Affiliates of this Section 5.9 would be inadequate, that
Peabody and Buyer shall be entitled to injunctive or other equitable relief in
such case in addition to any other right Peabody or Buyer may have, whether at
law or in equity. If it is ever held that any part of any of the covenants of
this Section 5.9 is too broad to permit enforcement of such covenants to their
fullest extent, it may be severed without affecting the remaining enforceability
of that or the other covenants, and Seller hereby consents and agrees that such
scope may be judicially modified accordingly in any proceeding brought to
enforce such covenants. Seller acknowledges that in relation to this Agreement
and in particular this clause it has received legal advice or has had the
opportunity of obtaining legal advice.
5.10 Competing Transaction; Return of Confidential
Information. (a) From the date hereof until the earlier of the Closing or the
termination of this Agreement in accordance with its terms, neither Seller nor
any of its Affiliates or their respective representatives shall, directly or
indirectly (i) solicit or encourage the submission of any inquiries, indications
of interest, proposals or offers from any Person other than Peabody and Buyer
(collectively, "Third Parties"), concerning the sale of any equity securities or
all or any substantial part of the assets of the Company or any of its
Subsidiaries to, or any merger or other business combination transaction
involving the Company of any of its Subsidiaries with, any such Third Party (a
"Competing Transaction") or (ii) participate with any Third Party in any
discussions or negotiations regarding, or enter into any agreements with any
Third Party relating to, a Competing Transaction with such Third Party, or
provide any information concerning the Company or any of its Subsidiaries to any
Third Party with respect to a Competing Transaction with such Third Party,
including any Third Parties that Seller, or any of its Affiliates or
representatives had conducted negotiations with prior to the date of this
Agreement. Seller will promptly notify Peabody and Buyer, after the receipt by
Seller or any of its Affiliates, from a third party other than Peabody and
Buyer, of any bona fide written proposal for a Competing Transaction, of the
principal terms of such proposal, excluding the identity of any party thereto,
any party on whose behalf such proposal is delivered or the identity of any of
their respective representatives.
(b) Seller shall instruct each Third Party to whom it
delivered confidential information in connection with a Competing Transaction or
other possible sale of the Company or any of its Subsidiaries to (i) return to
Seller or destroy such information (and copies thereof) and (ii) certify in
writing any such destruction, in each case, to the extent such Third Parties
shall be required to do so pursuant to applicable confidentiality agreements.
5.11 Intercompany Accounts; Affiliate Agreements. All
Intercompany Accounts shall be paid in full in cash on or prior to the Closing.
All Affiliate Agreements shall be terminated on or prior to the Closing without
any liabilities of the Company or any of its Subsidiaries remaining thereunder,
except for Affiliate Agreements relating to the supply of coal and firm offers
to buy coal made by Seller or any of its Affiliates (other than the Company and
its Subsidiaries) and entered into or received by the Company or any of its
Subsidiaries in the
54
ordinary course of business and which contain arms-length terms, each of which
such agreement and firm offer is set forth on Schedule 5.11.
5.12 Intercompany Insurance. To the extent that (i) any
insurance policies controlled by Seller or its Affiliates (the "Seller Insurance
Policies"), cover any loss, liability, claim, damage or expense relating to the
Company, any of its Subsidiaries or their businesses (the "Subject Liabilities")
and relating to or arising out of occurrences prior to the Closing Date, and
(ii) the Seller Insurance Policies continue after the Closing to permit claims
to be made thereunder with respect to the Subject Liabilities relating to or
arising out of occurrences prior to the Closing Date ("Subject Claims"), Seller
and its Affiliates shall cooperate with Peabody and Buyer in submitting Subject
Claims on behalf of Buyer under the Seller Insurance Policies or pursuing claims
previously made. Seller and its Affiliates shall exercise commercially
reasonable efforts to cause the Seller Insurance Policies to be modified to
allow for the assignment to Buyer of all benefits, rights and obligations
thereunder in respect of any Subject Liabilities. To the extent any such
policies are not so assigned, upon receipt by Seller or its Affiliates of any
insurance proceeds relating to any Subject Claims made under the Seller
Insurance Policies, Seller or its applicable Affiliates will promptly pay such
insurance proceeds to Buyer.
5.13 Name Changes. No later than ten (10) Business Days
following the Closing Date, Buyer shall cause the organizational documents of
the Company and its Subsidiaries to be amended so as not to include "RAG" or any
word, phrase or acronym confusingly similar thereto. Buyer shall use
commercially reasonable efforts to remove "RAG" and any other words, names or
symbols proprietary to Seller and its Affiliates (and, to the extent not
including the phrase "RAG", identified to Buyer by Seller) from all tangible
properties of the Company and its Subsidiaries as promptly as possible following
the Closing Date and in any event within one hundred eighty (180) calendar days
following the Closing Date.
5.14 Seller Guarantees Provided to the Company.
(a) Following the date of this Agreement and prior to
Closing, Buyer, Peabody, Seller and Seller's Affiliates shall (i) cooperate with
one another in order to, and shall use their respective commercially reasonable
efforts in order to, novate or otherwise replace all of the Seller Guarantees
with guarantees given by Peabody or its Affiliates (which commercially
reasonable efforts shall include preparing and submitting documents and
providing information and responses to requests from the beneficiaries of such
Seller Guarantees) and (ii) use their respective commercially reasonable efforts
to cause Seller and all Affiliates of Seller who are parties to the Seller
Guarantees to be fully released and discharged with respect thereto, in each
case, as of the Closing Date. Notwithstanding the foregoing, neither Buyer nor
Peabody will contact any party to any Seller Guaranty (other than the Seller,
the Company and its Subsidiaries, and other Affiliates of the Seller) prior to
the Closing without the prior consent of Seller, which consent shall not be
unreasonably withheld or delayed. With respect to any Seller Guarantees which
are not fully released and discharged as of the Closing Date, Buyer and Peabody
shall continue to use commercially reasonable efforts to replace such Seller
Guarantees and/or to cause Seller and all Affiliates of Seller to be fully
released and discharged therefrom.
55
(b) Following the date of this Agreement and prior to
Closing, Seller shall not enter into any Seller Guarantees without the prior
written consent of Buyer (which shall not be unreasonably withheld). Any such
Seller Guarantees with respect to which Buyer consents shall be deemed to be
included on Schedule 1.1(C) for all purposes of this Agreement.
(c) Until all of the Seller Guarantees are fully released
and discharged, Buyer and Peabody shall jointly and severally indemnify and hold
Seller and all Affiliates of Seller harmless from and against, and pay and
reimburse Seller and all Affiliates of Seller for, any and all out-of-pocket (i)
Losses that Seller or any of its Affiliates suffer as a result of being required
to make any payment under the Seller Guarantees after the Closing Date as a
result of either (x) the failure of the Company to meet its obligations
underlying the Seller Guarantees or (y) the failure of Seller and its Affiliates
(other than the Company and its Subsidiaries) to be fully released from the
Seller Guarantees, and (ii) costs and expenses incurred by Seller or any of its
Affiliates (including, without limitation, premium payments, bank fees or
similar costs) after the Closing Date relating to extension or renewal of Seller
Guarantees that have not been fully released and discharged. The indemnification
obligation of Buyer and Peabody pursuant to this Section 5.14(c) shall not be
subject to any limitation under Section 9.1 of this Agreement.
(d) Notwithstanding the foregoing, in no event shall any
party hereto be required to file any lawsuit or to take other legal action, make
any amendment to any Seller Guarantee or waive any rights thereunder or pay any
amount, in order to cause the replacement and/or release and discharge of any
Seller guarantee (provided, however, nothing in this sentence shall prohibit any
party from taking such actions).
5.15 Tax Consolidation. Peabody and Buyer shall not elect
(and shall procure that no other Person controlled by Peabody or Buyer elects)
to consolidate Company for Tax purposes pursuant to a Tax Law with effect for
any period prior to Closing Date.
5.16 Confidentiality. (a) Seller shall, and shall cause
its Affiliates, consultants, advisors, agents and representatives (together, the
"Seller Representatives") to, keep confidential and not disclose to any Person,
any Confidential Information with respect to the transactions contemplated by
this Agreement (other than disclosure to Seller Representatives responsible for
matters relating to this Agreement); provided that, subject to the requirements
of all applicable Laws, Seller and the Seller Representatives may disclose any
such information to the extent that: (i) such information is or becomes
generally available to the public through no act or omission of such Person;
(ii) such information otherwise is or becomes known to such Person other than by
disclosure by another Person to such agreement or an Affiliate thereof, provided
that the source of such information is not known by such Person to be bound by a
confidentiality agreement or other contractual, legal or fiduciary obligation of
confidentiality; or (iii) such Person is required by Law or legal process to
disclose such information. "Confidential Information" means all technical,
financial and other information (including, but not limited to, information
relating to customers of Peabody, Buyer, the Company, its Subsidiaries, its
Associated Companies or its Joint Ventures and information of any regulatory
nature) whatsoever, in whatever form it may be held, relating to the business
and operations of Peabody, Buyer, the Company, its Subsidiaries, its Associated
Companies or its Joint Ventures or so furnished under this Agreement and made
available to Seller or any Seller Representatives in connection with the
transactions contemplated hereby. In addition, Seller agrees to use its
56
reasonable best efforts to enforce all confidentiality agreements, if any,
entered into by Seller and any Seller Representatives, in each case to the
extent such provisions pertain to the business or assets of the Company, its
Subsidiaries, its Associated Companies or its Joint Ventures.
(b) Buyer and Peabody shall, and shall cause their
respective Affiliates, consultants, advisors, agents and representatives
(together, the "Buyer Representatives") to, keep confidential and shall not
disclose to any Person, any Seller Confidential Information with respect to the
transactions contemplated by this Agreement (other than disclosure to Buyer
Representatives responsible for matters relating to this Agreement); provided
that subject to the requirements of all applicable laws, Buyer, Peabody and the
Buyer Representatives may disclose any such information to the extent that (i)
such information is or becomes generally available to the public through no act
or omission of such Person; (ii) such information otherwise is or becomes known
to such Person other than by disclosure by another Person to such agreement or
an Affiliate thereof, provided that the source of such information is not known
by such Person to be bound by a confidentiality agreement or other contractual,
legal or fiduciary obligation of confidentiality; or (iii) such Person is
required by Law or legal process to disclose such information. "Seller
Confidential Information" means all technical, financial and other information
(including but not limited to information relating to customers of Seller (other
than customers of the Company, its Subsidiaries, its Associated Companies or its
Joint Ventures) and information of any regulatory nature) whatsoever, in
whatever form it may be held, relating to the business and operations of Seller
(other than any such information relating to the Company, its Subsidiaries, its
Associated Companies or its Joint Ventures), or so furnished under this
Agreement and made available to Peabody, Buyer or any Buyer Representatives in
connection with the transactions contemplated hereby.
(c) From and after the Closing Date, Seller shall, and
shall cause the Seller Representatives to, not use such information to the
detriment of the business of Peabody, its Affiliates, the Company, its
Subsidiaries, its Associated Companies or its Joint Ventures.
(d) Peabody, Buyer and Seller shall, and shall cause the
Buyer Representatives and the Seller Representatives, as applicable, to, comply
with the provisions of Law regarding confidentiality as they relate to any such
Person.
(e) Notwithstanding anything to the contrary in this
Agreement, each of Peabody, Buyer and Seller acknowledges and agrees, on behalf
of itself and the Buyer Representatives and the Seller Representatives, as
applicable, that (i) Peabody, Buyer, Seller, the Buyer Representatives and the
Seller Representatives may provide Confidential Information regarding the
transactions contemplated by this Agreement to applicable regulatory
authorities; provided that Peabody, Buyer, Seller, such Buyer Representative or
such Seller Representative, as applicable, (x) requests that such Confidential
Information or Seller Confidential Information, as applicable, be kept
confidential by such authorities and (y) if such confidential treatment is
granted by such authorities, uses its respective reasonable efforts to maintain
such confidential treatment and (ii) Peabody, Buyer, Seller, the Buyer
Representatives and the Seller Representatives may publicly disclose the
material terms of this Agreement to which it is a party to the extent required
by the disclosure requirements of applicable Law and of any stock exchanges or
quotation systems on which any of such Person's securities are or may become
listed or quoted.
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(f) All of the provisions of the Confidentiality
Agreement, dated as of October 10, 2003, shall terminate as of the Closing Date,
notwithstanding any provision therein for the survival of any provision after
the termination thereof, provided, however, the parties acknowledge that such
agreement will terminate only with respect to information relating to the
Company, its Subsidiaries, its Associated Companies and its Joint Ventures.
5.17 Cooperation in Financing. (a) Prior to the Closing,
the Seller shall, and shall cause the Company and its Subsidiaries to,
reasonably cooperate, and request the auditors of the Company and its
Subsidiaries to, reasonably cooperate, with Peabody's and Buyer's auditors in
connection with the financing of the transactions contemplated by this
Agreement. The cooperation requested of the auditors of the Company and its
Subsidiaries shall include providing consent to Peabody and Buyer to prepare and
use Seller's and its Subsidiaries' audit reports relating to the Company and its
Subsidiaries and to provide any necessary "comfort letters".
(b) Without limitation of Section 5.17(a), prior to the
Closing, the Seller shall, and shall cause the Company and its Subsidiaries to,
provide, and request their respective accountants, advisors, counsel and other
representatives to provide, reasonable cooperation in connection with the
arrangement of financing by Peabody and Buyer in respect of the transactions
contemplated by this Agreement. Such cooperation shall include, to the extent
reasonable and customary, arranging for officers of the Company and its
Subsidiaries to meet with prospective lenders and investors in presentations,
meetings, road shows and due diligence sessions, reasonable assistance with
preparation of registration statements, offering memoranda, private placement
memoranda, prospectuses and similar documents and the execution and delivery of
any pledge and security documents, other definitive financing documents, or
other certificates, legal opinions or documents as may be reasonably be
requested by Buyer.
5.18 Company Restructuring Matters. (a) Not later than
three (3) business days prior to the Closing Date, Seller shall deliver to Buyer
a statement setting forth (i) Seller's good faith estimate of the retained
profits of the Company and its consolidated entities, expressed in Australian
Dollars, as of the Closing Date, (ii) Seller's good faith estimate of the cash,
expressed in Australian Dollars, held by the Company as of the Closing Date
immediately prior to the Buyer Loan, and (iii) the excess (if any) of amount (i)
above over amount (ii) above (such excess, the "Cash Shortfall Amount").
Immediately prior to the Closing, the Company may pay a dividend to Seller in
cash in an amount up to the amount of (i) above (the "Company Dividend").
(b) (i).Schedule 5.18(b) sets forth a true and complete
list of all agreements, contracts and understandings of the Company and its
Subsidiaries with banks and other financial institutions regarding Debt
("Company Bank Debt").
(ii) Not later than three (3) Business days prior to the
Closing Date, Seller shall deliver to Peabody and the Buyer a notice setting
forth the amount of outstanding Liabilities under the agreements, contracts and
understandings set forth on Schedule 5.18(b) (the "Company Bank Debt Amount").
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(ii) Peabody and Buyer agree that, immediately prior to
the Closing, Peabody, Buyer or another Affiliate of Peabody shall make a loan in
cash to the Company (the "Buyer Loan") in an amount equal to sum of the Company
Bank Debt Amount and the Cash Shortfall Amount. Immediately prior to the
Closing, the Company shall use the proceeds of the Buyer Loan to (x) repay in
full the Company Bank Debt (the "Company Bank Debt Repayment" and (y) pay the
portion of the Company Dividend that is equal to the Cash Shortfall Amount. For
purposes of this Agreement, the term "Company Restructuring" shall refer
collectively to the Company Bank Debt Repayment, the Company Dividend and the
Buyer Loan.
ARTICLE VI
CONDITIONS TO SELLER's OBLIGATIONS
The obligation of Seller to effect the Closing under this
Agreement is subject to the satisfaction, at or prior to the Closing, of each of
the following conditions, unless validly waived in writing by Seller.
6.1 Representations and Warranties. The representations
and warranties of Peabody and Buyer in this Agreement that are qualified by
materiality (including Company Material Adverse Effect qualifiers and dollar
thresholds) shall be true and correct in all respects and the representations
and warranties of Peabody and Buyer in this Agreement that are not qualified by
materiality shall be true and correct in all material respects as of the Closing
Date, other than representations and warranties that expressly speak as of a
specific date or time (which need only be true and correct in all respects or
true and correct in all material respects, as applicable, as of such date or
time).
6.2 Performance. Peabody and Buyer shall have performed
and complied in all material respects with all agreements and obligations
required by this Agreement to be so performed or complied with by it at or prior
to the Closing.
6.3 Officer's Certificates. Peabody and Buyer shall have
delivered to Seller a certificate, dated as of the Closing Date and executed by
an executive officer of Peabody and Buyer, as applicable, certifying to the
fulfillment of the conditions specified in Sections 6.1 and 6.2.
6.4 Governmental Approvals. All Governmental Approvals
with respect to the transactions contemplated hereby listed on Schedule 6.4
shall have been obtained and all conditions relating to such Governmental
Approvals shall have been satisfied.
6.5 Injunctions. At the Closing there shall not be in
effect any Law or Governmental Order which restrains, prohibits or declares
illegal the consummation of the transactions contemplated by this Agreement and
no Governmental Authority of competent jurisdiction shall have instituted or
threatened a Proceeding seeking to impose any such restraint or prohibition.
6.6 Closing Deliveries. Peabody and Buyer shall have
delivered, or caused to be delivered, all of the closing deliveries required by
Section 2.4(b).
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6.7 Colorado Transaction. With respect to that certain
Stock Purchase Agreement, dated as of the date hereof (the "Colorado
Agreement"), among Seller, RAG American Coal Company, a company incorporated
under the laws of the U.S. State of Delaware, Peabody and BTU Worldwide, Inc., a
company incorporated under the laws of the U.S. State of Delaware, the Closing
(as defined in the Colorado Agreement) shall have occurred simultaneously with
the Closing hereunder.
ARTICLE VII
CONDITIONS TO PEABODY'S AND BUYER's OBLIGATIONS
The obligation of Peabody and Buyer to effect the Closing
under this Agreement is subject to the satisfaction, at or prior to the Closing,
of each of the following conditions, unless waived in writing by Peabody and
Buyer.
7.1 Representations and Warranties. The representations
and warranties of Seller in this Agreement that are qualified by materiality
(including Company Material Adverse Effect qualifiers and dollar thresholds)
shall be true and correct in all respects and the representations and warranties
of Seller in this Agreement that are not qualified by materiality shall be true
and correct in all material respects as of the Closing Date, other than
representations and warranties that expressly speak as of a specific date or
time (which need only be true and correct in all respects or true and correct in
all material respects, as applicable, as of such date or time) and the
representations and warranties contained in Section 3.4 which shall be true and
correct in all respects.
7.2 Performance. Seller shall have performed and complied
in all material respects with all agreements and obligations required by this
Agreement to be performed or complied with by them at or prior to the Closing.
7.3 Officer's Certificate. Seller shall have delivered to
Peabody and Buyer a certificate, dated as of the Closing Date and executed by an
executive officer of Seller, certifying to the fulfillment of the conditions
specified in Sections 7.1 and 7.2.
7.4 Governmental Approvals. All Governmental Approvals
with respect to the transactions contemplated hereby listed on Schedule 7.4
shall have been obtained and all conditions relating to such Governmental
Approvals shall have been satisfied.
7.5 Third Party Approvals. All Consents from Persons
other than Governmental Authorities with respect to the transactions
contemplated hereby listed on Schedule 7.5 shall have been obtained, and be on
terms satisfactory to Buyer; including, without limitation, Consents required in
connection with Debt of the Company or any of its Subsidiaries and any
arrangements or agreements to replace or refinance such Debt.
7.6 Injunctions. At the Closing there shall not be in
effect any Law or Governmental Order which restrains, prohibits or declares
illegal the consummation of the transactions contemplated by this Agreement and
no Governmental Authority of competent jurisdiction shall have instituted or
threatened a Proceeding seeking to impose any such restraint or prohibition.
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7.7 Intercompany Accounts; Affiliate Agreements. Buyer
shall have received evidence, in a form to its satisfaction, that all
Intercompany Accounts and Affiliate Agreements shall have been terminated on or
prior to the Closing without any liabilities of the Company or any of its
Subsidiaries remaining thereunder, except for those agreements set forth on
Schedule 5.11.
7.8 Absence of Company Material Adverse Effect. Since the
date of this Agreement, there shall not have occurred any change, occurrence or
development which has had, or would reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect.
7.9 Closing Deliveries. Seller shall have delivered, or
caused to be delivered, all of the closing deliveries required by Section
2.4(a).
7.10 Company and Subsidiary Board Meetings. Buyer shall
have received evidence to its satisfaction that the board meetings contemplated
by Section 2.5 shall have occurred.
7.11 North Goonyella Longwall. The Company's North
Goonyella underground mine shall be in operation in all material respects at the
Closing and shall have produced at least 170,000 metric tonnes of ROM coal
during the calendar month of March 2004; the parties acknowledge and agree that
Peabody and Buyer may waive this condition for any reason, including, without
limitation, based on reports received from their representative, and the
independent geologist, located at the North Goonyella mine site as provided
Section 5.2.
7.12 Colorado Transaction. With respect to the Colorado
Agreement, the Closing (as defined in the Colorado Agreement) shall have
occurred simultaneously with the Closing hereunder.
ARTICLE VIII
TERMINATION
8.1 Termination. This Agreement may be terminated at any
time prior to the Closing:
(a) by the mutual written consent of Seller, Peabody and
Buyer;
(b) by Seller, on the one hand, or Peabody and Buyer, on
the other hand, if the Closing has not occurred on or before May 16, 2004;
(c) by Seller, on the one hand, or Peabody and Buyer, on
the other hand, if any of the conditions to such party's (or parties')
obligations to perform set forth in ARTICLE VI or ARTICLE VII, as applicable,
becomes incapable of fulfillment; provided, however, that a party (or parties)
may not seek termination pursuant to this Section 8.1(c) if such condition is
incapable of fulfillment due to the failure of such party (or parties) seeking
to terminate to perform the agreements contained herein required to be performed
by such party (or parties) at or before the Closing;
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(d) by Seller, on the one hand, or Peabody and Buyer, on
the other hand, if the other party (or parties) not seeking to terminate shall
have breached or failed to perform in any material respect any of its (or their)
representations, warranties, covenants or other agreements contained in this
Agreement, and such breach or failure to perform (i) is not cured within thirty
(30) days after written notice thereof from the non-breaching party (or parties)
or, in the case where the date or period of time specified for performance has
lapsed, promptly following written notice thereof from the non-breaching party
(or parties) or (ii) is incapable of being cured by the non-terminating party
(or parties); or
(e) by Seller, on the one hand, or Peabody and Buyer, on
the other hand, if any Governmental Authority of competent jurisdiction shall
have issued a Governmental Order or taken any other action restraining,
enjoining or otherwise prohibiting the transactions contemplated hereby and such
Governmental Order or other action shall have become final and nonappealable.
8.2 Procedure and Effect of Termination. In the event of
the termination of this Agreement and the abandonment of the transactions
contemplated hereby pursuant to Section 8.1, written notice thereof shall
forthwith be given the other party. If this Agreement is terminated and the
transactions contemplated by this Agreement are abandoned as provided herein, no
party to this Agreement will have any Liability under this Agreement to the
other except that nothing herein shall relieve any party from any Liability for
any willful breach of any of the representations, warranties, covenants and
agreements set forth in this Agreement. The provisions of Section 5.9(d) and
Article IX shall survive any termination pursuant to Section 8.1.
ARTICLE IX
INDEMNIFICATION
9.1 Indemnification. (a) Indemnification by Seller.
Subject to the limitations set forth in this Section 9.1, Seller agrees to
indemnify, defend and hold Peabody and Buyer and their respective Affiliates and
their respective officers, directors, partners, members, stockholders,
employees, agents, representatives, successors and permitted assigns
(collectively, the "Buyer Indemnitees"), harmless from and in respect of any and
all Losses that they may incur arising out of or related to (i) any inaccuracy
of any representation or the breach of any warranty of Seller contained in this
Agreement, without regard to materiality qualifiers (including Company Material
Adverse Effect and dollar thresholds) contained therein, (ii) any breach of any
covenant, undertaking or other agreement of Seller contained in this Agreement
and (iii) Ruhrkohle International Mining GmbH ("Ruhrkohle") being or appearing
as the registered owner of any of the Shares in the statutory record books of
the Company or any public filings or registers in Australia, including, without
limitation, any claim brought by a third party, any stamp duty or other fees (or
any portion thereof) related to Ruhrkohle being or appearing as the registered
owner of the Shares.
(b) Indemnification by Peabody and Buyer. Subject to the
limitations set forth in this Section 9.1, Peabody and Buyer, jointly and
severally, agree to indemnify, defend and hold Seller and its Affiliates and
their respective officers, directors, partners, members, stockholders,
employees, agents, representatives, successors and permitted assigns
(collectively, the "Seller Indemnitees"), harmless from and in respect of any
and all Losses that they may incur
62
arising out of or relating to (i) any inaccuracy of any representation or the
breach of any warranty of Peabody or Buyer contained in this Agreement, without
regard to materiality qualifiers (including Company Material Adverse Effect and
dollar thresholds) contained therein and (ii) any breach of any covenant,
undertaking or other agreement of Peabody or Buyer contained in this Agreement.
(c) Survival of Representations, Warranties and
Indemnities. The several representations, warranties, covenants, undertakings
and agreements of the parties contained in or made pursuant to this Agreement or
in any instrument delivered pursuant hereto, and the rights of the parties to
seek indemnification with respect thereto, shall survive the Closing; provided,
however, that, except in respect of any claims for indemnification as to which
written notice shall have been duly given to the Indemnifying Party (as
hereinafter defined) pursuant to Section 9.1(d) hereof prior to the relevant
expiration date set forth below, and subject to the remaining provisions of this
Section 9.1(c), such representations, warranties, covenants, undertakings and
agreements, and the rights of the parties to seek indemnification with respect
thereto, shall expire on the following dates (each an "Indemnity Termination
Date"):
(i) in the case of claims arising out of any inaccuracies
in the representations and warranties set forth in Section 3.4, such
representations and warranties shall not expire;
(ii) in the case of claims arising out of the breach of
any covenants required to be performed after the Closing Date, on the
thirtieth (30th) day after the obligations under such covenant shall
cease to exist; and
(iii) in the case of all other claims for indemnification
arising under this Agreement or under any instrument delivered pursuant
hereto, on the third (3rd) anniversary of the Closing Date.
Any claim for indemnification under this Agreement which is
made in good faith and in writing prior to the expiration of such claim on the
Indemnity Termination Date shall survive such expiration until mutually resolved
or otherwise determined hereunder, as applicable, and the Indemnity Termination
Date for all purposes hereunder shall automatically be extended with respect to
such claim (but not any other claims) until such claim is so mutually resolved
or otherwise determined hereunder. Any such claim not so made in writing prior
to the expiration of such claim on the relevant Indemnity Termination Date shall
be deemed to have been waived. Notwithstanding anything to the contrary in this
Section 9.1, no party hereunder shall be entitled to recover under this ARTICLE
IX with respect to claims for any inaccuracy or breach of any representations or
warranties under Sections 9.1(a)(i) or (b)(i) (but excluding claims for any
inaccuracy or breach of the representations and warranties set forth in Sections
3.4 and 3.15) or any breach of the covenants set forth in Section 5.8 unless and
until the total of all claims brought by such party for indemnity or damages
with respect to any inaccuracy or breach of any such representations or
warranties under Sections 9.1(a)(i) or (b)(i) (but excluding claims for any
inaccuracy or breach of the representations and warranties set forth in Sections
3.4 and 3.15) and any breach of the covenants set forth in Section 5.8, exceeds
Six Million U.S. Dollars (US$6,000,000) and then only for the amount by which
such claims for indemnity or damages exceed Six Million U.S. Dollars
(US$6,000,000); provided, however, that no party hereunder
63
shall be entitled to recover under this ARTICLE IX with respect to claims for
any inaccuracy or breach of any such representations or warranties under
Sections 9.1(a)(i) or (b)(i) (but excluding claims for any inaccuracy or breach
of the representations and warranties set forth in Sections 3.4 and 3.15) or any
breach of the covenants set forth in Sections 5.1 (but excluding claims for any
breach of the covenants set forth in Section 5.1(b)(ix)), 5.2, 5.4, 5.5, 5.6,
5.7, 5.8, 5.11, 5.12, 5.13, 5.15, 5.16 or 5.17 more than Forty Million U.S.
Dollars (US$40,000,000), in the aggregate, pursuant to this Section 9.1 or
otherwise; provided further, that no amount shall be payable with respect to
claims for any inaccuracy or breach of any such representations or warranties
under Sections 9.1(a)(i) or (b)(i) (but excluding claims for any inaccuracy or
breach of the representations and warranties set forth in Sections 3.4 and 3.15)
or any breach of the covenants set forth in Section 5.8 by an Indemnifying Party
pursuant to Sections 9.1(a)(i) or (b)(i) or Section 5.8 for any inaccuracy or
breach of any such representation or warranty or covenant resulting in aggregate
Losses of less than Five Hundred Thousand U.S. Dollars (US$500,000) with respect
to any matter or series of related matters and such Losses shall not be included
in calculating the threshold of US$6,000,000 referred to above.
Notwithstanding anything to the contrary in this Agreement:
(v) Seller shall have no liability or obligation to Peabody or Buyer for any
Loss to the extent the liability attributable to such Loss is reflected or
reserved against (other than reserved for deferred Taxes) (but only to the
extent so reflected or reserved) in the Final Closing Balance Sheet, and the
amount of any such Loss, to the extent so reflected or reserved, shall not count
toward any threshold referred to above; (w) any amount payable by an
Indemnifying Party in respect of any Loss shall be reduced by any related
insurance recovery received by the Indemnified Party (net of any costs incurred
in order to obtain such recovery and the effect of any retrospective rate
increase) and by any payments received by such Indemnified Party from third
parties who are not Affiliates of such Indemnified Party; (x) if, in the Tax
year the Loss occurred (or within the two subsequent Tax years (the "Benefit
Period"), a Tax Benefit is actually realized by the Indemnified Party (or any
Affiliate thereof) as a result of such Loss, then promptly after the Indemnified
Party (or any Affiliate thereof) files a Tax Return claiming such Loss and
realizes that Tax Benefit, the Indemnified Party will pay to the Indemnifying
Party the Tax Benefit; provided, however, that such payment will not be made
prior to the payment in full for such Loss by the Indemnifying Party; provided,
further, that to the extent that such Tax Benefit is denied by a Taxing
Authority, the Indemnifying Party shall refund to the Indemnified Party the
amount of any payments previously made to the Indemnifying Party pursuant to
this Section 9.1(c)(x) in respect of such Tax Benefit. Each of Peabody and Buyer
shall (and shall cause each of its Affiliates controlled by it to) file all Tax
Returns, use its reasonable best efforts which, for the avoidance of any doubt,
shall not obligate Peabody, Buyer or any of its Affiliates to commence a legal
proceeding or breach a written agreement to which it is a party, and take any
action as reasonably necessary to realize all Tax Benefits that may be available
during each Benefit Period; (y) the calculation of the amount of any Losses
arising out of the breach of more than one representation or warranty shall be
determined without duplication or double-counting of the same Loss; and (z) upon
payment of any amount pursuant to a claim for indemnification hereunder, the
Indemnifying Party (as defined in Section 9.1(d)) shall be subrogated, to the
extent of such payment, to all of the rights of recovery of the Indemnified
Party (as defined in Section 9.1(d)) against any third party with respect to the
matters to which such claim relates.
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"Tax Benefit" shall mean any amount by which the Tax liability
of the Indemnified Party is reduced by reason of claiming a loss, deduction or
credit for Tax purposes arising from the Loss in respect of which the indemnity
payment was made, after giving effect to any Tax detriment to the Indemnified
Party arising from the receipt of the indemnification payment with respect to
such Loss. For the purposes of this Agreement, where the Indemnified Party has
other losses, deductions, credits or items available to it, the determination of
any Tax Benefit shall be calculated by comparing the current Tax liability of
the Indemnified Party, computed without regard to any losses, deductions,
credits or items relating to the Loss, to the current Tax liability of the
Indemnified Party after taking into account the losses, deductions, credits or
items relating to the Loss. For the avoidance of doubt, no Tax Benefit will be
taken to arise if the Indemnified Party does not have a liability for Tax in
respect of the Benefit Period in which the Loss was incurred.
(d) Notice and Opportunity to Defend. (i) If there occurs
an event which a party (an "Indemnified Party") asserts is an indemnifiable
event pursuant to Section 9.1(a) or 9.1(b), respectively, the Indemnified Party
shall provide the other party obligated to provide indemnification (an
"Indemnifying Party") promptly with written notice thereof, which notice shall
describe in reasonable detail the basis for the Indemnified Party's claim for
indemnification. If such event involves (i) any claim or (ii) the commencement
of any action or proceeding by a third Person (a "Third-Party Claim"), the
Indemnified Party will give such Indemnifying Party prompt written notice of
such claim or the commencement of such action or proceeding, which notice shall
describe in reasonable detail the basis for such claim or action to the extent
then known by the Indemnified Party, but the failure to so notify the
Indemnifying Party will not relieve the Indemnifying Party of any liability that
it may have to any Indemnified Party, except to the extent that the Indemnifying
Party demonstrates that the defense of such indemnifiable event is prejudiced by
the Indemnified Party's failure to give such notice.
(ii) If any Third-Party Claim is against an Indemnified
Party and it gives notice to the Indemnifying Party of the assertion of
such Third-Party Claim, the Indemnifying Party shall be entitled to
participate in the defense of such Third-Party Claim and, to the extent
that it wishes (unless (i) the Indemnifying Party is also a Person
against whom the Third-Party Claim is made and the Indemnified Party
determines in good faith that joint representation would be
inappropriate, or (ii) the Indemnifying Party fails to provide
reasonable assurance to the Indemnified Party of its financial capacity
to defend such Third-Party Claim and provide indemnification with
respect to such Third-Party Claim), to assume the defense of such
Third-Party Claim with counsel reasonably satisfactory to the
Indemnified Party. After notice from the Indemnifying Party to the
Indemnified Party of its election to assume the defense of such
Third-Party Claim, the Indemnifying Party shall not as long as it
diligently conducts such defense, be liable to the Indemnified Party
under this Article IX for any fees of other counsel or any other
expenses with respect to the defense of such Third-Party Claim, in each
case subsequently incurred by the Indemnified Party in connection with
the defense of such Third-Party Claim, other than reasonable costs of
investigation. If the Indemnifying Party assumes the defense of a
Third-Party Claim, (i) such assumption will conclusively establish for
purposes of this Agreement that the claims made in that Third-Party
Claim are within the scope of and subject to indemnification; (ii) no
compromise or settlement of such Third-Party Claims may be effected by
the Indemnifying Party without the
65
Indemnified Party's Consent unless (A) there is no finding or admission
of any violation of Law or any violation of the rights of any Person
and no effect on any other claims that may be made against the
Indemnified Party, and (B) the sole relief provided is monetary damages
that are paid in full by the Indemnifying Party; and (iii) the
Indemnified Party shall have no liability with respect to any
compromise or settlement of such Third-Party Claims effected without
its Consent. If notice is given to an Indemnifying Party of the
assertion of any Third-Party Claim and the Indemnifying Party does not,
within ten days after the Indemnified Party's notice is given, give
notice to the Indemnified Party of its election to assume the defense
of such Third-Party Claim, the Indemnifying Party will be bound by any
determination made in such Third-Party Claim or any compromise or
settlement effected by the Indemnified Party.
(iii) Notwithstanding any of the foregoing in this Section
9.1(d), if an Indemnified Party determines in good faith that there is
a reasonable probability that a Third-Party Claim may adversely affect
it or its Affiliates other than as a result of monetary damages for
which it would be entitled to indemnification under this Agreement, the
Indemnified Party may, by notice to the Indemnifying Party, assume the
exclusive right to defend, compromise, or settle such Third-Party
Claim, but the Indemnifying Party will not be bound by any
determination of any Third-Party Claim so defended for the purposes of
this Agreement or any compromise or settlement effected without its
Consent (which may not be unreasonably withheld).
(iv) With respect to any Third-Party Claim subject to
indemnification under this Article IX: (i) both the Indemnified Party
and the Indemnifying Party, as the case may be, shall keep the other
Person fully informed of the status of such Third-Party Claims and any
related Proceedings at all stages thereof where such Person is not
represented by its own counsel, and (ii) the parties agree (each at its
own expense) to render to each other such assistance as they may
reasonably require of each other and to cooperate in good faith with
each other in order to ensure the proper and adequate defense of any
Third-Party Claim.
(e) Other Damages. Notwithstanding any other provision of
this Agreement to the contrary, no Indemnifying Party shall be liable to an
Indemnified Party for any consequential or punitive damages. For purposes of
this paragraph, consequential and punitive damages do not include out-of-pocket
Losses incurred by an Indemnified Party and resulting from a Third Party Claim.
9.2 Specific Indemnification. (a) Seller agrees to
indemnify, defend and hold Peabody, Buyer, the Company or any of its
Subsidiaries harmless from any and all Permitted Restructuring Tax Costs that
are incurred.
(b) Seller agrees to indemnify, defend and hold Peabody,
Buyer, the Company or any of its Subsidiaries (including the head company of any
tax consolidated group of which the Company and its Subsidiaries are members)
harmless from any liability for franking deficit tax (including any related
interest and penalties) that becomes due and payable after Closing by Buyer, the
Company or any of its Subsidiaries (including the head company of any tax
consolidated group of which the Company and its Subsidiaries are members) to the
extent that (i)
66
such an amount arises in respect of the next succeeding tax period ending after
the Closing, and (ii) only to the extent that such amount relates to a refund,
overpayment or overprovision of tax recognized in the Final Closing Balance
Sheet or if the amount is not so recognized only to the extent that such amount
becomes payable to Seller under Section 5.3(g) and (iii) only to the extent that
such amount does not arise because of any payment or declaration of a dividend
by the Company or any of its Subsidiaries (including the head company of any tax
consolidated group of which the Company and its Subsidiaries are members) after
Closing.
(c) For the avoidance of doubt, any claim under this
Section 9.2 shall not be reduced or otherwise mitigated because Peabody or the
Buyer has consented to the Company Restructuring.
9.3 Treatment of Indemnification Payments. All
indemnification payments made under this Agreement (including for this purpose,
all payments made under any provision of Section 5.3), whether pursuant to this
Article IX or otherwise, shall be treated by Buyer and Seller as an adjustment
to the Purchase Price.
ARTICLE X
GOODS & SERVICES TAX
10.1 Imposition of GST. The parties acknowledge that any
amounts referred to in this Agreement do not include GST. If GST is or becomes
payable on a supply made under or in connection with this Agreement, an
additional amount ("Additional Amount") is payable by the recipient
("Recipient") equal to the amount of GST payable on that supply as calculated by
the party making the supply ("Supplier") in accordance with the GST Law. The
Additional Amount includes any penalties or interest imposed by the Australian
Taxation Office ("ATO") on the Supplier due to late remittance of GST to the
ATO.
10.2 Payment. The Additional Amount payable under Section
10.1 is payable at the same time and in the same manner as the consideration for
the supply, and the Supplier shall provide the Recipient with a Tax Invoice
within fourteen (14) days after the time of payment of the Additional Amount.
10.3 Reimbursements and Indemnities. Notwithstanding any
other provision in this Agreement, if an amount payable under or in connection
with this Agreement (whether by way of reimbursement, indemnity or otherwise) is
calculated by reference to an amount incurred by a party, whether by way of
cost, expense, outlay, disbursement or otherwise ("Amount Incurred"), the amount
payable shall be reduced by the amount of any Input Tax Credit to which that
party is entitled in respect of that Amount Incurred.
10.4 Interpretation. Any reference in this Article 10 to:
(a) an Input Tax Credit to which a party is entitled
includes, without limitation, an Input Tax Credit arising from a Creditable
Acquisition by that party but to which the Representative Member of a GST Group
of which the party is a member is entitled; and
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(b) a term that is not defined in this Agreement has the
same meaning as in the A New Tax System (Goods & Services Tax) Xxx 0000 (Cth).
ARTICLE XI
MISCELLANEOUS
11.1 Fees and Expenses. Except as otherwise provided in
this Agreement, Seller, on the one hand, and Peabody and Buyer, on the other
hand, shall bear their own expenses and the expenses of their respective
Affiliates (including, in the case of Seller, the Company, the Company's
Subsidiaries, the Associated Companies and the Joint Ventures) in connection
with the preparation and negotiation of this Agreement and the consummation of
the transactions contemplated by this Agreement. Seller, on the one hand, and
Peabody and Buyer, on the other hand, shall bear the fees and expenses of any
broker or finder retained by such party and their respective Affiliates
(including, in the case of Seller, the Company, the Company's Subsidiaries, the
Associated Companies and the Joint Ventures) in connection with the transactions
contemplated by this Agreement. Seller shall bear responsibility for, and prior
to the Closing shall pay, all fees and penalties associated with the
termination, prepayment, refinancing or replacement of (and obtaining any
Consents related to) the Debt of the Company or any of its Subsidiaries and the
fees and penalties associated with obtaining any Consents related to interest
rate swap agreements.
11.2 Governing Law. This Agreement shall be construed
under and governed by the Laws of the State of New York.
11.3 Amendment. This Agreement may not be amended,
modified or supplemented except upon the execution and delivery of a written
agreement that specifically references this Agreement and is executed by all of
the parties hereto.
11.4 Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any party hereto
without the prior written consent of the other parties; provided that either
Seller or Buyer may assign any of its rights and obligations under this
Agreement to one or more of their respective Affiliates and cause such Affiliate
to perform such party's obligations hereunder. Notwithstanding the foregoing, no
assignment by either of Seller or Buyer to any of their respective Affiliates
shall in any way affect such party's rights or relieve such party of any of its
obligations under this Agreement. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by,
the parties hereto and their respective successors and permitted assigns, and is
not intended to confer upon any Person other than the parties hereto and their
respective successors and permitted assigns any rights or remedies hereunder.
11.5 Waiver. Any of the terms or conditions of this
Agreement which may be lawfully waived may be waived in writing at any time by
each party which is entitled to the benefits thereof. Any waiver of any of the
provisions of this Agreement by any party hereto shall be binding only if set
forth in an instrument in writing signed on behalf of such party. No failure to
enforce any provision of this Agreement shall be deemed to or shall constitute a
waiver of such provision and no waiver of any of the provisions of this
Agreement shall be deemed to or
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shall constitute a waiver of any other provision hereof (whether or not similar)
nor shall such waiver constitute a continuing waiver.
11.6 Notices. (a) Any notice, demand, or communication
required or permitted to be given by any provision of this Agreement shall be
deemed to have been sufficiently given or served for all purposes if (i)
personally delivered, (ii) sent by a internationally recognized overnight
courier service to the recipient at the address below indicated, (iii) sent by
registered or certified mail, return receipt requested, postage prepaid, or (iv)
successfully transmitted by facsimile with confirmation of receipt:
If to Peabody or Buyer:
Peabody Energy Corporation
Attention: Xxxxxxx X. Xxxxxxx
000 Xxxxxx Xxxxxx
Xxxxx 000
Xx. Xxxxx, XX 00000-0000
Telephone No. 000-000-0000
Fax No. 000-000-0000
With a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
Attention: D. Xxxxx Xxxxxxx
Xxxxxxxx X. Xxxxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone No. 000-000-0000
Fax No. 000-000-0000
If to Seller:
RAG Coal International AG
Attention: Xxxx-Xxxxxx Xxxxxxxxxxxx
Xxxxxxxxxxxxx Xxxx(xxxx)x-00
00000 Xxxxx
Telephone No. 00-000-000-00
Fax No. 00-000-000-0000
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With a copy to:
Coudert Brothers LLP
Attention: Xxxxxxx Xxxxxxxx
Xxxxx X. XxXxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Telephone No. 000-000-0000
Fax No. 000-000-0000
or to such other address as any party hereto may, from time to time, designate
in a written notice given in like manner, provided, however, that any notice of
change of address or facsimile number shall be effective only upon receipt.
(b) Except as otherwise provided herein, any notice under
this Agreement will be deemed to have been given (x) on the date such notice is
personally delivered or delivered by facsimile, (y) the next succeeding Business
Day after the date such notice is delivered to the overnight courier service if
sent by overnight courier, or (z) five (5) Business Days after the date such
notice is sent by registered or certified mail; provided that in each case
notices received after 4:00 p.m. (local time of the recipient) shall be deemed
to have been duly given on the next Business Day.
11.7 Complete Agreement. This Agreement, the Schedules,
the Confidentiality Agreement and the other documents and writings referred to
herein or delivered pursuant hereto contain the entire understanding of the
parties with respect to the subject matter hereof and thereof and supersede all
prior agreements and understandings, both written and oral, between the parties
with respect to the subject matter hereof.
11.8 Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement and each of which shall be deemed an original.
11.9 Publicity. Seller, Peabody and Buyer will consult
with each other and will mutually agree upon any publication or press release of
any nature with respect to this Agreement or the transactions contemplated
hereby and shall not issue any such publication or press release prior to such
consultation and agreement except as may be required by Law or by obligations
pursuant to any listing agreement with any securities exchange or any securities
exchange regulation, in which case the party proposing to issue such publication
or press release shall make all reasonable efforts to consult with the other
party before issuing any such publication or press release.
11.10 Headings. The headings table of contents and index
contained in this Agreement are for reference only and shall not affect in any
way the meaning or interpretation of this Agreement.
11.11 Severability. Any provision of this Agreement which
is invalid, illegal or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such
70
invalidity, illegality or unenforceability, without affecting in any way the
remaining provisions hereof in such jurisdiction or rendering that or any other
provision of this Agreement invalid, illegal or unenforceable in any other
jurisdiction.
11.12 Third Parties. Nothing herein expressed or implied is
intended or shall be construed to confer upon or give to any Person or
corporation, other than the parties hereto and their permitted successors or
assigns, any rights or remedies under or by reason of this Agreement.
11.13 Consent to Jurisdiction; Waiver of Jury Trial. Each
of the parties expressly and irrevocably submits to the exclusive jurisdiction
of the United States District Court for the Southern District of New York
located in the borough of Manhattan in the City of New York, or if such court
does not have jurisdiction, the Supreme Court of the State of New York, New York
County, for the purposes of any Proceeding arising out of this Agreement or any
transaction contemplated hereby. Each party hereby waives the right to any other
jurisdiction or venue for any litigation arising out of or in connection with
this Agreement or the transactions contemplated hereby to which any of them may
be entitled by reason of its present or future domicile. Each of the parties
further agrees that service of any process, summons, notice or document to such
party's respective address listed above in one of the manners set forth in
Section 11.6 shall be deemed in every respect effective service of process in
any such Proceeding, and waives any objection it might otherwise have to service
of process under Law. Nothing herein shall affect the right of any Person to
serve process in any other manner permitted by Law. Each of the parties hereto
irrevocably and unconditionally waives any objection to the laying of venue of
any Proceeding arising out of this Agreement or the transactions contemplated
hereby in (a) the United States District Court for the Southern District of New
York or (b) the Supreme Court of the State of New York, New York County, and
hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such Proceeding brought in any such court has
been brought in an inconvenient forum. The parties hereto hereby irrevocably and
unconditionally waive trial by jury in any Proceeding relating to this Agreement
or any other agreement entered into in connection therewith and for any
counterclaim with respect thereto.
11.14 Specific Performance; Rescission. (a) With respect to
Sections 2.3, 5.9, 5.10(b), 5.16 and 11.9, each of the parties hereto
acknowledges and agrees that in the event of any breach of such provisions, each
non-breaching party would be irreparably and immediately harmed and could not be
made whole by monetary damages. It is accordingly agreed that the parties hereto
(a) will waive, in any action for specific performance, the defense of adequacy
of a remedy at law with respect to such provisions and (b) shall be entitled, in
addition to any other remedy to which they may be entitled at law or inequity,
to compel specific performance of such provisions.
(b) Notwithstanding anything to the contrary contained
herein, the parties hereto agree not to make any claim to the remedy of
rescission with respect to this Agreement except to the extent that a claim for
rescission is based on fraud, fraudulent inducement, bad faith or willful
misconduct.
[Remainder of this page intentionally left blank.]
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized officer, in each case as of the
date first above written.
RAG COAL INTERNATIONAL AG
By:_________________________________________________
Name:
Title:
By:_________________________________________________
Name:
Title:
PEABODY ENERGY CORPORATION
By:_________________________________________________
Name:
Title:
PEABODY ENERGY AUSTRALIA PTY LIMITED
By:__________________________________________________
Name:
Title:
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