EXHIBIT 10.3
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
XXXXXX CLEAR COAL CORPORATION, SELLER
AND
NATIONAL COAL CORPORATION, BUYER
DATED: OCTOBER 26, 2004
TABLE OF CONTENTS
PAGE
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ARTICLE 1 SALE AND PURCHASE..................................................1
Section 1.1 Purchase and Sale of Certain Assets........................1
Section 1.2 Closing....................................................2
Section 1.3 Purchase Price.............................................3
Section 1.4 Delivery of Possession.....................................3
ARTICLE 2 COVENANTS AND AGREEMENTS...........................................3
Section 2.1 Cooperation and Good Faith.................................3
Section 2.2 Existing Mine Operations...................................4
Section 2.3 Removal of Seller's Property...............................4
Section 2.4 Permit 3116 and Replacement of Reclamation Bonds...........4
Section 2.5 Assumed Obligations and Post-Closing Compliance
with Laws...............................................7
Section 2.6 Cooperation................................................7
Section 2.7 Performance of Leases......................................8
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER...........................8
Section 3.1 Corporate Organization.....................................8
Section 3.2 Authorization, Execution and Delivery......................8
Section 3.3 Validity of Contemplated Transactions and Approvals........9
Section 3.4 Consents and Approvals of Governmental Authorities.........9
Section 3.5 Property Interests.........................................9
Section 3.6 Mining and Geological Information.........................11
Section 3.7 Labor and Employee Relations..............................11
Section 3.8 Compliance with Law.......................................11
Section 3.9 Permits and Licenses......................................12
Section 3.10 Equipment.................................................13
Section 3.11 Environmental Matters.....................................13
Section 3.12 Brokers...................................................14
Section 3.13 Representations and Warranties As of The Closing
Date...................................................14
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER...........................14
Section 4.1 Corporate Organization....................................14
Section 4.2 Authorization, Execution and Delivery.....................15
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TABLE OF CONTENTS
(continued)
PAGE
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Section 4.3 Validity of Contemplated Transactions.....................15
Section 4.4 Brokers...................................................15
Section 4.5 Representations and Warranties As of The Closing
Date...................................................16
ARTICLE 5 Conditions to buyer's obligations.................................16
Section 5.1 Representations and Warranties............................16
Section 5.2 Performance...............................................16
Section 5.3 No Material Adverse Change................................16
Section 5.4 Consents..................................................16
Section 5.5 Non-Foreign Status Affidavit..............................17
Section 5.6 No Actions, Suits or Proceedings..........................17
Section 5.7 Closing Documents.........................................18
Section 5.8 Purchase of Other Assets..................................18
ARTICLE 6 CONDITIONS TO SELLER'S OBLIGATIONS................................18
Section 6.1 Representations and Warranties............................18
Section 6.2 Performance...............................................18
Section 6.3 No Actions, Suits or Proceedings..........................18
Section 6.4 Closing Documents.........................................19
Section 6.5 Buyer's Purchase of Other Assets..........................19
ARTICLE 7 CLOSING DELIVERIES................................................19
Section 7.1 Deliveries by Seller......................................19
Section 7.2 Deliveries by Buyer.......................................21
Section 7.3 Release from Escrow.......................................22
Section 7.4 Post-Closing Assistance...................................23
ARTICLE 8 SURVIVAL AND INDEMNIFICATION......................................23
Section 8.1 Survival..................................................23
Section 8.2 Indemnification by Seller.................................23
Section 8.3 Notice to Seller, Etc.....................................24
Section 8.4 Indemnification by Buyer..................................24
Section 8.5 Notice to Buyer, Etc......................................25
Section 8.6 Survival of Indemnification...............................25
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TABLE OF CONTENTS
(continued)
PAGE
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ARTICLE 9 MISCELLANEOUS.....................................................26
Section 9.1 Knowledge of Seller.......................................26
Section 9.2 "Material" Defined........................................26
Section 9.3 Notices...................................................26
Section 9.4 Entire Agreement..........................................27
Section 9.5 Modifications and Amendments..............................27
Section 9.6 Assignment................................................28
Section 9.7 Parties in Interest.......................................28
Section 9.8 Governing Law.............................................28
Section 9.9 Severability..............................................28
Section 9.10 Headings and Captions.....................................29
Section 9.11 Expenses..................................................29
Section 9.12 Counterparts..............................................29
Section 9.13 Interpretation............................................29
Section 9.14 Schedules.................................................29
Section 9.15 Time of the Essence.......................................29
Section 9.16 Facsimile Signature.......................................30
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is entered into this 26th
day of October, 2004, by and among XXXXXX CLEAR COAL CORPORATION, a Tennessee
corporation, whose address is 2980 General Xxxx X. Xxxxxx Xxxxxxx, XxXxxxxxxx,
Xxxxxxxxx 00000, ("Seller") and NATIONAL COAL CORPORATION, a Tennessee
corporation, whose address is 000 Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxx 00000
("Buyer").
W I T N E S S E T H:
WHEREAS, Seller is the owner of certain assets which include, among
other things, leases, permits, contracts, and mining equipment, and
WHEREAS, Seller desires to sell to Buyer and Buyer desires to purchase
from Seller, only such assets as specifically described herein, all of which
shall be upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the strict performance and
observance of the terms, conditions, promises, covenants, stipulations, and
agreements hereinafter set forth to be performed and observed by the parties,
and the further consideration set forth herein, the sufficiency of which is
hereby acknowledged by the parties, the parties agree as follows:
ARTICLE 1
SALE AND PURCHASE
SECTION 1.1 PURCHASE AND SALE OF CERTAIN ASSETS. Upon the terms and
subject to all the conditions in this Agreement, Buyer agrees to purchase from
Seller and Seller agrees to sell and deliver to Buyer, on the Closing Date (as
defined in Section 1.2), all of the hereinafter described property which shall
be collectively referred to as the "Assets," as follows:
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(a) All right, title and interest of Seller in those certain
leases identified on Schedule 1.1(a) (the "Leases"), including any pre-payments
or recoupments to which Seller may be entitled, as set forth on Schedule 1.1(a).
The Leases and the property demised thereunder are sometimes hereinafter
referred to as the "Real Property."
(b) All right, title and interest in the machinery and
equipment as shown on the Schedule of Equipment attached hereto and made a part
hereof as Schedule 1.1(b) (the "Equipment").
(c) All right, title and interest in all pending and/or issued
Permits and licenses (the "Permits") held by Seller in relation to Seller's
mining operations on the Real Property, as set forth on the Schedule of Permits
attached hereto and made a part hereof as Schedule 1.1(c).
(d) All of Seller's right, title and interest in all
geological data, reserve data, mine maps, core hole logs, coal measurements,
coal samples, lithologic data, mine plans, mining feasibility studies or
analyses, reserve reports, exploration data, mining permit applications and
supporting data, engineering studies, title reports and opinions in the
possession of or in the control of Seller relating to or affecting the coal
reserves, mining conditions, mines and mining plans of Seller in or upon the
Real Property and pertaining in any way to the ownership, condition or operation
of the Assets (the" Records" ) .
SECTION 1.2 CLOSING. The consummation of the transactions contemplated
herein (the "Closing") shall be held within two (2) business days after receipt
by Seller and/or Buyer of the OSM Notice from the Department of Interior, Office
of Surface Mining, including TDEC, (collectively, "OSM") that it is prepared to
transfer Permit 3116 and the related TDEC Permit to
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Buyer, as provided in Section 2.4(a) herein (the "Closing Date"), but in no
event later than November 30, 2004, at a mutually agreeable location in
Knoxville, Tennessee. Provided, however: (i) notwithstanding anything herein to
the contrary, the Closing shall be held prior to the date of actual transfer of
Permit 3116 to Buyer by OSM, and (ii) in the event the TDEC Permit is
transferred by TDEC and the Closing Documents are not released to Buyer under
the Escrow Agreement referenced in Section 7.3, Buyer shall sign and deliver all
forms and applications necessary to transfer the TDEC Permit back to Seller.
SECTION 1.3 PURCHASE PRICE. In consideration of the sale, transfer and
delivery of the Assets, Buyer shall pay to Seller the Purchase Price of Two
Million Two Hundred Forty-One Thousand One Hundred Twenty-Nine and 50/100
Dollars ($2,241,129.50) payable at Closing in immediately available funds. The
Purchase Price shall be allocated to the Assets as shown on Schedule 1.3.
SECTION 1.4 DELIVERY OF POSSESSION. Simultaneously with the Closing,
Seller will take all such steps that may be required to place Buyer in actual
possession of the Real Property, Equipment and Records.
ARTICLE 2
COVENANTS AND AGREEMENTS
SECTION 2.1 COOPERATION AND GOOD FAITH. Each of the parties hereto
shall use its best efforts in good faith to perform and fulfill all conditions
and obligations to be fulfilled or performed by it hereunder to the end that the
transactions contemplated hereby will be fully and timely consummated and
enforced. From time to time after the Closing, the parties will execute
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and deliver such other instruments and take such other action as may be
reasonably required to consummate the transactions under this Agreement.
SECTION 2.2 EXISTING MINE OPERATIONS. As of the release from escrow of
the closing documents to Buyer after Closing as provided in Section 7.3, Buyer
will assume responsibility for Seller's existing permitted mining operations
located on the Leases (the "Mine") including but not limited to all reclamation
obligations under Permit 3116 (as identified on Schedule 1.1(c)). Seller may
conduct mining operations through the Closing Date but shall keep reclamation
obligations at the Mine reasonably current and consistent with conditions now
existing and with the existing mining and reclamation plan of Seller. Seller
shall not conduct active mining operations on the Leases after the Closing Date
and prior to the release from escrow as provided in Section 7.3. Buyer has
inspected and approved the status of the Real Property and existing reclamation
and accepts same in its condition "AS IS, WHERE IS" as of the date hereof. Buyer
shall inspect and approve the status of the Real Property and reclamation prior
to the Closing, and by closing accepts same in its then condition "AS IS, WHERE
IS" as of the Closing.
SECTION 2.3 REMOVAL OF SELLER'S PROPERTY. Seller shall have the right
to remove all coal inventory and other property of Seller, exclusive of the
Assets, from the Real Property within thirty (30) days after the Closing Date.
Any such other Seller property and coal inventory thereafter on the Real
Property shall belong to Buyer.
SECTION 2.4 PERMIT 3116 AND REPLACEMENT OF RECLAMATION BONDS.
(a) As soon as reasonably practicable but not later than ten
(10) days after date hereof, Buyer and Seller shall file any and all necessary
applications with OSM for
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transfer of Permit 3116 and with TDEC for the transfer of the related Permit
(collectively, the "Successor Permittee Application") to Buyer. Buyer shall
prepare the Successor Permittee Application and applications for transfer of the
other Permits (collectively the "Applications"). Prior to the time of transfer
to Buyer of Permit 3116 by the regulatory agency, and not later than the date of
the closing, Buyer shall post all bonds (with appropriate collateral of a type
satisfactory to the appropriate regulatory authority) necessary to substitute
Buyer's bonds for Seller's bonds identified in Schedule 2.4(a) ("Bonds") so that
the regulatory agency shall transfer Permit 3116 and as soon as reasonably
practicable thereafter release Seller's Bonds and all collateral for the Bonds.
Any and all necessary filing fees for the Applications, the cost of advertising
the filing of the Applications, any and all costs payable to any governmental
authority in connection with the Applications, and the cost of pursuing transfer
of Permit 3116, shall be borne by Buyer; otherwise, each party will bear its own
costs and expenses in connection with such transfer of Permit 3116. Each party
hereto shall bear all its bond fees and other costs with respect to the bonds
and other security it has posted or may post in connection with the foregoing.
(b) Buyer will file at such time as expressly provided by
Section 2.4(a) above, bonds with appropriate collateral of a type satisfactory
to the appropriate regulatory authority as surety for the performance of all
obligations under Permit 3116, including but not limited to reclamation of the
boundaries affected by Permit 3116, including all areas therein previously
affected by the Seller, with good and sufficient surety or collateral
satisfactory to the regulatory agency. The parties shall take all reasonable
steps necessary to ensure that promptly (considering the normal time frame for
regulatory action) upon the transfer of Permit 3116 or reissuance of Permit 3116
to Buyer by the appropriate regulatory agency or agencies, Seller shall
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be released and absolved from all liability and obligation under Permit 3116 and
all Bonds and all deposits, letters of credit or collateral posted by Seller as
security for such Bonds and any cash bonds or letters of credit posted by the
Seller directly with the regulatory agency in connection therewith shall be
refunded in full and/or returned to Seller.
(c) Buyer and Seller agree to diligently prosecute at Buyer's
cost the Application process contemplated hereby for the transfer of Permit 3116
until: (i) such time as the Permit 3116 is transferred, or (ii) such transfer is
denied by the regulatory agency, whichever is earlier. Buyer and Seller may
submit additional information and documentation as may be requested by the
regulatory agency to allow Permit 3116 to be transferred, but if the transfer is
denied, the Successor Permittee Application shall not be re-submitted. Provided,
however, if the OSM Notice Date has not occurred on or before November 30, 2004,
Buyer, Seller, or either of them may in their sole discretion withdraw the
Successor Permittee Application and neither party shall have any further
obligations of performance under this Agreement.
(d) Buyer understands that certain non-compliances and
violations exist under Permit 3116 (as identified on Schedule 3.8) as of date
hereof and as of the Closing which Buyer agrees to timely remediate (as required
in said non-compliances and notices of violations) after the Closing but prior
to the issuance of any cessation order by governmental agencies. Seller shall
use its best reasonable efforts to conduct its mining operations after date
hereof and up to the Closing, in compliance with Permit 3116 so that no new
notices of violation or non-compliance are issued to Seller prior to the
Closing. Seller shall use its best reasonable efforts to cause any new
violations or non-compliances to be abated or remediated prior to Closing.
Seller may, prior to the expiration of the time allowed for abatement of the
violation, obtain extensions of time from the regulatory agency. In the event
new notices of violation or
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non-compliance are issued by the regulatory agency after date hereof which have
not been abated or remediated prior to Closing, the parties shall proceed to
close hereunder, except if any such violation or non-compliance has a material
adverse effect, Buyer shall have the right to terminate this Agreement.
(e) Buyer shall at all times after release from escrow of the
closing documents to Buyer as provided in Section 7.3 indemnify and hold
harmless each member of Seller's Group for all losses, costs, fines, penalties,
claims, obligations, expenses (including but not limited to attorneys fees)
(collectively the "Losses") incurred by each member of Seller's Group in
connection with any and all: (i) pre-Closing and post-Closing notices of
violations and any and all actions or failure to act of Buyer relating to the
Assets, the Permits (including bonds and other security therefor), the Real
Property, the Leases, and Seller's mining operations prior to Closing, and (ii)
all other obligations of Buyer under this Agreement, which Losses shall
constitute Assumed Obligations of Buyer. As used in this Agreement, Seller's
Group shall include Seller and its officers, directors, employees, agents,
contractors and affiliates.
SECTION 2.5 ASSUMED OBLIGATIONS AND POST-CLOSING COMPLIANCE WITH LAWS.
From and after the release from escrow of the closing documents to Buyer as
provided in Section 7.3, Buyer shall timely perform, pay and discharge all
Assumed Obligations and comply with all environmental laws, mining laws and all
other laws, regulations and orders and shall release, indemnify and hold
harmless each member of Seller's Group from any and all Losses related to such
Assumed Obligations.
SECTION 2.6 COOPERATION. Both until and after the Closing, at the cost
of Buyer, Seller at all times will reasonably cooperate in seeking to obtain all
governmental consents, Permit, and
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licenses deemed desirable by Buyer for the consummation of the transactions
contemplated by this Agreement.
SECTION 2.7 PERFORMANCE OF LEASES. Buyer agrees and covenants that as
Assignee of the Leases after release from escrow as provided in Section 7.3 it
will assume performance thereof and that it will, from and after the release
from escrow of the closing documents to Buyer as provided in Section 7.3, hold
Seller harmless from and against any liability arising out of the breach of the
terms and covenants of the Leases arising after the Closing.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to, and covenants with, Buyer that:
SECTION 3.1 CORPORATE ORGANIZATION. Seller is a Tennessee corporation
duly organized, validly existing and in good standing under the laws of the
State of Tennessee and has all the requisite corporate power and authority to
conduct its business as now conducted and to own the Assets.
SECTION 3.2 AUTHORIZATION, EXECUTION AND DELIVERY.
(a) Excepting only the matters set forth on Schedule 3.2: (i)
Seller is the record and beneficial owner of the Assets free and clear of any
security interest, mortgage, pledge, lien, agreement, encumbrance or adverse
claim against Seller's rights in the Assets; (ii) Seller has the complete and
unrestricted right, power and authority to execute and deliver this Agreement;
and (iii) Seller has the complete and unrestricted right, power and authority to
sell, assign, transfer, convey and deliver the Assets to Buyer and to otherwise
perform each of the obligations hereunder, and the Seller's Board of Directors
has approved same.
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(b) This Agreement and the documents executed pursuant thereto have been duly
executed and delivered by Seller and constitute the valid and binding obligation
of Seller enforceable against Seller in accordance with the terms of each,
except as may be limited by bankruptcy, insolvency, reorganization or similar
laws affecting the enforcement of creditors' rights in general, and are
effective to convey the interests of Seller as set forth herein, except as shown
on Schedule 4.2.
SECTION 3.3 VALIDITY OF CONTEMPLATED TRANSACTIONS AND APPROVALS.
Neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) contravene, violate or result in the
violation of any statute, law, ordinance, rule or regulation to which Seller is
subject; (ii) contravene, violate or result in the violation of any judgment,
order, injunction, writ or decree of any court or any government department,
agency, instrumentality or authority which is applicable to Seller; (iii)
violate or conflict with any provision of any certificate of incorporation or
by-law of Seller; and (iv) except as set forth in Schedule 4.3, require the
consent of any other party, or permit any other party (including the other
parties under the Leases and Contracts) to terminate or materially impair the
rights of Seller or Buyer in any of the Assets, including but not limited to the
Leases and the Permit.
SECTION 3.4 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. Except
with respect to the transfer of the Permits, no consent, approval or
authorization of, or declaration, registration or filing with, or any
notification to any governmental or regulatory authority is required to be made
or obtained by Seller in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby.
SECTION 3.5 PROPERTY INTERESTS.
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(a) Other than the Leases, Seller has no legal or equitable
title or interest in any other coal rights, mineral estates, coal leases, coal
subleases, surface mining leases, mining rights, spoilage or overburden disposal
rights, surface disturbance consents, easements, licenses, rights of way,
wheelage agreements, access rights and other rights or interests in real
property and improvements thereon relating to the mining of coal, or the coal
therein and thereunder, or access thereto of the right to mine, remove and/or
transport same, located within fifteen (15) miles of the Leases. Seller has
delivered or made available to Buyer true and complete copies of all deeds,
leases, subleases, documents of title, title opinions, title insurance policies,
abstracts, surveys, plats and maps, in its possession or in its control relating
to the title to the Real Property.
(b) Other than liens for current ad valorem taxes not yet due
and payable, Seller has good and marketable title to the Assets, free and clear
of any mortgage, security interest, lien, encumbrance, option or agreement.
(c) To Seller's best knowledge, the lessors under the Leases
have good and marketable title to the Real Property free and clear of any
mortgage, security interest, lien, encumbrance, option or agreement except the
Leases.
(d) Except as set forth in Schedule 3.5(d), there are no
pending or to the knowledge of Seller threatened, claims, actions, suits or
proceedings, including any relating to condemnation, eminent domain or other
public taking or use, against or affecting Seller's interests in the Assets, or
any portion thereof or any interest therein, or relating to or arising out of
the interest of Seller in the Assets, or any portion thereof, in any court or
before or by any
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federal, state, county or municipal department, commission, board, bureau,
agency or other governmental instrumentality.
(e) Seller enjoys quiet and peaceable possession under the
Leases. The Leases are now, and at the Closing Date will be, in full force and
effect, enforceable in accordance with the terms of each against the respective
lessor thereunder. To Seller's knowledge, no event will have occurred which
(whether with or without notice, lapse of time or the occurrence of any other
event) would constitute a default by any other party under the Leases, which
default would permit the non-defaulting party to terminate the Leases or
materially impair the rights of the non-defaulting party.
SECTION 3.6 MINING AND GEOLOGICAL INFORMATION. Seller has provided to
Buyer copies of or access to the Records. SELLER MAKES NO REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE CORRECTNESS OF THE RECORDS
AND/OR THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED THEREIN.
SECTION 3.7 LABOR AND EMPLOYEE RELATIONS. No union is certified, or
claiming to have been or seeking to be certified or recognized, as collective
bargaining agent to represent any employee of Seller. The Real Property is not
subject to any successorship obligations under any National Bituminous Coal Wage
Agreement to which Seller or any predecessor in title or interest was a party.
SECTION 3.8 COMPLIANCE WITH LAW. To Seller's knowledge, except as shown
on Schedule 3.8, Seller is in material compliance with all laws, ordinances,
legal requirements, rules, regulations and orders applicable to it, its
operations, properties, assets, products and
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services, including, without limitation, the (i) federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Superfund
Amendments and Reauthorization Act, the federal Resource Conservation and
Recovery Act of 1976 (including the Hazardous and Solid Waste Amendments
thereto), the federal Clean Air Act, the federal Water Pollution Control Act of
1972, the federal Clean Water Act, the federal Surface Mining Control and
Reclamation Act ("SMCRA"), the federal Mine Safety and Health Act of 1977, as
amended, the federal Occupational Safety and Health Act of 1970, the federal
Solid Waste Disposal Act, the federal Insecticide, Fungicide and Rodenticide
Act, and the Toxic Substances Control Act, each as amended and as now or
hereinafter in effect, together with the state counterpart of each, including
the Tennessee Department of Environment and Conservation ("TDEC").
SECTION 3.9 PERMITS AND LICENSES. Schedule 1.1(c) contains a correct
and complete list of all licenses, Permits and other authorizations held by
Seller relating to mining operations on the Real Property. To Seller's
knowledge, except as set forth in Schedule 1.1(c), each of said Permits,
licenses and other authorizations is in full force and effect; Seller is in
compliance in all material respects with the terms, provisions and conditions
thereof; there are and have been no violations, penalties, notices of
noncompliance, agreements, judgments, consent decrees, agreed orders or
administrative action(s) or proceeding(s) of a material nature (including but
not limited to any notice that same constitute a pattern of violations under
SMCRA or its state counterpart) affecting any of said Permits, licenses and
other authorizations; Permit 3116 set forth on Schedule 1.1(c) is in compliance
in all material respects with and satisfies all requirements of the SMCRA; and
to Seller's knowledge, Seller has performed and is current in all material
respects with all reclamation activities, water treatment, discharge
requirements, air pollution abatement, health and safety requirements and
environmental responsibilities required to be performed
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pursuant to, in connection with or as a condition of the validity of said
Permits, licenses and other authorizations or required pursuant to any federal,
state or local statute, regulation or law.
SECTION 3.10 EQUIPMENT. SELLER MAKES NO WARRANTY, EXPRESS OR IMPLIED,
WITH RESPECT TO THE EQUIPMENT, ITS CONDITION, MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE OR USE, AND SELLER WILL CONVEY THE EQUIPMENT "AS IS, WHERE
IS" IN ITS EXISTING CONDITION AS OF THE CLOSING. Seller shall service the
equipment in accordance with customary practice after date hereof and prior to
the Closing, but shall not be required to make major repairs or replacements of
major components; provided, however, the Buyer may elect to service the
equipment as it determines is in its best interest.
SECTION 3.11 ENVIRONMENTAL MATTERS. To Seller's knowledge, Seller and
all Assets are in compliance in all material respects with all applicable laws,
rules, regulations, orders, ordinances, judgments and decrees of all
governmental authorities with respect to all environmental statutes, rules and
regulations. Seller has not received notice of, nor does Seller have knowledge
of, any past or present events, conditions, circumstances, activities,
practices, incidents or actions of Seller or Seller's predecessors, either
collectively, individually or severally, which may form the basis of any claim,
action, suit, proceeding, hearing, or investigation, based on or related to the
disposal, storage, handling, manufacture, processing, distribution, use,
treatment or transport, or the emission, discharge, release or threatened
release into the environment, of any Substance. As used in this Section 3.11,
the term "Substance" or "Substances" shall mean any pollutant, hazardous
substance, hazardous material, hazardous waste or toxic waste, as defined in any
federal, state or local statute or any regulation that has been promulgated
pursuant thereto. No part of any of the Assets have been listed or proposed for
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listing on the National Priorities List established by the United States
Environmental Protection Agency, or any other such list by any federal, state or
local authorities.
SECTION 3.12 BROKERS. Seller represents and warrants that all
negotiations on behalf of Seller relative to this Agreement and the transactions
contemplated hereby have been carried on without the intervention of any broker
acting on its behalf, Seller hereby indemnifies Buyer and agrees to hold it
harmless against and in respect of any claim from anyone acting on Seller's
behalf for brokerage or other commissions relative to this Agreement and the
transactions contemplated hereby.
SECTION 3.13 REPRESENTATIONS AND WARRANTIES AS OF THE CLOSING DATE. All
of the representations and warranties of Seller set forth in this Agreement
shall be true and correct in all material respects at the Closing Date as if
made on the Closing Date. In the event of any change or event after date hereof
which would cause any representation or warranty to be untrue as of the Closing,
Seller shall supplement the Schedules to this Agreement prior to Closing. In the
event any such supplement to the Schedules involves a material adverse impact on
the Assets or the conduct of the business operations of Seller, Buyer may at its
option elect not to close and the parties shall have no further obligations
under this Agreement.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
SECTION 4.1 CORPORATE ORGANIZATION. Buyer is a corporation duly
organized, validly existing and in good standing as a domestic corporation under
the laws of the State of Tennessee and has all the requisite corporate power and
authority to perform its obligations under this
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Agreement and the other documents delivered pursuant hereto and to carryon its
business as now conducted.
SECTION 4.2 AUTHORIZATION, EXECUTION AND DELIVERY. The execution and
delivery of this Agreement by Buyer and the performance by it of the
transactions herein contemplated, have been, or will have been on the date this
Agreement is executed on behalf of Buyer, duly authorized and approved by the
Board of Directors of Buyer. No further corporate authorization with respect to
Buyer is or will be required.
SECTION 4.3 VALIDITY OF CONTEMPLATED TRANSACTIONS. Neither the
execution or delivery by Buyer of this Agreement nor the consummation of the
transactions contemplated hereby will in any material respect (i) contravene,
violate or result in the violation of any statute, law, ordinance, rule or
regulation to which Buyer is subject; (ii) contravene, violate or result in the
violation of any judgment, order, injunction, writ or decree of any court or any
government department, agency, instrumentality or authority which is applicable
to Buyer; and (iii) violate or conflict with any provision of any certificate of
incorporation or by-law of Buyer.
SECTION 4.4 BROKERS. Buyer represents and warrants that all
negotiations on behalf of Buyer relative to this Agreement and the transactions
contemplated hereby have been carried on without the intervention of any broker
acting on its behalf, Buyer hereby indemnifies Seller and agrees to hold it
harmless against and in respect of any claim from anyone acting on Buyer's
behalf for brokerage or other commissions relative to this Agreement and the
transactions contemplated hereby.
15
SECTION 4.5 REPRESENTATIONS AND WARRANTIES AS OF THE CLOSING DATE. All
of the representations and warranties of Buyer set forth on this Agreement shall
be true and correct in all material respects at the Closing Date as if made on
the Closing Date.
ARTICLE 5
CONDITIONS TO BUYER'S OBLIGATIONS
The obligation of Buyer to consummate the transactions contemplated
hereby is subject to the satisfaction, on or before the Closing Date, of the
following conditions, unless waived in writing by Buyer in its sole discretion:
SECTION 5.1 REPRESENTATIONS AND WARRANTIES. All of the representations
and warranties of Seller set forth in this Agreement shall be true and correct
in all material respects on the Closing Date.
SECTION 5.2 PERFORMANCE. Seller in all material respects shall have
performed and observed its obligations and covenants as set forth in this
Agreement prior to or on the Closing Date.
SECTION 5.3 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date,
there shall be no material adverse change in the Assets or to Seller's
operations on the Real Property, whether as a result of any revocation of any
Permit or rights to do business, fire, explosion, accident, casualty, labor
trouble, flood, drought, riot, storm, condemnation or act of God or other public
force or otherwise.
SECTION 5.4 CONSENTS. All consents of third parties required to be
received to prevent any Asset from terminating prior to its scheduled
termination, as a result of the consummation of the transactions contemplated
hereby, including, without limitation, all consents of the lessors
16
under the Leases, shall have been obtained by Buyer using its reasonable
efforts. Buyer shall use its reasonable efforts to obtain estoppel certificates
from the lessors under the Leases that there is no existing default by Seller
under any of the Leases, and no event has occurred which (whether with or
without notice, lapse of time or the occurrence of any other event) would
constitute a default by Seller under the Leases.
SECTION 5.5 NON-FOREIGN STATUS AFFIDAVIT. Buyer shall have received or
waived the affidavit of Seller certifying as to its non-foreign status in
accordance with section 1445(b)(2) of the Internal Revenue Code in form and
substance satisfactory to Buyer.
SECTION 5.6 NO ACTIONS, SUITS OR PROCEEDINGS. Except as shown on
Schedule 3.5(d), as of the Closing Date, no action, suit, investigation or
proceeding brought by any person, corporation, governmental agency or other
entity shall be pending or, to the best knowledge of Seller, threatened, before
any court or governmental body (i) to restrain, prohibit, restrict or delay, or
to obtain damages in respect of this Agreement or the consummation of the
transactions contemplated hereby, or (ii) which has had or may have a materially
adverse effect on the condition, financial or otherwise, or prospects of Seller.
No order, decree or judgment of any court or governmental body shall have been
issued restraining, prohibiting, restricting or delaying, the consummation of
the transactions contemplated by this Agreement. No insolvency proceeding of any
character including without limitation, bankruptcy, receivership,
reorganization, dissolution or arrangement with creditors, voluntary or
involuntary, affecting Seller shall be pending, and Seller shall not have taken
any action in contemplation of, or which would constitute the basis for, the
institution of any such proceedings.
17
SECTION 5.7 CLOSING DOCUMENTS. Seller shall have delivered at the
Closing all of the resolutions, certificates, documents and instruments required
by this Agreement.
SECTION 5.8 PURCHASE OF OTHER ASSETS. Buyer shall have entered into an
agreement with B&B Hauling and Sevenstar for the purchase of and closing on the
assets listed in Exhibit A and Exhibit B hereto, which closing shall be prior to
the Closing hereunder.
ARTICLE 6
CONDITIONS TO SELLER'S OBLIGATIONS
The obligation of Seller to consummate the transactions contemplated
hereby is subject to the satisfaction, on or before the Closing Date, of the
following conditions, unless waived in writing by Seller in its sole discretion:
SECTION 6.1 REPRESENTATIONS AND WARRANTIES. All of the representations
and warranties of Buyer set forth in this Agreement shall be true and correct in
all material respects on the Closing Date.
SECTION 6.2 PERFORMANCE. Buyer in all material respects shall have
performed and observed its obligations and covenants as set forth in this
Agreement prior to or on the Closing Date.
SECTION 6.3 NO ACTIONS, SUITS OR PROCEEDINGS. As of the Closing Date,
no action, suit, investigation or proceeding brought by any person, corporation,
governmental agency or other entity shall be pending or, to the best knowledge
of Buyer, threatened, before any court or governmental body to restrain,
prohibit, restrict or delay, or to obtain damages or a discovery order in
respect of this Agreement or the consummation of the transactions contemplated
hereby. No order, decree or judgment of any court or governmental body shall
have been issued
18
restraining, prohibiting, restricting or delaying, the consummation of the
transactions contemplated by this Agreement. No insolvency proceeding of any
character including without limitation, bankruptcy, receivership,
reorganization, dissolution or arrangement with creditors, voluntary or
involuntary, affecting Buyer shall be pending, and Buyer shall not have taken
any action in contemplation of, or which would constitute the basis for, the
institution of any such proceedings.
SECTION 6.4 CLOSING DOCUMENTS. Buyer shall have delivered at Closing
the Purchase Price and all of the resolutions, certificates, documents and
instruments required by this Agreement.
SECTION 6.5 BUYER'S PURCHASE OF OTHER ASSETS. Buyer shall have closed
with B&B Hauling and Sevenstar the purchase of the assets listed in Exhibit A
and Exhibit B hereto, which closing shall be prior to the Closing hereunder.
ARTICLE 7
CLOSING DELIVERIES
SECTION 7.1 DELIVERIES BY SELLER. At the Closing, Seller will deliver
the following:
(a) The Records (Buyer will be placed in possession as of the
release from escrow as provided in Section 7.3);
(b) The Escrow Agreement in the form attached hereto as
Exhibit C (the "Escrow Agreement");
(c) The affidavit of Seller certifying as to its non-foreign
status required by Section 5.5 above.
19
(d) A resolution of the shareholders of Seller approving this
Agreement and the consummation of the transactions hereunder;
(e) The following documents to be delivered to the Escrow
Agent under the Escrow Agreement:
(i) Xxxx of Sale (for equipment) - 1 original
(ii) Assignment and Assumption of Coal Lease
Agreement (Xxxxxxx) - 4 originals
(iii) Assignment and Assumption of Coal Lease and
Wheelage Agreement (Vanguard) - 3 originals
(iv) Assignment and Assumption of Wheelage Agreement
(Xxxxx) - 3 originals
(v) Memorandum of Assignment of Coal Lease Agreement
(Xxxxxxx) - 3 originals
(vi) Memorandum of Assignment of Coal Lease and
Wheelage Agreement (Vanguard) - 3 originals
(vii) Memorandum of Assignment of Wheelage Agreement
(Xxxxx) - 3 originals
(f) All other documents, instruments and writings required to
be delivered by Seller at or prior to the Closing Date pursuant to this
Agreement or otherwise required in connection herewith.
20
SECTION 7.2 DELIVERIES BY BUYER. At the Closing, Buyer will deliver the
following:
(a) The Purchase Price less any deposit paid prior to Closing
shall be delivered to the Escrow Agent;
(b) The Escrow Agreement signed and entered into by Buyer and
Escrow Agent;
(c) The following documents shall be delivered to the Escrow
Agent:
(i) Xxxx of Sale (for equipment) - 1 original
(ii) Assignment and Assumption of Coal Lease
Agreement (Xxxxxxx) - 4 originals
(iii) Assignment and Assumption of Coal Lease and
Wheelage Agreement (Vanguard) - 3 originals
(iv) Assignment and Assumption of Wheelage Agreement
(Xxxxx) - 3 originals
(v) Memorandum of Assignment of Coal Lease Agreement
(Xxxxxxx) - 3 originals
(vi) Memorandum of Assignment of Coal Lease and
Wheelage Agreement (Vanguard) - 3 originals
(vii) Memorandum of Assignment of Wheelage Agreement
(Xxxxx) - 3 originals
21
(viii) Assumption and Modification Agreement
(Xxxxxxx) - 3 originals
(ix) Acknowledgment, Subordination, Non-Disturbance
and Attornment Agreement (the "Acknowledgment and SNDA") - 3
originals
(d) All other documents, instruments and writings required to
be delivered by Buyer at or prior to the Closing Date pursuant to this Agreement
or otherwise required in connection herewith.
SECTION 7.3 RELEASE FROM ESCROW. The parties will at Closing deliver
the documents and funds necessary to consummate the Closing to the Escrow Agent
under the Escrow Agreement. In the event Permit 3116 and the related TDEC Permit
are not transferred to Buyer by the regulatory agency within fourteen (14) days
after the Closing, the Escrow Agent shall upon written demand from Seller or
Buyer after said date but prior to the transfer of Permit 3116 by the regulatory
agency, return all documents and/or funds to the party which delivered the
respective documents and/or funds as follows: the documents identified in
Sections 7.1(e)(i) - (vii) shall be returned to Seller, and the documents and
funds identified in Section 7.2(a) and 7.2(c)(iv) and (v) shall be returned to
Buyer and this Agreement shall be null and void and neither party shall have any
further obligation to the other. Upon delivery of such notice to the Escrow
Agent, Seller and Buyer shall immediately cause a withdrawal of the pending
Successor Permittee Application. Notwithstanding anything herein or in the
Escrow Agreement to the contrary, in the event Seller does not, through no fault
of Seller, consummate a sale of its other equipment to Xxxxxxx Machinery
Corporation under a Xxxx of Sale in the form of Exhibit D attached hereto prior
to or simultaneous with the release from escrow, Buyer agrees to purchase
22
such equipment on the same terms and conditions as Exhibit D, prior to or
simultaneous with the release from escrow, payment for which shall be in
immediately available funds.
SECTION 7.4 POST-CLOSING ASSISTANCE. From and after the Closing, upon
the request of either party, the other party hereto shall do, execute,
acknowledge and deliver all such further acts, assurances, deeds, assignments,
transfers, conveyances and other instruments and papers as may be reasonably
required or appropriate to carry out the transactions contemplated by this
Agreement. Seller shall be permitted to store Excluded Assets at the properties
of the Buyer at no cost to Seller for a period not to exceed thirty (30) days
following Closing, and Buyer will reasonably cooperate with Seller in the
relocation and/or sale of such Excluded Assets by Seller during the thirty (30)
day period following the Closing. After the Closing, at Seller's request and
expense, Buyer shall employ its best efforts to assist the Seller in obtaining
the full benefit of any and all Tax credits, Tax refunds and Tax benefits
related to all Taxes paid and all other matters related to Seller's business
prior to the Closing.
ARTICLE 8
SURVIVAL AND INDEMNIFICATION
SECTION 8.1 SURVIVAL. The representations, warranties and covenants in
this Agreement shall survive the purchase of the Assets contemplated hereby.
SECTION 8.2 INDEMNIFICATION BY SELLER. Seller shall indemnify, defend,
and hold Buyer, its officers, directors, employees, agents and contractors,
successors and assigns (the "Seller's Indemnitees"), harmless from, against and
with respect to any claim, liability, obligation, loss, damage, assessment,
judgment, cost and expense of any kind or character,
23
including but not limited to reasonable attorneys fees (the "Damages"), arising
out of or in any manner incident, relating or attributable to:
(a) Any inaccuracy in any representation or breach of any
warranty of Seller contained in this Agreement; and
(b) Any failure by Seller to perform or observe, or to have
performed or observed, in full, any covenant, agreement or condition to be
performed or observed by it under this Agreement or any of the documents
delivered in connection with this transaction.
SECTION 8.3 NOTICE TO SELLER, ETC. If any of the matters as to which
Seller's Indemnitees are entitled to receive indemnification under Section 8.2
may entail litigation with parties other than Seller, Seller shall be given
prompt notice thereof and shall have the right, at its expense, to appoint legal
counsel to consult with and remain advised by Buyer in any contest of a claim
with such other parties. To the extent requested by Buyer, Seller, at its
expense, shall cooperate with and assist Buyer, in any such contest. Buyer shall
have final authority to determine all matters in connection with any such
litigation or prospective litigation; provided, however, that Buyer shall not
settle any litigation involving a third party claim (and thereafter seek
indemnification from Seller) without the consent of Seller, which shall not be
unreasonably denied or delayed.
SECTION 8.4 INDEMNIFICATION BY BUYER. Buyer shall indemnify, defend,
and hold Seller, its officers, directors, employees, agents, contractors,
successors and assigns (the "Buyer's Indemnitees"), harmless from, against and
with respect to any claim, liability, obligation, loss, damage, assessment,
judgment, cost, fine, penalty, obligation and expense of any kind or character,
including but not limited to reasonable attorneys fees (the "Damages"),
24
irrespective of whether Permit 3116 is ever transferred or issued to Buyer,
arising out of or in any manner incident, relating or attributable to:
(a) Any inaccuracy in any representation or breach of warranty
of Buyer contained in this Agreement; and
(b) Any failure by Buyer to perform or observe, or to have
performed or observed, in full, any covenant, agreement or condition to be
performed or observed by it under this Agreement or any of the documents
delivered in connection with this transaction, including but not limited to the
Assumed Obligations.
SECTION 8.5 NOTICE TO BUYER, ETC. If any of the matters as to which
Buyer's Indemnitees are entitled to receive indemnification under Section 8.4
may entail litigation with parties other than Buyer, Buyer shall be given prompt
notice thereof and shall have the right, at its expense, to appoint legal
counsel to consult with and remain advised by Seller in any contest of a claim
with such other parties. To the extent requested by Seller, Buyer, at its
expense, shall cooperate with and assist Seller, in any such contest. Seller
shall have final authority to determine all matters in connection with any such
litigation or prospective litigation; provided, however, that Seller shall not
settle any litigation involving a third party claim (and thereafter seek
indemnification from Buyer) without the consent of Buyer, which consent shall
not be unreasonably denied or delayed.
SECTION 8.6 SURVIVAL OF INDEMNIFICATION. The obligations to indemnify
and hold harmless pursuant to this ARTICLE 8 shall survive the Closing.
25
ARTICLE 9
MISCELLANEOUS
SECTION 9.1 KNOWLEDGE OF SELLER. Any representation or warranty
contained in this Agreement expressly qualified by reference to the best
knowledge of Seller, shall be construed to mean matters within the actual
knowledge of Xxxxxx Clear and/or Xxxxxxx Clear.
SECTION 9.2 "MATERIAL" DEFINED. For purposes of this Agreement, an
event or circumstance shall be deemed to constitute or have a material adverse
change, material result or material effect if such event or circumstance would
result in a material adverse change, or have a material result or material
effect on the Assets or results of operations or the Real Property taken as a
whole.
SECTION 9.3 NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing, shall be addressed to the
receiving party's address set forth below or to such other address as a party
may designate by notice hereunder, and shall be either (i) delivered by hand,
(ii) made by telex, telecopy or facsimile transmission, (iii) sent by recognized
overnight courier, or (iv) sent by registered or certified mail, return receipt
requested, postage prepaid.
If to Buyer:
National Coal Corporation
000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxx X. Xxx
with a copy to:
Xxxxxxx X. Xxxx
000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
26
If to Seller:
Xxxxxx Clear Coal Corporation
P. O. Xxx 000
XxXxxxxxxx, Xxxxxxxxx 00000
ATTN: Xxxxxxx Clear
with a copy to:
Xxxxxx Clear and Xxxxxxx Clear
P. O. Xxx 000
XxXxxxxxxx, Xxxxxxxxx 00000
All notices, requests, consents and other communications hereunder shall be
deemed to have been given (i) if by hand, at the time of the delivery thereof to
the receiving party at the address of such party set forth above, (ii) if made
by telex, telecopy or facsimile transmission, at the time that receipt thereof
has been acknowledged by electronic confirmation or otherwise, (iii) if sent by
overnight courier, on the next business day following the day such notice is
delivered to the courier service, or (iv) if sent by registered or certified
mail, on the fifth business day following the day such mailing is sent.
SECTION 9.4 ENTIRE AGREEMENT. This Agreement, and the documents
referred herein or attached hereto embody the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof and
supersedes all prior oral or written agreements and understandings relating to
the subject matter hereof. No statement, representation, warranty; covenant or
agreement of any kind not expressly set forth herein shall affect, or be used to
interpret, change or restrict, the express terms and provisions of this
Agreement.
SECTION 9.5 MODIFICATIONS AND AMENDMENTS. The terms and provisions of
this Agreement may be modified or amended only by written agreement executed by
the parties hereto.
27
SECTION 9.6 .ASSIGNMENT. Neither this Agreement, nor any right
hereunder, may be assigned by either of the parties hereto without the prior
written consent of the other party. Provided, however, Buyer shall have the
right to assign this Agreement to any entity which is a corporate subsidiary or
corporate affiliate of Buyer but Buyer shall nevertheless remain liable for full
performance hereunder.
SECTION 9.7 PARTIES IN INTEREST. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto and their permitted
assigns, and nothing in this Agreement, express or implied, is intended to
confer upon any other person any rights or remedies of any nature whatsoever
under or by reason of this Agreement. Nothing in this Agreement shall be
construed to create any rights or obligations except among the parties hereto,
and no person or entity shall be regarded as a third-party beneficiary of this
Agreement.
SECTION 9.8 GOVERNING LAW. This Agreement and the rights and
obligations of the parties hereunder shall be construed in accordance with and
governed by the laws of the State of Tennessee.
SECTION 9.9 SEVERABILITY. In the event that any court of competent
jurisdiction shall finally determine that any provision, or any portion thereof,
contained in this Agreement shall be void or unenforceable in any respect, then
such provision shall be deemed limited to the extent that such court determines
it enforceable, and as so limited shall remain in full force and effect. In the
event that such court shall determine any such provision, or portion thereof,
wholly unenforceable, the remaining provisions of this Agreement shall
nevertheless remain in full force and effect.
28
SECTION 9.10 HEADINGS AND CAPTIONS. The headings and captions of the
various subdivisions of this Agreement are for convenience of reference only and
shall in no way modify, or affect, or be considered in construing or
interpreting the meaning or construction of any of the terms or provisions
hereof.
SECTION 9.11 EXPENSES. Each of the parties hereto shall pay its own
fees and expenses (including the fees of any attorneys, accountants, appraisers
or others engaged by such party) in connection with this Agreement and the
transactions contemplated hereby whether or not the transactions contemplated
hereby are consummated.
SECTION 9.12 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, and by different parties hereto on separate counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
SECTION 9.13 INTERPRETATION. This Agreement has been negotiated between
the parties with assistance of counsel, and in the event of any conflict or
ambiguity in the terms hereof, the rule of law, construction or interpretation
which requires that it be interpreted or construed against the drafter or
preparer shall not apply.
SECTION 9.14 SCHEDULES. All matters shown or identified on any Schedule
to this Agreement are incorporated in and made a part of all Schedules as if set
forth on each and all Schedules.
SECTION 9.15 TIME OF THE ESSENCE. Time is of the essence in the
performance of all this Agreement.
29
SECTION 9.16 FACSIMILE SIGNATURE. The parties may execute this
Agreement and the accompanying Letter of Intent and transmit a signed copy
thereof to the other party with the original to be forwarded by express delivery
service.
IN WITNESS WHEREOF, Buyer and Seller have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
SELLER:
XXXXXX CLEAR COAL CORPORATION
By: /s/ Xxxxxx Clear
---------------------------------
Title: President
---------------------------------
BUYER:
NATIONAL COAL CORPORATION
By: /S/ XXXXXXX XXXX
------------------------------------
Title: Xxxxxxx Xxxx, General Counsel
30
SCHEDULE 1.1(A)
LEASES
1. Coal Lease Agreement between RCCC and Xxxxxxx Land Company, Inc. dated
November 6, 2001.
2. Addendum to Coal Lease Agreement between RCCC and Xxxxxxx Land Company,
Inc. dated March 15, 2003.
3. Acknowledgement, Subordination, Non-Disturbance and Attornment
Agreement between RCCC and Xxxxxxx Land Company, Inc. and Bank of
Xxxxxx dated March 14, 2002.
4. Wheelage Agreement between RCCC and Xxxx Xxxxxxx Xxxxx/Xxxxxx Xxxxx
dated July 8, 2002.
5. Coal Lease/Wheelage Agreement between RCCC and Vanguard Investment
Properties, Inc. dated September 1, 2002.
SCHEDULE 1.1(B)
EQUIPMENT
EQUIPMENT SERIAL NUMBER AMOUNT
--------------------------------------------------------------------------------
2003 Crusher Plant/Tipple 155,000.00
1999 International Truck 0XXXXXXX0XX000000
1999 International Truck 0XXXXXXX0XX000000
1999 International Truck 0XXXXXXX0XX000000 150,000.00
--------------------------------------------------------------------------------
TOTAL 305,000.00
SCHEDULE 1.1(C)
PERMITS AND NONCOMPLIANCES (SEE ALSO SECTIONS 3.8 AND 3.9)
1. NPDES Permit #TN0076376 (the "TDEC Permit")
2. OSM Permit #3116
3. OSM Revisions:
a. #3/ Revise Drainage Control Plan for Xxx Xxxxxx Watershed
b. #4/ Incidental Boundary Revision
c. #5/ Redesignate 43.8 Acres of Unaffected Mine Management Area
and 68.7 Acres of Auger Mine Area as Surface Mine Area; Revise
Topsoil Handling Plan to Promote Reforestation.
d. #6/ Change Bonding Scheme from Standard to Incremental
4. OSM Violation:
a. NO3-090-171-004 issued 12-15-03 related to Revision #3
b. CO4-090-171-001 issued 1-14-04 related to Revision #3
c. NO4-090-171-004 issued 6-3-04 related to Revision #?
5. TDEC Violation:
a. 03-22 dated 12-2-2003 related to OSM Revision #3
b. 04-03 dated 1-16-2004 relates to chemical treatment and
directors order/agreed order
c. Directors Order 04-0038 dated 1-26-2004/ with Agreed Order on
7-20-2004
d. Agreed Order - Case No. 04-0038 / settled agreement 7-20-2004
e. Notice of Violation No. 04-49
SCHEDULE 1.3
ALLOCATION OF PURCHASE PRICE
1. Equipment $305,000.00
2. Lease Reserves under Permit $1,736,129.50
3. Unpermitted Lease Reserves $300,000.00
4. Other Leases $0.00
5. Permits $0.00
-----------------------
TOTAL $2,341,129.50
Less Reclamation Expense Credit - 100,000.00
-----------------------
$2,241,129.50
SCHEDULE 2.4(A)
BONDS
TYPE NUMBER AMOUNT DATE
---- ------ ------ ----
First National Bank of XxXxxxxxxx
Irrevocable Letter of Credit 581 $1,700,000 6/20/03
Collateral Bond N/A $1,700,000 6/24/03
First State Bank Irrevocable
Letter of Credit 500 $2,190,000 6/24/03
Collateral Bond N/A $2,190,000 6/24/03
SCHEDULE 3.2
ENCUMBRANCES, ADVERSE CLAIMS, ETC., AGAINST ASSETS
SECURED PARTY APPROXIMATE PAYOFF
------------- ------------------
1. Caterpillar Financial Services Corporation $1,528,789.98
2. Caterpillar Financial Services Corporation $108,455.62
3. Caterpillar Financial Services Corporation $273,186.53
4. Caterpillar Financial Services Corporation $678,092.12
5. First National Bank 119,934.18
NOTE:
(i) These payoffs will be updated at time of release of funds
from escrow as provided in Section 7.3.
(ii) These encumbrances will be paid in full and deducted from
the sales proceeds from Xxxxxxx Machinery Corporation under the Xxxx of Sale
Exhibit D.
SCHEDULE 3.3
CONSENTS
1. Xxxxxxx Land Company, Inc.
2. Vanguard Investment Properties, Inc.
3. Xxxx Xxxxxxx Xxxxx and Xxxxxx Xxxxx (Release of RCCC only -
consent not required.)
SCHEDULE 3.5(D)
ACTIONS, SUITS OR PROCEEDINGS
1. Save Our Cumberland, et al. x. Xxxxxx, et al., U. S. District
Court for the Eastern District of Tennessee, Case No.
3:03-CV-462.
2.
3.
SCHEDULE 3.8
VIOLATIONS OF LAWS AND ORDINANCES
1. OSM Violation:
a. NO3-090-171-004 issued 12-15-03 related to Revision
#3
b. CO4-090-171-001 issued 1-14-04 related to Revision #3
c. NO4-090-171-004 issued 6-3-04 related to Revision #?
2. TDEC Violation:
a. 03-22 dated 12-2-2003 related to OSM Revision #3
b. 04-03 dated 1-16-2004 relates to chemical treatment
and directors order/agreed order
c. Directors Order 04-0038 dated 1-26-2004/ with Agreed
Order on 7-20-2004
d. Agreed Order - Case No. 04-0038 / settled agreement
7-20-2004
e. Notice of Violation No. 04-49
EXHIBIT A
B & B HAULING
2002 Peterbilt Tractor New tires/1 month old
2004 Kenworth Tractor New tires/1 month old
1982 Mack
1985 Parts Truck
1977 Mechanic Truck w/compressor
2000 Xxxxxx Trailer
1985 Xxxxxx Trailer
1982 East Trailer
1984 East Trailer
Spare tires, rims, all stock and repair parts for Mack, Peterbilt, Kenworth and
trailers.
PACKAGE PRICE $290,000.00
EXHIBIT B
SEVENSTAR
1990 Mack tractor
1988 Mack tractor
1988 Mack tractor
1985 Mack tractor
1996 East Trailer
1977 Trailmobile Trailer
15 Speed Transmission (needs rebuilt)
20 Tires
20 rims
U-joints, wheels seals, wheel studs, wheel keepers, bearings, brakes,
filters - air, oil, fuel; lights, stabilizer bars, wheel spacers, air
regulators, races, fan belts.
History:
Rebuilt rear end in 1988 Xxxx, Xxxxx, 2004
Rebuilt rear end in 1988 Xxxx, May, 2004
New rebuilt transmission in 1990 Xxxx, Xxxx, 2004
New recap tires on 1988 Xxxx, May, 2004
New recap tires on 1990 Xxxx, Xxxx, 2004
New recap tires on 1996 East Trailer, May, 2004
New springs, trunion, saddles, bushings, complete suspension on 1985 Xxxx,
February, 2004
PACKAGE PRICE $186,000.00
