Exhibit 2.11
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ COAL COMPANY, LLC ("SELLER")
AND
WBRD LLC
("BUYER")
COVERING THE ACQUISITION OF
CERTAIN ASSETS OF ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ COAL COMPANY, LLC
April 9, 2003
TABLE OF CONTENTS
1. DEFINITIONS AND INTERPRETATIONS.................................................................. 1
1.1 Definitions................................................................................ 1
1.2 Interpretations............................................................................ 1
2. PURCHASE AND SALE OF ASSETS...................................................................... 1
2.1 Purchase and Sale.......................................................................... 1
2.2 Purchase Price............................................................................. 2
2.3 The Closing................................................................................ 2
2.4 Deliveries at the Closing.................................................................. 2
3. REPRESENTATIONS AND WARRANTIES CONCERNING THE TRANSACTION........................................ 3
3.1 Representations and Warranties Concerning Seller........................................... 3
3.2 Representations and Warranties of Buyer.................................................... 4
4. REPRESENTATIONS AND WARRANTIES CONCERNING THE ASSETS............................................. 5
4.1 Representations and Warranties Concerning the Assets....................................... 5
4.2 Limitations of Representations and Warranties.............................................. 8
5. PRE-CLOSING COVENANTS............................................................................ 8
5.1 Satisfaction of Conditions Precedent....................................................... 8
5.2 Notices and Consents....................................................................... 9
5.3 Operation of Business...................................................................... 9
5.4 Access to Information...................................................................... 9
5.5 Contact with Lessees, Customers and Vendors................................................ 10
5.6 Amendment of Disclosure Schedule........................................................... 10
6. POST-CLOSING COVENANTS........................................................................... 10
6.1 General.................................................................................... 10
6.2 Delivery and Retention of Records.......................................................... 10
7. CONDITIONS PRECEDENT............................................................................. 11
7.1 Conditions to Obligation of Buyer.......................................................... 11
7.2 Conditions to Obligation of Seller......................................................... 12
8. REMEDIES FOR BREACHES OF AGREEMENT............................................................... 14
8.1 Survival of Representations, Warranties and Certain Covenants.............................. 14
8.2 Indemnification Provisions for Benefit of Buyer............................................ 14
8.3 Indemnification Provisions for Benefit of Seller........................................... 15
8.4 Matters Involving Third Parties............................................................ 15
8.5 Determination of Amount of Adverse Consequences............................................ 16
8.6 Tax Treatment of Indemnity Payments........................................................ 16
9. TAX MATTERS...................................................................................... 16
9.1 Post-Closing Tax Returns................................................................... 16
9.2 Pre-Closing Tax Returns.................................................................... 16
9.3 Prorated Ad Valorem Taxes.................................................................. 16
9.4 Claims for Refund.......................................................................... 17
9.5 Cooperation on Tax Matters................................................................. 17
9.6 Certain Taxes.............................................................................. 17
9.7 Confidentiality............................................................................ 17
9.8 Audits..................................................................................... 17
9.9 Control of Proceedings...................................................................... 18
9.10 Powers of Attorney.......................................................................... 18
9.11 Remittance of Refunds....................................................................... 18
9.12 Purchase Price Allocation................................................................... 18
9.13 Closing Tax Certificate..................................................................... 19
10. TERMINATION OF AGREEMENT.......................................................................... 19
10.1 Termination of Agreement.................................................................... 19
10.2 Effect of Termination....................................................................... 19
11. MISCELLANEOUS..................................................................................... 20
11.1 Insurance................................................................................... 20
11.2 Press Releases and Public Announcements..................................................... 20
11.3 No Third Party Beneficiaries................................................................ 20
11.4 Succession and Assignment................................................................... 20
11.5 Counterparts................................................................................ 21
11.6 Notices..................................................................................... 21
11.7 Governing Law............................................................................... 22
11.8 Entire Agreement............................................................................ 22
11.9 Severability................................................................................ 22
11.10 Transaction Expenses..................................................................... 22
EXHIBITS
EXHIBIT A: DEFINITIONS AND INTERPRETATIONS
EXHIBIT B: FORM OF CONVEYANCE DEED
EXHIBIT C: FORM OF LEASE AGREEMENT
EXHIBIT D: DISCLOSURE SCHEDULE
EXHIBIT E: FORM OF LEGAL OPINIONS
EXHIBIT F: FORM OF ▇▇▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇ AGREEMENT
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") dated as of April 9,
2003 is by and between (1) ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ COAL COMPANY, LLC, a Delaware
limited liability company ("Seller"), and (2) WBRD LLC, a Delaware limited
liability company, (the "Buyer"). Seller and Buyer are sometimes referred to
collectively herein as the "Parties" and individually as a "Party."
RECITALS
WHEREAS, Seller owns certain coal reserves and related mining rights in
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ Counties, Virginia; and
WHEREAS, all of Seller's limited liability company membership interest is
held directly or indirectly by Alpha Natural Resources, LLC, ("Alpha");
WHEREAS, this Agreement contemplates a financing transaction in which (i)
Buyer will purchase from Seller, and Seller will sell, certain of its rights,
title and interests in and to such coal reserves in return for the consideration
specified in this Agreement, and (ii) Seller will lease such coal reserves back
from Buyer as provided in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual promises
made in this Agreement, and in consideration of the representations, warranties,
and covenants contained in this Agreement, the Parties agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
1.1 Definitions. Unless otherwise provided to the contrary in this
Agreement, capitalized terms in this Agreement shall have the meanings set forth
in Section 1.1 of Exhibit A.
1.2 Interpretations. Unless expressly provided to the contrary in this
Agreement, this Agreement shall be interpreted in accordance with the provisions
set forth in Section 1.2 of Exhibit A.
ARTICLE II
PURCHASE AND SALE OF ASSETS
2.1 Purchase and Sale. On the terms and subject to the conditions of
this Agreement, Seller agrees to sell to Buyer, and Buyer agrees to purchase
from Seller, all of Seller's right, title and interest in (i) the coal reserves
and related mining rights more specifically described in the real property
descriptions included in Exhibit B and (ii) the files, data, information and
records relating to the coal reserves being conveyed (the
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"Records") (all of which are collectively referred to as the "Assets"). For
avoidance of doubt, the Assets shall not include any of the following: (a) the
inventories owned by Seller (including inventories of extracted coal and other
raw materials and supplies) that are located on or are in transit to the mining
or processing sites of Seller (although Buyer shall receive all royalty
attributable to such inventory, to the extent such coal is sold after April 1,
2003); (b) real property surface rights or interests except as listed in Exhibit
B, preparation plants, buildings, infrastructure, machinery, equipment,
vehicles, furniture, supplies, replacement parts, tools and any other tangible
personal property that are located on or are in transit to the mining or
processing sites of Seller; (c) any governmental licenses or permits relating to
the Assets or the operation of the business of Seller or any of its Affiliates;
and (d) any accounts, accounts receivable, notes and notes receivable,
reclamation and performance bonds, deposit, pre-paid rentals and royalties, cash
and cash equivalents and other securities and instruments.
2.2 Purchase Price. In consideration for the sale of the Assets, Buyer
agrees to pay to Seller at the Closing $13,625,000 (the "Purchase Price")
payable by wire transfer of immediately available funds as allocated pursuant to
Section 9.12 hereof to the following account:
PNC Bank
Pittsburgh, PA
ABA#: ▇▇▇▇▇▇▇▇▇
Account to Credit: 1017286716
Account Name: Alpha Natural Resources, LLC Concentration Account
2.3 The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place via facsimile delivery of documents
and receipt of documents previously sent by overnight courier service commencing
at 10:00 a.m. (Eastern time) on the second business day following the
satisfaction or waiver of all conditions to the obligations of the Parties to
consummate the transactions contemplated by this Agreement (other than
conditions with respect to actions each Party will take at the Closing itself),
or such other date as the Parties may mutually determine (the "Closing Date").
All of the deliveries of documents that are contemplated by this Agreement to be
made at the Closing shall be delivered to the applicable Party by (i) overnight
courier service for delivery on the Closing Date or (ii), if delivery by
overnight courier service on the Closing Date is not practicable, then by
facsimile on the Closing Date, with original executed documents delivered on the
next succeeding business day. Any documents to be delivered to a Party on the
Closing Date will be delivered and held in escrow until the Parties communicate
via telephone to confirm delivery of all documents and consummation of all other
actions contemplated by this Article II.
2.4 Deliveries at the Closing. At the Closing, (a) Seller will deliver
to Buyer the various certificates, instruments, and documents referred to in
Section 7.l, (b) Buyer will deliver to Seller the various certificates,
instruments, and documents referred to in Section 7.2, (c) Seller will execute
and deliver to Buyer a deed substantially in the form attached as Exhibit B that
conveys the Assets other than the Records, (d) Seller and
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Buyer shall execute a mutually agreeable ▇▇▇▇ of sale conveying the Records, (e)
Seller will execute and deliver to Buyer, and Buyer will execute and deliver to
Seller, the Lease Agreement substantially in the form attached as Exhibit C with
regard to the lease of the Assets to Buyer for the purpose of mining, processing
and transporting coal, (f) Buyer and Seller will enter into a right of first
refusal agreement in the form of Exhibit F, and (g) Buyer will pay the Purchase
Price by wire transfer to Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES CONCERNING
THE TRANSACTION
3.1 Representations and Warranties Concerning Seller. Except as set
forth in the Disclosure Schedule set forth as Exhibit D, Seller represents and
warrants to Buyer, but only as to itself, as follows:
(a) Organization of Seller. Seller is a limited liability company
that is duly organized, validly existing, and in good standing under the Laws of
the state of Delaware, the entire limited liability company membership interest
of which is held directly or indirectly by Alpha. Seller is duly qualified and
in good standing to do business in each jurisdiction in which the nature of the
business conducted by it or the ownership or leasing of its properties makes
such qualification necessary, except where the failure to qualify would not have
a material adverse effect on Seller or its ability to consummate the
transactions contemplated by this Agreement.
(b) Authorization of Transaction. Seller has full power and
authority (including full company power and authority) to execute and deliver
this Agreement and to perform its obligations under this Agreement and each
other agreement or instrument to which it is a party in connection with this
Agreement. This Agreement and all other agreements or instruments executed and
delivered by Seller pursuant to this Agreement constitute the valid and legally
binding obligation of Seller enforceable in accordance with its terms and
conditions, subject, however, to the effects of bankruptcy, insolvency,
reorganization, moratorium or similar Laws affecting creditors' rights
generally, and to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). Seller need
not give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any Governmental Authority in order to consummate the
transactions contemplated by this Agreement.
(c) Noncontravention. Neither the execution and delivery of this
Agreement or any other agreement or instrument to which it is a party executed
in connection with this Agreement or delivered pursuant to this Agreement, nor
the consummation of the transactions contemplated hereby, will (i) violate any
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any Governmental Authority to which Seller is subject or
any provision of its Organizational Documents or (ii) conflict with, result in a
breach of, constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license,
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instrument, or other arrangement to which Seller is a party or by which it is
bound or to which any of its assets is subject, except for (x) required consents
to transfer and related provisions as set forth in Section 3.l(c) of the
Disclosure Schedule, (y) any other third-party approvals or consents
contemplated in this Agreement; and (z) such violations, defaults, breaches, or
other occurrences that do not have a Material Adverse Effect on the ability of
Seller to consummate the transactions contemplated by this Agreement.
(d) Brokers' Fees. Neither Seller nor its Affiliates have any
liability or obligation to pay any fees or commissions to any broker, finder, or
agent with respect to the transactions contemplated by this Agreement for which
Buyer or its Affiliates could become liable or obligated.
(e) Solvency. As of the date of this Agreement, and after
consummation of the transactions contemplated by this Agreement, Seller is not
insolvent or unable to pay its debts or has made a general assignment with or
for the benefit of its creditors, and no proceeding under any bankruptcy,
insolvency or reorganization law has been commenced by or with respect to
Seller.
3.2 Representations and Warranties of Buyer. Buyer hereby represents and
warrants to Seller as follows:
(a) Organization of Buyer. Buyer is a limited liability company
duly organized, validly existing, and in good standing under the Laws of the
state of Delaware.
(b) Authorization of Transaction. Buyer has full power and
authority (including full company power and authority) to execute and deliver
this Agreement and to perform its obligations under this Agreement and each
other agreement or instrument to which it is a party in connection with this
Agreement. This Agreement and all other agreements or instruments executed and
delivered by Seller pursuant to this Agreement constitutes the valid and legally
binding obligation of Buyer, enforceable in accordance with its terms and
conditions, subject, however, to the effects of bankruptcy, insolvency,
reorganization, moratorium, or similar Laws affecting creditors' rights
generally and to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). Buyer need
not give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any Governmental Authority in order to consummate the
transactions contemplated by this Agreement.
(c) Noncontravention. Neither the execution and delivery of this
Agreement or any other agreement or instrument to which it is a party executed
in connection with this Agreement or delivered pursuant to this Agreement, nor
the consummation of the transactions contemplated hereby, will (i) violate any
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any Governmental Authority to which Buyer is subject or
any provision of its Organizational Documents or (ii) conflict with, result in a
breach of, constitute a default under, result in the acceleration of, create in
any Party the right to accelerate, terminate, modify, or cancel, or require any
notice, approval or consent under any agreement,
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contract, lease, license, instrument, or other arrangement to which Buyer is a
party or by which it is bound or to which any of its assets is subject, except
for such violations, defaults, breaches, or other occurrences that do not,
individually or in the aggregate, have a material adverse effect on the ability
of Buyer to consummate the transactions contemplated by this Agreement.
(d) Brokers' Fees. Buyer has no liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which Seller or its Affiliates
could become liable or obligated.
(e) Financing. Buyer has sufficient immediately available funds to
enable it to make payment of the Purchase Price at Closing without encumbrance
or delay and without causing Buyer to become insolvent or to declare insolvency.
Buyer expressly acknowledges that, in executing this Agreement, Seller is
relying on Buyer's representation with regard to the availability of the
necessary funds for the payment of the Purchase Price upon Closing and that
there is no condition precedent under this Agreement with regard to Buyer's
ability to obtain financing.
(f) Seller's Breach of Representation or Warranty. To Buyer's
Knowledge as of the date of this Agreement, there is no fact or circumstance
that would cause Seller to be in breach of any representation or warranty set
forth in this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES CONCERNING
THE ASSETS
4.1 Representations and Warranties Concerning the Assets. Except as set
forth in the Disclosure Schedule set forth as Exhibit D, Seller represents and
warrants to Buyer as follows:
(a) Title to the Assets. To Seller's Knowledge, the Assets are
free and clear of all Encumbrances, except for (i) Permitted Encumbrances, (ii)
the Encumbrances disclosed in the Disclosure Schedule and (iii) Encumbrances
which do not have a Material Adverse Effect. Seller has delivered or made
available to Buyer all material title reports, title insurance policies, title
commitments, title opinions and title abstracts relating to the Assets (the
"Title Information") which are in the possession and control of Seller. To
Seller's Knowledge, all Title Information is true and accurate except to the
extent such inaccuracy would not have a Material Adverse Effect or as set forth
in the Disclosure Schedule.
(b) No Adverse Claims. To Seller's Knowledge, there are no adverse
claims to any of the Assets, except for (i) Permitted Encumbrances, (ii) those
claims which would not have a Material Adverse Effect, and (iii) those claims
disclosed in the Disclosure Schedule. There are no eminent domain, zoning or
condemnation proceedings pending, or to Seller's Knowledge, threatened against
any of Assets, except such
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proceedings that would not have a Material Adverse Effect.
(c) [Intentionally omitted.]
(d) Material Change. To Seller's Knowledge, since December 13,
2002, there has been no Material Adverse Effect.
(e) Tax Matters. Except as would not have a Material Adverse
Effect:
(i) There is no dispute or claim concerning any Tax
liability with respect to the Assets claimed or raised by any authority in
writing.
(ii) There are no outstanding agreements or waivers extending
the statutory period of limitations applicable to any Tax Returns required to be
filed by or with respect to the Assets and for which Buyer may be responsible.
(iii) Seller or its Affiliates has filed all Tax Returns with
respect to the Assets that it was required to file and such Tax Returns (with
respect to the Assets) are accurate in all respects. All Taxes shown as due with
respect to the Assets on any such Tax Returns have been paid.
(iv) To Seller's Knowledge, no special assessments for
improvements are outstanding or have been completed as of the date of this
Agreement and all currently due ad valorem taxes have been paid.
(f) Litigation. Section 4.l(f) of the Disclosure Schedule sets
forth each instance in which any of the Assets (i) is subject to any outstanding
injunction, judgment, order, decree, ruling, or charge, or (ii) is the subject
of any action, suit, proceeding, hearing, or investigation of, in, or before any
court or quasi-judicial or administrative agency of any federal, state, local,
or foreign jurisdiction, or is the subject of any pending or, to Seller's
Knowledge, threatened claim, demand, or notice of violation or liability from
any Person, except where any of the foregoing would not have a Material Adverse
Effect.
(g) Environmental Matters. To Seller's Knowledge:
(i) With respect to the Assets, Seller is in
compliance with all applicable federal, state and local Laws (including common
law) relating to the protection of the environment as in effect on or before the
date of this Agreement, including, without limitation, the Surface Mining
Control and Reclamation Act of 1977, 30 U.S.C. section 1201 et seq., the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended, 42 U.S.C. section 9601, et seq. ("CERCLA"), the Resource
Conservation and Recovery Act of 1976, as amended, 42 U.S.C. section 6901, et
seq., the Clean Air Act, as amended, 42 U.S.C. section 7401, et seq., the
Federal Water Pollution Control Act, as amended, 33 W.S.C. section 1251, et
seq., and the Oil Pollution Act of 1990, 33 U.S.C. section 2701, et seq. and the
statutes,
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regulations, rules and orders of all agencies responsible for supervision and
enforcement of environmental and mining laws of Virginia (collectively, the
"Environmental Laws" and individually an "Environmental Law"), except as set
forth in Section 4.l(g) of the Disclosure Schedule, and except for such
instances of noncompliance that do not have a Material Adverse Effect.
(ii) With respect to the Assets, Seller has obtained
all permits, licenses, franchises, authorities, consents, and approvals, and has
made all filings and maintained all material information, documentation, and
records, as necessary under applicable Environmental Laws for operating its
assets and business as it is presently conducted, and all such permits,
licenses, franchises, authorities, consents, approvals, and filings remain in
full force and effect, except as set forth in Section 4.l(g) of the Disclosure
Schedule, and except for such matters that do not have a Material Adverse
Effect.
(iii) Except as set forth in Section 4.l(g) of the
Disclosure Schedule, and except as does not have a Material Adverse Effect, (A)
there are no pending or, to Seller's Knowledge, threatened claims, demands,
actions, administrative proceedings or lawsuits against it, with respect to the
Assets under any Environmental Laws, and Seller has no Knowledge (without any
obligation of due inquiry) of facts which would give rise to the same and (B)
none of the Assets are, subject to any outstanding injunction, judgment, order,
decree or ruling, under any Environmental Laws.
(iv) Seller has not received any written notice with
respect to the Assets that it is or may be a potentially responsible party under
CERCLA or any analogous state law in connection with any site actually or
allegedly containing or used for the treatment, storage or disposal of Hazardous
Substances.
For the avoidance of doubt, Seller makes no representation or warranty
relating to any Environmental Law except as expressly set forth in this Section
4.l(g).
(h) Noncontravention. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any Governmental Authority to which the
Assets or Seller is subject or (ii) to Seller's Knowledge, conflict with, result
in a breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or cancel, or
require any notice or trigger any rights to payment or other compensation under
any agreement, contract, lease, license, instrument, or other arrangement to
which any Asset is subject, except for (x) required consents to transfer and
related provisions and any other third party appraisals or consents contemplated
in this Agreement or (y) where the violation, conflict, breach, default,
acceleration, termination, modification, cancellation, failure to give notice,
right to payment or other compensation, or Encumbrance would not have a Material
Adverse Effect, or would not materially adversely affect the ability of Seller
to consummate the transactions
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contemplated by this Agreement. Seller needs to give no notice to, make any
filing with, or obtain any authorization, consent, or approval of any
Governmental Authority in order for the Parties to consummate the transactions
contemplated by this Agreement, except where the failure to give notice, to
file, or to obtain any authorization, consent, or approval would not have a
Material Adverse Effect or would not materially adversely affect the ability of
Seller to consummate the transactions contemplated by this Agreement.
4.2 Limitations of Representations and Warranties. The following
limitations apply with regard to any representations and warranties by Seller:
(a) Buyer acknowledges that (i) it has had and pursuant to this
Agreement will have before Closing access to Seller, the Assets, and the
officers and employees of Seller, and (ii) in making the decision to enter into
this Agreement and consummate the transactions contemplated hereby, Buyer has
relied solely on the basis of its own independent investigation and upon the
express representations, warranties, covenants, and agreements set forth in this
Agreement. Without limiting the above, Buyer has, prior to the execution and
delivery of this Agreement, (i) reviewed the environmental site assessments
available to Seller with respect to the Assets that were provided to Buyer and
are more fully described in Section 4.2 of the Disclosure Schedule, (ii) had
full opportunity to conduct to its satisfaction inspections of the Assets, and
(iii) fully completed all inspections of the Assets. Buyer acknowledges, after
such review and inspections, that no further investigation of the Assets is
necessary for purposes of acquiring the Assets for Buyer's intended use. BUYER
ACKNOWLEDGES THAT THERE ARE NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT.
(b) WITHOUT LIMITING THE ABOVE, NOTWITHSTANDING ANYTHING TO THE
CONTRARY IN THIS AGREEMENT, SELLER MAKES NO, AND DISCLAIMS ANY, REPRESENTATION
OR WARRANTY, WHETHER EXPRESS OR IMPLIED, AND WHETHER BY COMMON LAW, STATUTE, OR
OTHERWISE REGARDING ALL GEOLOGICAL DATA, RESERVE OR RESOURCE DATA, SUFFICIENCY
OF MINING RIGHTS (EXCEPT AS EXPRESSLY SET FORTH IN SECTION 4.l(a) ABOVE),
PROCESSING CAPABILITIES OF THE ASSETS, MINEABILITY OF COAL, QUALITY OF COAL
RESERVES AND INVENTORIES. THE ACREAGES OF THE REAL PROPERTY SET FORTH IN THIS
AGREEMENT ARE APPROXIMATIONS AND ANY REPRESENTATION OR WARRANTY WITH RESPECT
THERETO IS DISCLAIMED.
ARTICLE V
PRE-CLOSING COVENANTS
5.1 Satisfaction of Conditions Precedent. From the date of this
Agreement until the earlier of the Closing Date or the termination of this
Agreement, each Party will use all commercially reasonable efforts to take all
action and to do all things necessary, proper, or advisable in order to
consummate and make effective the transactions
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contemplated by this Agreement, including without limitation the satisfaction of
the conditions precedent set forth in Article VII. Without limiting the
generality of the foregoing, Buyer and Seller agree to cooperate to take all
commercially reasonable actions to satisfy the conditions precedent and
consummate the transactions contemplated under this Agreement not later than
April 15, 2003.
5.2 Notices and Consents. From the date of this Agreement until the
earlier of the Closing Date or the termination of this Agreement, Seller will
give any notices to third parties, and will use its commercially reasonable
efforts to obtain the third party consents, listed on Section 5.2 of the
Disclosure Schedule. Each of the Parties will give any notices to, make any
filings with, and use all commercially reasonable efforts to obtain any
authorizations, consents, and approvals of Governmental Authorities.
5.3 Operation of Business. From the date of this Agreement until the
earlier of the Closing Date or the termination of this Agreement, Seller will
not, without the consent of Buyer (which consent shall not be unreasonably
withheld or delayed), except as expressly contemplated by this Agreement or
Section 5.3 of the Disclosure Schedule, engage in any practice, take any action,
or enter into any transaction, each solely with respect to the Assets, outside
the Ordinary Course of Business. Without limiting the generality of the
foregoing, Seller will not, without the consent of Buyer (which consent shall
not be unreasonably withheld, delayed or conditioned), except as expressly
contemplated by this Agreement or as set forth in Section 5.3 of the Disclosure
Schedule, do any of the following:
(a) cause or allow any of the Assets to become subject to an
Encumbrance, except for Permitted Encumbrances and other Encumbrances identified
in Section 5.3(a) of the Disclosure Schedule; or
(b) except in the Ordinary Course of Business, amend in any
material respect, or terminate any material agreement, contract, lease, license
or other instrument affecting or related to the Assets before the expiration of
the term thereof, other than to the extent any of them terminate or are
terminable pursuant to their respective terms in the Ordinary Course of
Business.
5.4 Access to Information. Seller will permit representatives of Buyer
to have reasonable access at all reasonable times, and in a manner so as not to
interfere with the normal business operations of Seller to all premises,
properties, personnel, books, records (including Tax records), contracts, and
documents of or pertaining to the Assets. Any information obtained by Buyer, its
employees, representatives, consultants, attorneys, agents, lender is and other
advisors under this Section 5.4 shall be subject to the confidentiality and use
restrictions contained in the Confidentiality Agreement. All "due diligence"
activities of Buyer shall be conducted in accordance with applicable Laws and
Buyer shall indemnify Seller and its Affiliates from and against all damages,
losses and liabilities incurred as a result of such activities. During the
period prior to Closing, in no event shall Buyer or its Affiliates or their
respective officers, directors, employees, counsel, financial advisors or other
representatives be permitted to conduct Phase II
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environmental assessments or any other sampling or testing of soil and/or ground
or surface water at, or under, any real property associated with the Assets,
without the prior written consent of Seller, which consent shall not be
unreasonably withheld or delayed.
5.5 Contact with Lessees, Customers and Vendors. Buyer shall not, prior
to the Closing Date, contact any lessee, customer, vendor, supplier or employee
of, or any other Person having business dealings with, Seller or its Affiliates
with respect to any aspect of the Assets or the transactions contemplated
hereby, without the prior consent of Seller, which consent shall not be
unreasonably withheld or delayed.
5.6 Amendment of Disclosure Schedule. Each Party agrees that, with
respect to the representations and warranties of such Party contained in this
Agreement, such Party shall have the continuing obligation until the Closing to
supplement or amend the Disclosure Schedule applicable to that Party with
respect to any matter hereafter arising or discovered which, if existing or
known at the date of this Agreement, would have been required to be set forth or
described in the Disclosure Schedule. For the purposes of determining whether
the conditions set forth in Article VII have been fulfilled, the Disclosure
Schedule shall be deemed to include only that information contained therein on
the date of this Agreement and shall be deemed to exclude all information
contained in any supplement or amendment thereto. However, if the Closing shall
occur, then all matters disclosed pursuant to any such supplement or amendment
at or prior to the Closing shall be deemed included in the Disclosure Schedule,
and no Party shall be entitled to make a claim for Indemnification under this
Agreement with regard to such supplemental information based on the absence of
any such supplemental information in the Disclosure Schedule as of the date of
this Agreement, pursuant to the terms of this Agreement.
ARTICLE VI
POST-CLOSING COVENANTS
6.1 General. In case at any time after the Closing any further action is
necessary to carry out the purposes of this Agreement, each of the Parties will
take such further action (including the execution and delivery of such further
instruments and documents) as the other Party reasonably may request, all at the
sole cost and expense of the requesting Party (unless the requesting Party is
entitled to indemnification therefor under Article VIII).
6.2 Delivery and Retention of Records. Promptly after the Closing,
Seller shall provide access to Buyer on reasonable advance notice to all Records
in the possession of Seller, it being understood by Buyer and Seller that (i)
certain of the Records are in the possession of other Persons and (ii) Buyer
shall have such rights and obligations with respect to the records as Seller
has, and Seller represents that it has the right of immediate access during
regular business hours to the Records while still in the possession of such
third party and has the right to make copies thereof at its own expense. On or
before time to be mutually agreed upon by Buyer and Seller, at Buyer's request,
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Seller will use commercially reasonable efforts to cause the Records to be made
available to Buyer at a mutually agreeable location. Upon actual delivery of the
Records to Buyer (and their successors and assigns), Seller may retain a copy of
the Records to the extent that they relate to the operation of its business.
Buyer agrees to: (a) hold the Records and not to destroy or dispose of any
portion thereof for a period of ten years from the Closing Date or such longer
time as may be required by Law, provided that, if it desires to destroy or
dispose of such Records during such period, it will first offer in writing at
least sixty (60) days before such destruction or disposition to surrender them
to Seller and if Seller does not accept such offer within twenty (20) days after
receipt of such offer, Buyer may take such action; and (b) following the Closing
Date to afford (i) Seller, (ii) Seller's successors and assigns, and (iii) any
of their accountants, and counsel, during normal business hours, upon reasonable
request, at any time, full access to the Records and to Buyer's employees at no
cost to Seller (other than for reasonable out-of-pocket expenses); provided that
such access will not be construed to require the disclosure of Records that
would cause the waiver of any attorney-client, work product or like privilege;
provided, further, that in the event of any litigation nothing herein shall
limit any Party's rights of discovery under applicable Law. Nothing herein shall
impose any liability upon Buyer in the event of destruction or loss of any
Records as a result of casualty. Buyer agrees to provide Seller and its
successors and assigns to the interests in Seller and their Affiliates involved
in the coal mining business reasonable access to the Records after the Closing
Date in order for Seller to comply with their obligations under this Agreement
(including without limitation, the preparation of any required tax returns in
accordance with this Agreement and to comply with any indemnity obligations),
and to conduct any historical audit of the financial statements of Alpha or its
Affiliates in accordance with generally accepted accounting principles and in
accordance with Regulation S-X of the Securities and Exchange Commission.
ARTICLE VII
CONDITIONS PRECEDENT
7.1 Conditions to Obligation of Buyer. The obligation of Buyer to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(a) the representations and warranties of Seller contained in
Section 3.1 and Article IV and in any document to be delivered in connection
with this Agreement shall be true and correct when made and as of the Closing
Date (other than representations and warranties that are made as of a specific
date which shall have been true and correct as of such date), except to the
extent that any failures of such representations and warranties to be so true
and correct would not have a Material Adverse Effect; provided, however, that if
any representation and warranty of Seller is determined to be untrue or
incorrect prior to the Closing Date and such failure of such representation and
warranty to be so true and correct would have a Material Adverse Effect, then
Buyer shall notify Seller upon such determination, and Seller shall have the
right, but not the obligation, to cure such failure on or before the Closing
Date, in which
11
case, if cured, such failure shall be deemed to have been waived;
(b) Seller shall have performed and complied with all of its
covenants hereunder through the Closing except to the extent that any failure to
perform or comply would not have a Material Adverse Effect;
(c) there shall not be any injunction, judgment, order, decree,
ruling, or charge in effect preventing consummation of any of the transactions
contemplated by this Agreement;
(d) Seller shall have delivered to Buyer an officer's certificate
to the effect that each of the conditions specified in subsections 7.l(a)-(c) is
satisfied in all respects;
(e) any Governmental Approvals required to consummate the
transactions contemplated by this Agreement shall have been received;
(f) the transactions contemplated by that certain Purchase and
Sale Agreement of even date between CSTL LLC, a Delaware limited liability
company, and Alpha Land and Reserves, LLC, a Delaware limited liability company,
shall have consummated; and
(g) Seller shall have delivered to Buyer an opinion of Bartlit
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, or such other counsel to Seller that is
reasonably acceptable to Buyer, substantially in the form attached as Exhibit E,
with such qualifications and assumptions as shall be customary for opinion
letters covering such matters.
(h) Seller shall have delivered to Buyer evidence reasonably
satisfactory to Buyer from (i) Travelers Casualty and Surety Company of America
consenting to the transactions contemplated by this Agreement and (ii) PNC Bank,
National Association, as agent, consenting to the transactions contemplated by
this Agreement under that certain Credit Agreement, dated as of March 11, 2003,
to which Seller and others is a party.
(i) Seller shall have delivered to Buyer a consent reasonably
satisfactory to Buyer from Pittston Coal Company to permit Buyer to have the
same access that Seller has to the Records in the possession of Pittston Coal
Company.
Buyer may waive any condition specified in this Section 7.1 if it executes a
writing so stating at or before the Closing.
7.2 Conditions to Obligation of Seller. The obligation of Seller to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(a) the representations and warranties of Buyer contained in
Section
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3.2 and in any document to be delivered in connection with this Agreement shall
be true and correct when made and as of the Closing Date (other than
representations and warranties that are made as of a specific date which shall
have been true and correct as of such date), except to the extent that any
failures of such representations and warranties to be so true and correct would
not have a material adverse effect on Seller; provided, however, that if any
representation and warranty of Buyer is determined to be untrue or incorrect
prior to the Closing Date and such failure of such representation and warranty
to be so true and correct would have a Material Adverse Effect, then Seller
shall notify Buyer upon such determination, and Buyer shall have the right, but
not the obligation, to cure such failure on or before the Closing Date, in which
case, if cured, such failure shall be deemed to have been waived;
(b) Buyer shall have performed and complied with all of its
covenants hereunder through the Closing except to the extent any failure to
perform or comply would not have a Material Adverse Effect on Seller;
(c) there shall not be any injunction, judgment, order, decree,
ruling, or charge in effect preventing consummation of any of the transactions
contemplated by this Agreement;
(d) Buyer shall have delivered to Seller a certificate to the
effect that each of the conditions specified in subsections 7.2(a)-(c) is
satisfied in all respects;
(e) any Governmental Approvals required to consummate the
transactions contemplated by this Agreement shall have been received;
(f) all third party consents required to effectuate the
transaction under this Agreement have been received by Seller on terms
acceptable to it, in its sole discretion;
(g) the transactions contemplated by that certain Purchase and
Sale Agreement of even date between CSTL LLC, a Delaware limited liability
company, and Alpha Land and Reserves, LLC, a Delaware limited liability company
shall have consummated; and
(h) Buyer shall have delivered to Seller an opinion of the law
firm of Huddleston, Bolen, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP (relying to the extent
deemed necessary by such counsel on the opinion of Delaware counsel), or other
counsel to Buyer that is reasonably acceptable to Seller, substantially in the
form attached as Exhibit E, with such qualifications and assumptions as shall be
customary for opinion letters covering such matters.
Seller may waive any condition specified in this Section 7.2 if it executes a
writing so stating at or before the Closing.
ARTICLE VIII
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REMEDIES FOR BREACHES OF AGREEMENT
8.1 Survival of Representations, Warranties and Certain Covenants. (i)
All of the representations and warranties of Seller contained in Articles III
and IV and in any documentation or certificates delivered pursuant to Section
7.l(d) shall survive the Closing under this Agreement for a period of two years
after the Closing Date; (ii) the representations and warranties in Section
4.l(e) shall survive the Closing with respect to any given claim that would
constitute a breach of such representation or warranty until the earlier of four
(4) years from the Closing Date or sixty days following the expiration of the
statute of limitations applicable to the underlying Tax matter giving rise to
that claim; and (iii) the representations and warranties in Section 4.l(g) shall
survive the Closing under this Agreement for a period of three years after the
Closing Date. The representations and warranties of Buyer contained in Section
3.2 shall survive the Closing for a period of two years after the Closing Date.
The covenants contained in this Agreement to be performed after the Closing
shall survive the Closing indefinitely.
8.2 Indemnification Provisions for Benefit of Buyer.
(a) Seller shall indemnify and hold Buyer Indemnities harmless
from and against any and all Adverse Consequences whatsoever arising out of or
resulting from:
(i) Any breach of warranty or misrepresentation by Seller or
the nonperformance of any covenant or obligation to be performed by Seller to
the extent that and only to the extent that (A) there is an applicable survival
period pursuant to Section 8.1; and that (B) Buyer makes a written claim for
indemnification against Seller pursuant to Section 11.6 within such survival
period; or
(ii) Any attempt (whether or not successful) by any person to
cause or require Buyer to pay or discharge any debt, obligation or liability
relating to Seller not associated with the Assets.
(b) Limitations of Indemnification. The following limitations
shall apply with regard to Seller's obligation to indemnify Buyer Indemnitees
pursuant to this Section 8.2:
(i) Seller's liability under this Agreement shall not exceed
25% of the Purchase Price paid in accordance with Section 2.2. The limitations
on Seller's indemnification obligations set forth in the prior sentence shall
not apply to losses resulting from fraud or willful misconduct by Seller.
(ii) Seller and its Affiliates will have no liability
for any Adverse Consequences, unless and until the aggregate Adverse
Consequences for which Buyer Indemnitees are entitled to recover under this
Agreement exceeds 1.0% of the Purchase Price paid in accordance with Section 2.2
(the "Threshold Amount"); provided, however, once such amount exceeds the
Threshold Amount, Buyer Indemnitees will be entitled to
14
recover all amounts to which they are entitled in excess of the Threshold
Amount, subject to the limitations set forth in (i) above.
(iii) Seller and its Affiliates shall not be liable to Buyer
Indemnitees for any Adverse Consequences associated with a claim that is based
upon any fact, matter or circumstance within the actual knowledge of Buyer,
Buyer Indemnitees and their Affiliates as of the date hereof, as well as such
facts, matters or circumstances which before the Closing Date had been
communicated to Buyer, Buyer Indemnitees or their Affiliates in writing.
(iv) Buyer acknowledges and agrees that the indemnification
provisions in this Article VIII and the termination rights in Section 10.1 shall
be the exclusive remedies of Buyer, Buyer Indemnitees and their Affiliates with
respect to the transactions contemplated by this Agreement.
8.3 Indemnification Provisions for Benefit of Seller. Buyer shall
indemnify and hold Seller Indemnities forever harmless from and against all
Adverse Consequences whatsoever arising out of or resulting from any breach of
warranty or misrepresentation by Buyer contained herein, or the non-performance
of any covenant or obligation to be performed by Buyer to the extent that and
only to the extent that (A) there is an applicable survival period pursuant to
Section 8.1; and that (B) Seller make a written claim for indemnification
against Buyer pursuant to Section 11.6 within such survival period.
8.4 Matters Involving Third Parties.
(a) If any third party shall notify any Party (the "Indemnified
Party") with respect to any matter (a "Third Party Claim") that may give rise to
a right to claim for indemnification against any other Party (the "Indemnifying
Party") under Section 8.2 or Section 8.3, then the Indemnified Party shall
promptly (and in any event within five business days after receiving notice of
the Third Party Claim) notify the Indemnifying Party thereof in writing.
(b) The Indemnifying Party will have the right to assume and
thereafter conduct the defense of the Third Party Claim with counsel of its
choice reasonably satisfactory to the Indemnified Party; provided, however, that
the Indemnifying Party will not consent to the entry of any judgment or enter
into any settlement with respect to the Third Party Claim without the prior
written consent of the Indemnified Party (not to be withheld unreasonably)
unless the judgment or proposed settlement involves only the payment of money
damages and does not impose an injunction or other equitable relief upon the
Indemnified Party.
(c) Unless and until the Indemnifying Party assumes the defense of
the Third Party Claim as provided in subsection 8.4(b), the Indemnified Party
may defend against the Third Party Claim in any manner it reasonably may deem
appropriate.
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(d) In no event will the Indemnified Party consent to the entry of
any judgment or enter into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnifying Party which consent shall
not be withheld unreasonably.
8.5 Determination of Amount of Adverse Consequences. The Adverse
Consequences giving rise to any indemnification obligation hereunder shall be
limited to the actual loss suffered by the Indemnified Party (i.e., reduced by
any insurance proceeds or other payment or recoupment received, realized or
retained by the Indemnified Party as a result of the events giving rise to the
claim for indemnification), net of any reduction in Taxes of the Indemnified
Party (or the affiliated group of which it is a member) occasioned by such loss
or damage. The amount of the actual loss and the amount of the indemnity payment
shall be computed by taking into account the timing of the loss or payment, as
applicable, using a 8% interest or discount rate, as appropriate. Upon the
request of the Indemnifying Party, the Indemnified Party shall provide the
Indemnifying Party with information sufficient to allow the Indemnifying Party
to calculate the amount of the indemnity payment in accordance with this Section
8.5. An Indemnified Party shall take all reasonable steps to mitigate damages in
respect of any claim for which it is seeking indemnification and shall use
reasonable efforts to avoid any costs or expenses associated with such claim
and, if such costs and expenses cannot be avoided, to minimize the amount
thereof.
8.6 Tax Treatment of Indemnity Payments. All indemnification payments
made under this Agreement, including any payment made under Article VIII, shall
be treated as purchase price adjustments for Tax purposes.
ARTICLE IX
TAX MATTERS
9.1 Post-Closing Tax Returns. Buyer shall prepare or cause to be
prepared and file or cause to be filed any Post-Closing Tax Returns with respect
to the Assets. Buyer shall pay (or shall cause to be paid) any Taxes due with
respect to such Tax Returns.
9.2 Pre-Closing Tax Returns. Seller shall prepare or cause to be
prepared and file or cause to be filed all Pre-Closing Tax Returns with respect
to the Assets. Seller shall pay (or cause to be paid) any Taxes due with respect
to such Tax Returns.
9.3 Prorated Ad Valorem Taxes. Ad valorem real property taxes on the
Assets will be handled between the Parties as follows: Seller will pay and be
responsible for all ad valorem real property tax bills which have been received
and are due prior to the Closing, including all tax bills for years prior to
2003, whether or not they have been received or are due. Buyer will pay all tax
bills it receives after the Closing. Buyer shall be entitled to reimbursement
for Ad valorem real property taxes for the year 2003, pursuant to the terms of
the Lease Agreement entered into in accordance with the terms of this Agreement
as if the Lease Agreement had been in effect on January 1, 2003.
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9.4 Claims for Refund. Buyer shall not file any claim for refund of
taxes with respect to the Assets for whole or partial taxable periods on or
before the Closing Date.
9.5 Cooperation on Tax Matters.
(a) Buyer and Seller shall cooperate fully, as and to the extent
reasonably requested by the other parties, in connection with the filing of Tax
Returns pursuant to this Section and any audit, litigation or other proceeding
and making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder. Buyer
and Seller shall (i) retain all books and records with respect to Tax matters
pertinent to the Assets relating to any whole or partial taxable period
beginning before the Closing Date until the expiration of the statute of
limitations (and, to the extent notified by Buyer or Seller, any extensions
thereof) of the respective taxable periods, and to abide by all record retention
agreements entered into with any taxing authority, and (ii) give the other party
reasonable written notice prior to transferring, destroying or discarding any
such books and records and, if the other party so requests, Buyer or Seller, as
the case may be, shall allow the other party to take possession of such books
and records.
(b) Buyer and Seller further agree, upon request, to use their
best efforts to obtain any certificate or other document from any Governmental
Authority or any other Person as may be necessary to mitigate, reduce or
eliminate any Tax that could be imposed (including, but not limited to, with
respect to the transactions contemplated hereby).
9.6 Certain Taxes. Seller will file all necessary Tax Returns and other
documentation with respect to all transfer (including without limitation, stock
transfer), recording, documentary, sales, use, stamp, registration and other
Taxes and fees, and, if required by applicable Law, Buyer will, and will cause
its Affiliates to, join in the execution of any such Tax Returns and other
documentation. Notwithstanding anything set forth in this Agreement to the
contrary, Buyer will be obligated to bear and shall pay at Closing, any
transfer, documentary, sales, recording, use, stamp, registration and other
Taxes and fees incurred in connection with this Agreement and the transactions
contemplated under this Agreement. Buyer agrees to indemnify, defend and hold
Seller harmless for all such taxes and fees.
9.7 Confidentiality. Any information shared in connection with Taxes
shall be kept confidential, except as may otherwise be necessary in connection
with the filing of Tax Returns or reports, refund claims, tax audits, tax claims
and tax litigation, or as required by Law.
9.8 Audits. Seller and Buyer shall provide prompt written notice to the
others of any pending or threatened tax audit, assessment or proceeding that it
becomes aware of related to the Assets for whole or partial periods for which it
may be indemnified by the other party hereunder. Such notice shall contain
factual information (to the extent known) describing the asserted tax liability
in reasonable detail and shall be accompanied by
17
copies of any notice or other document received from or with any tax authority
in respect of any such matters. If an indemnified party has knowledge of an
asserted tax liability with respect to a matter for which it may be indemnified
hereunder and such party fails to give the indemnifying party prompt notice of
such asserted tax liability, then (a) if the indemnifying party is precluded by
the failure to give prompt notice from contesting the asserted tax liability in
any forum, the indemnifying party shall have no obligation to indemnify the
indemnified party for any Taxes arising out of such asserted tax liability, and
(b) if the indemnifying party is not so precluded from contesting, but such
failure to give prompt notice results in a detriment to the indemnifying party,
then any amount which the indemnifying party is otherwise required to pay the
indemnified party pursuant to this Section shall be reduced by the amount of
such detriment, provided, the indemnified party shall nevertheless be entitled
to full indemnification hereunder to the extent, and only to the extent, that
such party can establish that the indemnifying party was not prejudiced by such
failure. Section 9.10 shall control the procedure for Tax indemnification
matters to the extent it is inconsistent with any other provision of this
Agreement.
9.9 Control of Proceedings. The party responsible for the Tax under this
Agreement shall control audits and disputes related to such Taxes (including
action taken to pay, compromise or settle such Taxes). Reasonable out of pocket
expenses with respect to such contests shall be borne by Seller and Buyer in
proportion to their responsibility for such Taxes as set forth in this
Agreement. Except as otherwise provided by this Agreement, the noncontrolling
party shall be afforded a reasonable opportunity to participate in such
proceedings at its own expense.
9.10 Powers of Attorney. Buyer shall provide Seller and their Affiliates
with such powers of attorney or other authorizing documentation as are
reasonably necessary to empower them to execute and file returns they are
responsible for hereunder, file refund and equivalent claims for Taxes they are
responsible for, and contest, settle, and resolve any audits and disputes that
they have control over under Section 9.8 (including any refund claims which turn
into audits or disputes).
9.11 Remittance of Refunds. If Buyer or any Affiliate of Buyer receives a
refund of any Taxes attributable to a Pre-Closing Tax Period that Seller is
responsible for hereunder, or if Seller or any Affiliate of Seller receives a
refund of any Taxes attributable to a Post-Closing Tax Period that Buyer is
responsible for hereunder, the party receiving such refund shall, within thirty
days after receipt of such refund, remit it to the party who has responsibility
for such Taxes hereunder. For the purpose of this Section 9.1 1, the term
"refund" shall include a reduction in Tax and the use of an overpayment as a
credit or other tax offset, and receipt of a refund shall occur upon the filing
of a return or an adjustment thereto using such reduction, overpayment or offset
or upon the receipt of cash.
9.12 Purchase Price Allocation. Within thirty (30) days of the date of
this Agreement and in any event prior to Closing, Seller and Buyer shall attempt
to agree upon the allocation of the Purchase Price among the Assets for all
purposes (including
18
Tax and financial accounting purposes). Buyer, Seller and their applicable
Affiliates will file all Tax Returns (including amended Tax Returns and claims
for refund) and information reports in a manner consistent with such agreed upon
allocation.
9.13 Closing Tax Certificate. At the Closing, Seller shall deliver, or
cause each of its selling Affiliates to deliver, to Buyer a certificate signed
under penalties of perjury (i) stating that it is not a foreign corporation,
foreign partnership, foreign trust or foreign estate, (ii)providing its U.S.
Employer Identification Number and (iii) providing its address, all pursuant to
Section 1445 of the Code. At the Closing, Buyer shall deliver to Seller a
statement providing its U.S. Employment Identification Number and its address.
ARTICLE X
TERMINATION OF AGREEMENT
10.1 Termination of Agreement. The Parties may terminate this Agreement,
as provided below:
(a) Buyer and Seller may terminate this Agreement by mutual
written consent at any time before the Closing;
(b) Buyer may terminate this Agreement by giving written notice to
Seller at any time before Closing if the Closing shall not have occurred on or
before April 15, 2003 (unless the failure results primarily from Buyer itself
breaching any representation, warranty or covenant contained in this Agreement);
(c) Seller may terminate this Agreement by giving written notice
to Buyer at any time before the Closing if the Closing shall not have occurred
on or before April 15, 2003 (unless the failure results primarily from Seller
breaching any representation, warranty or covenant contained in this Agreement);
(d) Buyer or Seller may terminate this Agreement if any court of
competent jurisdiction or any governmental, administrative or regulatory
authority, agency or body shall have issued an order, decree or ruling or shall
have taken any other action permanently enjoining, restraining or otherwise
prohibiting the transactions contemplated hereby or impairing use or
exploitation of any Assets and such order, decree, ruling or other action shall
have become final and nonappealable; and
(e) Seller may terminate this Agreement by giving written notice
to Buyer at any time before the Closing to the extent that Buyer does not
provide its consent to the assignment of the Lease Agreements to a third party
(whether pursuant to a direct assignment or pursuant to a transfer of control)
designated by Seller.
10.2 Effect of Termination. If any Party terminates this Agreement
pursuant to Section 10.1, all rights and obligations of the Parties with respect
to any Assets not theretofore sold to Buyer hereunder shall terminate without
any liability of any Party to any other Party (except for any liability of any
Party then in breach); provided that the
19
confidentiality provisions contained in the Confidentiality Agreement and
Sections 11.2 and 11.3 of this Agreement shall survive termination.
ARTICLE XI
MISCELLANEOUS
11.1 Insurance. Buyer acknowledges and agrees that, following the
Closing, the Insurance Policies of Seller and its Affiliates may be terminated
or modified to exclude coverage of all or any portion of the Assets by Seller or
its Affiliates and, as a result, Buyer acknowledges that the Assets will not be
insured by Seller. Buyer further acknowledges that Seller only maintained such
Insurance Policies (including self insurance and deductible levels) that it
deemed necessary in its sole discretion or that were required by Law.
Notwithstanding Section 11.l, if any claims are made or losses occur prior to
the Closing Date that relate solely to the Assets and such claims, or the claims
associated with such losses, properly may be made against the policies retained
by Seller or its Affiliates pursuant to Section 11.1 or under policies otherwise
retained by Seller or its Affiliates after the Closing, then, subject to any
limitations under the Insurance Policies (including without limitation time
restrictions on "claims made" policies), Seller shall use its commercially
reasonable efforts so that Buyer can file, notice, and otherwise continue to
pursue these claims pursuant to the terms of such policies; provided, however,
that nothing in this Agreement shall require Seller to maintain or to refrain
from asserting claims against or exhausting any retained policies and Seller
shall not be required to proceed against any direct or indirect self-insured
primary insurance programs or policies of any of its Affiliates, including
arrangement with carriers for claims administration service under cost plus
reimbursement agreements, assumed retention, deductible or retrospective rating
plans or other plans or arrangements to the extent that risk of loss thereunder
is ultimately assumed or paid by one of its Affiliates.
11.2 Press Releases and Public Announcements. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement without the prior written approval of the other Parties; provided
that any Party may make any public disclosure it believes in good faith is
required by the terms of any contract to which it is a party, applicable Law, or
any listing or trading agreement concerning its publicly traded securities (in
which case the disclosing Party will advise the other Parties before making the
disclosure).
11.3 No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
11.4 Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests or obligations hereunder without the prior written approval of
the other Party.
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11.5 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original but which together will constitute one and
the same instrument.
11.6 Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given two business days
after it is sent by registered or certified mail, return receipt requested,
postage prepaid, and addressed to the intended recipient as set forth below:
If to Buyer: WBRD LLC
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇ ▇▇▇▇
With copy to: NRP (Operating) LLC
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Seller: ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ Coal Company LLC
c/o Alpha Natural Resources, LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Bartlit ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the addresses set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, ordinary mail, or electronic mail), but no such notice, request,
demand, claim, or other
21
communication shall be deemed to have been duly given unless and until it
actually is received by the intended recipient. Any Party may change the address
to which notices, requests, demands, claims, and other communications hereunder
are to be delivered by giving the other Party notice in the manner herein set
forth.
11.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic Laws of the state of Delaware without giving effect
to any choice or conflict of law provision or rule (whether of the state of
Delaware or any other jurisdiction) that would cause the application of the Laws
of any jurisdiction other than the state of Delaware.
11.8 Entire Agreement. This Agreement (including the documents referred
to in this Agreement) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations by or among
the Parties, written or oral, to the extent they have related in any way to the
subject matter of this Agreement. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by Buyer
and Seller.
11.9 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
11.10 Transaction Expenses. Each of Buyer and Seller will bear its own
costs and expenses (including legal fees and expenses) incurred in connection
with this Agreement and the transactions contemplated hereby.
[SIGNATURE PAGE FOLLOWS]
22
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.
WBRD LLC, a Delaware limited liability company
By: NRP (Operating) LLC, a Delaware limited liability
company, its sole operating manager
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇
Its President and Chief Operating Officer
▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ COAL COMPANY, LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: President & Manager
Natural Resource Partners L.P., a Delaware limited partnership,
hereby (i) unconditionally and irrevocably agrees with Seller to perform, when
due, all of Buyer's obligations pursuant to the Purchase Agreement, (ii) agrees
to be fully bound and obligated by the terms hereof to the same extent as is
Buyer, (iii) waives all defenses as a surety including notice, (iv) agrees that
its obligations under this paragraph shall not be impaired, diminished or
discharged by any extension of time granted by Seller, by any course of dealing
between Seller and Buyer, or by any event or circumstance which might operate to
discharge a guarantor and (v) covenants to take any and all actions and execute
and deliver further documents reasonably requested by Seller to implement and
enforce such foregoing obligations.
NATURAL RESOURCES PARTNERS L.P.
By NRP (GP) LP, its General Partner
By GP Natural Resources Partners LLC, its general
Partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: President and Chief Operating Officer
Alpha Natural Resources, LLC, a Delaware limited liability company,
hereby (i) unconditionally and irrevocably agrees with Buyer to perform, when
due, all of Seller's obligations pursuant to the Purchase Agreement, (ii) agrees
to be fully bound and obligated by the terms hereof to the same extent as is
Seller, (iii) waives all defenses as a surety including notice, (iv) agrees that
its obligations under this paragraph shall not be impaired, diminished or
discharged by any extension of time granted by Buyer, by any course of dealing
between Seller and Buyer, or by any event or circumstance which might operate to
discharge a guarantor and (v) covenants to take any and all actions and execute
and deliver further documents reasonably requested by Buyer to implement and
enforce such foregoing obligations.
Alpha Natural Resources, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President & Manager
EXHIBIT A
DEFINITIONS AND INTERPRETATIONS
1.1 Definitions. Unless otherwise provided to the contrary in this
Agreement, capitalized terms in this Agreement shall have the following
meanings:
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, liabilities, obligations, Taxes, liens, losses, expenses, and
fees, including court costs and attorneys' fees and expenses, but excluding lost
profits, punitive, exemplary, special or consequential damages.
"Affiliate" means, with respect to any specified Person, any other person
which directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person. For the
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling," "controlled by" and "under common control with"), as
used with respect to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
such Person, whether through the ownership of voting securities, by agreement or
otherwise.
"Agreement" has the meaning set forth in the preface.
"Assets" means the assets which are described in more detail in Exhibit B.
"Buyer" has the meaning set forth in the preface.
"Buyer Indemnitees" means, collectively, Buyer and its Affiliates and its
and their officers, directors, employees, agents and representatives.
"Closing" has the meaning set forth in Section 2.3.
"Closing Date" has the meaning set forth in Section 2.3.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor Law.
"Confidentiality Agreement" means the Confidentiality Agreement between
Natural Resource Partners L.P. and First Reserve Corporation dated December 10,
2002.
"Encumbrance" means any mortgage, pledge, lien, encumbrance, servitude,
restriction, easement, right-of-way, charge, other security interest including
any and all coal or mineral leases or surface leases on any Assets and including
rights or obligations under any collective bargaining agreement.
"Environmental Condition" means any condition at, on, under, within, or
migrating to or from the Sites, in each case arising out of any Environmental
Law and requiring Remedial Work.
"Environmental Law" or "Environmental Laws" has the meaning set forth in
Section 4.l(f)(i).
"Governmental Authority" means the United States and any state, county,
city or other political subdivision, agency, court or instrumentality.
"Hazardous Substance" means any material defined as a "hazardous
substance" or "hazardous waste" under any Environmental Law.
"Indemnified Party" has the meaning set forth in Section 8.4(a).
"Indemnifying Party" has the meaning set forth in Section 8.4(a).
"Insurance Policies" means those material policies of insurance which
Seller or any of its Affiliates maintained with respect to the Assets prior to
Closing.
"Knowledge" means, in the case of Seller, the actual knowledge of the
individuals listed on Section 1.1A of the Disclosure Schedule upon due inquiry
and, in the case of Buyer, the actual knowledge of the individuals listed on
Section 1.1A of the Disclosure Schedule upon due inquiry.
"Laws" means any statute, code, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any applicable
Governmental Authority.
"Lease Agreement" means the lease substantially in the form set forth in
Exhibit C.
"Material Adverse Effect" means any change or effect that, individually or
in the aggregate with other changes or effects, is materially adverse to the
ownership of the Assets taken as a whole, provided that in determining whether a
Material Adverse Effect has occurred, the following changes or effects shall not
be considered: (i) the coal mining industry generally (including, but not
limited to, the price of coal and the costs associated with the mining,
production and delivery of coal); (ii) United States or global economic
conditions or financial markets in general, including changes in interest rates;
(iii) the transactions contemplated by this Agreement; (iv) changes in Law, or
any judgments, orders or decrees that apply generally to similarly situated
persons; and (v) any change in or effect on the Assets which is cured (including
by payment of money) before the earlier of the Closing and the termination of
this Agreement pursuant to Section 10.1.
"Obligations" means duties, liabilities and obligations, whether vested,
absolute or contingent, known or unknown, asserted or unasserted, accrued or
unaccrued, liquidated
or unliquidated, due or to become due, and whether contractual, statutory or
otherwise.
"Ordinary Course of Business" means the ordinary course of business in all
material respects consistent with the affected party's past custom and practice
(including with respect to quantity and frequency).
"Organizational Documents" means the articles of incorporation,
certificate of incorporation, charter, bylaws, articles or certificate of
formation, regulations, operating agreement, certificate of limited partnership,
partnership agreement, and all other similar documents, instruments or
certificates executed, adopted, or filed in connection with the creation,
formation, or organization of a Person, including any amendments thereto.
"Party" and "Parties" have the meanings set forth in the preface.
"Permitted Encumbrances" means any of the following: (i) any liens for
Taxes and assessments not yet due and payable or, if due and payable, that are
being contested in good faith in the Ordinary Course of Business; (ii) any
obligations or duties vested in any municipality or other Governmental Authority
to regulate any Asset in any manner including obligations, duties, restrictions
and limitations under all applicable Laws; (iii) liens reserved for Seller's
performance under leases, subleases, licenses and similar instruments, (iv) any
Encumbrances set forth in Section 4.1 of the Disclosure Schedule, (v)
Encumbrances and other conveyances (including deeds, easements, leases and
licenses) of record in the chain of title of Seller or its Affiliates and their
predecessors-in-title; (vi) Encumbrances apparent from an inspection of the
Assets; and (vii) easements, rights-of-way, restrictions and other similar
encumbrances which, in the aggregate, are not substantial in amount and which do
not in any case materially detract from the value of the property subject
thereto as it is currently being used or materially interfere with the ordinary
conduct of the business. Notwithstanding the above, paragraphs (iv) and (v)
above does not include Encumbrances consisting of mortgages, deeds of trust,
pledges, liens or security interests.
"Person" means an individual or entity, including, without limitation, any
corporation, association, joint stock company, trust, joint venture, limited
liability company, unincorporated organization, or governmental entity (or any
department, agency or political subdivision thereof).
"Post-Closing Tax Period" means any Tax period beginning after the Closing
Date.
"Post-Closing Tax Return" means any Tax Return that is required to be
filed with respect to a Post-Closing Tax Period.
"Pre-Closing Tax Period" means any Tax periods or portions thereof ending
on or before the Closing Date.
"Pre-Closing Tax Return" means any Tax Return that is required to be filed
with
respect to a Pre-Closing Tax Period.
"Purchase Price" has the meaning set forth in Section 2.2.
"Records" has the meaning set forth in Section 2.1.
"Remedial Work" means all investigative, site monitoring, restoration,
abatement, detoxification, containment, handling, treatment, removal, storage,
decontamination, clean-up, transport, disposal or other ameliorative work,
corrective action or response action required by (i) any Environmental Law, (ii)
any order or request of any federal, state or local agency, or (iii) any final
judgment, consent decree, settlement or compromise with respect to any
Environmental Law.
"Seller" has the meaning set forth in the preface.
"Seller Indemnitees" means, collectively, Seller and its Affiliates and
its and their officers, directors, employees, agents, and representatives.
"Subsidiary" means, with respect to any relevant Person, any other Person
that is (directly or indirectly) controlled and more than 90%-Owned (directly or
indirectly) by the relevant Person.
"Tax" or "Taxes" means any state or local ad valorem, real property or
personal property tax, including any interest, penalty or addition thereto,
whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Third Party Claim" has the meaning set forth in Section 8.4.
1.2 Interpretations. Unless expressly provided for elsewhere in this
Agreement, this Agreement shall be interpreted in accordance with the following
provisions:
(a) Whenever the context may require, any pronoun used in this
Agreement shall include the corresponding masculine, feminine, or neuter forms,
and the singular form of nouns, pronouns and verbs shall include the plural and
vice versa.
(b) If a word or phrase is defined, its other grammatical forms
have a corresponding meaning.
(c) A reference to a person, corporation, trust, estate,
partnership, or other entity includes any of them.
(d) The headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
(e) All references in this Agreement to articles, sections or
subdivisions thereof shall refer to the corresponding article, section or
subdivision thereof of this Agreement unless specific reference is made to such
articles, sections, or subdivisions of another document or instrument.
(f) A reference to any agreement or document (including without
limitation a reference to this Agreement) is to the agreement or document as
amended, varied, supplemented, novated or replaced, except to the extent
prohibited by this Agreement or that other agreement or document.
(g) No waiver by either Party of any default by the other Party in
the performance of any provision, condition or requirement herein shall be
deemed to be a waiver of, or in any manner release the other Party from,
performance of any other provision, condition or requirement herein, nor shall
such waiver be deemed to be a waiver of, or in any manner a release of, the
other Party from future performance of the same provision, condition or
requirement. Any delay or omission of either Party to exercise any right
hereunder shall not impair the exercise of any such right, or any like right,
accruing to it thereafter. The failure of either Party to perform its
obligations hereunder shall not release the other Party from the performance of
such obligations.
(h) A reference to any party to this Agreement or another
agreement or document includes the party's successors and assigns.
(i) A reference to legislation or to a provision of legislation
includes a modification or reenactment of it, a legislative provision
substituted for it and a regulation or statutory instrument issued under it.
(j) A reference to a writing includes a facsimile transmission of
it and any means of reproducing of its words in a tangible and permanently
visible form.
(k) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and article,
section, subsection, schedule and exhibit references are to this Agreement
unless otherwise specified.
(l) The word "including" shall mean including without limitation.
(m) The Exhibits identified in this Agreement are incorporated
herein by reference and made a part of this Agreement.
(n) The Parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Parties and no
presumption or burden of proof shall arise favoring or disfavoring any Party by
virtue of the authorship of any of the provisions of this Agreement.