Exhibit (i)
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT, dated April 12, 2000, between KFx Fuel
Partners, L.P., a Limited Partnership organized under Delaware Law (Seller") and
Landrica Development Company, a South Dakota corporation, ("Buyer").
Collectively Seller and Buyer shall be referred to as the "Parties", or
individually as a "Party").
WITNESSETH:
WHEREAS, Seller is the owner of a 500,000 ton per year facility to
beneficiate coal into "K-Fuel" (the "Plant"), together with a rail loop ("Rail
Loop"), and Pit #1 ("Pit #1") as more fully described in Exhibit 1, located on
Seller's property located northwest of Gillette, Wyoming, USA, which property is
more particularly described in Exhibit 2 hereto (the "Land"). The Plant, Land,
Rail Loop and Pit #1 are collectively referred to herein as the "Property"; and
WHEREAS, Seller desires to sell to Buyer and Buyer desires to purchase
from Seller the Property on the terms and conditions set forth herein; and
NOW THEREFORE, in consideration of the mutual covenants set forth herein,
the Parties hereto agree as follows:
1. Sale of the Land and the Property; Retained Items.
(A) On the date of the Closing of this transaction (as defined in Section
2 below) Seller agrees to sell to Buyer, and Buyer agrees to purchase from
Seller, all of Seller's right, title and interest in the Property identified on
Exhibits 1 and 2, the Assigned Contracts and Agreements listed in Exhibit 3 and
the Assigned Permits and Licenses listed in Exhibit 4, hereto (the "Assigned
Contracts" and the "Assigned Permits"). Upon and after such purchase and sale,
the Buyer shall assume full responsibility and all liabilities and obligations
arising out of the Property, the Assigned Contracts and the Assigned Permits,
except for the Retained Items, described below, for which Seller shall retain
all rights, obligations and liabilities.
(B) Seller shall retain all rights, claims and obligations arising out of
the following (the "Retained Items"):
(i) All rights, causes of action, obligations, liabilities, rights
to recovery, judgments, responsibility for mechanics liens and
control of the litigation, arising out of the litigation
styled as Fidelity and Deposit of Maryland as subrogee for
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Xxxxx Construction Company, a Division of Xxx X. Xxxxxxxx
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Company, now known as A.T.K.N. Company v. KFx Fuel Partners,
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L.P. a/k/a/ KFx Fuels, L.P., Civil Action No. 21753 District
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Court of Wyoming Sixth Judicial District, as described in
Exhibit 5.
(ii) All rights to production tax credits occurring to Seller under
Section 29 of the Internal Revenue Code arising out of K-Fuel
produced by the Plant prior and up to the Closing Date.
(iii) All cash and cash equivalents of Seller.
(iv) All accounts and notes receivable arising out of or resulting
from or relating to the Property prior and up to the Closing
Date.
(v) All computer and related equipment and software of Seller except
to the extent such equipment and software is part of the process
control system for operation of the Plant.
(vi) All rights under insurance policies of Seller and its affiliates
relating to the Property.
(vii) All tax refunds and income tax obligations of Seller.
(viii) All obligations with respect to employees of Seller which
obligations and liabilities have their origins to a time prior to
the Closing Date.
(ix) All obligations arising under contracts or agreements entered
into by Seller whether or not listed on Exhibit 3, to the extent
such obligations have their origins arising prior to the Closing
Date; provided however, Seller shall not retain any obligations
with respect to the Assigned Contracts or Assigned Permits except
as specifically provided herein.
(x) All books, records and files of Seller, including file cabinets
containing such files, except those needed for the operation of
the Plant.
2. Closing.
(A) Closing. The Closing of the transaction contemplated hereby and the
transfer of the Property (the "Closing") shall occur at the offices of Xxxxxx
Xxxxxx, Bangs, McCullen, Xxxxxx, Xxxx & Xxxxxxx, LLP, 000 Xx. Xxx Xxxxxx, Xxxxx
Xxxx, XX 00000 within three days of the satisfaction of the conditions to
closing set forth herein (the "Closing Date"). If the Closing Date has not
occurred by April 28, 2000, because of a failure to achieve a closing condition
set forth in Article 7 (Seller's Conditions), Seller may terminate this
Agreement, without any liability to Buyer or extend the deadline for Closing up
to 60 calendar days. If the Closing Date has not occurred by April 28, 2000,
because of a failure to achieve a closing condition set forth in Article 8
(Buyer's Conditions), Buyer may terminate this Agreement without any liability
to Seller, or extend the deadline for Closing for up to 60 calendar days. In the
case of any such extension of the term hereof, the Parties will work in good
faith to satisfy the condition. At the expiration of 60 calendar days or any
such earlier deadline for Closing, absent further agreement of the parties, this
Agreement shall terminate.
(B) Purchase Consideration. The consideration for Seller to sell the
Property shall be (i) Buyer's assumption of the reclamation obligations of
Seller to the State of Wyoming for the Property, provided such assumption is
satisfactory to Seller, (ii) a general release of claims from Wyodak Resources
Development Corporation in accordance with Section 15 hereof; and (iii)
achievement of all of Seller's conditions in Article 7 herein.
(C) Actions at Closing. When all the conditions to Closing set forth in
Articles 7 and 8 hereto have been satisfied within the time limits set forth in
Section 2 (A) above, the Parties shall proceed to Closing as soon as possible,
and neither Party shall then have any further right to terminate this Agreement.
At the Closing, the Seller shall convey to Buyer: (i) the Land and Pit #1 by
means of deeds in the form specified in Exhibit 6 hereto; (ii) the Plant to
Buyer by a Xxxx of Sale and Assignment in the form of Exhibit 7 hereto; (iii)
the Assigned Agreements and Permits by an Assignment of Contracts and Permits in
the form of Exhibit 8 hereto; (iv) Seller shall convey, or cause Wyoming Coal
Resources Company Inc. to convey, a deed for the Rail Loop to Buyer; and (v)
Seller shall convey all of its rights to the xxxxx located on the Property by
appropriate deeds.
3. Taxes.Utilities; Operating Costs Any real property taxes with respect to the
Property and any personal property taxes with respect to the Plant or the
Property and any other special assessments with respect to the Property shall be
prorated as of the Closing Date on a daily basis. Any taxes, excise taxes, fees
or costs related to the transfer of the Property as a result of this Agreement
shall be shared equally by Buyer and Seller. Seller shall be responsible for all
utilities and operating costs related to the Property through the Closing Date,
including, but not limited to, electricity, gas and payments due under any
contract which were due on or before the Closing Date, including accrued and
unpaid monthly lease payments through April 30, 2000 owed to Air Liquide under
the Lease Agreement between Air Liquide and Seller, but not including any Lease
Cancellation Payment which may be owed thereunder, and also not including any
prepayment obligations arising under Assigned Contracts.
4. Representations and Warranties of Seller. The Seller represents and warrants
to Buyer as of the Closing Date to the matters set forth in Paragraph 4 below:
(A) Seller is a duly organized limited partnership or corporation, validly
existing and in good standing under the laws of the State of Wyoming, and is
duly qualified to conduct business in Wyoming. Seller has the requisite power
and authority to execute and deliver this Agreement and each document
contemplated hereby and to perform its obligations thereunder.
(B) The execution, delivery and performance of this Agreement and each
document, instrument or agreement executed pursuant to this Agreement by the
Seller and the consummation of the transactions contemplated thereby (i) have
been duly authorized by all necessary partnership action; (ii) no other
partnership action on the part of the Seller is necessary to authorize and
approve the execution, delivery and performance of this Agreement or any other
document or agreement contemplated hereby or the consummation of the
transactions contemplated thereby; and (iii) will not violate Seller's
partnership agreement or cause breach of any other agreement, instrument, order
or decree of any court or governmental body or governmental authorization,
except to the extent consents to transfer or assignments must be obtained from
governmental agencies.
(C) This Agreement has been duly executed and delivered by the Seller, and
assuming due authorization, execution and delivery by Buyer, this Agreement
constitutes the legal, valid and binding obligation of the Seller enforceable
against it in accordance with its terms.
(D) The Seller has merchantable title to the Property (except the Rail
Loop) free and clear of all liens, charges, claims, pledges, security interests,
and encumbrances placed by Seller, except for a mechanics lien related to the
Xxxxx/Fidelity litigation (for which a surety bond will be obtained by Seller in
the form of Exhibit 15, hereto or Seller will obtain a complete release of the
mechanics lien), and otherwise subject to any liens, claims and encumbrances
listed in Exhibit 10 or listed in the special warranty deed in Exhibit 6,
hereto. Seller makes no representation or warranty of any kind hereunder with
respect to title to the Rail Loop.
(E) To Seller's actual knowledge, and subject to the exceptions specified
in Exhibit 11, Seller is in material compliance as of the Closing Date with
Federal, State and local environmental laws and regulations with respect to the
Property. Seller's knowledge shall be solely determined by the actual knowledge
as of the Closing Date of the individuals listed in Exhibit 12.
(F) Exhibit 3 is a list of all Assigned Contracts and Agreements.
(G) Exhibit 4 is a list of all Assigned Permits and Licenses.
(H) Except as specified in Exhibit 13, there are no claims, actions, suits
proceedings, civil or criminal, pending or to the knowledge of Seller,
threatened against the Seller as it concerns the Property which is the subject
of this transaction which if decided adversely to Seller, would have a material
adverse effect on the Property.
(I) Seller has entered into the Patent and Technology License attached in
Exhibit 14, which shall be assigned to Buyer with such consents from KFx, Inc.
as may be required.
5. Representations and Warranties of Buyer. Buyer represents and warrants to
Seller as of the Closing Date as follows:
(A) Buyer is a corporation duly organized and validly existing under the
laws of South Dakota. Buyer has the corporate power and authority to execute and
deliver this Agreement and each document, contemplated thereby and to perform
its obligations thereunder.
(B) The execution, delivery and performance of this Agreement and each
document pursuant to this Agreement by Buyer and the consummation of the
transactions contemplated thereby have been duly authorized by all necessary
corporate action, and no other corporate action on the part of Buyer is
necessary to authorize and approve the execution, delivery and performance of
this Agreement or any other document contemplated hereby or the consummation of
the transactions contemplated thereby. Buyer is not subject to any provision of
its charter or by-laws or any agreement, instrument, governmental authorization
or order or decree of any court or governmental body which would prevent
consummation of the transactions contemplated by this Agreement.
(C) This Agreement has been duly executed and delivered by Buyer, and
assuming due authorization, execution and delivery by Seller, this Agreement
constitutes the legal, valid and binding obligation of Buyer enforceable against
it in accordance with its terms.
6. Disclaimer of Representations and Warranties; Survival:
(A) EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, THE PROPERTY, AND THE
ASSIGNED CONTRACTS AND PERMITS ARE SOLD "AS IS" AND "WITH ALL FAULTS," AND
SELLER MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED,
INCLUDING ANY IMPLIED WARRANTIES OR MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE OR OTHERWISE. Buyer acknowledges that Buyer has had full access to the
Property and in making its decision to enter into this Agreement has relied upon
and made its own investigation as to the state of the Property.
(B) The representations and warranties of Seller and Buyer shall survive
for eighteen (18) months after date of this Agreement, and thereafter shall
expire.
7. Seller's Conditions Precedent to Closing. The obligations of Seller to
consummate the transactions contemplated by this Agreement are subject to the
satisfaction of each of the following conditions ("Seller's Conditions"):
(A) The representations and warranties of Buyer set forth in this
Agreement shall be true and correct in all material respects as of the date when
made and as of the Closing Date.
(B) Buyer shall have performed and complied with all provisions of this
Agreement required to be performed or complied with by Buyer as of the Closing
Date.
(C) The Exhibits hereto are completed on terms and conditions reasonably
satisfactory to Seller.
(D) Buyer has provided a Reclamation Performance Bond satisfactory to
Seller to cover the total cost of reclamation of Property, including Plant, the
Land, the Rail Loop and Pit #1, and such Bond has been accepted in writing by
The Wyoming Department of Environmental Quality, and the Wyoming DEQ has
released Seller and its affiliates from all reclamation liabilities related to
the Property, the Land, the Rail Loop and Pit #1.
8. Buyer's Conditions Precedent to Closing: The obligations of Buyer to
consummate the transactions contemplated by this Agreement are subject to the
satisfaction of each of the following conditions:
(A) The representations and warranties of Seller set forth in this
Agreement shall be true and correct in all material respects as of the date when
made and as of the Closing Date, as though made at that time.
(B) Seller shall have performed and complied with all provisions of this
Agreement required to be performed or complied with by Seller as of the Closing
Date.
(C) The Exhibits hereto are completed on terms and conditions reasonably
satisfactory to Buyer.
(D) Seller provides surety Bond in the form of Exhibit 15 providing surety
with respect to the mechanics lien arising out of the Xxxxx/Fidelity litigation,
or alternatively, Seller provides Buyer evidence of a complete release of said
mechanics lien.
(E) Thermo Ecotek Corporation has entered into an assignment to the Buyer
for 2,000,000 shares of the Stock of KFx Inc. owned by Thermo Ecotek Corporation
which have been registered with the Securities and Exchange Commission by an S-3
registration statement file by KFx, Inc. on July 7, 1999. Thermo Ecotek
Corporation makes no representation or warranty with respect to the value of
KFx, Inc. or the Stock.
(F) Seller and its affiliates have received a full and final release
satisfactory to Seller in the lawsuit styled Wyoming Coal Resources Company v.
KFx Fuel Partners L.P. and Thermo Ecotek Corporation, Civil No. 22108, District
Court of Wyoming, Sixth Judicial District. Buyer shall have received from
Wyoming Coal Resources Company a special warranty deed to the Rail Loop.
(G) Payment to Buyer of $50,000 by each General Partner of Seller.
9. Covenants.
A) Seller Covenant. After the date hereof and prior to Closing, Seller
shall provide Buyer reasonable and continuous access to the Property and to
Seller's books and records related to the Plant and equipment, except for
Seller's financial, tax and litigation related books, records and documents.
(B) Buyer Covenant. As of the date hereof and after the Closing Date Buyer
shall take all necessary actions to file all documents with any appropriate
regulatory agency with respect to the transfer of the Assigned Permits and to
cause all appropriate regulatory agencies to acknowledge or consent, if
necessary, to the transfer of the Assigned Permits to Buyer.
(C) Post Closing Access. Buyer agrees to provide Seller with reasonable
access to the Property and the books and records of the Plant transferred to
Buyer hereunder as may be needed by Seller for purposes of the Xxxxx Litigation
for a period of 3 years from the Closing Date.
10. Indemnities.
(A) Buyer Indemnity. Buyer shall indemnify, defend and hold harmless
Seller and its officers, directors, agents, representatives, affiliates,
partners and parent companies from an against all third party claims, actions,
demands, suits, losses, liabilities and expenses, including attorneys fees,
arising out of or resulting from:
(i) Breach of any representation or warranty by Buyer contained in
this Agreement;
(ii) Any failures to perform any covenant or agreement of Buyer
contained in this Agreement;
(iii) Except as specifically otherwise provided herein, any liabilities
arising out of the Property, the Assigned Contracts or the
Assigned Permits.
(B) Seller Indemnity. Seller shall indemnify, defend and hold harmless
Buyer and its officers, partners and parent companies from and against all third
party claims, action, demands, suits, losses, liabilities, and expenses,
including attorneys fees, arising out of or resulting from:
(i) Breach of any Representations or Warranty by Seller contained in
this Agreement;
(ii) Any failures to perform any covenant or agreement of Seller
contained in this Agreement;
(iii) Any obligations arising out of any Retained Items.
(C) Limitations on Scope of Indemnities.
(i) The indemnification provided herein shall be Buyer's and Seller's
sole and exclusive indemnification obligation under this
Agreement or under applicable law with respect to the Property,
the Assigned Contracts or the Assigned Permits;
(ii) This indemnity shall terminate and cease to be of any force or
affect eighteen months after the Closing Date;
(iii) This indemnification shall not extend to any condition of the
Property caused by Buyer; and
(iv) the indemnified party shall be entitled to indemnity only to the
extent that the aggregate indemnity payments hereunder shall
exceed one hundred thousand dollars ($100,000), and the
indemnifying party's obligation under this indemnity to the
indemnified party shall in no event exceed the aggregate of one
million dollars ($1,000,000).
(D) Buyer and Seller, for purposes of providing assurances to the other
with regard to their respective capacities to perform the indemnity obligations
hereunder, further agree that:
(i) Seller, in the event of a resolution of the Xxxxx Litigation by
settlement, final judgment or otherwise resulting in a Net
Settlement to Seller, shall retain the first $900,000.00 thereof
(or such lesser amount as may be received as a Net Settlement)
until eighteen months after the Closing Date, where the Net
Settlement to Seller means the proceeds in hand to Seller net of
any offsets or counterclaims of the other party and all
litigation expenses including costs, legal fees, expert
witnesses, etc. Provided that Seller may substitute a letter of
credit or a Thermo Electron guarantee, in a form reasonably
acceptable to Buyer, for the foregoing amount.
(ii) In the event that Buyer shall sell, alienate, transfer, pledge,
hypothecate or otherwise encumber all or substantially all of the
Property acquired by Buyer under this agreement, Black Hills
Capital Group, an affiliate of Buyer, shall assume and be
responsible for Buyer's indemnity obligations under this
agreement. Black Hills Capital Group, by its signature to this
agreement, acknowledges that its conditional agreement to assume
Buyer's indemnity obligation is a material inducement to Seller
entering into this agreement, and Black Hills Capital Group
further acknowledges that it expects to benefit from this
Agreement.
11. Assurances. Seller and Buyer shall execute such further documents and
instruments, requested by either party either at or after the Closing, as may be
necessary or reasonably desirable to consummate the transactions contemplated by
the Agreement or any part thereof.
12. Notices. All notices or other communications under this Agreement shall be
in writing and transmitted by telecopier, delivered by air courier, or deposited
in the mail, postage prepaid and certified, and addressed as follows or as
otherwise specified by Seller or Buyer by notice hereunder.
Notices shall be effective upon confirmed receipt.
If to Buyer:
Landrica Development Company
000 Xxxxx Xxxxxx
X.X. Xxx 0000
Xxxxx Xxxx, XX 00000
Attention: Xxxx Xxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
With copy to:
Xxxxxxx Xxxxxx Xxxxxx & Xxxxx, LLP
000 Xxxxx Xxxxxx, 0xx Xxxxx
X.X. Xxx 0000
Xxxxx Xxxx, XX 00000
Attention: Xxxx Xxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to Seller:
KFx Fuel Partners, LP
c/o Eco Fuels, Inc.
c/o Thermo Ecotek Corporation
000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
With copy to:
Xxxxxx X. Xxxxxxxxxxx
Thermo Ecotek Corporation
000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
13. No Waiver. No failure by Seller or Buyer to insist upon the performance of
any covenant, agreement, provision, or condition of this Agreement or to
exercise any right or remedy consequent upon a default hereunder shall
constitute a waiver of any such default or of such covenant, agreement,
provision or condition. No waiver of any default shall affect or alter this
Agreement, but each and every covenant, agreement, provision, and condition of
this Agreement shall continue in full force and effect with respect to any other
then existing or subsequent default hereunder.
14. Entire Agreement. This Agreement, including the exhibits and other writings
referred to herein or delivered pursuant hereto, constitutes the entire
agreement between Seller and Buyer with respect to the subject matter hereof,
and supersedes all prior oral or written agreements, commitments or
understandings with respect thereto. No amendment hereof shall be binding on the
parties unless in writing and signed by authorized representatives of both
parties hereto. The headings used in this Agreement are for convenience of
reference only and shall not be used to define the meaning of any provision.
Time is of the essence in the execution and performance of this Agreement.
15. There presently exists a dispute between Seller and Wyodak Resources
Development Corp. ("Wyodak"), an affiliate of Buyer, with respect to liability
for a fire occurring in Wyodak's Clovis Point slot storage barn in conjunction
with Wyodak storing K-Fuel product produced by Seller and stored in the storage
barn. Seller and Wyodak, in further consideration of the undertakings to be
which is hereby acknowledged, mutually release each other, their directors,
officers, employees, and their respective successors and assigns, with respect
to the deductible portion of the damages arising therefrom in the amount of one
hundred thousand dollars ($100,000.00). The consideration stated herein is
contractual and not a mere recital. This release is limited to the deductible
portion of the loss, but Seller, Buyer and Wyodak do not waive or release any
claim, defense, demand or action that may exist with regard to any subrogation
claim of Wyodak's insurer, Hartford Steam Boiler.
16. Successors and Assigns. This Agreement shall inure to the benefit of and be
binding on the parties hereto and their respective legal representatives,
successors and assigns.
17. No Consequential Damages. No Party shall be liable to the other Party for
any consequential, secondary or indirect damages including, without limitation,
loss of profits, lost opportunity, loss of capital or loss of customers, whether
arising out of breach of contract, tort or strict liability
18. Governing Law. This Agreement shall be governed and construed in accordance
with the laws of the State of Wyoming without the application of its choice of
law rules.
19. Survival. The terms and conditions of this Agreement which by their terms
require or may require performance after the date hereof, and any liability that
arises pursuant to this Agreement, shall survive the expiration or termination
of this Agreement, except as provided in Section 6, hereof, and shall not be
merged into the Deed or Xxxx of Sale or any other document executed in
connection with the transactions contemplated hereby.
20. Execution; counterparts. This Agreement may be executed in multiple
counterparts with facsimile signatures, and the agreement shall be deemed fully
executed and delivered if signatures of all parties are present even if such
signatures are contained on multiple, different and/or separate pages.
IN WITNESS WHEREOF, this Agreement is entered into as of the date first
set forth above.
KFX FUEL PARTNERS, LP
By: Eco Fuels, Inc.
General Partner
By: /s/ Xxxxx X. Xxxx
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Xxxxx Xxxx
President
KFx Wyoming Inc.
General Partner
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
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Title: President
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LANDRICA DEVELOPMENT COMPANY
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
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Title: Controller
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Wyodak Resources Development Corporation executes this Agreement only with
respect to Section 15 hereof.
Wyodak Resources Development Corporation
By: /s/ Xxxx X. Xxxx
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Name: Xxxx X. Xxxx
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Title: President and Chief Operating Officer
Black Hills Capital Group executes this Agreement only with respect to Section
10(D)(ii) hereof.
Black Hills Capital Group
By: /s/ Xxxx X. Xxxx
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Name: Xxxx X. Xxxx
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Title: President and Chief Operating Officer
{Exhibits and Schedules Intentionally Omitted]
