EXHIBIT 10.4
ASSET PURCHASE AGREEMENT
This is an Asset Purchase Agreement (this "Agreement"), dated as of May
8, 2005, by and between (i) National Coal Corporation, a Tennessee corporation
("Buyer"); and (ii) LCC Tennessee, LLC, a Delaware limited liability company
("Seller").
RECITALS
WHEREAS, Buyer and Seller have determined that it is in their
respective best interests for Seller to transfer to Buyer, and for Buyer to
acquire from Seller, certain assets and liabilities of Seller on the terms and
conditions contained in this Agreement;
WHEREAS, the parties hereto desire to make certain representations,
warranties, covenants and agreements in connection with the transactions
contemplated hereby;
NOW THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. As used herein, the following terms have the
meanings set forth below:
(a) "Affiliate" means, with respect to any specified
Person, any Person that (directly or indirectly through one or more
intermediaries) controls, is controlled by, or is under common control with, the
specified Person. "Control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly, of the power
to direct or cause the direction of the management policies of a Person, whether
through the ownership of voting securities, by contract or credit arrangement,
as trustee or executor, or otherwise.
(b) "Approvals" means the consents and approvals required
or contemplated to be obtained in connection with the transactions contemplated
hereby, which consents and approvals are listed on SCHEDULE 1.1(B) hereto.
(c) "Assignment of Lease" means the Assignment of Lease
in substantially the form of EXHIBIT A to this Agreement.
(d) "Xxxx of Sale" means the Xxxx of Sale, General
Assignment and Assumption Agreement in substantially the form of EXHIBIT B to
this Agreement.
(e) "Bond Release Agreement" means the Bond Release
Agreement in substantially the form of EXHIBIT C to this Agreement.
(f) "Business Day" means any day other than any Saturday,
Sunday or legal holiday in Lexington, Kentucky.
(g) "Deed" means the Special Warranty Deed substantially
in the form of EXHIBIT D to this Agreement.
(h) "Equipment" means the equipment set forth on SCHEDULE
1.1(H) hereto.
(i) "Escrow Agreement" means the Escrow Agreement
substantially in the form of EXHIBIT E to this Agreement.
(j) "Facility Lease Termination Agreement" means the
Permit and Facility Lease Amendment and Termination Agreement substantially in
the form of EXHIBIT F to this Agreement.
(k) "Fee Lease Amendment" means the Amendment to Surface
and Mineral Lease Agreement substantially in the form of EXHIBIT G to this
Agreement.
(l) "Governmental Authority" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, any foreign country or any domestic or foreign state, county,
city or other political subdivision.
(m) "Improvements" means the buildings and structures
located on the Owned Real Property.
(n) "Lease Amendments" means the Fee Lease Amendment and
the Reclamation Agreement Amendment.
(o) "Lease" means the Rail Siding Lease, dated October 9,
1996, as amended, by and between Tennessee Railway Company and Tennessee Mining,
Inc. (which was assigned to Seller).
(p) "Owned Real Property" means the real property set
forth on SCHEDULE 1.1(P) hereto.
(q) "Permits" means the permits set forth on SCHEDULE
1.1(Q) hereto.
(r) "Permitted Liens" means any (a) pledge, assessment,
security interest, lease, judgment lien, tax lien, mechanic's lien,
materialman's lien, other lien, adverse claim, levy, charge, option, right of
first refusal, charge, debenture, indenture, deed of trust, right-of-way,
restriction, encroachment, license, lease, security agreement, or other
encumbrance of any kind, and other restrictions or limitations on the use or
ownership of real or personal property or irregularities in title thereto or any
conditional sale contract, title retention contract or other contract to give
any of the foregoing (i) imposed by law which does not materially impair the
value, use or operation of the Purchased Assets in the ordinary course of
business, such as liens for real estate taxes not yet payable and mechanic's
liens incurred in the ordinary course; (ii) which is assumed or consented to by
Buyer herein (including those, if any, included in Assumed Liabilities); (iii)
created by Buyer; (iv) in favor of the lessor under the Lease; or (v) provided
for in, or contemplated by, this Agreement; (b) easements, rights-of-way,
restrictions or minor defects or irregularities in title; and (c) encumbrances
consisting of zoning restrictions, easements, licenses or restrictions on the
use of the Owned Real Property or minor
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imperfections in title thereto, which do not materially impair the value or use
of the Owned Real Property for coal mining purposes.
(s) "Person" means any natural person, corporation,
limited liability company, general partnership, limited partnership, sole
proprietorship, trust, union, association, Governmental Authority or other
business organization.
(t) "Purchased Assets" means the Equipment, the
Improvements, the Lease, the Owned Real Property and the Permits.
(u) "Reclamation Agreement Amendment" means the Amendment
to Reclamation Agreement substantially in the form of EXHIBIT H to this
Agreement.
(v) "Related Agreements" means (i) the Assignment of
Lease, (ii) the Xxxx of Sale, (iii) the Deed, (iv) the Escrow Agreement, (v) the
Facility Lease Termination Agreement, (vi) the Lease Amendments, (vii) the
Sublease Termination Agreement, and (viii) any other agreement, certificate or
similar document executed by a party hereto pursuant to or in connection with
this Agreement.
(w) "Related Person" means, with respect to a specific
Person, any officer, director, employee, agent, shareholder, representative,
successor or assign of such Person.
(x) "Seller Bonds" means the bonds posted by Seller or
Horizon Natural Resources Company or any of their respective Affiliates with the
Office of Surface Mining in connection with the Permits.
(y) "Sublease Termination Agreement" means the Permit and
Sublease Amendment and Termination Agreement substantially in the form of
EXHIBIT I to this Agreement.
1.2 RULES OF INTERPRETATION.
(a) The singular includes the plural and the plural
includes the singular.
(b) The word "or" is not exclusive.
(c) A reference to a Person includes its permitted successors and permitted
assigns.
(d) The words "include," "includes" and "including" are
not limiting.
(e) A reference in a document to an Article, Section,
Exhibit, Schedule, Annex or Appendix is to the Article, Section, Exhibit,
Schedule, Annex or Appendix of such document unless otherwise indicated.
Exhibits, Schedules, Annexes and Appendices to any document shall be deemed
incorporated by reference in such document.
(f) References to any document, instrument or agreement
(i) shall include all exhibits, schedules and other attachments thereto, (ii)
shall include all documents, instruments or
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agreements issued or executed in replacement thereof, and (iii) shall mean such
document, instrument or agreement, or replacement or predecessor thereto, as
amended, modified and supplemented from time to time and in effect at any given
time.
(g) The words "hereof," "herein" and "hereunder" and
words of similar import when used in any document shall refer to such document
as a whole and not to any particular provision of such document.
(h) References to "days" shall mean calendar days, unless
the term "Business Days" shall be used.
(i) This Agreement is the result of negotiations among,
and has been reviewed by the parties hereto. Accordingly, this Agreement shall
be deemed to be the product of all parties, and no ambiguity shall be construed
in favor of or against any party.
ARTICLE 2
PURCHASE AND SALE OF ASSETS
2.1 PURCHASED ASSETS. Upon the terms and subject to the conditions
contained in this Agreement, at the Closing, Seller shall sell, assign, transfer
and convey to Buyer, and Buyer shall purchase, acquire and accept from Seller,
all of Seller's right, title and interest in the Purchased Assets, free and
clear of all liens and encumberances, except as otherwise provided herein.
2.2 EXCLUDED ASSETS. The parties acknowledge that Seller is not
selling, assigning, transferring or conveying to Buyer, and Buyer is not
purchasing, acquiring or accepting from Seller, any assets other than the
Purchased Assets.
2.3 TRANSFER OF PERMITS TO BUYER.
(a) Buyer and Seller acknowledge that the Permits are not
in Seller's name, but are currently contemplated to be transferred to Seller
from Tennessee Mining, Inc. ("TMI"). Buyer and Seller further acknowledge that
TMI's corporate existence has been terminated in connection with TMI's
bankruptcy proceeding. Buyer and Seller shall use commercially reasonable
efforts to effect the transfer of the Permits from TMI to Seller and from Seller
to Buyer. At least three (3) Business Days prior to the Closing Date, Buyer
shall deliver to Seller completed and fully executed originals of all necessary
documents or applications (including an "operator assignment") required by the
Office of Surface Mining and/or the Tennessee Department of Environment and
Conservation (collectively, the "Mining Authorities") for the transfer of the
Permits to Buyer and the designation of Buyer as operator. Thereafter, Seller
shall, within five (5) Business Days after the Closing Date, file all such
applications and other documents with the Mining Authorities and Buyer shall
cooperate with TMI and Seller to diligently pursue the expeditious transfer of
the Permits.
(b) Notwithstanding the provisions of SECTION 2.3(A),
Buyer and Seller agree and acknowledge that Buyer shall not be designated as the
operator under OSM Permit 3021 unless and until such Permit has been transferred
to Buyer and the corresponding Seller Bonds have been replaced, terminated and
surrendered.
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2.4 ASSUMED LIABILITIES. At the Closing, Buyer shall assume all of
the liabilities and obligations relating to the Purchased Assets, whether known
or unknown and whether arising before or after the Closing (the "Assumed
Liabilities"), including: (a) all liabilities and obligations relating to the
Purchased Assets for reclamation required by law, contract or otherwise, whether
known or unknown and whether arising before or after the Closing; (b) all
liabilities and obligations for environmental impact, harm or damage or other
liability or obligation of any nature related to the Purchased Assets, whether
known or unknown and whether arising before or after the Closing; and (c) all
liabilities and obligations relating to the Purchased Assets for electrical
power, water, telephone and other utilities, security, road maintenance, water
treatment, insurance, taxes, bonding, engineering support, permitting actions,
reclamation, fines and fees, whether known or unknown and whether arising before
or after the Closing. Buyer's assumption of the Assumed Liabilities shall be in
addition to, and shall in no way diminish, modify or otherwise alter, any and
all liabilities and obligations Buyer has under any other agreements it has with
Seller or Seller's predecessors or assignors, including any and all liabilities
and obligations arising under the Facility Lease Agreement (the "Facility Lease
Agreement"), entered into effective as of the 16th day of July, 2004, by and
between TMI and Buyer, the Permit Agreement of even date between such parties
related thereto, the Sublease Agreement (the "Sublease Agreement"), made as of
the 16th day of July, 2004, by and between such parties, and the Permit
Agreement of even date between such parties related thereto, except to the
extent those Agreements require the payment of rent, which shall be abated and
paid only if the Buyer does not obtain the Permits that relate to the respective
lease property within the Transfer Period, as below defined. Notwithstanding any
provision of this Agreement to the contrary, Buyer shall not assume any
liability of Horizon Natural Resources Company or any of its subsidiaries,
including TMI, that were discharged, paid, compromised or satisfied, in each
case, in full pursuant to the bankruptcy proceedings to which Horizon Natural
Resources Company and its subsidiaries, including TMI, were parties.
2.5 NON-ASSIGNMENT OF PURCHASED ASSETS. Notwithstanding any other
provision of this Agreement or the Related Agreements to the contrary, neither
this Agreement nor the Related Agreements shall constitute an agreement to
assign or transfer and shall not effect the assignment or transfer of any
Purchased Asset if (a) an attempted assignment or transfer thereof, without the
approval, authorization or consent of, or granting or issuance of any license or
permit by, any third party thereto (each such action a "Necessary Consent"),
would constitute a breach thereof and (b) such Necessary Consent has not been
obtained. In such event, from and after the Closing Date, Seller and Buyer shall
use commercially reasonable efforts to obtain each such Necessary Consent.
2.6 REAL PROPERTY ESCROW.
(a) Notwithstanding any provision herein to the contrary,
at the Closing, the Owned Real Property, the Improvements and the Lease shall
not be transferred to Buyer. The executed Deed and the executed Assignment of
Lease (the "Escrowed Documents") shall be held by Seller in escrow and
distributed as set forth in this SECTION 2.6. The Equipment shall be transferred
to Buyer at the Closing.
(b) With respect to each Permit, Buyer shall use
commercially reasonable efforts to cause such Permit to be transferred to Buyer
and the corresponding Seller Bonds to be
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replaced, terminated and surrendered within two hundred seventy (270) days from
the Closing Date (the "Transfer Period"); provided, however, that with respect
to any Permit, (i) the running of the Transfer Period shall be tolled during any
time that the transfer of such Permit is delayed as a direct consequence of any
action or inaction (when action was required) solely on the part of Seller,
including any such delay that arises as a direct consequence of any past or
future action or inaction (when action was required) solely by LCC in connection
with the transfer of the Permits from TMI to LCC, it specificially being the
intention of the Parties that the running of the Transfer Period shall not begin
until such time as the Permits have transferred from TMI to LCC; and (ii) the
Transfer Period may be extended upon the written consent of Seller. Seller shall
deliver each Escrowed Document to Buyer as soon as all Permits to which such
Escrowed Document relates have been transferred to Buyer and all Seller Bonds
related to such Permits have been replaced, terminated and surrendered.
(c) With respect to each Permit, if Buyer has not caused
such Permit to be transferred to Buyer and the corresponding Seller Bonds to be
replaced, terminated and surrendered prior to the expiration of the applicable
Transfer Period, (i) the Escrowed Documents related to such Permit(s) shall, at
the option of Seller (which shall be exercisable in Seller's sole and absolute
discretion), no longer be deemed to be in escrow and Seller shall be entitled to
retain the same; (ii) Buyer and Seller shall, at the option of Seller (which
shall be exercisable in Seller's sole and absolute discretion), instruct the
Mining Authorities not to proceed with the transfer of such Permit(s); and (iii)
Buyer shall, at the option of Seller (which shall be exercisable in Seller's
sole and absolute discretion), reconvey to Seller such Permit and any documents
related thereto and any right, title or interest Buyer may have acquired
therein.
(d) Until such time as the Escrowed Documents with
respect to each Permit are released from escrow to Buyer, Buyer shall have no
right, title or interest in the Owned Real Property, the Improvements or the
Lease, except the right to have the Escrowed Documents released from escrow
pursuant to the terms of this Agreement.
2.7 BOND ESCROW.
(a) Buyer acknowledges that it is not obtaining any
right, title or interest in any of the Seller Bonds. Buyer shall obtain all
bonds necessary in connection with the Permits, and shall cause the Seller Bonds
to be replaced, terminated and surrendered as soon as practicable after the
Closing. At the Closing, Buyer shall deliver to U.S. Bank National Association
(the "Escrow Agent") cash in an amount equal to Five Hundred Thirty-Eight
Thousand Two Hundred Dollars ($538,200.00) to be held pursuant to the terms of
the Escrow Agreement.
(b) With respect to each Permit set forth on Schedule 2.7
if Buyer has caused such Permit to be transferred to Buyer and the corresponding
Seller Bonds to be replaced, terminated and surrendered prior to the expiration
of the applicable Transfer Period, Seller shall instruct the Escrow Agent to and
the Escrow shall transfer to Buyer the amount of cash corresponding to such
Permit on Schedule 2.7 in accordance with the Escrow Agreement.
(c) With respect to each Permit set forth on Schedule
2.7, if Buyer has not caused such Permit to be transferred to Buyer and the
corresponding Seller Bonds to be replaced,
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terminated and surrendered prior to the expiration of the applicable Transfer
Period, Seller shall instruct the Escrow Agent to transfer to Seller the amount
corresponding to such Permit on Schedule 2.7 in accordance with the Escrow
Agreement. Provided, however, if the non-transfer of any Permit is due to the
fault, or action or failure to act of the Seller, then the Seller shall instruct
the Escrow Agent to transfer to the Buyer the amount of cash corresponding to
such Permit on Schedule 2.7 in accordance with the Escrow Agreement.
(d) In the event this Agreement or any of the Related
Agreements are terminated, rejected or materially breached by Buyer after the
Closing, Seller shall have the rights and remedies set forth in Section 7.2 as
though this Agreement had been terminated pursuant to Article 7 and Seller shall
be entitled to, and shall instruct the Escrow Agent to transfer to Seller, all
funds then held pursuant to the Escrow Agreement.
2.8 TAXES. Buyer shall pay any and all sales, use or other taxes,
duties or recording costs, if any, imposed on the transfer of the Purchased
Assets pursuant to this Agreement or any Related Agreement. All utility charges,
lease payments and royalty payments under the Purchased Assets and all ad
valorem, real property, personal property and mineral taxes with respect to the
Purchased Assets, in each case, other than those for which Buyer is responsible
pursuant to the terms of the Sublease Agreement or the Facility Lease Agreement
(which amounts Buyer shall pay to Seller at the Closing), shall be prorated as
of the Closing Date. Seller shall be responsible for all such costs relating to
the period prior to the Closing Date, and Buyer shall be responsible for all
such costs relating to the period beginning on the Closing Date. Buyer and
Seller shall make any such payments within a reasonable time period following
the Closing.
2.9 TIME AND PLACE OF CLOSING. Unless this Agreement is earlier
terminated pursuant to its terms, the closing of the transactions contemplated
hereby (the "Closing") shall take place within five (5) Business Days after all
conditions precedent to Closing set forth in this Agreement have been satisfied
or waived (such date on which the Closing occurs, the "Closing Date"); provided,
however, that Buyer and Seller shall use commercially reasonable efforts to
cause the Closing to occur on or before July 8, 2005. The Closing shall take
place at the offices of Xxxxx Xxxxx Xxxx LLC, 0000 Xxxxxxxxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx.
2.10 ACCESS RIGHTS. Buyer hereby acknowledges and agrees that (a)
in the event some but not all of the Permits are transferred from Seller to
Buyer, Seller shall have the right, without any payment of any kind to Buyer or
any other Person, to use the areas covered by any of such transferred Permits,
including OSM Permit 3020; and (b) in the event all of the Permits are
transferred from Seller to Buyer, Seller shall have the right, without any
payment of any kind to Buyer or any other Person, to use the area covered by OSM
Permit 3020, in each case, to the extent necessary to enable Seller to conduct
any permissible activities on, and to be able to access, properties owned,
controlled or otherwise operated by Seller or its Affiliates; provided, however,
that if Seller or its Affiliates or agents haul a material amount of coal over
the Fork Mountain haulroad after OSM Permit 3020 is transferred to Buyer, Buyer
and Seller shall share in the reasonable maintenance costs for such haulroad
during the period that Seller or its Affiliates or agents are hauling coal on
such haulroad, based on the relative tonnage of coal hauled by Seller and its
Affiliates and agents, on one hand, and hauled by Buyer and its Affiliates and
agents, on the other hand. Buyer further agrees to take all such commercially
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reasonable actions as Seller may request to further evidence, or give effect to,
the rights set forth in this section, including the filing of all documents
required to be filed with any Governmental Authority with respect to such
rights.
2.11 AIG ESCROW. The parties acknowledge that, pursuant to the Bond
Release Agreement, Affiliates of American International Group will agree to pay
Five Hundred Thousand Dollars ($500,000.00) or such other amount to Buyer,
provided the Seller Bonds are replaced, terminated and surrendered within the
Release Period (as defined in the Bond Release Agreement).
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
In order to induce Buyer to enter into this Agreement, Seller makes the
representations and warranties set forth below.
3.1 ORGANIZATION. Seller is a limited liability company duly
organized, validly existing and in good standing under the laws of the state of
its formation. Seller has full power, authority and capacity to execute and
deliver this Agreement and the Related Agreements and, subject to obtaining the
Approvals, to perform its obligations hereunder and thereunder and to consummate
the transactions contemplated hereby and thereby.
3.2 EXECUTION AND DELIVERY. The execution, delivery and
performance of this Agreement and the Related Agreements by Seller, and the
consummation of the transactions contemplated hereby and thereby, have been duly
authorized and approved by Seller, and no other limited liability company action
on the part of Seller is necessary to authorize the execution, delivery and
performance of this Agreement and the Related Agreements by Seller and the
consummation of the transactions contemplated hereby and thereby. This Agreement
has been duly and validly executed and delivered by Seller and constitutes, and
upon the execution and delivery by Seller of the Related Agreements, the Related
Agreements shall constitute, legal, valid and binding obligations of Seller
enforceable against Seller in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganizations,
moratorium or other laws affecting creditors' rights generally.
3.3 NO CONFLICTS. Subject to obtaining the Approvals, the
execution and delivery by Seller of this Agreement and the Related Agreements,
the performance of its obligations under this Agreement and the Related
Agreements and the consummation of the transactions contemplated hereby and
thereby do not and shall not:
(a) Conflict with or result in a violation or breach of
any of the terms, conditions or provisions of its articles of organization or
operating agreement;
(b) Conflict with or result in a violation or breach of
any term or provision of any license, law or order applicable to Seller or any
of the Purchased Assets; or
(c) Conflict with or result in a violation or breach of,
or constitute a default under, or require Seller to obtain any consent or
approval under the terms of, any of the Purchased Assets.
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3.4 GOVERNMENTAL APPROVALS AND FILINGS. Subject to obtaining the
Approvals, no consent, approval or action of, filing with or notice to any
Governmental Authority on the part of Seller is required in connection with the
execution, delivery and performance of this Agreement or any of the Related
Agreements or the consummation of the transactions contemplated hereby or
thereby.
3.5 BROKERS. Neither Seller nor any of its Affiliates has incurred
any liability for any fee or commission to any broker, finder, investment banker
or other intermediary in connection with the transactions contemplated by this
Agreement.
3.6 SELLER HAS OWNERSHIP OF, AND TITLE TO AND THE RIGHT TO
TRANSFER TITLE TO THE ASSETS INTENDED TO BE TRANSFERRED BY THIS AGREEMENT FROM
THE SELLER TO THE BUYER. SELLER IS THE HOLDER OF OR WILL BE THE HOLDER OF THE
PERMIT WITHIN THE TRANSFER PERIOD, AND HAS OR WILL HAVE THE LEGAL ABILITY,
SUBJECT TO THE NECESSARY GOVERNMENTAL CONSENTS AND APPROVALS, TO TRANSFER THE
PERMITS TO THE BUYER WITHIN THE TRANSFER PERIOD.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
In order to induce Seller to enter into this Agreement, Buyer makes the
representations and warranties set forth below.
4.1 ORGANIZATION. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation.
Buyer has full power, authority and capacity to execute and deliver this
Agreement and the Related Agreements and to perform its obligations hereunder
and thereunder and to consummate the transactions contemplated hereby and
thereby.
4.2 EXECUTION AND DELIVERY. The execution, delivery and
performance of this Agreement and the Related Agreements by Buyer, and the
consummation of the transactions contemplated hereby and thereby, have been duly
authorized and approved by Buyer, and no other corporate action on the part of
Buyer is necessary to authorize the execution, delivery and performance of this
Agreement and the Related Agreements by Buyer and the consummation of the
transactions contemplated hereby and thereby. This Agreement has been duly and
validly executed and delivered by Buyer and constitutes, and upon the execution
and delivery by Buyer of the Related Agreements, the Related Agreements shall
constitute, legal, valid and binding obligations of Buyer enforceable against
Buyer in accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganizations, moratorium or other laws affecting
creditors' rights generally.
4.3 NO CONFLICTS. Subject to obtaining the Approvals, the
execution and delivery by Buyer of this Agreement and the Related Agreements,
the performance of its obligations under this Agreement and the Related
Agreements and the consummation of the transactions contemplated hereby and
thereby do not and shall not:
(a) Conflict with or result in a violation or breach of
any of the terms, conditions or provisions of its articles of incorporation or
bylaws;
(b) Conflict with or result in a violation or breach of
any term or provision of any law or order applicable to Buyer; or
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(c) Conflict with or result in a violation or breach of,
or constitute a default under, or require Buyer to obtain any consent or
approval under the terms of, any contract or license to which Buyer is a party
or by which Buyer's assets or properties are bound.
4.4 GOVERNMENTAL APPROVALS AND FILINGS. Subject to obtaining the
Approvals, no consent, approval or action of, filing with or notice to any
Governmental Authority on the part of Buyer is required in connection with the
execution, delivery and performance of this Agreement or any of the Related
Agreements or the consummation of the transactions contemplated hereby or
thereby.
4.5 BROKERS. Neither Buyer nor any of its Affiliates has incurred
any liability for any fee or commission to any broker, finder, investment banker
or other intermediary in connection with the transactions contemplated by this
Agreement.
4.6 ADEQUATE FUNDS. Buyer has or has access to adequate funds
available to it in order to consummate the transactions contemplated by this
Agreement and the Related Agreements and to perform its obligations hereunder
and thereunder.
4.7 PERMITTING. Neither Buyer or any of its Affiliates, nor any of
their respective Related Persons have been subject to any bond forfeiture,
permit suspension or revocation or similar effort or proceeding instituted by
any Governmental Authority. Neither Buyer or any of its Affiliates, nor any of
their respective Related Persons has been notified by the Federal Office of
Surface Mining or the agency of any state administering the Surface Mining
Control and Reclamation Act (30 U.S.C. xx.xx. 1201 et seq.), or any comparable
state statute, that it is (a) ineligible to receive additional surface mining
permits, or (b) under investigation to determine whether its eligibility to
receive such permits should be revoked, i.e., "permit blocked".
ARTICLE 5
CONDITIONS PRECEDENT TO PERFORMANCE BY PARTIES
5.1 CONDITIONS PRECEDENT TO PERFORMANCE BY SELLER. The obligations
of Seller to consummate the transactions contemplated by this Agreement is
subject to the fulfillment, at or before the Closing, of the following
conditions, any one or more of which may be waived by Seller in its sole
discretion:
(a) All representations and warranties made by Buyer in
this Agreement or the Related Agreements shall be true and correct in all
material respects on the date of this Agreement and on and as of the Closing
Date (except to the extent that any such representation and warranty is made as
of a specified date, in which case such representation and warranty shall be
made only as of such specified date), and the covenants and agreements of Buyer
to be performed on or before the Closing Date shall have been duly performed in
all material respects in accordance with this Agreement, and Seller shall have
received a certificate, dated the Closing Date and signed by an officer of
Buyer, to that effect.
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5.2 CONDITIONS PRECEDENT TO PERFORMANCE BY BUYER. The obligations
of Buyer to consummate the transactions contemplated by this Agreement are
subject to the fulfillment, at or before the Closing, of the following
conditions, any one or more of which may be waived by Buyer in its sole
discretion:
(a) All representations and warranties made by Seller in
this Agreement or the Related Agreements shall be true and correct in all
material respects on the date of this Agreement and on and as of the Closing
Date (except to the extent that any such representation and warranty is made as
of a specified date, in which case such representation and warranty shall be
made only as of such specified date), and the covenants and agreements of Seller
to be performed on or before the Closing Date, shall have been duly performed in
all material respects in accordance with this Agreement, and Buyer shall have
received a certificate, dated the Closing Date and signed by an officer of
Seller, to that effect.
5.3 CONDITIONS TO EACH PARTY'S OBLIGATIONS. The respective
obligations of each party to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment or waiver, at or before the
Closing, of the following conditions:
(a) There shall not be outstanding, as of the Closing,
any order, injunction or similar action prohibiting the consummation of all, or
any material portion of, the transactions contemplated by this Agreement and no
action shall have been commenced, as of the Closing, which could reasonably be
expected to prohibit the consummation of all, or any material portion of, the
transactions contemplated hereby.
(b) There shall not have been any action taken or any
statute enacted by any Governmental Authority, as of the Closing, which would
render the parties unable to consummate the transactions contemplated hereby or
make the transactions contemplated hereby illegal or prohibit the consummation
of the transactions contemplated hereby.
(c) As of the Closing, the parties hereto shall have
obtained all material approvals and consents, if any, necessary for the
consummation of the transactions contemplated by this Agreement, except for the
governmental consents and approvals required to transfer the Permits and the
consent necessary to assign the Lease.
ARTICLE 6
COVENANTS
6.1 COMPLIANCE WITH PERMITS. Buyer shall comply with all
conditions and requirements of, or pertaining to, any Permits that Buyer
operates under after the Closing. Buyer shall bear any risk or expense
associated with not having any Permits transferred or otherwise in effect
following the Closing. In the event that any demand is made under any Seller
Bond after the Closing, at the option of Seller (which option shall be exercised
in Seller's sole and absolute discretion) either (a) Buyer shall satisfy such
demand or reimburse the Person that suffered a loss as a result of such demand;
or (b) Buyer and Seller shall instruct the Escrow Agent to satisfy such demand
from the cash held pursuant to the Escrow Agreement. Buyer shall use its best
efforts to cause the Permits to be transferred to Buyer as soon as possible
following the Closing, but in no event later than the applicable Transfer
Period.
11
6.2 CURE OF VIOLATIONS. Buyer shall provide Seller prompt written
notice of any "notice of violation" or other notice of default or violation with
respect to the Permits being issued after the execution of this Agreement and
prior to final transfer of the Permits to Buyer. All liabilities for fines and
penalties and all liabilities and obligations for remedial work or otherwise
arising from or relating to "notices of violation" and other notices of default
or violation under any Permit or any law, rule or regulation applicable to the
Purchased Assets, whether arising before or after the Closing, shall be the
responsibility and liability of Buyer, and shall be cured as soon as reasonably
possible. Prior to the final transfer of the Permits to Buyer, Seller may, but
shall have no obligation to, take such actions as Seller reasonably believes to
be necessary or desirable to cure any "notice of violation" or other default or
violation under any Permit or any law, rule or regulation applicable to the
Purchased Assets, and Seller may, at its election, offset the costs associated
therewith against any other amounts owing to Buyer pursuant to this Agreement or
any Related Agreement. In the event Seller cannot or does not offset its cure
costs against amounts owed to Buyer, at the option of Seller (which option shall
be exercised in Seller's sole and absolute discretion) either (a) Seller's
documented cure costs shall be reimbursed by Buyer within 30 days after Seller
requests reimbursement; or (b) Buyer and Seller shall instruct the Escrow Agent
to satisfy such demand from the cash held pursuant to the Escrow Agreement.
6.3 RECLAMATION. Buyer shall comply with all applicable laws in
connection with the reclamation obligations associated with all of the Permits.
6.4 PERFORMANCE UNDER LEASES. From and after the Closing Date,
Buyer shall (a) assume all obligations and liabilities of Seller under the
Lease, and (b) at the discretion of Seller, take all actions necessary to
satisfy the lessee's obligations and liabilities under the terms and conditions
of the Lease.
6.5 BUYER'S CLOSING DELIVERIES. At the Closing, Buyer shall
deliver the following to Seller:
(a) the Related Agreements to which Buyer is a party,
duly executed by Buyer;
(b) the Bond Release Agreement, duly executed by Buyer(it
shall be the responsibility of the Seller to obtain the execution of the
Agreement by AIG);
(c) a copy of the resolutions of the board of directors
of Buyer approving this Agreement and the Related Agreements;
(d) a good standing certificate for Buyer, dated a recent
date prior to the Closing Date and certified by the Secretary of State of
Tennessee;
(e) incumbency certificates of Buyer, dated the Closing
Date, signed by a duly authorized officer of Buyer, and giving the name and
bearing a specimen signature of each individual who shall be authorized to sign,
in the name and on behalf of Buyer, this Agreement and the Related Agreements;
and
12
(f) all other documents and instruments contemplated to
be delivered by Buyer pursuant to this Agreement.
6.6 SELLER'S CLOSING DELIVERIES.
(a) At the Closing, Seller shall deliver the following to
Buyer:
(i) the Related Agreements (other than the Deed
and the Assignment of Lease) to which Seller is a party, duly executed by
Seller;
(ii) the Bond Release Agreement, duly executed by
the Seller and by an authorized representative of AIG;
(iii) a copy of the resolutions of the boards of
directors or other governing body of Seller approving this Agreement and the
Related Agreements;
(iv) a good standing certificate for Seller,
dated a recent date prior to the Closing Date and certified by the Secretary of
State of its state of formation;
(v) an incumbency certificate, dated the Closing
Date, signed by a duly authorized officer, member or manager of Seller and
giving the name and bearing a specimen signature of each individual who shall be
authorized to sign, in the name and on behalf of Seller, this Agreement and the
Related Agreements; and
(vi) all other documents and instruments (other
than the Deed and the Assignment of Lease) contemplated to be delivered by
Seller pursuant to this Agreement.
(b) Seller shall deliver the Deed and the Assignment of
Lease to Buyer pursuant to the terms of Section 2.6
6.7 INSURANCE. Without limiting the obligations of Buyer to
protect, indemnify, hold harmless and defend Seller as provided in this
Agreement, Buyer agrees, at its own cost and expense, to procure and keep in
force and effect the insurance listed on Schedule 6.7 with insurance carrier(s)
acceptable to Seller until such time as the Permits are completely transferred
to Buyer. Before commencing, or permitting any other Person to commence, any
work under the Permits, Buyer shall furnish Seller with certificates of
insurance attested by a duly authorized representative of Buyer's insurance
carrier(s) evidencing that the insurance required hereunder is in full force and
effect and that such insurance shall not be cancelled or materially changed
without giving to Seller at least ten (10) days' prior written notice.
6.8 TITLE. Seller has title to the Purchased Assets. At the
Closing, Seller shall transfer the Equipment to Buyer free and clear of all
material liens, claims, defaults and encumbrances, except Permitted Liens. Upon
the approval of the transfer of the Permits and the replacement, termination and
surrender of the Seller Bonds, Seller shall transfer the Permits, the Owned Real
Property, the Lease (provided the consent of the lessor thereunder has been
obtained) and the Improvements to Buyer free and clear of all material liens,
claims, defaults and encumbrances, except Permitted Liens.
13
6.9 PAYMENTS. At the Closing, Buyer shall pay to Seller all
amounts due to Seller under the Facility Lease Agreement and the Sublease
Agreement through the Closing Date, regardless of whether such amounts are then
payable or would become payable after the Closing Date.
ARTICLE 7
TERMINATION
7.1 TERMINATION. This Agreement may be terminated before the
Closing:
(a) By mutual consent of Buyer and Seller at any time;
(b) By Seller if the Closing has not occurred on or
before May 6, 2005 (as such date may be extended by agreement of the parties
hereto); provided, however, that as of such date Seller is not in material
default under this Agreement;
(c) Provided the terminating party is not otherwise in
material default or breach of this Agreement, and has not failed or refused to
perform without justification hereunder, by either Buyer or Seller, without
prejudice to other rights and remedies which the terminating party may have, if
the other party shall (i) have materially failed to perform its covenants or
agreements contained herein required to be performed, or (ii) have materially
breached any of its representations or warranties contained herein; provided,
however, that in the case of clause (i) or (ii), the defaulting party shall have
a period of ten (10) days following written notice from the non-defaulting party
to cure any breach of this Agreement, if such breach is curable.
7.2 EFFECT OF TERMINATION; REMEDIES. In the event this Agreement
is terminated pursuant to this Article 7, this Agreement shall become null and
void and have no effect (other than Articles 7, 8, and 9 of this Agreement and
any indemnification provisions contained elsewhere in this Agreement, all of
which shall survive termination), with no liability on the part of Seller or
Buyer, or their respective Affiliates or Related Persons, with respect to this
Agreement, except for (i) the liability of a party for its own expenses pursuant
to Section 9.1; and (ii) provided, however that any such termination shall be
without prejudice to the rights of any party hereto arising out of the breach by
any other party of any covenant or agreement contained in this Agreement. In the
event this Agreement or any of the Related Agreements is terminated, rejected or
materially breached after the Closing, Seller shall have the rights and remedies
set forth in this Section as though this Agreement had been terminated pursuant
to Article 7 and Seller shall have the right to have the Equipment returned to
it, in which case Buyer shall execute all such documents and take all such
actions as Seller shall reasonably request to effect the transfer of the
Equipment from Buyer to Seller.
ARTICLE 8
INDEMNIFICATION
8.1 INDEMNITY BY SELLER. Seller shall indemnify and hold Buyer and
its officers, directors, members, managers, employees and Affiliates
(collectively, the "Buyer Indemnitees") harmless from and against, and shall pay
to the Buyer Indemnitees the full amount of, any loss, claim, damage, liability
or expense (including reasonable attorneys' fees but excluding all
14
special, exemplary, punitive and consequential damages) (each, a "Loss")
resulting to the Buyer Indemnitees, either directly or indirectly, from any
inaccuracy in any representation or warranty, or any breach of any covenant or
agreement, by Seller contained in this Agreement or in any of the Related
Agreements.
8.2 INDEMNITY BY BUYER. Buyer shall indemnify and hold Seller, TMI
and their officers, directors, members, managers, employees and Affiliates
(collectively, the "Seller Indemnitees") harmless from and against, and shall
pay to the Seller Indemnitees the full amount of, any Loss resulting to the
Seller Indemnitees, either directly or indirectly, from: (a) the Purchased
Assets, (b) the Assumed Liabilities, (c) any violation (or claimed violation) by
Buyer of any law, rule or regulation, or (d) any inaccuracy in any
representation or warranty, or any breach of any covenant or agreement, by Buyer
contained in this Agreement or in any of the Related Agreements.
8.3 REMEDIES; RIGHT OF OFFSET. Upon the occurrence of any event
for which any Seller Indemnitee is entitled to indemnification from Buyer under
this Agreement, it shall have all the rights and remedies at law and in equity
available to it. Without limiting the foregoing, if Buyer fails or refuses to
pay any such amounts promptly after the request of any Seller Indemnitee, then
such Seller Indemnitee, at its election, may offset any such amounts against any
amounts owed to Buyer or any of its Affiliates by such Seller Indemnitee. Upon
the occurrence of any event for which any Buyer Indemnitee is entitled to
indemnification from Seller under this Agreement, it shall have all the rights
and remedies at law and in equity available to it. Without limiting the
foregoing, if Seller fails or refuses to pay any such amounts promptly after the
request of any Buyer Indemnitee, then such Buyer Indemnitee, at its election,
may offset any such amounts against any amounts owed to Seller or its Affiliates
by such Buyer Indemnitee.
8.4 CONTROL OF INDEMNIFIED MATTERS. If a third-party claim is made
against an indemnified party that may result in a loss to the indemnified party,
the indemnifying party shall be entitled to participate in the defense thereof,
and if it so chooses, to assume the defense thereof with counsel selected by the
indemnifying party and reasonably satisfactory to the indemnified party. If the
indemnifying party elects to assume the defense of such third-party claim, the
indemnifying party shall not be liable to the indemnified party for legal
expenses subsequently incurred by the indemnified party in connection with the
defense thereof. If the indemnifying party assumes such defense, the indemnified
party shall have the right to participate in the defense thereof and to employ
counsel, at its own expense, separate from the counsel employed by the
indemnifying party, it being understood that the indemnifying party shall
control such defense. The indemnifying party shall be liable for the fees and
expenses of counsel employed by the indemnified party for any period during
which the indemnifying party has not assumed the defense thereof. If the
indemnifying party chooses to defend or prosecute any third-party claim, all of
the parties hereto shall cooperate in the defense or prosecution thereof. Such
cooperation shall include the retention and (upon the indemnifying party's
request) the provision to the indemnifying party of records and information
which are reasonably relevant to such third-party claim, and making employees
available on a mutually convenient and reasonable basis to provide additional
information and explanation of any material provided hereunder. Whether or not
the indemnifying party shall have assumed the defense of a third-party claim,
the indemnified party shall not admit any liability with respect to, or settle,
compromise or discharge, such third-party claim without the indemnifying party's
prior written
15
consent (which consent shall not be unreasonably withheld). Notwithstanding any
provision in this SECTION 8.4, an indemnifying party shall have no right to
participate in or in any way assume the defense of a third-party claim if such
third-party claim seeks an order, injunction, non-monetary claim or other
equitable relief against the indemnified party; provided, however, that in such
case the indemnifying party shall be liable for the fees and expenses of counsel
for the indemnified party.
8.5 REIMBURSEMENT. For purposes of clarification and not
limitation, the parties hereto acknowledge and agree that Buyer shall reimburse
Seller for all Losses it incurs with respect to the Purchased Assets following
the Closing.
ARTICLE 9
MISCELLANEOUS
9.1 EXPENSES. Except as specifically set forth in this Agreement
or any Related Agreement, the parties shall bear their own expenses, including,
without limitation, fees, disbursements and other costs of any brokers, finders,
investment bankers, attorneys, accountants and other advisors, in connection
with this Agreement, the Related Agreements, and the transactions contemplated
hereby and thereby. For purposes of clarification, the parties hereto
acknowledge and agree that Buyer shall pay all costs and expenses associated
with the transfer of the Permits. In any action or proceeding commenced in
connection with a breach of this Agreement or any Related Agreement, the
prevailing party therein shall be entitled to an award of its reasonable
attorneys' fees and costs.
9.2 NOTICES. All notices, requests, demands and other
communications made in connection with this Agreement shall be in writing and
shall be (a) mailed by registered or certified mail, return receipt requested,
postage prepaid, (b) transmitted by hand delivery, (c) sent by facsimile, or (d)
sent by nationally recognized overnight courier for next Business Day delivery,
addressed as follows:
(a) If to Seller:
LCC Tennessee, LLC
Attention: President, Xxx Xxxxxx
000 Xxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with copies to:
Xxxxxxxxx Doll & XxXxxxxx PLLC
Attention: Xxxxxx Xxxxxxxxxx
000 Xxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
Telephone: (000)000-0000
Facsimile: (000)000-0000
16
(b) If to Buyer:
National Coal Corporation
Attention: President, Xxx X. Xxx
0000 Xxxxxx Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or, in each case, such other address as may be specified in writing to the other
party hereto.
All such notices, requests, demands, waivers and other communications
shall be deemed to have been received (w) if by registered or certified mail, on
the first Business Day after the delivery date documented by the United States
Postal Service for the delivery thereof, (x) if by hand delivery, on the first
Business Day after such actual delivery, (y) if by facsimile and the
transmitting party receives a transmission receipt dated the day of
transmission, on the next Business Day after transmission, and (z) if by
nationally recognized overnight courier, on the next Business Day after the
delivery date documented by such courier.
9.3 AMENDMENT; WAIVERS, ETC. No amendment, modification or
discharge of this Agreement, and no waiver hereunder, shall be valid or binding
unless set forth in writing and duly executed by the party against whom
enforcement of the amendment, modification, discharge or waiver is sought. Any
such waiver shall constitute a waiver only with respect to the specific matter
described in such writing and shall in no way impair the rights of the party
granting such waiver in any other respect or at any other time.
9.4 HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.5 ASSIGNMENT. Buyer shall not assign this Agreement or any
rights or obligations under this Agreement (by operation of law or otherwise)
without the prior written consent of Seller.
9.6 PARTIES IN INTEREST. This Agreement and the Related Agreements
shall be binding upon and inure solely to the benefit of the parties hereto and
their successors and permitted assigns, and nothing in this Agreement or any
Related Agreement, expressed or implied, is intended to confer upon any other
Person any rights or remedies of any nature under or by reason of this Agreement
or any Related Agreement; provided, however, that the Buyer Indemnitees, the
Seller Indemnitees and the Related Persons of Seller and its Affiliates may rely
on the provisions of this Agreement or any Related Agreement applicable to such
Persons.
9.7 BULK SALES OR TRANSFER LAWS. Buyer hereby waives compliance by
Seller with the provisions of the bulk sales or transfer laws of all applicable
jurisdictions.
9.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original, but all
of which shall constitute one and the
17
same instrument, and shall become effective when one or more counterparts have
been signed by each of the parties hereto.
9.9 GOVERNING LAW. This Agreement and the Related Agreements shall
be governed by and construed and enforced in accordance with the laws of the
Commonwealth of Kentucky, without regard to its conflicts of law rules.
9.10 JURISDICTION. Each of the parties hereto agrees that any
proceeding brought to enforce the rights or obligations of any party hereto
under this Agreement or any Related Agreement shall be commenced and maintained
in Circuit Court in Xxxx County, Kentucky or the United States District Court
for the Eastern District of Kentucky, Lexington Division, and such courts shall
have exclusive jurisdiction over any such proceeding. Each of the parties
consents to the exercise of jurisdiction over it and its properties with respect
to any proceeding arising out of or in connection with this Agreement, any
Related Agreement or the transactions contemplated hereby or thereby, or the
enforcement of any rights under this Agreement or any Related Agreement.
9.11 SEVERABILITY. If any provision of this Agreement is
inoperative or unenforceable for any reason, such circumstances shall not have
the effect of rendering the provision in question inoperative or unenforceable
in any other case or circumstance, or of rendering any other provision or
provisions herein contained invalid, inoperative, or unenforceable to any extent
whatsoever, so long as this Agreement, taken as a whole, still expresses the
material intent of the parties. The invalidity of any one or more phrases,
sentences, clauses, sections or subsections of this Agreement shall not affect
the remaining portions of this Agreement.
9.12 ENTIRE AGREEMENT. This Agreement and the Related Agreements
constitute the entire agreement between the parties with respect to the subject
matter hereof, and supersede all prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof.
9.13 DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
SELLER IS NOT MAKING ANY REPRESENTATIONS OR WARRANTIES REGARDING THE PURCHASED
ASSETS, EXPRESS OR IMPLIED. WITHOUT LIMITING THE FOREGOING BUYER ACKNOWLEDGES
THAT THE PURCHASED ASSETS ARE CONVEYED "AS IS", "WHERE IS" AND "WITH ALL FAULTS"
AND THAT ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
ARE DISCLAIMED. FURTHERMORE BUYER ACKNOWLEDGES THAT SELLER AND ITS AFFILIATES
AND THEIR RESPECTIVE RELATED PERSONS HAVE MADE NO REPRESENTATION OR WARRANTY
CONCERNING (I) ANY USE TO WHICH THE PURCHASED ASSETS MAY BE PUT, (II) ANY FUTURE
REVENUES, COSTS, EXPENDITURES, CASH FLOW, RESULTS OF OPERATIONS, FINANCIAL
CONDITION OR PROSPECTS THAT MAY RESULT FROM THE OWNERSHIP, USE OR SALE OF THE
PURCHASED ASSETS OR THE ASSUMPTION OF THE ASSUMED LIABILITIES, (III) ANY OTHER
INFORMATION OR DOCUMENTS MADE AVAILABLE TO BUYER OR ITS AFFILIATES OR RELATED
PERSONS, (IV) THE CONDITION OF THE PURCHASED ASSETS, OR (V) COMPLIANCE WITH ANY
ENVIRONMENTAL LAWS OR OTHER LAWS.
18
9.14 NO CONSEQUENTIAL DAMAGES. In connection with any breach of
this Agreement or any Related Agreement, the parties hereby waive, to the extent
permitted by law, any right to receive or claim any consequential, punitive,
special or incidental damages, or any damages other than, or in addition to,
actual damages.
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19
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
as of the date first above written.
BUYER: NATIONAL COAL CORPORATION
By: /S/ XXX X. XXX
----------------------------------------
Name: XXX X. XXX
----------------------------------------
Title: CHIEF EXECUTIVE OFFICER
----------------------------------------
SELLER: LCC TENNESSEE, LLC
By: /S/ XXX XXXXXX
----------------------------------------
Name: XXX XXXXXX
----------------------------------------
Title: PRESIDENT
----------------------------------------
20
EXHIBIT A
ASSIGNMENT OF LEASE
This Assignment of Lease (this "Agreement"), dated as of
______________, is between LCC Tennessee, LLC, a Delaware limited liability
company (the "Seller") and National Coal Corporation, a Tennessee corporation
(the "Buyer").
RECITALS
A. The Buyer and the Seller are parties to that certain Asset
Purchase Agreement (the "Purchase Agreement") dated May 8, 2005 between the
parties hereto. Capitalized terms used herein but not otherwise defined herein
shall have the meanings given to them in the Purchase Agreement.
B. The Seller is a party to the lease described on Schedule A
hereto (the "Lease").
C. The Seller desires to assign to the Buyer, and the Buyer
desires to assume, all of the Seller's right, title and interest in and to the
Lease, pursuant to the terms of the Purchase Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. ASSIGNMENT. The Seller hereby assigns, transfers and sets over
unto the Buyer all of its right, title, interest, duties and obligations in, to
and under the Lease.
2. ASSUMPTION. The Buyer hereby assumes all of the Seller's
right, title, interest, duties and obligations in, to and under the Lease and
agrees to be bound by all of the terms and conditions of the Lease and to pay,
perform and discharge, all duties and obligations of the Seller under the Lease,
and agrees to indemnify and hold the Seller harmless from and against, and shall
pay to the Seller the full amount of, any loss, claim, damage, liability or
expense (including reasonable attorneys' fees) resulting to the Seller, either
directly or indirectly, from such duties and obligations.
3. CONFLICT. This Agreement is subject to all the terms and
conditions of the Purchase Agreement. No provision of this Agreement shall be
deemed to enlarge, alter or amend the terms or provisions of the Purchase
Agreement. Notwithstanding anything to the contrary set forth herein, if there
is any conflict between the terms and conditions of this Agreement and the terms
and conditions of the Purchase Agreement, the terms and conditions of the
Purchase Agreement shall control.
4. GOVERNING LAW. This Agreement shall be governed by and
construed according to the laws of the State of Tennessee, without regard to or
application of its conflict of laws principles. Provided however, jurisdiction
for litigation of any dispute arising under this agreement shall be in the
courts of general jurisdiction for Fayette County, Kentucky.
5. COUNTERPARTS. This Agreement may be executed in one or more
counterparts (including by means of facsimile signature pages) and all such
counterparts taken together shall constitute one and the same Agreement.
6. SEVERABILITY. If any provision of this Agreement or its
application will be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of all other applications of that
provision, and of all other provisions and applications hereof, will not in any
way be affected or impaired. If any court shall determine that any provision of
this Agreement is in any way unenforceable, such provision shall be reduced to
whatever extent is necessary to make such provision enforceable.
7. ENTIRE AGREEMENT. All prior negotiations and agreements by and
among the parties hereto with respect to the subject matter hereof are
superseded by this Agreement, the Purchase Agreement and the Related Agreements,
and there are no representations, warranties, understandings or agreements with
respect to the subject matter hereof other than those expressly set forth in
this Agreement, the Purchase Agreement and the Related Agreements.
8. HEADINGS. Section headings are not to be considered part of
this Agreement, are solely for convenience of reference, and shall not affect
the meaning or interpretation of this Agreement or any provision in it.
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2
IN WITNESS WHEREOF, the parties hereto have caused their authorized
representatives to execute this Agreement as of the date first set forth above.
SELLER: LCC TENNESSEE, LLC
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
BUYER: NATIONAL COAL CORPORATION
By:
---------------------------
Xxxxxxx X. Xxxx
Senior Vice President
S-1
SCHEDULE A
1. Rail Siding Lease, dated October 9, 1996 (as amended) by and between
Tennessee Railway Company and Tennessee Mining, Inc. for property
located in Xxxxxxx, Tennessee,
EXHIBIT B
XXXX OF SALE, GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT
This is a Xxxx of Sale, General Assignment and Assumption Agreement
(this "Xxxx of Sale"), dated as of _____________, between (i) LCC Tennessee,
LLC, a Delaware limited liability company (the "Seller"), and (ii) National Coal
Corporation, a Tennessee corporation (the "Buyer").
RECITALS
This Xxxx of Sale is being entered into to effect the transactions
contemplated by the Asset Purchase Agreement, dated May 8, 2005 (the
"Agreement"), between the Buyer and the Seller.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS. All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Agreement.
2. ASSIGNMENT. Pursuant to the Agreement, subject to all
necessary governmental approvals and to the extent the Seller has the right to
do so, the Seller does hereby unconditionally and irrevocably grant, convey,
transfer, assign and deliver to the Buyer as of the date hereof all of the
Permits and the Equipment, free and clear of all liens, claims, defaults and
encumbrances, except as contemplated by the Agreement.
3. ACKNOWLEDGMENT AND ASSUMPTION. The Buyer hereby assumes and
agrees to pay, perform and discharge the Assumed Liabilities, and agrees to
indemnify and hold the Seller and its Affiliates harmless from and against, and
shall pay to the Seller or its Affiliates the full amount of, any loss or
liability (including reasonable attorneys' fees) resulting to the Seller or its
Affiliates, either directly or indirectly, from the Assumed Liabilities.
4. CONFLICT. This Xxxx of Sale is subject to all the terms and
conditions of the Agreement. No provision of this Xxxx of Sale shall be deemed
to enlarge, diminish, alter or amend the terms or provisions of the Agreement.
Notwithstanding anything to the contrary set forth herein, if there is any
conflict between the terms and conditions of this Xxxx of Sale and the terms and
conditions of the Agreement, the terms and conditions of the Agreement shall
control.
5. BINDING EFFECT. This Xxxx of Sale shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
6. COUNTERPARTS. This Xxxx of Sale may be executed in one or more
counterparts (including by means of facsimile signature pages) and all such
counterparts taken together shall constitute one and the same agreement.
7. GOVERNING LAW. This Xxxx of Sale shall be governed by and
construed according to the laws of the Commonwealth of Kentucky, without regard
to or application of its conflict of laws principles.
8. ENTIRE AGREEMENT. All prior negotiations and agreements by and
among the parties hereto with respect to the subject matter hereof are
superseded by this Xxxx of Sale, the Agreement, and the other Related
Agreements, and there are no representations, warranties, understandings or
agreements with respect to the subject matter hereof other than those expressly
set forth in this Xxxx of Sale, the Agreement and the other Related Agreements.
9. HEADINGS. Section headings are not to be considered part of
this Xxxx of Sale, are solely for convenience of reference, and shall not affect
the meaning or interpretation of this Xxxx of Sale or any provision in it.
10. FURTHER ASSURANCES. Each party hereto agrees, upon the
reasonable request of the other party hereto (and at such other party's
expense), to make, execute and deliver any and all documents or instruments of
any kind or character, and to perform all such other actions, that may be
reasonably necessary or proper to effectuate, confirm, perform or carry out the
terms or provisions of this Xxxx of Sale.
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2
IN WITNESS WHEREOF, the parties hereto have caused their authorized
representatives to execute this Xxxx of Sale as of the date first set forth
above.
SELLER: LCC TENNESSEE, LLC
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
BUYER: NATIONAL COAL CORPORATION
By:
---------------------------
Xxxxxxx X. Xxxx
Senior Vice President
S-1
EXHIBIT C
BOND RELEASE AGREEMENT
This Bond Release Agreement (this "Agreement"), dated as of
____________, is among (i) National Coal Corporation, a Tennessee corporation
("National"), (ii) LCC Tennessee, LLC, a Delaware limited liability company
("LCC") and (iii) American International Specialty Lines Insurance Company and
Insurance Company of the State of Pennsylvania (collectively, "Surety").
RECITALS
A. National and LCC are parties to that certain Asset Purchase
Agreement (the "Purchase Agreement"), dated May 8, 2005.
B. LCC and Surety are among the parties to the Permitting and
Reclamation Plan Agreement, dated August 31, 2004 (the "Reclamation Agreement")
which addresses bonds issued by Surety for certain of LCC's reclamation
obligations.
C. Pursuant to the Purchase Agreement, National is obligated to
effect the release of the surety bonds listed on SCHEDULE A hereto (the "Bonds")
issued by Surety on behalf of LCC or its affiliates.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. BOND RELEASE; PAYMENT. If all of the original Bonds are
released and returned to Surety within the Release Period, Surety hereby agrees
that, within ten (10) days after receipt of all of the original Bonds, Surety
shall pay to National, by check or wire transfer at the election of National
(such election to be made by National by written notice to Surety no later than
five (5) days after Surety's receipt of the original Bonds), $500,000 from the
AIG Reclamation Collateral Account (as defined in the Reclamation Agreement).
Notwithstanding any provision of the Reclamation Agreement to the contrary,
Surety hereby acknowledges and agrees that, if the only Bonds that are not
released and returned to Surety within the Release Period relate to Permits that
cannot be transferred to National as a direct consequence of any action or
failure to act (where action is required) solely by LCC, Surety shall pay to
National an amount equal to $500,000 multiplied by a fraction, the numerator of
which is the aggregate current bond penal amount of all original Bonds received
by Surety within the Release Period, and the denominator of which is aggregate
current bond penal amount of all Bonds. Surety hereby acknowledges and agrees
that neither LCC nor any of its affiliates shall be obligated, as a result of
such payment, to pay any amount to Surety or any of its affiliates in connection
with the Reclamation Agreement or otherwise. For purposes of this Agreement,
"Release Period" shall mean a period of time beginning on the day after the
Closing Date (as defined in the Purchase Agreement) and extending for the sum of
(a) one hundred eighty (180) days, plus (b) the greatest number of days, if any,
by which the transfer of a Permit that is not transferred to National during the
180-days set forth in the immediately preceding subclause (a) has been delayed
(i) as a direct consequence of any action or failure to act (when action was
required) solely by LCC, including any such delay that arises from any past or
future action or failure to act (when action was required) solely by LCC in
connection with the transfer of the Permits from Tennessee Mining, Inc. to LCC,
it
being the intention of the Parties that the Release Period shall not begin to
run until such time as the Permits have transferred from Tennessee Mining Inc.
to LCC, or (ii) as a direct consequence of any lawsuit filed against Buyer,
Seller or the Office of Surface Mining by the Sierra Club, the Tennessee Clean
Water Network, Save Our Cumberland Mountains, Cumberland Trail Associates,
Appalachian Voice or Southern Appalachian Bio Diversity Project and which
lawsuit has as its principal purpose the delay or denial of the Transfer of such
Permit; provided, however, that (y) subclause (b) shall not include any days of
delay that arise from any action or inaction occurring after the Release Period
(as extended by subclause (b)) ends, and (z) subclause (b) shall include only
the total number of days by which the transfer of the one Permit has been
delayed the longest number of days, not the cumulative number of days by which
the transfer of all Permits has been or may be delayed.
2. GOVERNING LAW. This Agreement shall be governed by and
construed according to the laws of the Commonwealth of Kentucky, without regard
to or application of its conflict of laws principles.
3. COUNTERPARTS. This Agreement may be executed in one or more
counterparts (including by means of facsimile signature pages) and all such
counterparts taken together shall constitute one and the same Agreement.
4. SEVERABILITY. If any provision of this Agreement or its
application will be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of all other applications of that
provision, and of all other provisions and applications hereof, will not in any
way be affected or impaired. If any court shall determine that any provision of
this Agreement is in any way unenforceable, such provision shall be reduced to
whatever extent is necessary to make such provision enforceable.
5. ENTIRE AGREEMENT. All prior negotiations and agreements by and
among the parties hereto with respect to the subject matter hereof are
superseded by this Agreement and the Purchase Agreement, and there are no
representations, warranties, understandings or agreements with respect to the
subject matter hereof other than those expressly set forth in this Agreement or
the Purchase Agreement.
6. HEADINGS. Section headings are not to be considered part of
this Agreement, are solely for convenience of reference, and shall not affect
the meaning or interpretation of this Agreement or any provision in it.
7. ACKNOWLEDGEMENT OF LIENS. National hereby acknowledges and
agrees that, notwithstanding any contrary provision set forth in the Purchase
Agreement, the Purchased Assets (as defined in the Purchase Agreement) will be
transferred to National subject to the security interests of Surety.
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IN WITNESS WHEREOF, the parties hereto have caused their authorized
representatives to execute this Agreement as of the date first set forth above.
NATIONAL: NATIONAL COAL CORPORATION
By:
-----------------------------
Xxxxxxx X. Xxxx
Senior Vice President
SURETY: AMERICAN INTERNATIONAL SPECIALTY
LINES INSURANCE COMPANY
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
INSURANCE COMPANY OF THE STATE
OF PENNSYLVANIA
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
LCC: LCC TENNESSEE, LLC
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
S-1
SCHEDULE A
BONDS
CURRENT BOND
PERMIT NO. JOB NAME/LOCATION INC. BOND NO. AMOUNT SURETY COMPANY
0000 Xxxx Xxxxxxxx Xxxx Xxxx - XXX0000000 $ 21,500.00 AIG Tennessee Mining
0000 Xxx Xxxxxx Xxxxxx - XXX0000000 455,000.00 AIG Tennessee Mining
0000 Xxxxxxx Xxxxxx #0 - XXX0000000 52,000.00 AIG Tennessee Mining
3023 Xxxxxxx Prep Plant - ESD7313694 207,000.00 AIG Tennessee Mining
0000 Xxxxxxx #0 & #0 Xxxx - XXX0000000 165,200.00 AIG Tennessee Mining
3026 Fork Mountain 2 ESD7313664 92,500.00 AIG Tennessee Mining
-----------
TOTAL $993,200.00
===========
EXHIBIT D
SPECIAL WARRANTY DEED
THIS INSTRUMENT WAS PREPARED BY:
Xxxxx X. Xxxxxxxxx
XXXXX XXXXX XXXX LLC
000 Xxxx Xxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000-0000
(000) 000-0000
STATE OF )
-----------------------------------
COUNTY OF )
----------------------------------
The undersigned Affiant affirms that to the best of Affiant's
knowledge, information and belief, the actual consideration for the transfer or
value of the property transferred, whichever is greater, is $26,350, which
amount is equal to or greater than the amount which the property transferred
would command at a fair and voluntary sale.
--------------------------
Affiant/Grantee
Subscribed and sworn to before me this ____ day of _____________, 2005.
--------------------------
Notary Public
My Commission expires:
---------------
--------------------------------------------------------------------------------
SPECIAL WARRANTY DEED
ADDRESS OF NEW OWNERS SEND TAX XXXX TO: TAX/PARCEL NUMBERS:
AS FOLLOWS: 0000 Xxxxxx Xxxxxxxx Xxxx Exhibit A
0000 Xxxxxx Xxxxxxxx Xxxx Xxxxxxxxx, Xxxxxxxxx 00000
Xxxxxxxxx, Xxxxxxxxx 00000
--------------------------------------------------------------------------------
LCC TENNESSEE, LLC, a Delaware limited liability company, with offices
at 000 Xxxx Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000 ("GRANTOR"), for
no cash consideration and certain obligations to be assumed pursuant to and in
furtherance of the obligation of GRANTOR to convey certain properties to
NATIONAL COAL
CORPORATION, a Tennessee corporation, with offices at 0000 Xxxxxx Xxxxxxxx Xxxx,
Xxxxxxxxx, Xxxxxxxxx 00000 ("GRANTEE"), in accordance with that certain Asset
Purchase Agreement, dated May 8, 2005, between GRANTOR and GRANTEE (as the same
may be hereafter amended or supplemented, the "Asset Purchase Agreement"), and
other valuable consideration, the receipt and sufficiency whereof is hereby
acknowledged, has bargained and sold, and by these presents does bargain, sell,
transfer and convey, and SPECIALLY WARRANTS, TO THE LIMITED EXTENT HEREINAFTER
SET FORTH, unto GRANTEE, all of the right, title and interest of GRANTOR in and
to the properties more particularly identified and set forth on Exhibit A
attached hereto and made a part hereof, together with any improvements thereon
and the appurtenances thereunto belonging, all of such property lying and being
in Xxxxxxxx County, Tennessee. The transfer of the properties covered hereby are
subject to the terms of the Asset Purchase Agreement.
GRANTEE assumes and agrees to pay all taxes and assessments relating to
the conveyed properties as of the date of closing and thereafter, regardless of
when invoiced.
Except for (i) any and all matters which appear of record or as are
evident on the ground relating to such properties, (ii) governmental laws,
ordinances and regulations affecting the conveyed properties, and (iii) the
taxes described in the preceding paragraph assumed by GRANTEE, GRANTOR warrants
title against liens and encumbrances created by, through or in behalf of
GRANTOR, and not otherwise. GRANTOR further covenants with respect to the
conveyances made hereunder that GRANTOR is lawfully seized and possessed of the
property described on Exhibit A, has full power and lawful authority to sell and
convey the same, and will forever warrant and defend the title against the
lawful claims of all persons claiming by, through or under GRANTOR but not
further nor otherwise.
2
This conveyance is further made and accepted upon the following
covenants, which shall be binding upon and enforceable against GRANTEE and
GRANTEE's successors and assigns, and shall be deemed covenants running with the
land:
1. GRANTEE acknowledges that the within conveyed properties have
been held for mining or mining related purposes and agrees that no claim shall
ever be asserted against GRANTOR, or any company or entity presently or formerly
associated with or operating under GRANTOR, for damages, injunctive relief or
regulatory relief arising directly or indirectly out of any surface or
subsurface condition or occurrence, known or unknown, now existing or hereafter
occurring or discovered and whether or not such condition or occurrence arises
out of or is the result of mining related activities on the within conveyed
properties or other properties;
2. Between GRANTOR and GRANTEE, GRANTEE assumes all risk and
responsibility for any injuries or damages sustained by any person or to any
property, in whole or in part, resulting from, arising out of, or in any way
connected with the possession or use of the property by GRANTEE;
3. GRANTOR does not warrant or represent subjacent or lateral
support of the surface or subsurface of the properties;
4. GRANTOR does not warrant or represent that the properties are
safe, habitable or otherwise suitable for the purposes for which they are
intended to be used by GRANTEE or for any other purpose whatsoever. GRANTEE
represents that GRANTEE has inspected the properties and agrees to accept the
same "as is", "where is"; and
3
The undersigned person executing this Deed on behalf of the GRANTOR
represents and certifies that he is a duly elected officer of GRANTOR and has
been fully empowered by proper resolution of the Board of Directors or other
governing body of GRANTOR to execute and deliver this Deed; that GRANTOR has
full limited liability company capacity to convey the real estate described
herein; and that all necessary limited liability company action for the making
of such conveyance has been taken and done.
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IN WITNESS WHEREOF, GRANTOR and GRANTEE have caused this instrument to
be executed and their seals to be affixed this 8th day of July, 2005.
LCC TENNESSEE, LLC
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
("GRANTOR")
NATIONAL COAL CORPORATION
By:
-----------------------------
Xxxxxxx X. Xxxx
Senior Vice President
("GRANTEE")
STATE OF )
--------------------------------
) SS:
COUNTY OF )
-------------------------------
Before me, ___________________ the undersigned, Notary Public in and
for the County and State aforesaid, personally appeared __________________, with
whom I am personally acquainted (or proved to me on the basis of satisfactory
evidence), and who upon oath acknowledged himself/herself to be _______________
of LCC Tennessee, LLC, the within- named grantor, a Delaware limited liability
company, and that he/she as such _____________ being authorized so to do,
executed the foregoing instrument for the purposes therein contained, by signing
the name of the company by himself/herself as ___________________.
Witness my hand and seal, at office in ______________, ______________,
this the ____ day of _______________, 2005.
--------------------------------------
NOTARY PUBLIC
My Commission Expires:
---------------
S-1
STATE OF )
--------------------------------
) SS:
COUNTY OF )
-------------------------------
Before me, ___________________ the undersigned, Notary Public in and
for the County and State aforesaid, personally appeared Xxxxxxx X. Xxxx, with
whom I am personally acquainted (or proved to me on the basis of satisfactory
evidence), and who upon oath acknowledged himself to be Senior Vice President of
National Coal Corporation, the within-named grantee, a Tennessee corporation,
and that he as such Senior Vice President, being authorized so to do, executed
the foregoing instrument for the purposes therein contained, by signing the name
of the corporation by himself/herself as Senior Vice President.
Witness my hand and seal, at office in ______________, ______________,
this the ____ day of _______________, 2005.
--------------------------------------
NOTARY PUBLIC
My Commission Expires:
---------------
S-2
EXHIBIT A
Being all that real property conveyed from Tennessee Mining, Inc. to LCC
Tennessee, LLC, pursuant to that certain Special Corporate Warranty Deed, filed
of record in the Office of the Register of Deeds for Xxxxxxxx County, Tennessee
at Book No. 1377, Page No. 2337. It has a parcel number of 01 049 049 044.00
000.
EXHIBIT E
ESCROW AGREEMENT
This Escrow Agreement (this "Agreement"), dated as of ___________, is
among (i) National Coal Corporation ("Buyer"), (ii) LCC Tennessee, LLC
("Seller"), and (iii) U.S. Bank National Association, a national banking
association, as escrow agent (the "Escrow Agent"). Capitalized terms not
otherwise defined herein shall have the meanings given to such terms in the
Purchase Agreement (as defined below).
RECITALS
A. This Agreement is being entered into to effect the
transactions contemplated by the Asset Purchase Agreement dated May 8, 2005 (the
"Purchase Agreement"), between Buyer and Seller.
B. Pursuant to the Purchase Agreement, Buyer is depositing funds
with the Escrow Agent to be held by the Escrow Agent in the manner and as set
forth below.
NOW, THEREFORE, the parties hereby agree as follows:
1. DEPOSIT INTO ESCROW. Simultaneously with the execution of this
Agreement, Buyer shall deposit with the Escrow Agent, and upon such deposit the
Escrow Agent shall acknowledge receipt of, an amount equal to Five Hundred
Thirty-Eight Thousand Two Hundred Dollars ($538,200) (the "Escrow Funds").
2. INVESTMENT OF ESCROW FUNDS; DISBURSEMENT OF EARNINGS. Upon
receipt of the Deposit, the Escrow Agent shall, pending the disbursement thereof
pursuant to this Agreement, invest the Escrow Funds in the U.S. Bank Money
Market Account in accordance with Exhibit A hereto. All interest and other
earnings accrued on the Escrow Funds shall be included in the Escrow Funds. If
all of the Permits are transferred to Buyer and all of the Seller Bonds are
replaced, terminated and surrendered, in each case, prior to the expiration of
the applicable Transfer Period (as defined below), Seller shall instruct the
Escrow Agent to transfer all earnings accrued on the Escrow Funds to Buyer.
Otherwise, Seller shall instruct the Escrow Agent to transfer all earnings on
the Escrow Funds to Seller; provided, however, if the only Permit(s) not
transferred to the Buyer arise due to the fault, action, or failure to act of
the Seller, then the Seller shall instruct the Escrow Agent to transfer all
earnings on the Escrow Funds to the Buyer. For purposes of this Agreement,
"Transfer Period" shall mean, with respect to each applicable Permit and Seller
Bond, two hundred seventy (270) days from the date of this Agreement; provided,
however, that with respect to any Permit, (a) the running of the Transfer Period
shall be tolled during any time that the transfer of such Permit is delayed (i)
as a direct consequence of any action or inaction (when action was required)
solely on the part of Seller, including any such delay that arises as a direct
consequence of any past or future action or inaction (when action was required)
solely by Seller in connection with the transfer of the Permits from Tennessee
Mining, Inc. to Seller, it specifically being the intention of the parties
hereto that the running of the Transfer Period shall not begin until such time
as the Permits have transferred from Tennessee Mining, Inc. to Seller; or (ii)
as a direct consequence of any lawsuit filed against Buyer, Seller or the Office
of Surface Mining by the Sierra Club, the Tennessee Clean Water Network, Save
Our Cumberland Mountains, Cumberland Trail Associates, Appalachian Voice or
Southern
Appalachian Bio Diversity Project and which lawsuit has as its principal purpose
the delay or denial of the Transfer of such Permit; and (b) the Transfer Period
may be extended upon the written consent of Seller.
3. DISBURSEMENT OF ESCROW FUNDS.
(a) With respect to each Permit set forth on Schedule 1
hereto, if Buyer has caused such Permit to be transferred to Buyer and the
corresponding Seller Bonds to be replaced, terminated and surrendered prior to
the expiration of the applicable Transfer Period, Seller shall, within five (5)
days of each such event, instruct the Escrow Agent to transfer to Buyer the
amount corresponding to such Permit on Schedule 1.
(b) With respect to each Permit set forth on Schedule 1,
if Buyer has not caused such Permit to be transferred to Buyer and the
corresponding Seller Bonds to be replaced, terminated and surrendered prior to
expiration of the applicable Transfer Period, Seller shall, within five (5) days
of each such event, instruct the Escrow Agent to transfer to Seller the amount
corresponding to such Permit on Schedule 1.
(c) With respect to each Permit set forth on Schedule 1
hereto, if Buyer has taken all action required of it for the transfer of any
Permit to it, but the Permit can not be transferred to the Buyer due to the
fault, action or failure to act of the Seller, then in such circumstance the
Seller shall, within five (5) days of each such event, instruct the Escrow Agent
to transfer to the Buyer the amount corresponding to such Permit on Schedule 1.
(d) All transfers of funds provided in above
subparagraphs (a), (b), and (c) shall be completed by the Escrow Agent within
five (5) business days of the Seller's notice to the Escrow Agent
(e) In the event the Purchase Agreement or any of the
Related Agreements are terminated, rejected or materially breached by Buyer
after the Closing, Seller shall instruct the Escrow Agent to transfer to Seller
all of the Escrow Funds then held by the Escrow Agent and all earnings thereon.
4. ESCROW AGENT. The Escrow Agent shall be liable only to deposit
and invest the Escrow Funds as provided in this Agreement, and to pay out the
Escrow Funds in accordance with the provisions of this Agreement. The Escrow
Agent is acting solely in a depository capacity as an accommodation to the other
parties to this Agreement and shall not be liable or responsible to anyone for
any damages, losses or expenses of any nature whatsoever except for actions
taken in bad faith or constituting gross negligence or willful misconduct. The
Escrow Agent may at any time resign and either deliver the Escrow Funds to a
successor escrow agent designated in writing to the Escrow Agent by all of the
other parties hereto or file an interpleader action in a court of competent
jurisdiction and deposit the Escrow Funds with the court, in either of which
events the Escrow Agent shall be relieved of all further duty, responsibility
and liability under this Agreement.
5. ESCROW AGENT FEE. The Escrow Agent's fee shall be One Thousand
Dollars ($1,000.00) annually and shall be paid by Buyer.
2
6. WARRANTIES; ACKNOWLEDGEMENT. Each party to this Agreement
represents to the other parties to this Agreement that such party's execution,
delivery and performance of this Agreement has been duly authorized by all
appropriate action, the individual executing and delivering this Agreement on
its behalf has been duly and properly empowered to do so, and this Agreement
does not violate any covenant, term, provision, instrument, indenture, contract
or other agreement to which it is a party or by which it is bound. Buyer
acknowledges and agrees that it has no right, title or interest in the Escrow
Funds unless and until it timely performs its obligations under Section 3(a) of
this Agreement.
7. NOTICES. All notices and other communications hereunder shall
be in writing and shall be delivered personally or shall be sent by registered
mail, certified mail or express mail service, postage prepaid and return receipt
requested, by nationally recognized overnight courier service, or by facsimile,
provided receipt is promptly confirmed by the sending operator, addressed to the
applicable party as follows:
(a) If to Buyer:
National Coal Corporation
Attention: President, Xxx X. Xxx
0000 Xxxxxx Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) If to Seller:
LCC Tennessee, LLC
Attention: President, Xxx Xxxxxx
000 Xxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxxxx Doll & XxXxxxxx PLLC
Attention: Xxxxxx Xxxxxxxxxx
000 Xxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
Telephone: (000)000-0000
Facsimile: (000)000-0000
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(c) If to Escrow Agent:
U.S. Bank National Association
000 Xxxxxx XX XXXXX0XX
Xxxxxxxxxx, Xxxx 00000
Attention: Corporate Trust Department/Xxxxx Xxxx
Facsimile: (000) 000-0000
Notices shall be deemed to have been given and received upon (i) the date of
their personal delivery or electronically confirmed transmission by facsimile,
(ii) the next business day after delivery to a nationally recognized courier
service with instructions for delivery upon the next business day, and (iii) two
(2) days after deposit in the United States mail, provided, however, that if the
second day after such deposit is not a day upon which mail is regularly
delivered, then upon the next day of regular mail delivery thereafter.
8. BINDING EFFECT. This Agreement shall be binding upon the
parties hereto and their respective successors and permitted assigns; provided,
however, that no party hereto may assign this Agreement or delegate its duties
hereunder without the prior written consent of the other parties hereto.
9. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Kentucky, without
regard to, or application of, its conflict of laws rules.
10. COUNTERPARTS AND FACSIMILE SIGNATURES. This Agreement may be
signed by different parties on different counterpart copies hereof (including
via facsimile), and said counterparts shall together constitute a single
agreement. This Agreement shall become effective upon the Escrow Agent's
execution of the Agreement and its receipt of a signed counterpart page from
each of Buyer and Seller, whether such signature is by facsimile or otherwise.
11. ENTIRE AGREEMENT. All prior negotiations and agreements by and
among the parties hereto with respect to the subject matter hereof are
superseded by this Agreement, the Purchase Agreement, and the other Related
Agreements, and there are no representations, warranties, understandings or
agreements with respect to the subject matter hereof other than those expressly
set forth in this Agreement, the Purchase Agreement, and the other Related
Agreements.
12. AMENDMENT. This Agreement may be amended only with the written
consent of all of the parties.
13. ASSIGNMENT. No assignment, transfer, conveyance or
hypothecation of any right, title or interest in and to the subject matter of
this Agreement shall be binding upon the Escrow Agent unless written notice
thereof shall be served upon the Escrow Agent and all fees, costs and expenses
incident to such transfer of interest shall have been paid.
14. COMPLIANCE WITH COURT ORDERS. The Escrow Agent is hereby
expressly authorized to comply with and obey any and all orders, judgments or
decrees of any court, and, if the Escrow Agent obeys or complies with any such
order, judgment or decree of any court, it shall
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not be liable to any of the parties hereto or any other person, firm or
corporation by reason of such compliance, notwithstanding that any such order,
judgment or decree subsequently is reversed, modified, annulled, set aside or
vacated, or found to have been entered without jurisdiction.
15. NO WAIVERS. No waiver with respect to this Agreement shall be
enforceable unless in writing and signed by the party against whom enforcement
is sought. Except as otherwise expressly provided herein, no failure to
exercise, delay in exercising, or single or partial exercise of any right, power
or remedy by any party hereto, and no course of dealing between or among any of
the parties hereto, shall constitute a waiver of, or shall preclude any other or
further exercise of the same or any other right, power or remedy.
16. SEVERABILITY. If any provision of this Agreement is construed
to be invalid, illegal or unenforceable, then the remaining provisions hereof
shall not be affected thereby and shall be enforceable without regard thereto.
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IN WITNESS WHEREOF, the parties have entered into this Agreement as of
the date first written above.
BUYER: NATIONAL COAL CORPORATION
By:
-----------------------------
Xxxxxxx X. Xxxx
Senior Vice President
SELLER: LCC TENNESSEE, LLC
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
ESCROW AGENT: U.S. BANK NATIONAL ASSOCIATION
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
S-1
EXHIBIT A
U.S. BANK TRUST NATIONAL ASSOCIATION
U.S. BANK MONEY MARKET ACCOUNTS
U.S. BANK NATIONAL ASSOCIATION
ACCOUNT DESCRIPTION AND TERMS
The U.S. Bank money market accounts are U.S. Bank National Association ("U.S.
Bank") deposit accounts designed to meet the needs of Global Escrow and other
Corporate Trust customers of U.S. Bank Trust National Association. The accounts
pay competitive variable interest rates, which are determined based upon the
customer's aggregated balance. These accounts are insured by the Federal Deposit
Insurance Corporation.
Interest rates currently offered on the accounts are determined at U.S. Bank's
discretion and may change daily. U.S. Bank uses the daily balance method to
calculate interest on these accounts. This method applies a daily periodic rate
to the principal in the accounts each day. The average daily balance is
calculated by adding the principal in an account for each day of the month and
dividing that figure by the number of days in the period. Interest is compounded
on a monthly basis.
The owner of the accounts is U.S. Bank Trust National Association as Agent for
its customers. All account deposits and withdrawals are performed by U.S. Bank
Trust National Association. U.S. Bank Trust National Association is an affiliate
of U.S. Bank.
For further information, call your account representative at U.S. Bank Trust
National Association.
AUTOMATIC AUTHORIZATION LETTER
In the absence of specific written direction to the contrary, U.S. Bank National
Association (or U.S. Bank) is hereby directed to invest and reinvest proceeds
and other available moneys in U.S. Bank money market account.
NATIONAL COAL CORPORATION LLC TENNESSEE, LLC
By: By:
---------------------------- ------------------------------
Xxxxxxx X. Xxxx Name:
------------------------------
Senior Vice President Title:
------------------------------
Date: Date:
---------------------------- ------------------------------
SCHEDULE 1
PERMIT NO. BOND AMOUNT
---------- -----------
3020 $ 21,500
3022 52,000
3023 207,000
3024 165,200
3026 92,500
EXHIBIT F
PERMIT AND FACILITY LEASE AMENDMENT AND TERMINATION AGREEMENT
THIS PERMIT AND FACILITY LEASE AMENDMENT AND TERMINATION AGREEMENT
(this "Amendment"), is made and entered into effective as of ______________,
between National Coal Corporation, a Tennessee corporation ("Buyer"), and LCC
Tennessee, LLC, a Delaware limited liability company ("Seller").
WITNESSETH:
WHEREAS, Buyer and Seller (as successor in interest to Tennessee
Mining, Inc.) are parties to that Permit Agreement, dated as of July 16, 2004
(the "Permit Agreement") and that related Facility Lease Agreement, dated as of
July 16, 2004 (the "Facility Lease");
WHEREAS, the parties hereto are parties to an Asset Purchase Agreement,
dated May 8, 2005 (the "APA"); and
WHEREAS, the parties hereto wish to enter into this Amendment to amend
the Permit Agreement and the Facility Lease as a result of the transactions
contemplated by the APA.
NOW THEREFORE, for and in consideration of the mutual covenants and
conditions contained herein, Buyer and Seller do now hereby agree to amend the
Permit Agreement and Facility Lease as follows:
1. AMENDMENT. The Permit Agreement and Facility Lease shall be
amended as follows:
(a) Upon transfer of OSM Permit No. 3022 to Buyer, and
replacement, termination and surrender of the corresponding Seller Bond (as
defined in the APA), the reference to such permit shall be deleted from EXHIBIT
A to the Permit Agreement and EXHIBIT A to the Facility Lease in its entirety,
and all other references to such permit shall also be deleted from the Facility
Lease in their entirety, and the lands encompassed thereby and the improvements
thereon shall no longer be subject to the Facility Lease or included in the
definition of the Leased Premises (as defined in the Facility Lease).
(b) Upon transfer of OSM Permit No. 3023 to Buyer, and
replacement, termination and surrender of the corresponding Seller Bond, the
reference to such permit shall be deleted from EXHIBIT A to the Permit Agreement
and EXHIBIT A to the Facility Lease in its entirety, and all other references to
such permit shall also be deleted from the Facility Lease in their entirety, and
the lands encompassed thereby and the improvements thereon shall no longer be
subject to the Facility Lease or included in the definition of the Leased
Premises (as defined in the Facility Lease).
2. SUSPENSION OF RENTAL OBLIGATIONS. All obligations for payment
of facility rental set forth in Section 4 of the Facility Lease shall be
suspended on the Closing Date (as defined in the APA); provided, however, that
in the event that either of the permits described in Section 1 hereof is not
transferred to Buyer, or replacement, termination and surrender of the
corresponding Seller Bond does not occur, in each case, prior to expiration of
the applicable Transfer Period (as defined in the APA), such facility rental
obligations shall be reinstated, effective retroactively to the Closing Date,
and shall be in full force and effect.
3. TERMINATION. Upon the satisfaction of the conditions set forth
in Section 1 hereof with respect to transfer of all of the permits referenced
therein to Buyer and replacement, termination and surrender of all of the
corresponding Seller Bonds, the Permit Agreement and the Facility Lease shall
terminate, and shall be of no further force or effect; provided, however, that
all provisions contained therein that survive termination by the terms of the
Permit Agreement or the Facility Lease shall remain in effect, as shall all
provisions relating to (a) Buyer's obligation to conduct reclamation and remedy
non-compliance, including, without limitation, the obligations set forth in
Section 6 of the Facility Lease and the obligations set forth in Sections 4 and
5 of the Permit Agreement; and (b) all of Buyer's indemnification obligations,
including, without limitation, the obligations set forth in Section 7 of the
Facility Lease and Section 3 of the Permit Agreement.
4. FULL FORCE AND EFFECT. Except as amended hereby, and subject
to the other provisions hereof, the Facility Lease and the Permit Agreement
shall remain in full force and effect.
[SIGNATURE PAGE FOLLOWS]
2
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized representatives to execute this Amendment effective as of the date
first set forth above.
BUYER: NATIONAL COAL CORPORATION
By:
-----------------------------
Xxxxxxx X. Xxxx
Senior Vice President
SELLER: LCC TENNESSEE, LLC
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
STATE OF
--------------------------------)
COUNTY OF
-------------------------------)
The foregoing instrument was executed and acknowledged before me, a
Notary Public, this ____ day of ________, 2005, by Xxxxxxx X. Xxxx, as Senior
Vice President of National Coal Corporation, on behalf of said company.
My Commission expires: .
---------------------
_______________________________
Notary Public
STATE OF
--------------------------------)
COUNTY OF
-------------------------------)
The foregoing instrument was executed and acknowledged before me, a
Notary Public, this ____ day of ________, 2005, by ___________________________
as _____________ of LCC Tennessee, LLC, on behalf of said company.
My Commission expires: .
---------------------
_______________________________
Notary Public
S-1
EXHIBIT G
AMENDMENT TO SURFACE AND MINERAL LEASE AGREEMENT
THIS AMENDMENT TO SURFACE AND MINERAL LEASE AGREEMENT (this
"Amendment"), is made and entered into effective as of ______________, between
National Coal Corporation, a Tennessee corporation ("Lessor"), and LCC
Tennessee, LLC, a Delaware limited liability company ("Lessee").
WITNESSETH:
WHEREAS, Lessor is a successor in interest to Cumberland Timber
Company, L.L.C., and Lessee is a successor in interest to Tennessee Mining,
Inc., under that certain Surface and Mineral Lease Agreement dated June 27,
2002, as amended by that certain Amendment No. 1 to Reclamation Agreement and
Amendment No. 1 to Surface and Mineral Lease, made and entered into effective as
of the 8th day of July, 2004, by and between Tennessee Mining, Inc. and Lessor
(together with any further amendments or modifications, the "Lease"), with
respect to certain surface and mineral rights to coal in, under and upon tracts
of property located in Xxxxxxxx and Xxxxxxxx Counties, Tennessee;
WHEREAS, the parties hereto are parties to an Asset Purchase Agreement,
dated May 8, 2005 (the "APA"); and
WHEREAS, the parties hereto wish to enter into this Amendment to amend
the Lease as a result of the transactions contemplated by the APA.
NOW THEREFORE, for and in consideration of the mutual covenants and
conditions contained herein, Lessor and Lessee do now hereby agree to amend the
Lease as follows:
1. AMENDMENT. The Lease shall be amended as follows:
(a) The reference to OSM Permit No. 3019, referred to in
EXHIBIT A to the Lease as "Windrock Deep Mine OSM Permit No. 3019 located on
Buffalo Mountain, Latitude: 36 10 11, Longitude: 84 19 45, Being a part of the
same property conveyed to Cumberland Timber, L.L.C., by Deed from Tennessee
Mining, Inc. dated August 8, 2002, and recorded in Book 1286, Page 470, of the
Recorder's Office of Xxxxxxxx County, Tennessee", shall be deleted from EXHIBIT
A to the Lease in its entirety, and the lands encompassed thereby shall no
longer be included in the definition of Leased Premises (as defined in the
Lease).
(b) Upon transfer of OSM Permit No. 3020 to Lessor,
referred to in EXHIBIT A to the Lease as "Fork Mountain Haul Road OSM Permit No.
3020 located on Fork Mountain, Latitude: 36 13 35, Longitude: 84 27 35, Being a
part of the same property conveyed to Cumberland Timber, L.L.C., by Deed from
Tennessee Mining, Inc. dated August 8, 2002, and recorded in Book 1286, Page
470, of the Recorder's Office of Xxxxxxxx County, Tennessee", and replacement,
termination and surrender of the corresponding Seller Bond (as defined in the
APA), the reference to such permit shall be deleted from EXHIBIT A to the Lease
in its entirety, and the lands encompassed thereby shall no longer be included
in the definition of Leased Premises.
(c) Upon transfer of OSM Permit No. 3026 to Lessor,
referred to in EXHIBIT A to the Lease as "Fork Mountain Deep & Surface Mine,
Increment 2, OSM Permit No. 3026 located on Fork Mountain, Latitude: 36 09 00,
Longitude: 84 25 07, Being a part of the same property conveyed to Cumberland
Timber, L.L.C., by Deed from Tennessee Mining, Inc. dated August 8, 2002, and
recorded in Book 1286, Page 470, of the Recorder's Office of Xxxxxxxx County,
Tennessee", and replacement, termination and surrender of the corresponding
Seller Bonds, the reference to such permit shall be deleted from EXHIBIT A to
the Lease in its entirety, and the lands encompassed thereby shall no longer be
included in the definition of Leased Premises.
(d) Upon transfer of OSM Permit No. 3024 to Lessor and
replacement, termination and surrender of the corresponding Seller Bond, the
reference to such permit, if any, shall be deleted from the Lease and any
exhibit thereto in its entirety, and the lands encompassed thereby shall
thereafter not be included in the definition of Leased Premises.
(e) A new Section 13.3 shall be added to the Lease to
read in its entirety as follows:
13.3 Lessor hereby acknowledges and agrees
that (a) in the event some but not all of OSM Permit
3020, OSM Permit 3021, OSM Permit 3022, OSM Permit
3023, OSM Permit 3024, OSM Permit 3026 and all NPDES
permits and other air, water and similar permits
related to the aforementioned permits (collectively,
the "Permits") are transferred from Lessee to Lessor,
Lessee shall have the right, without any payment of
any kind to Lessor or any other person or entity, to
enter and otherwise use the property covered by any
of such non-transferred Permits, including OSM Permit
3020; and (b) in the event all of the Permits are
transferred from Lessee to Lessor, Lessee shall have
the right, without any payment of any kind to Lessor
or any other person or entity, to enter and otherwise
use the property covered by OSM Permit 3020, in the
case of each of subclause (a) and (b), to the extent
necessary to enable Lessee to conduct any permissible
activities on, and to be able to access, properties
owned, controlled or otherwise operated by Lessee or
its affiliates; provided, however, that if Lessee or
its affiliates or agents haul a material amount of
coal over the Fork Mountain haulroad after OSM Permit
3020 is transferred to Lessor, Lessor and Lessee
shall share in the reasonable maintenance costs for
such haulroad during the period that Lessee or its
affiliates or agents are hauling coal on such
haulroad, based on the relative tonnage of coal
hauled by Lessee and its affiliates and agents, on
one hand, and hauled by Lessor and its affiliates and
agents, on the other hand. Lessor further agrees to
take all such commercially reasonable actions as
2
Lessee may request to further evidence, or give
effect to, the rights set forth in this section,
including the filing of all documents required to be
filed with any governmental authority with respect to
such rights. Notwithstanding any other provision of
this Agreement to the contrary, this Section 13.3
shall survive the termination or expiration of this
Agreement.
2. FULL FORCE AND EFFECT. Except as amended hereby, the Lease
shall remain in full force and effect.
[SIGNATURE PAGES FOLLOW]
3
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized representatives to execute this Amendment effective as of the date
first set forth above.
LESSOR: NATIONAL COAL CORPORATION
By:
-----------------------------
Xxxxxxx X. Xxxx
Senior Vice President
LESSEE: LCC TENNESSEE, LLC
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
STATE OF )
---------------------------
COUNTY OF )
--------------------------
The foregoing instrument was executed and acknowledged before me, a
Notary Public, this ____ day of ________, 2005, by Xxxxxxx X. Xxxx, as Senior
Vice President of National Coal Corporation, on behalf of said company.
My Commission expires: .
------------------------------
_______________________________
Notary Public
STATE OF )
---------------------------
COUNTY OF )
--------------------------
The foregoing instrument was executed and acknowledged before me, a
Notary Public, this ____ day of ________, 2005, by ___________________________
as _____________ of LCC Tennessee, LLC, on behalf of said company.
My Commission expires: .
------------------------------
_______________________________
Notary Public
S-1
EXHIBIT H
AMENDMENT TO RECLAMATION AGREEMENT
THIS AMENDMENT TO RECLAMATION AGREEMENT (this "Amendment"), is made and
entered into effective as of _________, between National Coal Corporation, a
Tennessee corporation ("Lessor"), and LCC Tennessee, LLC, a Delaware limited
liability company ("Lessee").
WITNESSETH:
WHEREAS, Lessor is a successor in interest to Cumberland Timber
Company, L.L.C., and Lessee is a successor in interest to Tennessee Mining,
Inc., under that certain Reclamation Agreement dated June 26, 2002 (together
with any amendments or modifications thereto, including that Amendment No. 1 to
Reclamation Agreement and Amendment No. 1 to Surface and Mineral Lease dated
July 7, 2004, the "Agreement"), with respect to certain tracts of property
located in Xxxxxxxx and Xxxxxxxx Counties, Tennessee;
WHEREAS, the parties hereto are parties to an Asset Purchase Agreement,
dated May 8, 2005 (the "APA"); and
WHEREAS, the parties hereto wish to enter into this Amendment to amend
the Agreement as a result of the transactions contemplated by the APA.
NOW THEREFORE, for and in consideration of the mutual covenants and
conditions contained herein, Lessor and Lessee do now hereby agree as follows:
1. AMENDMENT. The Agreement shall be amended as follows:
(a) Upon transfer of OSM Permit No. 3024 to Lessor,
referred to in EXHIBIT A to the Agreement as "Jellico Xx. 0 xxx Xx. 0 Xxxx, XXX
Xxxxxx Xx. 0000, located in Xxxxxxxx County, Tennessee", and replacement,
termination and surrender of the corresponding Seller Bond (as defined in the
APA), the reference to such permit shall be deleted from EXHIBIT A to the
Agreement in its entirety, and the lands encompassed thereby shall no longer be
included in the definition of Leased Premises (as defined in the Agreement).
(b) A new Section 10.2 shall be added to the Agreement to
read in its entirety as follows:
10.2 Lessor hereby acknowledges and agrees that (a)
in the event some but not all of OSM Permit 3020, OSM Permit
3021, OSM Permit 3022, OSM Permit 3023, OSM Permit 3024, OSM
Permit 3026 and all NPDES permits and other air, water and
similar permits related to the aforementioned permits
(collectively, the "Permits") are transferred from Lessee to
Lessor, Lessee shall have the right, without any payment of
any kind to Lessor or any other person or entity, to enter and
otherwise use the property covered by any of such
non-transferred Permits, including OSM Permit 3020; and (b) in
the event all of the Permits are transferred from Lessee to
Lessor, Lessee shall have the right,
4
without any payment of any kind to Lessor or any other person
or entity, to enter and otherwise use the property covered by
OSM Permit 3020, in the case of each of subclause (a) and (b),
to the extent necessary to enable Lessee to conduct any
permissible activities on, and to be able to access,
properties owned, controlled or otherwise operated by Lessee
or its affiliates; provided, however, that if Lessee or its
affiliates or agents haul a material amount of coal over the
Fork Mountain haulroad after OSM Permit 3020 is transferred to
Lessor, Lessor and Lessee shall share in the reasonable
maintenance costs for such haulroad during the period that
Lessee or its affiliates or agents are hauling coal on such
haulroad, based on the relative tonnage of coal hauled by
Lessee and its affiliates and agents, on one hand, and hauled
by Lessor and its affiliates and agents, on the other hand.
Lessor further agrees to take all such commercially reasonable
actions as Lessee may request to further evidence, or give
effect to, the rights set forth in this section, including the
filing of all documents required to be filed with any
governmental authority with respect to such rights.
Notwithstanding any other provision of this Agreement to the
contrary, this Section 10.2 shall survive the termination or
expiration of this Agreement.
2. FULL FORCE AND EFFECT. Except as amended hereby, the Agreement
shall remain in full force and effect.
[SIGNATURE PAGES FOLLOW]
2
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized representatives to execute this Amendment effective as of the date
first set forth above.
LESSOR: NATIONAL COAL CORPORATION
By:
-----------------------------
Xxxxxxx X. Xxxx
Senior Vice President
LESSEE: LCC TENNESSEE, LLC
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
STATE OF )
---------------------------
COUNTY OF )
--------------------------
The foregoing instrument was executed and acknowledged before me, a
Notary Public, this ____ day of ________, 2005, by Xxxxxxx X. Xxxx, as Senior
Vice President of National Coal Corporation, on behalf of said company.
My Commission expires: .
------------------------------
_______________________________
Notary Public
STATE OF )
---------------------------
COUNTY OF )
--------------------------
The foregoing instrument was executed and acknowledged before me, a
Notary Public, this ____ day of ________, 2005, by ___________________________
as _____________ of LCC Tennessee, LLC, on behalf of said company.
My Commission expires: .
------------------------------
_______________________________
Notary Public
S-1
EXHIBIT I
PERMIT AND SUBLEASE AMENDMENT AND TERMINATION AGREEMENT
THIS PERMIT AND SUBLEASE AMENDMENT AND TERMINATION AGREEMENT (this
"Amendment"), is made and entered into effective as of ______________, between
National Coal Corporation, a Tennessee corporation ("Buyer"), and LCC Tennessee,
LLC, a Delaware limited liability company ("Seller").
WITNESSETH:
WHEREAS, Buyer and Seller (as successor in interest to Tennessee
Mining, Inc.) are parties to that Permit Agreement, dated as of July 16, 2004
(the "Permit Agreement") and that related Sublease Agreement, dated as of July
16, 2004 (the "Sublease Agreement");
WHEREAS, the parties hereto are parties to an Asset Purchase Agreement,
dated May 8, 2005 (the "APA"); and
WHEREAS, the parties hereto wish to enter into this Amendment to amend
the Permit Agreement and the Sublease Agreement as a result of the transactions
contemplated by the APA.
NOW THEREFORE, for and in consideration of the mutual covenants and
conditions contained herein, Buyer and Seller do now hereby agree to amend the
Permit Agreement and Sublease Agreement as follows:
1. AMENDMENT. The Permit Agreement and Sublease Agreement shall
be amended as follows:
(a) Upon transfer of OSM Permit No. 3020 to Buyer, and
replacement, termination and surrender of the corresponding Seller Bond (as
defined in the APA), the reference to such permit shall be deleted from EXHIBIT
A to the Permit Agreement in its entirety, and all references to such permit
shall also be deleted from the Sublease Agreement in their entirety, and the
lands encompassed thereby shall no longer be subject to the Sublease Agreement
or included in the definition of the Property (as defined in the Sublease
Agreement).
(b) Upon transfer of OSM Permit No. 3026 to Buyer, and
replacement, termination and surrender of the corresponding Seller Bond, the
reference to such permit shall be deleted from EXHIBIT A to the Permit Agreement
in its entirety, and all references to such permit shall also be deleted from
the Sublease Agreement in their entirety, and the lands encompassed thereby
shall no longer be subject to the Sublease Agreement or included in the
definition of the Property (as defined in the Sublease Agreement).
2. SUSPENSION OF TONNAGE ROYALTY. All obligations for payment of
royalties set forth in Sections 3(a), (b) and (c) of the Sublease Agreement
shall be suspended on the Closing Date (as defined in the APA); provided,
however, that in the event that either of the permits described in Section 1
hereof is not transferred to Buyer, or replacement, termination and surrender of
the corresponding Seller Bond does not occur, in each case, prior to expiration
of the applicable Transfer Period (as defined in the APA), such royalty payment
obligations shall be reinstated, effective retroactively to the Closing Date,
and shall be in full force and effect.
3. TERMINATION. Upon the satisfaction of the conditions set forth
in Section 1 hereof with respect to transfer of all of the permits referenced
therein to Buyer and replacement, termination and surrender of all of the
corresponding Seller Bonds, the Permit Agreement and the Sublease Agreement
shall terminate, and shall be of no further force or effect; provided, however,
that all provisions contained therein that survive termination by the terms of
the Permit Agreement or the Sublease Agreement shall remain in effect, as shall
all provisions relating to (a) Buyer's obligation to conduct reclamation and
remedy non-compliance, including, without limitation, the obligations set forth
in Section 4(c) of the Sublease Agreement and the obligations set forth in
Sections 4 and 5 of the Permit Agreement; and (b) all of Buyer's indemnification
obligations, including, without limitation, the obligations set forth in Section
8 of the Sublease Agreement and Section 3 of the Permit Agreement.
4. FULL FORCE AND EFFECT. Except as amended hereby, and subject
to the other provisions hereof, the Sublease Agreement and the Permit Agreement
shall remain in full force and effect.
[SIGNATURE PAGE FOLLOWS]
2
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized representatives to execute this Amendment effective as of the date
first set forth above.
BUYER: NATIONAL COAL CORPORATION
By:
-----------------------------
Xxxxxxx X. Xxxx
Senior Vice President
SELLER: LCC TENNESSEE, LLC
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
STATE OF
--------------------------------)
COUNTY OF
-------------------------------)
The foregoing instrument was executed and acknowledged before me, a
Notary Public, this ____ day of ________, 2005, by Xxxxxxx X. Xxxx, as Senior
Vice President of National Coal Corporation, on behalf of said company.
My Commission expires: .
---------------------
_______________________________
Notary Public
STATE OF
--------------------------------)
COUNTY OF
-------------------------------)
The foregoing instrument was executed and acknowledged before me, a
Notary Public, this ____ day of ________, 2005, by ___________________________
as _____________ of LCC Tennessee, LLC, on behalf of said company.
My Commission expires: .
---------------------
_______________________________
Notary Public
S-1
SCHEDULE 1.1(B)
APPROVALS
1. Approval by Mining Authorities for transfer of the Permits.
2. Consent required pursuant to the Lease.
3. Any consent required from any surety or similar Person providing
bonding or other financial assistance to Seller.
SCHEDULE 1.1(H)
EQUIPMENT
1. Cat 963 Track Loader (S/N 74PT5826)
2. Cat D8N Dozer (S/N9TC04454)
3. Cat 416B Rubber-Tired Backhoe (S/N 8ZK10467)
4. Cat 12G Grader (S/N Unknown)
5. Cat 988B Coal Loader (S/N 50W09880)
6. Low-boy truck and trailer (S/N Unknown)
SCHEDULE 1.1(P)
OWNED REAL PROPERTY
Being all that real property conveyed from Tennessee Mining, Inc. to LCC
Tennessee, LLC, pursuant to that certain Special Corporate Warranty Deed, filed
of record in the Office of the Register of Deeds for Xxxxxxxx County, Tennessee,
at Book No. 1377, Page No. 2337.
SCHEDULE 1.1(Q)
PERMITS
1. OSM Permit 3020
2. OSM Permit 3021
3. OSM Permit 3022
4. OSM Permit 3023
5. OSM Permit 3024
6. OSM Permit 3026
7. All NPDES permits and other air, water and similar permits related to
the permits listed above.
SCHEDULE 2.7
PERMIT NO. BOND AMOUNT
---------- -----------
3020 $ 21,500
3022 52,000
3023 207,000
3024 165,200
3026 92,500
SCHEDULE 5.7
MINIMUM INSURANCE REQUIREMENTS
REQUIRED INSURANCE COVERAGE
Workers' Compensation Statutory
Employer's Liability (per accident) $1,000,000
Commercial General Liability (per occurrence) $1,000,000 CSL
Bodily Injury & Property Damage (Combined Single Limit)
Automobile Liability $1,000,000 CSL
Bodily Injury & Property Damage
Excess or Umbrella Liability $5,000,000 CSL
(Inclusive of above limits)
Coverage on the Improvements $1,000,000 CSL
THE FOLLOWING APPLY TO ALL POLICIES:
1. Seller shall be included as additional insured on all policies
(except Workers' Compensation coverage).
2. All policies shall contain a Waiver of Subrogation in favor of
Seller and its insurers.
3. Seller shall receive ten (10) days written notice of
cancellation or any material change.
4. Coverage under all insurance required to be carried by the
holder of, or operator under, the Permits or their Affiliates
or agents shall be primary insurance exclusive of any other
existing valid and collectible insurance.
5. All policies described herein shall have adequate territorial
and navigation limits for the location of the operations of
the Permit holder or operator or their Affiliates or agents
under the Permits.
6. All insurance shall be with insurers acceptable to Seller
(insurer shall be a licensed or registered company in the
State of Tennessee and must have a Best's rating of at least
B+7).
A. WORKERS' COMPENSATION AND EMPLOYER'S LIABILITY shall include:
1. Statutory Workers' Compensation for state of hire or operation
including Federal Black Lung Benefits
2. Employer's Liability
3. Voluntary Compensation
4. Alternate Employer or Borrowed Servant Liability
B. COMMERCIAL GENERAL LIABILITY (Occurrence Form) shall include:
1. Premises/Operations
2. Independent Contractors
3. Personal Injury
4. Products/Completed Operations
5. Blanket Contractual Liability
6. Cross Liability/Severability of Interests
7. Explosion, Collapse and Underground
8. Subsidence Coverage
C. COMPREHENSIVE AUTOMOBILE LIABILITY shall include:
1. Owned vehicles
2. Non Owned vehicles
3. Hired vehicles
D. EXCESS LIABILITY (Occurrence Form) shall comply with the Terms
and Conditions of the following underlying coverages:
1. Employer's Liability
2. Commercial General Liability
3. Comprehensive Automobile Liability
Seller reserves the right to require certified copies of any or all policies.
The above minimum insurance requirements are subject to change at the discretion
of Seller.