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EXHIBIT 10(xxxvii)
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PURCHASE AND SALE AGREEMENT
BY AND AMONG
PHILLIPS PETROLEUM COMPANY,
PHILLIPS COAL COMPANY,
THE NORTH AMERICAN COAL CORPORATION,
OXBOW PROPERTY COMPANY L.L.C.
AND
RED HILLS PROPERTY COMPANY L.L.C.
Dated October 11, 2000
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TABLE OF CONTENTS
Page
I. Purchase and Sale of Subject Assets; Effective Date and Time.............................................1
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(a) Purchase and Sale of Subject Assets.............................................................1
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(b) Effective Date and Time.........................................................................1
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II. Sale Price and Manner of Payment.........................................................................1
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III. Closing and Deliveries...................................................................................2
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(a) Time and Place of Closing.......................................................................2
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(b) Deliveries by PPC and Seller....................................................................2
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(c) Deliveries by Purchasers........................................................................4
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(d) Deliveries to Wholly-Owned Subsidiaries of NACoal...............................................5
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IV. Seller's Representations.................................................................................5
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(a) Representations Regarding PPC, Seller and this Agreement........................................5
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(i) Organization, Good Standing and Foreign Qualification..................................5
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(ii) Corporate Power and Authority..........................................................5
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(iii) Authorization, Validity and Non-Contravention..........................................5
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(iv) Title to Subject Assets................................................................6
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(v) Consents...............................................................................6
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(vi) Litigation.............................................................................7
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(vii) No Brokers or Finders..................................................................7
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(b) Representations Regarding the Joint Venture Interests...........................................7
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(i) No Default or Breach...................................................................7
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(ii) Disclosure.............................................................................7
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(iii) Joint Venture Assets...................................................................7
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(iv) Definition of Knowledge................................................................7
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(c) Representations Regarding Land Management Company...............................................8
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(i) Organization, Good Standing and Foreign Qualification..................................8
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(ii) Capitalization.........................................................................8
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(iii) Options or Other Rights................................................................8
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(iv) Title to Real Property.................................................................8
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(v) Quiet Enjoyment........................................................................9
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(vi) Defaults...............................................................................9
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(vii) Encumbrances...........................................................................9
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(viii) Environmental Matters.................................................................10
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(ix) Consents..............................................................................11
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(x) Litigation............................................................................11
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(xi) Land Management Company Non-Operating Interests.......................................11
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(xii) No Default or Breach in Land Management Company Non-Operating Interests...............11
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(xiii) Liabilities and Obligations...........................................................12
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(d) Representations Regarding the Coal Leases, Fee Properties, Non-Operating Interests and the
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Eight Mile Venture.............................................................................12
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(i) Title.................................................................................12
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(ii) Quiet Enjoyment.......................................................................12
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(iii) Defaults..............................................................................12
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(iv) Encumbrances..........................................................................12
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(v) Environmental Matters.................................................................13
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(vi) Non-Operating Interests...............................................................14
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(vii) No Default or Breach in Non-Operating Interests.......................................14
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(viii) Norit Agreements......................................................................14
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(ix) No Default or Breach in Norit Agreements..............................................14
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(x) Disclosure............................................................................15
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(xi) Liabilities and Obligations...........................................................15
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(e) Representations Regarding Power Project Interest...............................................15
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(i) Power Project Interest Contracts......................................................15
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(ii) No Default or Breach..................................................................15
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(iii) Disclosure............................................................................15
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(iv) Liabilities and Obligations...........................................................15
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(f) Representations Regarding the Miscellaneous Assets, the Office Lease and the Sublease..........16
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(i) Records...............................................................................16
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(ii) Office Lease..........................................................................16
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(iii) No Default or Breach Under Office Lease...............................................16
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(iv) Owned Fixtures and Personal Property..................................................16
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(v) Leased Fixtures and Personal Property.................................................17
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(vi) Sublease..............................................................................17
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(g) Tax Representations............................................................................17
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(i) Tax Returns...........................................................................17
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(ii) Audits, Claims, Waivers...............................................................18
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(iii) Payments..............................................................................18
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(iv) Withholding...........................................................................18
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(v) Affiliated Groups.....................................................................18
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(vi) Tax Sharing Agreements................................................................18
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(vii) Powers of Attorney....................................................................18
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(viii) Tax Definitions.......................................................................18
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V. Purchasers' Representations.............................................................................19
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(a) Organization, Good Standing and Authority......................................................19
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(b) Authorization, Validity and Non-Contravention..................................................19
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(c) No Brokers or Finders..........................................................................20
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(d) Consents.......................................................................................20
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(e) Sublease.......................................................................................20
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VI. The Subject Assets......................................................................................21
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(a) Subject Assets.................................................................................21
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1. Red River Mining Company..............................................................21
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2. Mississippi Lignite Mining Company....................................................21
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3. Shares of Land Management Company.....................................................22
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4. Coal Leases, Fee Properties, Non-Operating Interests and the Eight Mile Venture.......22
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5. Power Project Interest................................................................22
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6. Miscellaneous Assets..................................................................22
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VII. Consents to Assignments and Subleases...................................................................23
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(a) No Assignment..................................................................................23
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(b) Further Assurances.............................................................................23
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VIII. Guaranties of Performance...............................................................................24
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(a) Representation and Warranty of PPC.............................................................24
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(b) Release........................................................................................24
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(c) Equipment Lease Guaranties and Letter of Credit Securing Reclamation Bond......................24
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IX. Conditions of Closing...................................................................................25
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(a) Purchasers' Conditions.........................................................................25
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(i) Deliveries............................................................................25
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(ii) Representations and Warranties and Covenants..........................................25
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(iii) Third-Party Consents..................................................................25
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(iv) No Orders.............................................................................25
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(v) No Litigation.........................................................................25
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(vi) Equipment Lease Guaranties and Letter of Credit.......................................25
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(b) Conditions of PPC and Seller...................................................................26
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(i) Representations and Warranties and Covenants..........................................26
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(ii) No Orders.............................................................................26
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(iii) Deliveries............................................................................26
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(iv) No Litigation.........................................................................26
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(v) Equipment Lease Guaranties and Letter of Credit.......................................26
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X. Certain Pre-Closing Obligations.........................................................................26
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(a) Actions Regarding Pre-Closing Covenants........................................................26
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(b) Changes to the Subject Assets..................................................................26
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(c) Full Access....................................................................................27
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(d) No Shop........................................................................................28
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(e) Notice of Breach or Non-Compliance.............................................................28
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(f) Payment of Inter-Company Accounts Payable......................................................28
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XI. Indemnification.........................................................................................28
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(a) By PPC and Seller..............................................................................28
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(b) By Purchasers..................................................................................29
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(c) Notice of Claim................................................................................29
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(d) Defense of Actions.............................................................................29
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XII. Certain Post-Closing Covenants..........................................................................29
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(a) Use of Phillips Name...........................................................................29
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(b) Confidentiality of Records.....................................................................29
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(c) Assumed Liabilities............................................................................30
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(i) Joint Venture Contracts...............................................................30
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(ii) Coal Leases...........................................................................30
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(iii) Fee Properties and Miscellaneous Assets...............................................30
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(iv) Non-Operating Interests...............................................................30
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(v) Norit Agreements......................................................................30
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(vi) Power Project Interest Contracts......................................................31
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(vii) Contracts Included in Miscellaneous Assets............................................31
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(d) Real Property Administration...................................................................31
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(e) Red River Services Agreement...................................................................31
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(f) Post-Closing Expense Reimbursement.............................................................31
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(g) License to Office Space........................................................................32
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XIII. Tax Matters.............................................................................................32
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(a) Section 338(h)(10) Election....................................................................32
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(b) Section 338(h)(10) Allocation..................................................................32
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(c) Tax Price Allocation...........................................................................32
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(d) Post-Closing Tax Matters.......................................................................33
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XIV. Public Announcements....................................................................................33
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XV. Subsequent Power Project Interest.......................................................................33
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(a) Disposition of Power Project Interest..........................................................33
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(b) Payment Due Seller Upon Commercial Operation of Second Electric Power Generation Facility......34
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XVI. Termination.............................................................................................34
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(a) By Purchasers..................................................................................34
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(b) By PPC and Seller..............................................................................34
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(c) By Mutual Agreement; No Waiver.................................................................34
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(d) Due Diligence Termination......................................................................35
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XVII. Miscellaneous...........................................................................................35
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(a) Successors and Assigns.........................................................................35
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(b) No Third Party Beneficiaries...................................................................35
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(c) Assignment.....................................................................................35
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(d) Notices........................................................................................35
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(e) Counterparts...................................................................................36
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(f) Severability...................................................................................36
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(g) Survival.......................................................................................36
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(h) Entire Agreement...............................................................................36
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(i) Expenses.......................................................................................36
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(j) Applicable Law.................................................................................36
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(k) Headings.......................................................................................37
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(l) Waiver and Amendment...........................................................................37
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DEFINED TERMS
PAGE
Action...........................................................................................................25
Agreement.........................................................................................................1
Assumed Liabilities..............................................................................................26
CERCLA...........................................................................................................10
Claim............................................................................................................25
Closing...........................................................................................................2
Closing Date......................................................................................................2
Coal Leases......................................................................................................19
Code..............................................................................................................4
Consents..........................................................................................................3
Contracts.........................................................................................................5
Current Period Tax...............................................................................................17
Effective Date....................................................................................................1
Eight Mile Joint Venture Agreement...............................................................................19
Eight Mile Venture...............................................................................................19
Eight Mile Venture Interest......................................................................................19
Equipment Lease Guaranties.......................................................................................21
Excluded Liabilities.............................................................................................20
Fee Properties...................................................................................................19
Fixtures and Personal Property...................................................................................15
Guaranties.......................................................................................................21
Hazardous Materials...............................................................................................9
Hazardous Substance...............................................................................................9
Indemnified Party................................................................................................25
Indemnifying Party...............................................................................................25
Joint Ventures....................................................................................................3
Knowledge.........................................................................................................7
Land Management Assets............................................................................................8
Land Management Company..........................................................................................19
Landlord.........................................................................................................14
Laws..............................................................................................................5
Leasehold Assets..................................................................................................8
Letter of Credit.................................................................................................21
Liens.............................................................................................................6
Litigation........................................................................................................6
Miscellaneous Assets.............................................................................................20
Mississippi Lignite Interest.....................................................................................19
Mississippi Lignite Joint Venture Agreement......................................................................19
Mississippi Lignite Mining Company...............................................................................19
NACoal............................................................................................................1
Non-Operating Interests..........................................................................................19
Norit Agreements..................................................................................................2
Office Lease.....................................................................................................14
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Options...........................................................................................................6
Orders............................................................................................................5
Oxbow.............................................................................................................1
Pollutant or Contaminant..........................................................................................9
Power Project Interest...........................................................................................19
PPC...............................................................................................................1
Purchaser.........................................................................................................1
Purchasers........................................................................................................1
Records..........................................................................................................14
Red Hills.........................................................................................................1
Red River Interest...............................................................................................18
Red River Joint Venture Agreement................................................................................18
Red River Mining Company.........................................................................................18
Sale Price........................................................................................................2
Seller............................................................................................................1
Shares............................................................................................................7
Subject Assets...................................................................................................18
Sublease..........................................................................................................4
Tax..............................................................................................................16
Tax Price........................................................................................................28
Tax Return.......................................................................................................17
Taxing Authority.................................................................................................17
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SCHEDULES
Schedule IV(a)(v) Consents for PPC and Seller
Schedule IV(b)(i) No Default or Breach Under Joint Venture Contracts
Schedule IV(c)(iv) Title to Land Management Assets
Schedule IV(c)(vii) Encumbrances on Land Management Assets
Schedule IV(d)(i) Title to Coal Leases and Fee Properties
Schedule IV(d)(iv) Encumbrances on Coal Leases and Fee Properties
Schedule IV(e)(i) Power Project Interest Contracts
Schedule IV(g) Exceptions to Tax Representations
Schedule VI(a)(4)(i) Coal Leases
Schedule VI(a)(4)(ii) Fee Properties
Schedule VI(a)(4)(iii) Non-Operating Interests
Schedule VI(a)(4)(iv) Norit Agreements
Schedule VI(a)(6) Miscellaneous Assets
Schedule VIII(a) PPC Guaranties of Performance
Schedule XIII(b) Section 338(h)(10) Allocation
Schedule XIII(c) Tax Price Allocation
EXHIBITS
Exhibit III(b)(i)-1 Instrument of Assignment for Red River Interest
Exhibit III(b)(i)-2 Instrument of Assignment for Mississippi Lignite Interest
Exhibit III(b)(ii)-1 Instrument of Assignment for Coal Leases
Exhibit III(b)(ii)-2 Instrument of Assignment for Eight Mile Venture Interest and
the Norit Agreements
Exhibit III(b)(iii)-1 Special Warranty Deed for Fee Properties
Exhibit III(b)(iii)-2 Special Warranty Deed for Mineral Properties
Exhibit III(b)(iv) Instrument of Assignment for Non-Operating Interests
Exhibit III(b)(vi) Instrument of Assignment for Power Project Interest
Exhibit III(b)(vii)-1 Bill of Sale for Records and Fixtures and Personal Property
Exhibit III(b)(vii)-2 Instrument of Assignment for Leases of Fixtures and Personal
Property
Exhibit III(b)(xvi) Section 1445(b)(2) Certificate
Exhibit III(b)(xvii) Sublease of Office Lease
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PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement ("Agreement") is dated this 11th day
of October, 2000, by and among Phillips Petroleum Company, a Delaware
corporation ("PPC"), Phillips Coal Company, a Nevada corporation ("Seller"), The
North American Coal Corporation, a Delaware corporation ("NACoal"), Oxbow
Property Company L.L.C., a Louisiana limited liability company ("Oxbow"), and
Red Hills Property Company L.L.C., a Mississippi limited liability company ("Red
Hills"; NACoal, Oxbow and Red Hills, collectively, "Purchasers" and,
individually, a "Purchaser").
WHEREAS, Seller is the owner of certain assets more fully described in
Article VI hereof (the "Subject Assets"); and
WHEREAS, Seller desires to sell, and Purchasers desire to acquire, all
of Seller's respective right, title and interest in and to the Subject Assets
upon the terms and conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the mutual covenants, agreements,
representations, warranties and conditions hereinafter set forth, the parties
hereby agree as follows:
I. PURCHASE AND SALE OF SUBJECT ASSETS;
EFFECTIVE DATE AND TIME
(a) PURCHASE AND SALE OF SUBJECT ASSETS. Subject to the terms and
conditions set forth herein, at the Closing (as hereinafter defined) (i) Seller
shall sell, assign and transfer the Red River Interest (as hereinafter defined)
to Oxbow, (ii) Seller shall sell, assign and transfer the Mississippi Lignite
Interest (as hereinafter defined) to Red Hills, (iii) Seller shall sell, assign
and transfer all of the other Subject Assets to NACoal, (iv) NACoal shall cause
Oxbow to, and Oxbow shall, purchase and acquire the Red River Interest from
Seller, (v) NACoal shall cause Red Hills to, and Red Hills shall, purchase and
acquire the Mississippi Lignite Interest from Seller, and (vi) NACoal shall
purchase and acquire all of the other Subject Assets from Seller.
(b) EFFECTIVE DATE AND TIME. The effective date of the sale and
purchase provided for in this Agreement shall be the date of this Agreement (the
"Effective Date"), and the effective time of such purchase and sale shall be the
close of business on the Effective Date.
II. SALE PRICE AND MANNER OF PAYMENT
In consideration for the Subject Assets, at the Closing (i) NACoal
shall cause Oxbow to, and Oxbow shall, pay the sum of Twelve Million Five
Hundred Thousand Dollars ($12,500,000), (ii) NACoal shall cause Red Hills to,
and Red Hills shall, pay the sum of One Hundred Nine Million Dollars
($109,000,000), and (iii) NACoal shall pay or cause to be paid the sum of Six
Million Eight Hundred Thousand Dollars ($6,800,000), by bank wire transfer of
immediately available funds to Seller's bank accounts, which accounts shall be
designated in writing by PPC or Seller at least three (3) business days prior to
Closing. The total of such
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amounts is One Hundred Twenty-Eight Million Three Hundred Thousand Dollars
($128,300,000) (the "Sale Price"). The Sale Price and the payments required in
the foregoing sentence shall be adjusted in accordance with Article VIII(c) by
deducting from the amount stated in clause (ii) of the foregoing sentence the
amount which is stated in the last sentence of Article VIII(c).
III. CLOSING AND DELIVERIES
(a) TIME AND PLACE OF CLOSING. The consummation of the transactions
contemplated by this Agreement (the "Closing") shall take place at 9:00 a.m.
local time on October 11, 2000, subject to the satisfaction or waiver of the
conditions contained in Article IX, in the offices of NACoal located at 14785
Preston Road, Suite 1100, Dallas, Texas 75240-7891, or at such other time or
place as the parties mutually agree. The date on which the Closing occurs shall
be referred to herein as the "Closing Date".
(b) DELIVERIES BY PPC AND SELLER. At the Closing, PPC and Seller shall
deliver or cause to be delivered to Purchasers the following:
(i) a duly executed instrument of assignment in the
approximate form attached hereto as EXHIBIT III(b)(i)-1 assigning and
transferring to Oxbow the Red River Interest and a duly executed
instrument of assignment in the approximate form of EXHIBIT III(b)(i)-2
assigning and transferring to Red Hills the Mississippi Lignite
Interest;
(ii) duly executed instruments of assignment in the
approximate form attached hereto as EXHIBIT III(b)(ii)-1 assigning and
transferring to NACoal all of Seller's right, title and interest in and
to the Coal Leases (as hereinafter defined) and a duly executed
instrument of assignment in the approximate form attached hereto as
EXHIBIT III(b)(ii)-2 assigning and transferring to NACoal the Eight
Mile Venture Interest (as hereinafter defined), and all of Seller's
right, title and interest in and to the Contracts (as hereinafter
defined) listed on SCHEDULE VI(a)(4)(iv) (the "Norit Agreements");
(iii) duly executed deeds in the approximate form attached
hereto as EXHIBITS III(b)(iii)-1 and III(b)(iii)-2 conveying, assigning
and transferring to NACoal all of Seller's right, title and interest in
and to the Fee Properties (as hereinafter defined);
(iv) a duly executed instrument of assignment in the
approximate form attached hereto as EXHIBIT III(b)(iv) assigning and
transferring to NACoal all of Seller's right, title and interest in and
to the Non-Operating Interests (as hereinafter defined);
(v) certificates representing all of the Shares (as
hereinafter defined) duly endorsed to NACoal or duly executed stock
powers in proper form for transfer to NACoal, and true, correct and
complete minute books, share ledgers and transfer books of Land
Management Company (as hereinafter defined);
(vi) a duly executed instrument of assignment in the
approximate form attached hereto as EXHIBIT III(b)(vi) assigning and
transferring to NACoal all of Seller's right, title and interest in and
to the Power Project Interest (as hereinafter defined);
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(vii) a duly executed instrument of assignment and a bill of
sale in the approximate forms attached hereto as EXHIBITS III(b)(vii)-2
and III(b)(vii)-1, respectively, assigning and transferring to NACoal
all of Seller's right, title and interest in and to the Miscellaneous
Assets (as hereinafter defined);
(viii) receipt for the payment of the Sale Price delivered by
Purchasers pursuant to Article II hereof;
(ix) a recent good standing certificate for each of Land
Management Company, PPC and Seller from the Secretary of State of its
state of incorporation dated not more than twenty (20) days prior to
the Closing;
(x) unless otherwise previously agreed to by Purchasers in
writing, copies of all consents, approvals, authorizations, waivers or
notifications of any governmental authority or any other person
("Consents") listed on SCHEDULE IV(a)(v);
(xi) the certificate of incorporation of each of Land
Management Company, PPC and Seller, certified as of a recent date not
more than twenty (20) days prior to the Closing by the appropriate
Secretary of State;
(xii) a certificate of the Secretary or Assistant Secretary of
each of PPC and Seller certifying that attached thereto are true and
correct copies of (A) the bylaws of such party; and (B) resolutions
duly and validly adopted by the Board of Directors of such party
authorizing and approving this Agreement and all other transactions and
agreements contemplated hereby to be undertaken by such party;
(xiii) a certificate of an officer of each of PPC and Seller
certifying on behalf of such party that (A) each of its representations
and warranties contained in this Agreement is true and correct in all
respects as of the Closing Date with the same force and effect as
though made as of the Closing Date (except to the extent they expressly
relate to a prior date); (B) each of the conditions to be performed or
complied with by such party as of or prior to the Closing Date, unless
waived in writing by Purchasers, has been duly performed or complied
with by such party in accordance with the terms of this Agreement; and
(C) all agreements, undertakings and obligations to be performed or
complied with by such party as of or prior to the Closing Date, unless
waived in writing by Purchasers, have been duly performed or complied
with by such party in accordance with the terms of this Agreement;
(xiv) a resignation of each of the officers and the members of
the Board of Directors of Land Management Company;
(xv) a resignation of each of the members of the Management
Committee appointed by Seller for each of Red River Mining Company (as
hereinafter defined), Mississippi Lignite Mining Company (as
hereinafter defined; Red River Mining Company and Mississippi Lignite
Mining Company collectively, the "Joint Ventures") and the Eight Mile
Venture (as hereinafter defined);
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(xvi) a certificate of Seller, dated as of the Closing Date,
signed by an authorized officer of Seller under Section 1445(b)(2) of
the U.S. Internal Revenue Code of 1986, as amended (the "Code"), and
the rules and regulations thereunder, in the approximate form attached
hereto as EXHIBIT III(b)(xvi) setting forth Seller's (A) U.S. federal
taxpayer identification number, and (B) statement that Seller is not a
foreign person within the meaning of Section 1445(f)(3) of the Code;
and
(xvii) a duly executed Sublease Agreement (the "Sublease") in
the form attached hereto as EXHIBIT III(b)(xvii).
(c) DELIVERIES BY PURCHASERS. At the Closing, Purchasers shall deliver
or cause to be delivered to PPC and Seller the following:
(i) the Sale Price in the amount and manner specified in
Article II;
(ii) a receipt for the Shares;
(iii) a recent good standing certificate for each of the
Purchasers, from the Secretary of State of the state of its
incorporation or formation, dated not more than twenty (2y0) days prior
to the Closing;
(iv) the certificate of incorporation or similar charter
document of each of Purchasers certified as of a recent date not more
than twenty (20) days prior to the Closing by the Secretary of State of
the state of its incorporation or formation;
(v) a certificate of the Secretary or Assistant Secretary of
each of Purchasers certifying that attached thereto are true and
correct copies of (A) the bylaws or similar charter document of such
Purchaser and (B) resolutions duly and validly adopted by the Board of
Directors or similar governing body of such Purchaser authorizing and
approving this Agreement and all other transactions and agreements
contemplated hereby; and
(vi) a certificate of an officer of each of Purchasers
certifying on behalf of such Purchaser that (A) each of the
representations and warranties of such Purchaser contained in Article V
of this Agreement is true and correct in all respects as of the Closing
Date with the same force and effect as though made by such Purchaser as
of the Closing Date (except to the extent they expressly relate to a
prior date); (B) each of the conditions to be performed or complied
with by such Purchaser as of or prior to the Closing Date, unless
waived in writing by PPC and Seller, has been duly performed or
complied with by such Purchaser in accordance with the terms of this
Agreement; and (C) all agreements, undertakings and obligations to be
performed or complied with by such Purchaser as of or prior to the
Closing, unless waived in writing by PPC and Seller, have been duly
performed or complied with by such Purchaser in accordance with the
terms of this Agreement.
(d) DELIVERIES TO WHOLLY-OWNED SUBSIDIARIES OF NACOAL. Notwithstanding
Article III(b) above, NACoal shall have the right to require that any of the
Subject Assets to be conveyed to it be conveyed and delivered to one or more of
its directly or indirectly wholly-
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owned corporate subsidiaries, or to any Joint Venture that is to be directly or
indirectly wholly owned by it following the Closing, and that any conveyancing
document called for by Article III(b) convey all of Seller's right, title and
interest in such Subject Assets to the entity so designated and not to NACoal.
With respect to any Subject Asset so conveyed and delivered by Seller as
required by NACoal to any such entity, NACoal, on behalf of such entity, at the
Closing as provided in Article II shall pay Seller the portion of the Sale Price
allocated to such Subject Asset as set forth on SCHEDULE XIII(c).
IV. SELLER'S REPRESENTATIONS
PPC and Seller jointly and severally represent and warrant to and with
Purchasers that:
(a) REPRESENTATIONS REGARDING PPC, SELLER AND THIS AGREEMENT.
(i) ORGANIZATION, GOOD STANDING AND FOREIGN QUALIFICATION.
Seller is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Nevada; PPC is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Delaware;
and Seller is duly qualified to carry on its business in the states in which the
Subject Assets owned by it are located.
(ii) CORPORATE POWER AND AUTHORITY. Seller has all requisite
power and authority to carry on its business as presently conducted, to execute
and deliver this Agreement, to sell the Subject Assets on the terms described in
this Agreement, and to perform its obligations hereunder. PPC has all requisite
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder.
(iii) AUTHORIZATION, VALIDITY AND NON-CONTRAVENTION. This
Agreement has been duly and validly executed and delivered by each of PPC and
Seller and, assuming the due execution thereof by Purchasers, constitutes the
legal, valid and binding obligation of each of PPC and Seller, enforceable
against each of PPC and Seller in accordance with its terms, except as such
enforceability may be limited by (X) bankruptcy, insolvency, reorganization,
moratorium or similar Laws (as hereinafter defined) relating to or affecting
generally the enforcement of creditors' interests and (Y) the availability of
equitable remedies (whether in a proceeding in equity or at law). All necessary
corporate action has been taken by and on behalf of each of PPC and Seller with
respect to the authorization, execution, delivery and performance of this
Agreement. Neither the execution and delivery of this Agreement by either of PPC
or Seller nor the performance of its obligations hereunder will (A) violate,
conflict with or result in a breach of any law, statute, code, ordinance, rule,
regulation, treaty, convention or other requirement or any governmental
authority ("Laws") binding on either of PPC or Seller or to which the Subject
Assets are subject or any order, judgment, injunction, award, decree, ruling,
charge or writ of any governmental authority ("Orders") binding on either of PPC
or Seller or to which the Subject Assets are subject or either PPC's or Seller's
certificate of incorporation or bylaws, (B) violate, conflict with or result in
a breach or termination of, or otherwise give any contracting party additional
rights or compensation under, or the right to terminate or accelerate, or
constitute (with notice or lapse of time, or both) a default under the terms of,
any note, deed, lease, instrument, security agreement, mortgage, commitment,
contract, agreement, license or other instrument (collectively, "Contracts") to
which either of PPC or Seller is a party or by which any
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of the Subject Assets is bound, or (C) result in the creation or imposition of
any liens, security interest, mortgage, pledge, hypothecation easement or
conditional sale or other title retention document, defect in title, restrictive
covenant, option to purchase, restriction on sale or other restriction on title,
use, operation or voting ("Liens") on the Subject Assets, other than Liens and
Contracts created or entered into by any of Purchasers.
(iv) TITLE TO SUBJECT ASSETS. Except as set forth in a
schedule attached to this Agreement which references a specific Article,
paragraph or clause of this Agreement, Seller (A) is the record and beneficial
owner of all of the Subject Assets, (B) has full power, right and authority, and
any approval required by Law or any Order, to sell, assign, transfer and deliver
the Subject Assets to Purchasers, and (C) has title to the Subject Assets (other
than the Coal Leases and Fee Properties) free and clear of all (i) Liens, (ii)
authorized or outstanding options, plans, offers, warrants, conversion or
exchange rights, calls, Contracts, subscriptions, preemptive rights, or other
rights or agreements of similar nature ("Options"), or (iii) other Contracts
restricting the right of Seller, or obligating Seller, to transfer or sell any
Subject Assets. Except as set forth in a schedule attached to this Agreement
which references a specific Article, paragraph or clause of this Agreement, upon
the consummation of the transactions contemplated by this Agreement in
accordance with the terms hereof, each Purchaser shall acquire title to the
Subject Assets (other than the Coal Leases and Fee Properties) being purchased
and acquired by it, free and clear of all Liens, Options and Contracts, and such
Purchaser shall become the sole record and beneficial owner of such Subject
Assets, other than due to Liens, Options and Contracts created or entered into
by such Purchaser.
(v) CONSENTS. Except as set forth on SCHEDULE IV(a)(v), no
Consent is required to be obtained by PPC or Seller in connection with the
execution and delivery by PPC or Seller of this Agreement or the consummation of
the transactions contemplated hereby.
(vi) LITIGATION. There is no suit, action, proceeding, claim,
demand, proceeding or investigation ("Litigation") pending, or to the Knowledge
(as hereinafter defined) of PPC or Seller, threatened against PPC or Seller
which seeks to restrain or prohibit or otherwise challenges the consummation,
legality or validity of this Agreement or the transactions contemplated hereby,
or if pursued and/or resulting in an Order, would have a material adverse effect
on the right or ability of such Seller to sell the Subject Assets or consummate
any of the other transactions contemplated hereby.
(vii) NO BROKERS OR FINDERS. Except for Chase Securities Inc.,
the fees of which shall be paid by PPC or Seller, neither PPC nor Seller has
employed any broker, agent or finder in connection with the transaction
contemplated by this Agreement.
(b) REPRESENTATIONS REGARDING THE JOINT VENTURE INTERESTS. Except as
set forth in the schedules attached to this Agreement which are expressly
referenced in this Article IV(b):
(i) NO DEFAULT OR BREACH. To the Knowledge of PPC and Seller,
there exists no material default or breach by Seller under any of the Contracts
set forth on Schedule IV(b)(i), which Schedule lists all of the Contracts
relating to either of the Joint Ventures and to which Seller is a party.
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(ii) DISCLOSURE. To the Knowledge of PPC and Seller, NACoal
has been provided with all material information in the possession of PPC or
Seller and not previously in the possession of NACoal pertaining to either of
the Red River Interest and the Mississippi Lignite Interest, including without
limitation internal projections or forecasts relating to such Subject Assets,
and all such information is complete and accurate in all material respects. To
the Knowledge of PPC and Seller, none of such information contains any untrue
statements of a material fact or omits to state a material fact necessary to
make the statements contained therein not misleading.
(iii) JOINT VENTURE ASSETS. To the Knowledge of PPC and
Seller, neither of the Joint Ventures uses, possesses, has control over or has
any claim or right to any assets or properties, real or personal, tangible or
intangible, which are necessary or useful to the conduct of its business as now
conducted or as proposed to be conducted which are owned by, controlled by, or
titled in the name of Seller, either alone or together with any other person.
(iv) DEFINITION OF KNOWLEDGE. As used in this Agreement,
"Knowledge" shall mean the actual knowledge of any officer or director of PPC or
any manager, officer or director of Seller or what such individual, but for
grossly negligent, reckless or intentional conduct, should have known.
(c) REPRESENTATIONS REGARDING LAND MANAGEMENT COMPANY. Except as set
forth in the schedules attached to this Agreement which are expressly referenced
in this Article IV(c):
(i) ORGANIZATION, GOOD STANDING AND FOREIGN QUALIFICATION.
Land Management Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada. Land Management Company has
the corporate power and authority to own, operate and lease its properties and
to carry on its business as presently being conducted. Land Management Company
is duly qualified to do business and is in good standing in the States of
Louisiana, Mississippi, Tennessee and Texas, those being the only jurisdictions
in which such qualification is necessary to carry on its business as presently
conducted.
(ii) CAPITALIZATION. The authorized capital stock of Land
Management Company consists of 1000 shares of Common Stock, without par value,
of which ten (10) shares (the "Shares") are issued and outstanding, all of which
have been duly issued and are fully paid and nonassessable. All of the Shares
are owned of record and beneficially by Seller.
(iii) OPTIONS OR OTHER RIGHTS. Except for the Shares, (A)
there is no issued and outstanding capital stock or other securities (whether
debt, equity or a combination thereof) of Land Management Company; (B) there are
no restrictions or other obligations with respect to the sale or transfer of any
of such Shares, or evidencing the right to issue or to subscribe for any of such
Shares, or giving any person any rights with respect to such Shares or, in each
case, any other capital stock or other securities (whether debt, equity or a
combination thereof) of Land Management Company; (C) there are no outstanding or
authorized stock appreciation, phantom stock, profit participation or similar
rights with respect to Land Management Company; and (D) there are no voting
trusts, proxies or other agreements or understandings with respect to the voting
of the capital stock of Land Management Company.
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(iv) TITLE TO REAL PROPERTY. Seller has made available to
NACoal all documents in possession of Land Management Company relating to Land
Management Company's title to all real property, coal rights, mineral estates,
surface estates, coal leases, coal subleases, surface leases, mining rights,
water rights, surface disturbance consents, easements, rights of way, access
rights, non-operating interests (including rights to advance royalties,
production royalties and production payments) and other rights or interests in
real property, permits and licenses, personal property, all geological and
geophysical databases, Contracts and all other assets of Land Management Company
(the "Land Management Assets"; provided, however that the Land Management Assets
do not include that certain non-operating interest relating to the Calvert
Lignite Mine located in Robertson, Texas and operated by Walnut Creek Mining
Company, a Texas joint venture between Seller and KT Mining Company, a Delaware
corporation). Except as disclosed in SCHEDULE IV(c)(iv), Land Management Company
(A) is the record and beneficial owner of all of the Land Management Assets, and
(B) has title to the Land Management Assets (other than the Leasehold Assets (as
hereinafter defined) and the Land Management Assets constituting real property
owned in fee) free and clear of all (i) Liens and Taxes, (ii) Options, or (iii)
other Contracts. None of the Land Management Assets is encumbered by any Lien
created by, through or under Land Management Company or its affiliates, except
(x) for the Lien for real property or ad valorem taxes that are not then due and
payable and (y) as set forth on SCHEDULE IV(c)(iv). Except as disclosed in
SCHEDULE IV(c)(iv), there are no Contracts entered into by Land Management
Company or its affiliates with third parties (or affiliates) relating to the
Land Management Assets obligating Land Management Company to make payments with
respect to overriding royalties or similar burdens against production from the
Land Management Assets, creating preferential rights to purchase the Land
Management Assets, or dedicating the coal reserves beneath the Land Management
Assets to any particular Contract or sale. Except as disclosed in SCHEDULE
IV(c)(iv), Land Management Company is not in breach or default of any royalty,
rental or other payment obligation under any of the Leasehold Assets (as
hereinafter defined).
(v) QUIET ENJOYMENT. Land Management Company is in material
compliance with and enjoying quiet possession with respect to each of the Land
Management Assets to which it is a party constituting a lease or sublease
(collectively, the "Leasehold Assets"). Land Management Company has received no
notice and is not aware of any claim, demand or suit by a lessor or sublessor of
any of the Leasehold Assets claiming a material breach or default thereof or
termination of such lease or sublease.
(vi) DEFAULTS. Neither the execution and delivery of this
Agreement by PPC or Seller nor the performance of their obligations hereunder
constitute or will constitute a breach, default or event of default under any
such Leasehold Assets.
(vii) ENCUMBRANCES. Except as shown on SCHEDULES IV(c)(iv) and
IV(c)(vii), none of the Land Management Assets is encumbered by any matter
affecting title that materially and adversely affects the value of the Land
Management Assets (considered as an entirety) so affected or the utility of the
Land Management Assets (considered as an entirety) for the purposes to which
NACoal would intend to devote the same. The matters described on SCHEDULE
IV(c)(vii) shall be considered to be permitted exceptions to Land Management
Company's title to the Land Management Assets. Notwithstanding the foregoing to
the contrary, however, such matters described on SCHEDULE IV(c)(vii) do not
materially and adversely affect the value of the
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Land Management Assets (considered as an entirety) and do not materially and
adversely impair the utility of the Land Management Assets (considered as an
entirety) for the purpose to which NACoal would intend to devote the same.
(viii) ENVIRONMENTAL MATTERS. (A) (1) Neither Land Management
Company nor, to PPC's or Seller's Knowledge, any other person or entity has
generated, manufactured, stored, transported, treated, recycled, disposed of or
otherwise handled in any way any Hazardous Materials on, beneath or about any of
the Land Management Assets; (2) to PPC's or Seller's Knowledge, there has not
been a release or threat of release or discharge of Hazardous Materials into the
soil, surface waters, groundwaters, drinking water supplies, navigable waters,
land, surface or subsurface strata, ambient air or other environmental medium,
whether or not yet discovered, on, beneath or about the Land Management Assets
that has resulted in or could result in any damage, loss, cost, expense, claim,
demand or liability to or against Land Management Company or any of its
affiliates by any governmental authority or other third party, irrespective of
the cause of such condition; (3) Land Management Company has not received any
notice, complaint, order, directive or action from any governmental entity or
private or public entity or person relating to Hazardous Materials or
environmental problems, impairments or liabilities with respect to the Land
Management Assets that would prohibit use of such Assets as contemplated by
NACoal; (4) neither PPC nor Seller is aware of any regional contamination issues
that could adversely affect the value of the Land Management Assets (considered
as an entirety) for the use to which NACoal intends to devote the same; (5) to
the Knowledge of PPC or Seller, none of the Land Management Assets is currently
registered on the National Register of Historic Places pursuant to the National
Historic Preservation Act, 16 U.S.C. Sec. 470 et seq. (or as an historic
landmark) under any comparable state or local law), nor is any of the Land
Management Assets eligible for any such registration; (6) to the Knowledge of
PPC or Seller, none of the Land Management Assets constitutes a habitat for any
species designated as threatened or endangered pursuant to the Endangered
Species Act, 16 U.S.C. Sec. 1531 et seq.; (7) to the Knowledge of PPC or Seller,
no "navigable waters," as such term is used in Section 404 of the Clean Water
Act 33 U.S.C. Sec. 1441, are located on any of the Land Management Assets; (8)
no underground or above-ground storage tanks or subsurface structures are, to
the Knowledge of PPC or Seller, located on or under any of the Land Management
Assets; (9) to the Knowledge of PPC or Seller, none of the Land Management
Assets is (or with the passage of time and/or the giving of notice would be)
subject to any private or governmental lien or claim relating to Hazardous
Materials or environmental problems; (10) neither PPC nor Seller has any
Knowledge of any pending legislation relating to environmental matters that
would prohibit use of the Land Management Assets as contemplated by NACoal, and
(11) to the Knowledge of PPC or Seller, none of the Land Management Assets is
designated as lands unsuitable for surface coal mining operations or as areas
where such mining operations are prohibited or limited by the Surface Mining
Control and Reclamation Act of 1977, 30 U.S.C. Sec. 1201 ET SEQ., the Louisiana
Surface Mining and Reclamation Act, La. Rev. Stat. Ann. Sec. 30-901 ET SEQ., or
the Texas Surface Coal Mining and Reclamation Act, Tex. Nat. Resources Code Ann.
Sec. 134.001 ET SEQ., except for setback and similar limitations affecting the
right to mine within minimum distances of highways, pipelines, oil facilities or
gas facilities or other spacing requirements.
(B) As used in this Agreement, "Hazardous Materials" shall
mean (1) any "Hazardous Substance," "Pollutant or Contaminant" (as such terms
are defined in the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. 9601 et
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seq. as amended ("CERCLA")), or (2) any other chemical, substance, material,
object, condition, waste, pollutant or combination thereof that is or may be
hazardous to human health or safety or to the environment due to its
radioactivity, ignitability, corrosivity, reactivity, explosivity, toxicity,
carcinogenicity, infectiousness or other harmful properties or effects and all
of those chemicals, substances, materials, objects, conditions, wastes,
pollutants or combinations thereof that are listed, defined or regulated by any
federal, state or local law based upon, directly or indirectly, such properties
or effects.
(ix) CONSENTS. No Consents are required to be obtained by Land
Management Company in connection with the execution and delivery by PPC or
Seller of this Agreement or the consummation of the transactions contemplated
hereby.
(x) LITIGATION. There are no Orders or Litigation by Land
Management Company or against Land Management Company or any of its assets
either pending or, to the Knowledge of PPC or Seller, threatened, which involve
a material amount of the property and assets, or material rights or obligations,
of Land Management Company.
(xi) LAND MANAGEMENT COMPANY NON-OPERATING INTERESTS. Each of
the obligations to Land Management Company under each of the non-operating
interests included within the Land Management Assets constitutes a valid and
binding obligation and is enforceable by Land Management Company in accordance
with its terms, except as such enforceability may be limited by (X) bankruptcy,
insolvency, reorganization, moratorium, or similar laws relating to or affecting
generally the enforcement of creditors' interests and (Y) the availability of
equitable remedies (whether in a proceeding in equity or at law). Each of the
parties with obligations to Land Management Company under a non-operating
interest which constitutes a Land Management Asset has performed all of its
obligations under, or is otherwise in compliance with all of its obligations
under, such non-operating interest.
(xii) NO DEFAULT OR BREACH IN LAND MANAGEMENT COMPANY
NON-OPERATING INTERESTS. There exists no material default or breach with regard
to any of the obligations under the non-operating interests included within the
Land Management Assets, and no notice has been given or received claiming that
any party with obligations to Land Management Company under any such
non-operating interest has committed any such default or breach or indicating
the desire or intention of Land Management Company to amend, modify, rescind or
terminate the same and no event has occurred which, with notice or lapse of
time, would constitute a breach or default, or permit or cause termination,
modification or acceleration of any obligations under any such non-operating
interests and no party benefiting from or having any obligation under any such
non-operating interest has repudiated any provision of any such non-operating
interest.
(xiii) LIABILITIES AND OBLIGATIONS. Land Management Company
has not incurred any liability or obligation whatsoever, whether known, due or
to become due, accrued, absolute, contingent or otherwise, other than current
liabilities incurred or accrued in the ordinary course of business consistent
with the past practice of Land Management Company, and there has been no event,
occurrence, change or set of circumstances or facts which could reasonably be
expected to result in any such liability or obligation.
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(d) REPRESENTATIONS REGARDING THE COAL LEASES, FEE PROPERTIES,
NON-OPERATING INTERESTS AND THE EIGHT MILE VENTURE. Except as set forth in the
schedules attached to this Agreement which are expressly referenced in this
Article IV(d):
(i) TITLE. Seller has made available to NACoal all documents
in its possession relating to its title to the Coal Leases and the Fee
Properties. None of the Coal Leases or the Fee Properties is encumbered by any
Lien created by, through or under Seller or its affiliates, except (x) for the
Lien for real property or ad valorem taxes that are not then due and payable and
(y) as set forth on SCHEDULE IV(d)(i). Except as disclosed in SCHEDULE IV(d)(i),
there are no Contracts entered into between Seller or its affiliates with third
parties (or affiliates) relating to the Coal Leases or the Fee Properties
creating overriding royalties or similar burdens against production from the
Coal Leases or the Fee Properties, creating preferential rights to purchase the
Coal Leases or the Fee Properties, or dedicating the coal reserves beneath the
Coal Leases or Fee Properties to any particular Contract or sale. Except as
disclosed in SCHEDULE IV(d)(i), Seller is not in breach or default of any
royalty, rental or other payment obligation under any of the Coal Leases.
(ii) QUIET ENJOYMENT. Seller is in material compliance with
and enjoying quiet possession under each of the Coal Leases. Seller has received
no notice and is not aware of any claim, demand or suit by a lessor or sublessor
of any of the Coal Leases claiming a material breach or default thereof or
termination of any such Coal Leases.
(iii) DEFAULTS. Neither the execution and delivery of this
Agreement by Seller nor the performance of its obligations hereunder constitutes
or will constitute a breach, default or event of default under any such Coal
Leases.
(iv) ENCUMBRANCES. Except as shown on SCHEDULES IV(d)(i) and
IV(d)(iv), none of the Coal Leases or Fee Properties are encumbered by any
matter affecting title that materially and adversely affects the value of the
Coal Leases and the Fee Properties (considered as an entirety) so affected or
the utility of the Coal Leases and the Fee Properties (considered as an
entirety) for the purposes to which NACoal would intend to devote the same. The
matters described on SCHEDULE IV(d)(iv) shall be considered to be permitted
exceptions to Seller's title to the Coal Leases and the Fee Properties.
Notwithstanding the foregoing to the contrary, however, such matters described
on SCHEDULE IV(d)(iv) do not materially and adversely affect the value of the
Coal Leases and the Fee Properties (considered as an entirety) and do not
materially and adversely impair the utility of the Coal Leases and the Fee
Properties (considered as an entirety) for the purpose to which NACoal would
intend to devote the same.
(v) ENVIRONMENTAL MATTERS. (1) Neither Seller nor, to PPC's or
Seller's Knowledge, any other person or entity has generated, manufactured,
stored, transported, treated, recycled, disposed of or otherwise handled in any
way any Hazardous Materials on, beneath or about any of the Coal Leases or Fee
Properties; (2) to PPC's or Seller's Knowledge, there has not been a release or
threat of release or discharge of Hazardous Materials into the soil, surface
waters, groundwaters, drinking water supplies, navigable waters, land, surface
or subsurface strata, ambient air or other environmental medium, whether or not
yet discovered, on, beneath or about the Coal Leases or Fee Properties that has
resulted in or could result in any damage, loss, cost, expense, claim, demand or
liability to or against Seller or any of its affiliates by any
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governmental authority or other third party, irrespective of the cause of such
condition; (3) Seller has not received any notice, complaint, order, directive
or action from any governmental entity or private or public entity or person
relating to Hazardous Materials or environmental problems, impairments or
liabilities with respect to the Coal Leases or Fee Properties that would
prohibit use of the Coal Leases or Fee Properties as contemplated by NACoal; (4)
neither PPC nor Seller is aware of any regional contamination issues that could
adversely affect the value of the Coal Leases and the Fee Properties (considered
as an entirety) for the use to which NACoal intends to devote the same; (5) to
the Knowledge of PPC or Seller, none of the Coal Leases or Fee Properties is
currently registered on the National Register of Historic Places pursuant to the
National Historic Preservation Act, 16 U.S.C. Sec. 470 et seq. (or as an
historic landmark) under any comparable state or local law), nor is any of the
Coal Leases or Fee Properties eligible for any such registration; (6) to the
Knowledge of PPC or Seller, none of the Coal Leases or Fee Properties
constitutes a habitat for any species designated as threatened or endangered
pursuant to the Endangered Species Act, 16 U.S.C. Sec. 1531 et seq.; (7) to the
Knowledge of PPC or Seller, no "navigable waters," as such term is used in
Section 404 of the Clean Water Act 33 U.S.C. Sec. 1441, are located on any of
the Coal Leases or Fee Properties; (8) no underground or above-ground storage
tanks or subsurface structures are, to the Knowledge of PPC or Seller, located
on or under any of the Coal Leases or Fee Properties; (9) to the Knowledge of
PPC or Seller, none of the Coal Leases or Fee Properties is (or with the passage
of time and/or the giving of notice would be) subject to any private or
governmental lien or claim relating to Hazardous Materials or environmental
problems; (10) neither PPC nor Seller has any Knowledge of any pending
legislation relating to environmental matters that would prohibit use of the
Coal Leases or Fee Properties as contemplated by NACoal; and (11) to the
Knowledge of PPC or Seller, none of the Coal Leases or Fee Properties is
designated as lands unsuitable for surface coal mining operations or as areas
where such mining operations are prohibited or limited by the Surface Mining
Control and Reclamation Act of 1977, 30 U.S.C. Sec. 1201 ET SEQ., the Louisiana
Surface Mining and Reclamation Act, La. Rev. Stat. Ann. Sec. 30-901 ET SEQ., the
Mississippi Surface Coal Mining and Reclamation Law, Miss. Code Ann. Sec. 53-91
ET SEQ., the Coal Surface Mining Act of 1987, Tenn. Code Ann. Sec. 59-8-401, or
the Texas Surface Coal Mining and Reclamation Act, Tex. Nat. Resources Code Ann.
Sec. 134.001 ET SEQ., except for setback and similar limitations affecting the
right to mine within minimum distances of highways, pipelines, oil facilities or
gas facilities or other spacing requirements.
(vi) NON-OPERATING INTERESTS. Each of the obligations to
Seller under each of the Non-Operating Interests constitutes a valid and binding
obligation and is enforceable by Seller in accordance with its terms, except as
such enforceability may be limited by (X) bankruptcy, insolvency,
reorganization, moratorium, or similar laws relating to or affecting generally
the enforcement of creditors' interests and (Y) the availability of equitable
remedies (whether in a proceeding in equity or at law). Each of the parties with
obligations to Seller under a Non-Operating Interest has performed all of its
obligations under, or is otherwise in compliance with all of its obligations
under, such Non-Operating Interest.
(vii) NO DEFAULT OR BREACH IN NON-OPERATING INTERESTS. There
exists no material default or breach with regard to any of the obligations under
the Non-Operating Interests, and no notice has been given or received claiming
that any party with obligations to Seller under a Non-Operating Interest has
committed any such default or breach or indicating the desire or intention of
Seller to amend, modify, rescind or terminate the same, and no event has
occurred which, with
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notice or lapse of time, would constitute a breach or default, or permit or
cause termination, modification or acceleration of any obligations under any
such Non-Operating Interest and no party benefiting from or having any
obligation under any such Non-Operating Interest has repudiated any provision of
any such Non-Operating Interest.
(viii) NORIT AGREEMENTS. There are no Contracts relating to
the Eight Mile Venture except those set forth on SCHEDULE VI(a)(4)(iv). Each of
the obligations to Seller under each of such Contracts constitutes a valid and
binding obligation and is enforceable by Seller in accordance with its terms,
except as such enforceability may be limited by (X) bankruptcy, insolvency,
reorganization, moratorium, or similar laws relating to or affecting generally
the enforcement of creditors' interests and (Y) the availability of equitable
remedies (whether in a proceeding in equity or at law). Each of such Contracts
is in full force and effect, and Seller has performed all of its obligations
under, or is otherwise in compliance, with each of such Contracts.
(ix) NO DEFAULT OR BREACH IN NORIT AGREEMENTS. There exists no
material default or breach by Seller under any of the Contracts set forth on
SCHEDULE VI(a)(4)(iv) or by any other party thereto, and Seller has not received
any notice claiming that it has committed any such default or breach or
indicating the desire or intention of any party thereto to amend, modify,
rescind or terminate the same, and no event has occurred which, with notice or
lapse of time, would constitute a breach or default, or permit termination,
modification or acceleration, under any such Contract and no party to any such
Contract has repudiated any provision of such Contract.
(x) DISCLOSURE. NACoal has been provided with all material
information in the possession of PPC or Seller pertaining to the Eight Mile
Venture, including without limitation, internal projections or forecasts
relating to such Subject Asset, and all such information is complete and
accurate in all material respects. None of such information contains any untrue
statements of material fact or omits to state a material fact necessary to make
misstatements contained therein not misleading.
(xi) LIABILITIES AND OBLIGATIONS. There are no liabilities or
obligations whatsoever, whether known, due or to become due, accrued, absolute,
contingent or otherwise, of Seller relating to or arising out of the Eight Mile
Venture.
(e) REPRESENTATIONS REGARDING POWER PROJECT INTEREST. Except as set
forth in the schedules attached to this Agreement which are expressly referenced
in this Article IV(e):
(i) POWER PROJECT INTEREST CONTRACTS. There are no Contracts
relating to the Power Project Interest except those set forth on SCHEDULE
IV(e)(i). Each of such Contracts is in full force and effect, and Seller has
performed all of its obligations under, or is otherwise in compliance with each
of such Contracts.
(ii) NO DEFAULT OR BREACH. There exists no material default or
breach by Seller under any of the Contracts set forth on SCHEDULE IV(e)(i) or by
any other party thereto, and Seller has not received any notice claiming that it
has committed any such default or breach or indicating the desire or intention
of any party thereto to amend, modify, rescind or terminate the
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same, and no event has occurred which, with notice or lapse of time, would
constitute a breach or default, or permit termination, modification or
acceleration, under any such Contract and no party to any such Contract has
repudiated any provision of such Contract.
(iii) DISCLOSURE. NACoal has been provided with all material
information in the possession of PPC or Seller pertaining to the Power Project
Interest, including without limitation, internal projections or forecasts
relating to such Subject Asset, and all such information is complete and
accurate in all material respects. None of such information contains any untrue
statements of material fact or omits to state a material fact necessary to make
misstatements contained therein not misleading.
(iv) LIABILITIES AND OBLIGATIONS. There are no liabilities or
obligations whatsoever, whether known, due or to become due, accrued, absolute,
contingent or otherwise, of Seller relating to or arising out of the Power
Project Interest.
(f) REPRESENTATIONS REGARDING THE MISCELLANEOUS ASSETS, THE OFFICE
LEASE AND THE SUBLEASE. Except as set forth in the schedules to this Agreement
which are expressly referenced in this Article IV(f):
(i) RECORDS. All of the title records, prospect and lease
files and other data and documents (collectively, "Records") described on
SCHEDULE VI(a)(6) constitute all of the Records owned by Seller relating to the
Coal Leases, Fee Properties, Non-Operating Interests or Land Management Assets.
(ii) OFFICE LEASE. Seller currently occupies Suite 200 of a
certain office building located at 2929 North Central Expressway, Richardson,
Texas 75080-2043 under an oral arrangement with PPC which leases such Suite plus
more space at such building under an Office Lease Agreement dated April 24, 1991
between 2929 Partners, Ltd., successor-in-interest to State Mutual Life
Assurance Co. of America (the "Landlord"), and PPC (the "Office Lease"). The
Office Lease has been duly authorized, executed and delivered by each of the
parties thereto, constitutes a valid and binding obligation of each of the
parties thereto, and is enforceable against each of such parties in accordance
with its terms, except as such enforceability may be limited by (X) bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or affecting
generally the enforcement of creditors' interests and (Y) the availability of
equitable remedies (whether in a proceeding, in equity or at law). The Office
Lease is in full force and effect, and each of such parties thereto has
performed all of its obligations under, or is otherwise in compliance with, the
Office Lease. PPC is enjoying quiet possession under the Office Lease.
(iii) NO DEFAULT OR BREACH UNDER OFFICE LEASE. There exists no
default or breach by any of the parties to the Office Lease, and none of such
parties has received any notice claiming that it has committed any such default
or breach or indicating a desire or intention of any other party thereto to
amend, modify, rescind or terminate the same and no event has occurred which,
with notice or lapse of time, would constitute a breach or default, or permit or
cause termination, modification or acceleration, under the Office Lease, and no
party to the Office Lease has repudiated any provision of the Office Lease.
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(iv) OWNED FIXTURES AND PERSONAL PROPERTY. SCHEDULE VI(a)(6)
includes a complete and accurate list of all fixtures and personal property,
including but not limited to all machinery and equipment, office furniture and
equipment and vehicles (collectively, "Fixtures and Personal Property"), which
is owned by Seller and used at the office space covered by the Office Lease, as
well as a depreciation schedule for such assets. All of such assets are in good
operating condition, ordinary wear and tear excepted, and all have been
maintained, repaired and replaced consistent with Seller's past practice.
(v) LEASED FIXTURES AND PERSONAL PROPERTY. SCHEDULE VI(a)(6)
includes a complete list of all leases of Fixtures and Personal Property located
at the office space which is subject to the Office Lease and with respect to
which Seller is a lessee, including respective expiration dates and monthly
rentals for each such asset.
(vi) SUBLEASE. The Sublease has been duly authorized by PPC,
and assuming the due execution and delivery thereof by PPC and NACoal, shall
constitute the legal, valid and binding obligation of PPC, enforceable against
PPC in accordance with its terms except as such enforceability may be limited by
(X) bankruptcy, insolvency, reorganization, moratorium or similar Laws relating
to or affecting generally the enforcement of creditors interests and (Y) the
availability of equitable remedies (whether in a proceeding in equity or at
law). PPC has the corporate power and authority to enter into the Sublease and
to undertake and perform fully the transactions contemplated thereby. All
necessary corporate action has been taken by and on behalf of PPC with respect
to the authorization, execution, delivery and performance of the Sublease.
Neither the execution and delivery of the Sublease by PPC nor the performance of
its obligations thereunder will (i) violate, conflict with or result in a breach
of any Law or any Orders applicable to PPC or its certificate of incorporation
or bylaws, or (ii) violate, conflict with or result in a breach or termination
of, or otherwise give any contracting party additional rights or compensation
under, or the right to terminate or accelerate, or constitute (with notice or
lapse of time, or both) a default under the terms of, any contracts to which PPC
is a party or by which PPC is bound which would prevent the consummation by PPC
of the transactions contemplated by the Sublease.
(g) TAX REPRESENTATIONS. With respect to each of Seller and Land
Management Company that, except as set forth on SCHEDULE IV(g):
(i) TAX RETURNS. All Tax Returns (as hereinafter defined) that
are or were required to be filed on or before the Closing Date by or with
respect to either of such persons have been or will be timely filed (or a filing
extension from the appropriate Taxing Authority (as hereinafter defined) has
been or will have been obtained) and are or will be true and correct in all
material respects. All Taxes (as hereinafter defined) owed by either of such
persons for the taxable period covered by each such Tax Return (whether or not
shown on such Tax Return) have been or will be duly and timely paid in full on
or before the Closing Date. No claim has ever been made by any Taxing Authority
in a jurisdiction where either of such persons does not file Tax Returns that it
is or may be subject to Tax in such jurisdiction. No assets of either of such
persons is subject to any Liens, whether or not perfected, for any Taxes.
(ii) AUDITS, CLAIMS, WAIVERS. No Tax Return filed by either of
such persons is currently being audited or examined by any Taxing Authority.
There are no unsatisfied claims or
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deficiencies against either of such persons for Taxes. None of such persons has
given any waiver or extension (or is subject to a waiver or extension given by
any other person) of any statute of limitations relating to the assessment or
collection of any Taxes which has not by its terms either expired or been
terminated.
(iii) PAYMENTS. Each payment of Current Period Taxes (as
hereinafter defined), whether actual or estimated, payable by each of such
persons has been or will be timely paid by it before the date on which such
payment is required to be made and in an amount sufficient to avoid the
imposition of any penalty.
(iv) WITHHOLDING. Each of such persons has withheld and timely
paid, or will withhold and timely pay, all Taxes required to be withheld and
paid in connection with amounts paid before or on the Closing Date to (A) any
employee of either of such persons or (B) any person entitled to receive any
form of mineral royalty payment from either of such persons.
(v) AFFILIATED GROUPS. Neither of such persons has ever been a
member of an affiliated group filing a consolidated, combined or unitary income
or franchise Tax Return for state or local tax purposes, and neither of such
persons has any liability for any state or local Taxes of any other person.
(vi) TAX SHARING AGREEMENTS. Neither of such persons is a
party to any tax sharing agreement or arrangement that will require any payment
by either of such persons after the Closing.
(vii) POWERS OF ATTORNEY. No power of attorney currently in
force has been granted by either of such persons which will be binding on either
of such persons or any of Purchasers after the Closing. Neither of such persons
has entered into a closing agreement with any Taxing Authority which will have
continuing effect on such person, any of Purchasers or any affiliate of any of
Purchasers after the Closing.
(viii) TAX DEFINITIONS. For purposes of this Article IV(g) and
Article XIII of this Agreement:
(A) The term "Tax" means (1) all taxes or other
fiscal levies imposed by any governmental authority, domestic or foreign,
including, without limitation, any net income, alternative or add-on minimum,
gross income, gross receipts, sales, use, ad valorem, value added, transfer,
franchise, profits, license, registration, recording, documentary, conveyancing,
gains, withholding, payroll, employment, excise, severance, stamp, occupation,
premium, property, environmental or windfall profit tax, custom, duty or other
like assessment, together with any interest, penalty, addition to tax or
additional amount imposed or assessed by any governmental authority with respect
thereto; or (2) any liability for the payment of any amounts of the type
described in (1) as a result of being a member of an affiliated, consolidated,
combined or unitary group or being a party to any agreement under which
liability is determined or taken account with reference to the liability of any
other person; or (3) any liability for the payment of any amounts of the type
described in (1) as a result of any express or implied obligation to indemnify
any other person or as a result of being party to any other arrangement or
agreement.
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(B) The term "Tax Return" means any return,
declaration, report, claim for refund, or information return or statement
relating to Taxes, including any schedule or attachment thereto, and including
any amendment thereof.
(C) The term "Current Period Tax" means, in the case
of any taxable year which begins before and ends after the Closing Date, the
total Tax attributable to the portion of such taxable year which ends on and
includes the Closing Date.
(D) The term "Taxing Authority" means a governmental
body (whether federal, state, local, provincial or foreign) exercising taxing
authority, including without limitation, the U.S. Internal Revenue Service.
V. PURCHASERS' REPRESENTATIONS
Each of Purchasers jointly and severally represents and warrants to and
with PPC and Seller that:
(a) ORGANIZATION, GOOD STANDING AND AUTHORITY. NACoal is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware; and each of Oxbow and Red Hills is a limited liability
company duly formed, validly existing and in good standing under laws of the
state of its formation. Each of Purchasers has the power and authority
(corporate or limited liability company, as the case may be) to own, operate and
lease its properties and to carry on its business as presently being conducted.
Each of Purchasers is duly qualified to do business and is in good standing in
each jurisdiction necessary for such Purchaser to consummate the transactions
contemplated by this Agreement.
(b) AUTHORIZATION, VALIDITY AND NON-CONTRAVENTION. This Agreement has
been duly and validly executed and delivered by each of Purchasers and, assuming
the due execution thereof by PPC and Seller, constitutes the legal, valid and
binding obligation of such Purchaser, enforceable against such Purchaser in
accordance with its terms except as such enforceability may be limited by (X)
bankruptcy, insolvency, reorganization, moratorium or similar Laws relating to
or affecting generally the enforcement of creditors interests and (Y) the
availability of equitable remedies (whether in a proceeding in equity or at
law). Each of Purchasers has the power and authority (corporate or limited
liability company, as the case may be) to enter into this Agreement and to
undertake and perform fully the transactions contemplated hereby. All necessary
action (corporate or limited liability company, as the case may be) has been
taken by and on behalf of each of Purchasers with respect to the authorization,
execution, delivery and performance of this Agreement. Neither the execution and
delivery of this Agreement by any of Purchasers nor the performance of its
obligations hereunder will (i) violate, conflict with or result in a breach of
any Law or any Orders applicable to such Purchaser or its certificate of
incorporation or bylaws, or (ii) violate, conflict with or result in a breach or
termination of, or otherwise give any contracting party additional rights or
compensation under, or the right to terminate or accelerate, or constitute (with
notice or lapse of time, or both) a default under the terms of, any Contracts to
which such Purchaser is a party or by which such Purchaser is bound which would
prevent the consummation by such Purchaser of the transactions contemplated by
this Agreement.
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(c) NO BROKERS OR FINDERS. None of Purchasers has employed any broker,
agent or finder in connection with the transactions contemplated by this
Agreement.
(d) CONSENTS. No Consents are required to be obtained by any of
Purchasers in connection with the execution and delivery by such Purchaser of
this Agreement or the consummation of the transactions contemplated hereby.
(e) SUBLEASE. The Sublease has been duly authorized by NACoal, and
assuming the due execution and delivery thereof by PPC and NACoal, shall
constitute the legal, valid and binding obligation of NACoal, enforceable
against NACoal in accordance with its terms except as such enforceability may be
limited by (X) bankruptcy, insolvency, reorganization, moratorium or similar
Laws relating to or affecting generally the enforcement of creditors interests
and (Y) the availability of equitable remedies (whether in a proceeding in
equity or at law). NACoal has the corporate power and authority to enter into
the Sublease and to undertake and perform fully the transactions contemplated
thereby. All necessary corporate action has been taken by and on behalf of
NACoal with respect to the authorization, execution, delivery and performance of
the Sublease. Neither the execution and delivery of the Sublease by NACoal nor
the performance of its obligations thereunder will (i) violate, conflict with or
result in a breach of any Law or any Orders applicable to NACoal or its
certificate of incorporation or bylaws, or (ii) violate, conflict with or result
in a breach or termination of, or otherwise give any contracting party
additional rights or compensation under, or the right to terminate or
accelerate, or constitute (with notice or lapse of time, or both) a default
under the terms of, any Contracts to which NACoal is a party or by which NACoal
is bound which would prevent the consummation by NACoal of the transactions
contemplated by the Sublease.
VI. THE SUBJECT ASSETS
(a) SUBJECT ASSETS. The assets being sold hereunder and which are
referred to as the "Subject Assets" consist of the following:
1. RED RIVER MINING COMPANY. The interest of Seller in that certain joint
venture ("Red River Mining Company") established pursuant to that certain
agreement made and effective as of September 1, 1988, as amended (the "Red River
Joint Venture Agreement"), by and between Seller and NACoal, which interest
includes all of Seller's rights under the Contracts listed on SCHEDULE IV(b)(i)
relating to Red River Mining Company and all of Seller's right, title and
interest in and to Seller's capital account, Seller's rights in and to specific
Red River Mining Company assets and properties (if any), rights to participate
in the management of Red River Mining Company, rights to distributions,
reimbursements or other payments (including distributions of cash flow for the
period between the close of business on August 31, 2000, and the Closing Date
which have not been distributed), rights to profits, losses and other
allocations and all other rights and benefits of Seller of every description
whatsoever belonging or accruing to the benefit of Seller in Red River Mining
Company (the "Red River Interest"). Notwithstanding anything contained herein to
the contrary, no Purchaser is assuming any liability or obligation (whether
absolute, contingent, known or unknown) arising out of Seller's interest in or
relating to Red River Mining Company and existing prior to Closing.
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2. MISSISSIPPI LIGNITE MINING COMPANY. The interest of Seller in that certain
joint venture ("Mississippi Lignite Mining Company") established pursuant to
that certain agreement made and effective as of September 12, 1997, as amended
(the "Mississippi Lignite Joint Venture Agreement"), by and between Seller and
NACoal, which interest includes all of Seller's rights, under the Contracts
listed on SCHEDULE IV(b)(i) relating to Mississippi Lignite Mining Company and
all of Seller's right, title and interest in and to Seller's capital account,
Seller's rights in and to specific Mississippi Lignite Mining Company assets and
properties (if any), rights to participate in the management of Mississippi
Lignite Mining Company, rights to distributions, reimbursements or other
payments (including distributions of cash flow for the period between the close
of business on August 31, 2000, and the Closing Date which have not been
distributed), rights to profits, losses and other allocations and all other
rights and benefits of Seller of every description whatsoever belonging or
accruing to the benefit of Seller in Mississippi Lignite Mining Company (the
"Mississippi Lignite Interest"). Notwithstanding anything contained herein to
the contrary, no Purchaser is assuming any liability or obligation (whether
absolute, contingent, known or unknown) arising out of Seller's interest in or
relating to Mississippi Lignite Mining Company and existing prior to Closing.
3. SHARES OF LAND MANAGEMENT COMPANY. All of the issued and outstanding shares
of capital stock of Phillips Coal Land Management Corporation, a Nevada
corporation ("Land Management Company").
4. COAL LEASES, FEE PROPERTIES, NON-OPERATING INTERESTS AND THE EIGHT MILE
VENTURE. All of Seller's right, title and interest in and to: (i) the coal
leases and subleases owned by Seller and listed in SCHEDULE VI(a)(4)(i)
including, without limitation, all of Seller's right, title and interest in the
leasehold estates created thereunder (the "Coal Leases"), (ii) the real
properties and associated mining rights owned in fee by Seller and listed in
SCHEDULE VI(a)(4)(ii) (the "Fee Properties"), (iii) the non-operating interests
owned by Seller and listed on SCHEDULE VI(a)(4)(iii) (the "Non-Operating
Interests"); and (iv) that certain joint venture (the "Eight Mile Venture")
established pursuant to that certain agreement made and effective as of May 30,
2000, as amended (the "Eight Mile Joint Venture Agreement"), by and between
Seller and Norit Americas Inc., which interest includes all of Seller's rights
under the Contracts listed on SCHEDULE VI(a)(4)(iv) and all of Seller's right,
title and interest in and to Seller's capital account, Seller's rights in and to
specific Eight Mile Venture assets and properties (if any), rights to
participate in the management of the Eight Mile Venture, rights to
distributions, reimbursements or other payments, rights to profits, losses and
other allocations and all other rights and benefits of Seller of every
description whatsoever belonging or accruing to the benefit of Seller in the
Eight Mile Venture (the "Eight Mile Venture Interest"); provided, however, that
notwithstanding the foregoing, no Purchaser is assuming any liability or
obligations (whether absolute, contingent, known or unknown) arising out of or
relating to the Coal Leases, Fee Properties, Non-Operating Interests or Seller's
interest in or relating to the Eight Mile Venture and existing prior to Closing.
5. POWER PROJECT INTEREST. All of Seller's right, title and interest in and to
its interest in future power projects located in Choctaw County, Mississippi, as
described in the second sentence of paragraph 7 of that certain letter agreement
between Seller and CRSS, Inc., a Delaware corporation, dated December 12, 1996
("Power Project Interest"); provided, however that no Purchaser is assuming any
liability or obligation (whether absolute, contingent, known or unknown) arising
out of or relating to the Power Project Interest and existing prior to Closing.
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6. MISCELLANEOUS ASSETS. All of Seller's right, title and interest in and to the
assets and properties listed or otherwise described on SCHEDULE VI(a)(6)
("Miscellaneous Assets"); provided, however, that notwithstanding the foregoing,
no Purchaser is assuming any liability or obligation (whether absolute,
contingent, known or unknown) arising out of or relating to such Miscellaneous
Assets and existing prior to Closing. Such liabilities and obligations in the
foregoing proviso, in the provisos to Articles VI(a)(4) and VI(a)(5) and in the
last sentences of Article VI(a)(1) and (2) are referred to collectively as the
"Excluded Liabilities"; provided, however, that the Excluded Liabilities do not
include any liability or obligation of either of Red River Mining Company or
Mississippi Lignite Mining Company under applicable law to perform reclamation
of surface lands disturbed in connection with its mining operations.
VII. CONSENTS TO ASSIGNMENTS AND SUBLEASES
(a) NO ASSIGNMENT. To the extent that any of the Subject Assets
assigned hereunder is not assignable without the consent of another party, or to
the extent that the execution of the Sublease by PPC requires the Landlord's
consent, and any such consent has not been obtained at or prior to the Closing
(even though each of PPC and Seller will use its best efforts to obtain such
consents), this Agreement shall not constitute an assignment or an attempted
assignment or sublease or attempted sublease if such assignment or attempted
assignment or sublease or attempted sublease would constitute a breach thereof.
SCHEDULE IV(a)(v) hereto includes an identification of each of the Subject
Assets that are not assignable without the consent of another party and
indicates in each case whether such consent has been obtained. In addition, such
Schedule indicates whether the Sublease requires the consent of the Landlord
under the Office Lease and whether such consent has been obtained. Each of PPC
and Seller agrees to use its best efforts to obtain the consent of such other
party to such assignments and to the Sublease, in all cases in which such
consent is required. Until such consent has been obtained, or if such consent is
not obtained, each of PPC and Seller will cooperate with Purchasers in any
reasonable arrangements designed to provide Purchasers the benefits under any
such Subject Assets and the Office Lease, including enforcement, to the extent
reasonable, at the cost and for the account of Purchasers, of any and all rights
of Seller against the other party thereto arising out of the failure of such
other party to perform its obligations thereunder or otherwise.
(b) FURTHER ASSURANCES. Each of PPC and Seller hereby agrees that, from
time to time after the Closing, upon the reasonable request of Purchasers, it
will execute and deliver, or cause to be executed and delivered, all such other
instruments of conveyance and transfer and will take such other action as
Purchasers may reasonably request to vest more effectively in Purchasers' title
to, and put Purchasers in possession of, any of the Subject Assets and the
property to be subleased pursuant to the Sublease, and, in the case of any
rights, if any, that cannot be transferred effectively without the consent of
third parties, to assure to Purchasers the benefits thereof as contemplated by
this Agreement. In furtherance of the foregoing, upon the reasonable request of
Purchasers, each of PPC and Seller will, and will cause its employees, agents
and consultants to, communicate in writing to Purchasers and their
representatives all facts known to each of PPC and Seller respecting the Subject
Assets and the property to be subleased pursuant to the Sublease, testify in any
legal proceedings relating to or affecting the Subject Assets, sign all lawful
papers, execute all division, continuation, substitution, renewal and reissue
applications relating to or affecting the Subject Assets and the property to be
subleased pursuant to the Sublease.
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VIII. GUARANTIES OF PERFORMANCE
(a) REPRESENTATION AND WARRANTY OF PPC. PPC has given certain
guaranties of performance, performance bonds and other financial backstopping
arrangements on behalf of Seller as listed on SCHEDULE VIII(a) (the
"Guaranties") and represents and warrants to Purchasers that (i) it has
performed all of its obligations under, or is otherwise in compliance with, each
of such Guaranties, (ii) there exists no material default or breach by PPC
thereunder, (iii) PPC has not received any notice claiming that it has committed
any such default or breach or indicating the desire or intention of any party
benefiting from such Guaranty to assert that PPC is obligated to perform under
such Guaranty, and (iv) to the Knowledge of PPC no event has occurred which,
with notice or lapse of time, might give rise to any such claim.
(b) RELEASE. As long as the representation and warranty in Article
VIII(a) continues to be true and correct in all material respects, (x) NACoal
shall use reasonable efforts and cooperate with PPC and Seller to attempt to
obtain the releases of all such Guaranties, and (y) NACoal shall, from and after
Closing, defend, indemnify and hold harmless PPC from any and all loss, costs,
damages or claims resulting from, or relating to, any such unreleased Guaranty;
provided, however, that notwithstanding the foregoing, NACoal shall have no
liability or obligation with respect to any Guaranty to the extent that it
relates to any Excluded Liability.
(c) EQUIPMENT LEASE GUARANTIES AND LETTER OF CREDIT SECURING
RECLAMATION BOND. Subject to the proviso in Article VIII(b), in the case of that
certain Lease Guaranty (Corporate), dated October 18, 1999 from PPC to ICX
Corporation and that certain Guarantee Agreement, dated as of February 23, 1999
by PPC and NACoal in favor of Norlease, Inc. (collectively, the "Equipment Lease
Guaranties"), and that certain Irrevocable Standby Letter of Credit dated August
21, 1999, in favor of Mississippi Department of Environmental Quality as
security for the Mississippi Lignite Mining Company's Reclamation Bond ("Letter
of Credit"), NACoal and PPC shall use reasonable efforts and cooperate with each
other to obtain, by the Closing, releases of such Equipment Lease Guaranties and
Letter of Credit and the replacement thereof with letters of credit or other
similar arrangements on terms reasonably satisfactory to PPC, NACoal and the
lessors under the equipment leases, in the case of the Equipment Lease
Guaranties, and PPC, NACoal and the Mississippi Department of Environmental
Quality in the case of the Letter of Credit. In consideration of NACoal
obtaining such substitute letters of credit or other similar arrangements, PPC
and Seller hereby agree that the sum of One Million Seventy-Six Thousand Dollars
($1,076,000) shall be deducted from the amount due at the Closing from Red Hills
for the Mississippi Lignite Interest.
IX. CONDITIONS OF CLOSING
(a) PURCHASERS' CONDITIONS. The obligation of Purchasers to purchase
and pay for the Subject Assets at the Closing is subject to the fulfillment or
satisfaction, at or prior to the Closing, of the following conditions, any of
which may be waived in whole or in part in writing by Purchasers:
(i) DELIVERIES. PPC and Seller shall have delivered or caused
to be delivered all of the items required by Article III(b) of this Agreement.
All certificates, agreements, instruments and documents of PPC and Seller
mentioned herein or incident to the transactions
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provided for in this Agreement shall be reasonably satisfactory in form and
substance to Purchasers.
(ii) REPRESENTATIONS AND WARRANTIES AND COVENANTS. The
representations and warranties set forth in Article IV and Article VIII shall be
true and correct in all respects at and as of the Closing with the same force
and effect as though made on and as of the Closing Date, except for those
representations and warranties which speak as of a certain date in which case
such representations and warranties shall be accurate as of that date. Each of
PPC and Seller shall have performed or complied with all covenants and
agreements contemplated by this Agreement to be performed by such party at or
prior to the Closing.
(iii) THIRD-PARTY CONSENTS. PPC and Seller shall have obtained
all Consents that may be required in connection with the consummation of the
transactions contemplated by this Agreement, including the Consents listed on
SCHEDULE IV(a)(v).
(iv) NO ORDERS. There shall be no Orders in effect preventing
consummation of any of the transactions contemplated by this Agreement.
(v) NO LITIGATION. No Litigation challenging the legality of,
or seeking to restrain, prohibit or materially modify, the transactions provided
for in this Agreement shall have been instituted and not settled or otherwise
terminated.
(vi) EQUIPMENT LEASE GUARANTIES AND LETTER OF CREDIT. PPC
shall have been released from its obligations under the Equipment Lease
Guaranties and Letter of Credit in accordance with Article VIII(c), and such
Guaranties shall have been replaced by letters of credit or other similar
arrangements in accordance with Article VIII(c).
(b) CONDITIONS OF PPC AND SELLER. The obligations of PPC and Seller at
the Closing are subject to the fulfillment or satisfaction, at or prior to the
Closing, of the following conditions, any of which may be waived in whole or in
part in writing by PPC and Seller:
(i) REPRESENTATIONS AND WARRANTIES AND COVENANTS. The
representations and warranties set forth in Article V shall be true and correct
in all respects at and as of the Closing. Each of Purchasers shall have
performed or complied with all covenants and agreements contemplated by this
Agreement to be performed by it at or prior to the Closing.
(ii) NO ORDERS. There shall be no Orders in effect preventing
consummation of any of the transactions contemplated by this Agreement.
(iii) DELIVERIES. Purchasers shall have delivered or caused to
be delivered all of the items required by Article III(c) of this Agreement. All
certificates, agreements, instruments and documents of Purchasers and mentioned
herein or incident to the transactions contemplated hereby shall be reasonably
satisfactory in form and substance to PPC and Seller.
(iv) NO LITIGATION. No Litigation challenging the legality of,
or seeking to restrain, prohibit or materially modify, the transactions provided
for in this Agreement shall have been instituted and not settled or otherwise
terminated.
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(v) EQUIPMENT LEASE GUARANTIES AND LETTER OF CREDIT. PPC shall
have been released from its obligations under the Equipment Lease Guaranties and
Letter of Credit in accordance with Article VIII(c), and such Guaranties shall
have been replaced by letters of credit or other similar arrangements in
accordance with Article VIII(c).
X. CERTAIN PRE-CLOSING OBLIGATIONS
(a) ACTIONS REGARDING PRE-CLOSING COVENANTS. Each of the parties hereto
shall use commercially reasonable efforts to take all action and to do all
things necessary, proper or advisable in order to consummate and make effective
the transactions contemplated by this Agreement.
(b) CHANGES TO THE SUBJECT ASSETS. From the date hereof through the
Closing Date, except as expressly provided by this Agreement or expressly
approved in advance by Purchasers in writing, neither PPC nor Seller shall sell,
transfer or assign any of the Subject Assets or permit the creation of any Lien
with respect to the Subject Assets, and neither PPC nor Seller shall:
(i) make any change in, or permit Land Management Company to
make any change in, Land Management Company's authorized capital stock,
including any issuance, sale, split or reclassification in respect of
its outstanding capital stock or any other equity interests or
securities (including evidences of indebtedness) of Land Management
Company, or issue, sell or dispose of any capital stock, or grant any
Options, to or enter into any other Contracts with respect to the
purchase or other acquisition (including upon conversion or exercise)
any of its capital stock or other securities;
(ii) merge or consolidate Land Management Company, or permit
Land Management Company to merge or consolidate, with any other person,
permit Land Management Company to acquire any stock, business, or
substantially all of the property or assets of any other person;
(iii) permit Land Management Company to sell, transfer or
dispose of any Land Management Asset;
(iv) make any change in the certificate of incorporation or
by-laws of Land Management Company;
(v) cause, permit or suffer any changes in the Subject Assets
other than changes in the ordinary course of business, none of which
shall be materially adverse, or allow Land Management Company to cause,
permit or suffer any changes in the Land Management Assets other than
changes in the ordinary course of business, none of which shall be
materially adverse;
(vi) permit or suffer any damage, destruction or loss, whether
or not covered by insurance, materially and adversely affecting any of
the Subject Assets, or allow Land Management Company to permit or
suffer any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting any of the Land
Management Assets;
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(vii) cause, permit or suffer any waiver, compromise or other
settlement of any of its rights under any Contract which constitutes a
Subject Asset, or allow Land Management Company to cause, permit or
suffer any waiver, compromise or settlement of any of its rights under
any Land Management Asset which constitutes a Contract; or
(viii) solicit or negotiate with respect to or enter into any
agreement or understanding to do any of the foregoing.
(c) FULL ACCESS. Upon reasonable notice, PPC and Seller shall permit,
and shall cause Land Management Company to permit, (i) representatives of
Purchasers to have access, to the extent not prohibited by law, to all premises,
properties (whether real, personal or otherwise), books, records (including tax
records), Contracts and documents relating to the Subject Assets or Land
Management Company, and (ii) Purchasers to cause an independent environmental
consultant chosen by Purchasers to inspect, audit and test the Subject Assets
and the Land Management Assets for the existence of any Hazardous Materials or
any facts and circumstances that would constitute a breach of Article
IV(c)(viii) or Article IV(d)(v). PPC and Seller shall further cause their
managerial employees, counsel, environmental consultants and regular independent
certified accountants to be available upon reasonable advance notice to answer
questions of Purchasers concerning the Subject Assets or Land Management Company
and, in the case of environmental consultants, to make available all
environmental data and reports in their possession relating to Subject Assets or
Land Management Company and, at Purchasers' sole election and expense, to update
previously prepared environmental reports relating to the Subject Assets or Land
Management Company.
(d) NO SHOP. From the date hereof until the Closing Date, neither PPC
nor Seller shall solicit or enter into negotiations with any party other than
Purchasers or encourage, facilitate or initiate any discussions with any party
other than Purchasers, with regard to a purchase and sale of any of the Subject
Assets.
(e) NOTICE OF BREACH OR NON-COMPLIANCE. PPC and Seller shall give
prompt notice to Purchasers of (i) the occurrence or non-occurrence of any event
which would cause or has caused any material breach of any representation or
warranty of PPC or Seller contained in this Agreement at the Closing Date, and
(ii) any failure of PPC or Seller to comply in any material respect with or
satisfy any covenant or agreement to be complied with or performed by it
hereunder.
(f) PAYMENT OF INTER-COMPANY ACCOUNTS PAYABLE. Prior to the Closing,
PPC and Seller shall cause Land Management Company to pay in full or otherwise
be fully discharged from all inter-company accounts payable.
XI. INDEMNIFICATION
(a) BY PPC AND SELLER. PPC, Seller and their respective successors and
assigns, jointly and severally, will protect, indemnify and hold harmless
Purchasers and their affiliates, officers, directors, agents and employees in
respect of any losses, claims, damages, liabilities or related expenses
(including reasonable attorneys' fees) to which they may become subject as a
result of (i) any inaccuracy in or breach of the representations and warranties
made by PPC or
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Seller in this Agreement, (ii) any failure by PPC or Seller to perform, abide by
or fulfill agreements or covenants to be so performed, abided by or fulfilled by
PPC or Seller hereunder, or (iii) any of the Excluded Liabilities.
(b) BY PURCHASERS. Purchasers and their respective successors and
assigns, jointly and severally, will protect, indemnify and hold harmless PPC,
Seller, their affiliates, officers, directors, agents and employees in respect
of any losses, claims, damages, liabilities, or related expenses (including
reasonable attorneys' fees) to which they may be subject as a result of (i) any
inaccuracy in or breach of the representations and warranties made by any of
Purchasers in this Agreement, (ii) any failure by any of Purchasers to perform,
abide by or fulfill agreements or covenants to be so performed, abided by or
fulfilled by such Purchaser hereunder, or (iii) any Assumed Liability.
(c) NOTICE OF CLAIM. Promptly following the receipt by a party
hereunder of any claim, demand, action or suit or the incurrence of any loss,
cost, damage or expense that is subject to the provisions of this Article XI
("Action"), such party shall give written notice of such Action to the other
party hereto accompanied by copies of any written documentation with respect
thereto received by the notifying party and stating the basis upon which
indemnification is being sought pursuant to this Agreement. Such notice shall
constitute a claim for indemnification hereunder (the "Claim").
(d) DEFENSE OF ACTIONS. Any party required to provide indemnification
under this Article XI (the "Indemnifying Party") shall have the right at its
option to compromise or defend at its own expense and with its own counsel, any
such Action. Any party entitled to indemnification hereunder (the "Indemnified
Party") shall have the right at its option to participate in the settlement or
defense of any such action, with its own counsel and at its own expense, but the
Indemnifying Party shall have the right to control such settlement or defense.
The parties hereto agree to cooperate in any such defense or settlement and to
give each other reasonable access to all information relevant thereto. The
parties hereto shall similarly cooperate in the prosecution of any claim or
lawsuit against any third party. If an Indemnifying Party fails to notify an
Indemnified Party of its intent to take any action with respect to any Action
within fifteen (15) days after receipt of a Claim, the Indemnified Party without
waiving any rights to indemnification hereunder, may defend such Action and
shall have the right to enter into any good faith settlement thereof without
prior written consent of the Indemnifying Party.
XII. CERTAIN POST-CLOSING COVENANTS
(a) USE OF PHILLIPS NAME. Within sixty (60) days following the Closing,
NACoal shall change the name of Land Management Company so that Phillips does
not appear in said name. Purchasers shall cease using the names "Phillips,"
"Phillips Coal Land Management Company" or "Phillips Coal Company" for any
purpose after the Closing; provided, however, that Purchasers shall have sixty
(60) days after the Closing to complete such cessation of use.
(b) CONFIDENTIALITY OF RECORDS. Within sixty (60) days following the
Closing, Seller shall destroy or otherwise deliver to NACoal all copies of the
Records described on SCHEDULES VI(a)(6) and all copies of the geological and
geophysical databases owned by Land Management Company which are in the
possession of, or under the control of, PPC, Seller or any of their
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affiliated entities. Seller acknowledges that following the Closing the
information and data set forth on such Records shall at all times be and remain
the property of NACoal and the information on such geological and geophysical
databases shall at all times be and remain the property of Land Management
Company and that, except as to such information and data which Seller has been
advised by counsel in a written opinion is required to be disclosed pursuant to
applicable laws, Seller shall maintain such information and data in strict
confidence. If Seller is so advised, it will notify NACoal prior to such
disclosure, provide NACoal with a copy of the written opinion and consult and
cooperate with NACoal regarding such disclosure.
(c) ASSUMED LIABILITIES. At the Closing, NACoal shall assume, agree to
pay, perform and discharge when due the following liabilities and obligations
relating to the Subject Assets (the "Assumed Liabilities") or, in the case of
any Subject Asset which has been conveyed and delivered to a directly or
indirectly wholly owned corporate subsidiary, in accordance with Article III(d),
or in the case of any Subject Asset which has been purchased and acquired by any
one of the Purchasers other than NACoal, shall cause such entity to assume,
agree to pay, perform and discharge when due such liabilities and obligations
relating to such Subject Asset:
(i) JOINT VENTURE CONTRACTS. All liabilities and obligations
of Seller from and after the Closing arising out of the Contracts set forth on
SCHEDULE IV(b)(i).
(ii) COAL LEASES. All liabilities and obligations of Seller
from and after the Closing arising out of the Coal Leases listed in SCHEDULE
VI(a)(4)(i).
(iii) FEE PROPERTIES AND MISCELLANEOUS ASSETS. All liabilities
and obligations arising out of or resulting from the use or ownership from and
after the Closing of the Fee Properties listed in SCHEDULE VI(a)(4)(ii) and the
Records and Fixtures and Personal Property listed in SCHEDULE VI(a)(6).
(iv) NON-OPERATING INTERESTS. All liabilities and obligations
of Seller from and after the Closing arising out of the Non-Operating Interests
listed in SCHEDULE VI(a)(4)(iii).
(v) NORIT AGREEMENTS. All liabilities and obligations of
Seller from and after the Closing arising out of the Contracts set forth on
SCHEDULE VI(a)(4)(iv).
(vi) POWER PROJECT INTEREST CONTRACTS. All liabilities and
obligations of Seller from and after the Closing arising out of the Contracts
set forth on SCHEDULE IV(e)(i).
(vii) CONTRACTS INCLUDED IN MISCELLANEOUS ASSETS. All
liabilities and obligations of Seller from and after the Closing arising out of
the leases of Fixtures and Personal Property listed on SCHEDULE VI(a)(6).
Notwithstanding the foregoing, no Purchaser is assuming or agreeing to pay,
perform or discharge any liability or obligation that is an Excluded Liability
or any other liability or obligation of Seller or PPC.
(d) REAL PROPERTY ADMINISTRATION. Notwithstanding Article XII(c),
Seller, as a service to Purchasers, shall continue to make in a timely manner
all payments which are due in the ordinary course of business under the terms of
the Coal Leases and the coal leases and subleases
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held by the Joint Ventures within ninety (90) calendar days after the Closing
Date. Purchasers shall reimburse Seller for all payments so made by Seller and
due between the close of business on August 31, 2000, and the end of such 90-day
period, upon presentation by Seller of proper evidence of such payments. Seller
and Purchasers shall consult with each other monthly or as frequently as
necessary after the close of business on August 31, 2000, concerning the
payments required under the terms of such Coal Leases and such other coal leases
and subleases until such time as Purchasers have established their records so
that they can efficiently and properly make such payments. Seller shall provide
such service at no additional cost or expense to Purchasers for a period of
sixty (60) days following the Closing Date, after which Purchasers shall
reimburse Seller for Seller's actual out-of-pocket costs and expenses to provide
such services.
(e) RED RIVER SERVICES AGREEMENT. Notwithstanding Article XII(c),
Seller agrees to terminate, and Seller and NACoal agree to cause Red River
Mining Company to terminate, that certain Services Agreement, dated as of
September 1, 1988, by and between Seller and Red River Mining Company, which is
listed on SCHEDULE IV(b)(i), effective as of the Closing Date.
(f) POST-CLOSING EXPENSE REIMBURSEMENT. Purchasers shall reimburse
Seller, within sixty (60) days following the Closing and upon presentation by
Seller of proper evidence of payment, for all out-of-pocket expenses paid by
Seller for the period between the close of business on August 31, 2000, and the
Closing Date arising in the ordinary course of business out of its ownership of
the Red River Interest and the Mississippi Lignite Interest. Seller shall
reimburse Purchasers, within sixty (60) days following the Closing and upon
presentation by Purchasers of proper evidence of payment, one-half of all
out-of-pocket expenses paid by Purchasers to obtain the replacement arrangements
required by Article VIII(c) of this Agreement.
(g) LICENSE TO OFFICE SPACE. Seller shall be permitted to use office
space in the premises covered by the Sublease for a period of ninety (90) days
following the Closing on a rent-free basis in order to enable Seller to perform
its obligations under Article XII(d) and other similar real property
administration activities.
XIII. TAX MATTERS
(a) SECTION 338(h)(10) ELECTION. NACoal or an appropriate affiliate of
NACoal, on the one hand, and Seller or an appropriate affiliate of Seller, on
the other hand, shall join with each other in making the election provided by
Section 338(h)(10) of the Code, in accordance with Temporary Treasury Regulation
Section 1.338(h)(10)-1T(c)(2), with respect to the acquisition of the shares of
Land Management Company by NACoal and, if permissible, similar elections under
any applicable state or local income tax laws. The Section 338(h)(10) election
shall be made on Form 8023, which shall be prepared by NACoal and delivered by
NACoal to Seller as promptly as practicable, but no later than 180 days after
the Closing Date. A copy of the final version of such Form 8023, after having
been endorsed by Seller, shall be provided to NACoal by Seller no later than 30
days after the date on which NACoal shall have delivered such completed Form
8023 to Seller. NACoal shall timely file such Form 8023 with the Internal
Revenue Service in accordance with Temporary Treasury Regulation Section
338(h)(10)-1T(c)(2), and NACoal shall attach (or shall cause Land Management
Company to attach) a copy of such Form 8023 to the consolidated U.S. corporation
income tax return that an affiliate of
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NACoal will file for its taxable year which includes the Closing Date. PPC shall
attach a copy of such Form 8023 to the consolidated U.S. corporation income tax
return that PPC will file for its taxable year which includes the Closing Date.
PPC and Seller shall be responsible for any Taxes that are due as a result of
the Section 338(h)(10) election provided for in this Article XIII(a) with
respect to the purchase of the Shares of Land Management Company by NACoal.
(b) SECTION 338(h)(10) ALLOCATION. As soon as practicable, but in any
event prior to the Closing, NACoal and Seller shall agree on the allocation, in
accordance with the rules prescribed in Temporary Treasury Regulation Section
1.338-6T, of the aggregate deemed sales price at which Land Management Company
will be deemed, as a result of the Section 338(h)(10) election provided for in
Article XIII(a), to have sold on the Closing Date all of the Land Management
Assets. Such allocation shall be set forth on SCHEDULE XIII(b), which NACoal and
Seller shall prepare and append to this Agreement at or before the Closing. Each
of Seller and NACoal and their respective affiliates shall (and NACoal shall
cause Land Management Company after the Closing to) adhere to, and be bound by,
such allocation for U.S. federal income tax purposes, and to the extent such
Section 338(h)(10) election is recognized by any state or local Tax Authority
for state or local income tax purposes, for all such state or local income tax
purposes.
(c) TAX PRICE ALLOCATION. The Tax Price (as hereinafter defined) shall
be allocated among the Subject Assets, including, without limitation the Red
River Interest, Mississippi Lignite Interest, the Shares, the Coal Leases, the
Fee Properties, the Non-Operating Interests, the Eight Mile Venture Interest and
the other assets referred to in Articles VI(a)(5) and VI(a)(6) of this
Agreement, in the manner set forth on SCHEDULE XIII(c), which schedule NACoal,
on behalf of Purchasers, and Seller shall prepare and append to this Agreement
at or before the Closing. The term "Tax Price" shall mean the total of (i) the
Sale Price set forth in Article II of this Agreement, and (ii) the aggregate
amount of the monetary liabilities and obligations of Seller (if any) assumed by
Purchasers in connection with the transactions contemplated in this Agreement.
Each of Seller and Purchasers and their respective affiliates shall adhere to,
and be bound by, such allocation of the Tax Price. Each of Seller and Purchasers
shall timely file, or shall cause one of their respective affiliates timely to
file, asset acquisition statements on Form 8594 with its U.S. corporation income
tax return for the taxable year that includes the Closing Date, in accordance
with Temporary Treasury Regulation Section 1.1060-1T(e).
(d) POST-CLOSING TAX MATTERS. NACoal shall prepare and file, or cause
to be prepared and filed, all Tax Returns due after the Closing Date for Red
River Mining Company, Mississippi Lignite Mining Company, Land Management
Company or the Eight Mile Venture for (i) any taxable year which ends on or
before the Closing Date (other than the U.S. corporation income tax return of
Land Management Company for its taxable year which ends on the Closing Date,
which Seller or one of its affiliates shall prepare and file), and (ii) any
taxable year which begins before and ends after the Closing Date. With respect
to any Taxes payable by Red River Mining Company, Mississippi Lignite Mining
Company, Land Management Company or the Eight Mile Venture with respect to any
of such Tax Returns which NACoal is responsible for preparing, prior to the date
on which such Tax is required to be paid Seller shall remit to NACoal an amount
equal to the portion of such Tax which is attributable to the period of time
during such taxable year that Seller had an ownership interest in Red River
Mining Company, Mississippi Lignite Mining Company, Land Management Company or
the Eight Mile
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Venture, as the case may be, and which is based on the ownership interest that
Seller had in such person during such taxable year (or portion thereof). In the
case of a taxable year of Red River Mining Company, Mississippi Lignite Mining
Company, Land Management Company or the Eight Mile Venture which begins before
and ends after the Closing Date, the portion of such Tax which is attributable
to the period of time during such taxable year in which Seller had an ownership
interest in such person shall be determined on the basis of a closing of the
books of such person as of the Closing Date.
XIV. PUBLIC ANNOUNCEMENTS
No party hereto shall make any press release or other public
announcements, concerning this transaction, without the prior written approval
of the other parties, hereto and agreement to the form of the announcement,
except as may be required by applicable laws or rules and regulation of any
governmental agency or stock exchange.
XV. SUBSEQUENT POWER PROJECT INTEREST
(a) DISPOSITION OF POWER PROJECT INTEREST. If and when the buyer under
that certain Lignite Sales Agreement between Mississippi Lignite Mining Company
and Choctaw Generation Limited Partnership, dated as of April 1, 1998, as
amended, completes construction of a second electric power generation facility
in Choctaw County, Mississippi and for which such buyer would purchase lignite
from NACoal or one of its affiliates (including Mississippi Lignite Mining
Company) and supplied from the Red Hills Mine (or an expansion thereof or
another mine developed and constructed in connection therewith), either under
such Agreement or under other lignite sales agreements, to satisfy substantially
all of the fuel requirements for such second facility, then if thereafter NACoal
disposes of the Power Project Interest by sale in an arms length transaction
with an unaffiliated third party, upon consummation of such disposition Seller
shall be entitled to receive from NACoal, and NACoal shall pay to Seller,
seventy-five percent (75%) of the then cash value of the total proceeds received
by NACoal pursuant to the agreement for the disposition of such Interest.
(b) PAYMENT DUE SELLER UPON COMMERCIAL OPERATION OF SECOND ELECTRIC
POWER GENERATION FACILITY. In addition to the payment described in Article XV(a)
above, if and when the buyer under the Lignite Sales Agreement referred to in
Article XV(a) above begins selling electric power from the second electric power
generation facility referred to in Article XV(a) above, and the fuel
requirements to such facility are being substantially satisfied by purchases of
lignite from NACoal or one of its affiliates (including Mississippi Lignite
Mining Company) and supplied from the Red Hills Mine (or an expansion thereof or
another mine developed and constructed in connection therewith), either under
the Lignite Sales Agreement referred to in Article XV(a) or under other lignite
sales agreements, NACoal shall pay to Seller the sum of Ten Million Dollars
($10,000,000) within sixty (60) days of the actual commercial operation date of
such second generation facility.
XVI. TERMINATION.
(a) BY PURCHASERS. This Agreement may be terminated prior to the
Closing at the option of Purchasers by delivery of written notice to PPC and
Seller (i) if any of the conditions
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set forth in Article IX(a) shall not have been fulfilled at or prior to the
Closing; (ii) if the Closing shall not have occurred by December 1, 2000; or
(iii) in accordance with Article XVI(d).
(b) BY PPC AND SELLER. This Agreement may be terminated prior to the
Closing at the option of PPC and Seller by delivery of written notice to
Purchasers (i) if any of the conditions set forth in Article IX(b) shall not
have been fulfilled at or prior to the Closing; or (ii) if the Closing shall not
have occurred by December 1, 2000.
(c) BY MUTUAL AGREEMENT; NO WAIVER. This Agreement may also be
terminated prior to the Closing by an instrument in writing duly executed by the
parties hereto, or as otherwise expressly provided herein. A party's exercise of
its rights of termination under Article XVI(a), Article XVI(b) or Article XVI(d)
shall not constitute a waiver of its rights to recover damages, whether pursuant
to breach of contract or in tort, from the other party as a result of the
non-fulfillment of any condition in Article IX(a), (b) or (d), as the case may
be.
(d) DUE DILIGENCE TERMINATION. The parties acknowledge that this
Agreement is being executed and delivered prior to the completion of Purchasers'
due diligence investigation of the Subject Assets. Consequently, in addition to
the termination rights set forth in Article XVI(a), Purchasers shall have the
right to terminate this Agreement if, prior to the Closing, Purchasers shall
discover or become aware, as a result of its due diligence investigation of the
Subject Assets or otherwise, of any material adverse change since December 31,
1999 in or affecting the Subject Assets.
XVII. MISCELLANEOUS
(a) SUCCESSORS AND ASSIGNS. All of the terms, covenants and conditions
of this Agreement shall be binding upon and inure to the benefit of the parties
hereto, their respective heirs, successors and assigns.
(b) NO THIRD PARTY BENEFICIARIES. This Agreement is for the benefit of
PPC, Seller and Purchasers only and not for the benefit of any other parties.
(c) ASSIGNMENT. Neither PPC, Seller, nor Purchasers may assign any
rights or delegate any duties established pursuant to this Agreement without the
prior written consent of the other party; provided that NACoal shall have the
right to assign its rights hereunder to any corporate subsidiary in which 100%
of the capital stock of such subsidiary is directly or indirectly owned by
NACoal or to any Joint Venture which will be directly or indirectly owned by
NACoal following the Closing.
(d) NOTICES. All notices, consents, requests, instructions, approvals
and other communications provided for herein shall be deemed to be validly
given, made or served, if in writing and delivered personally or sent by courier
service, telefax, telex, or certified mail to the address listed below:
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If to PPC or Seller: If to Purchasers:
Phillips Petroleum Company The North American Coal Corporation
1530 POB Signature Place II
Bartlesville, Oklahoma 74004 14785 Preston Road, Suite 1100
Attention: Mr. David S. Smith Dallas, Texas 75240-7891
Phone: (918) 661-1571 Attention: Mr. Clifford R. Miercort
Telefax: (918) 661-3049 Phone: (972) 448-5400
Telefax: (972) 387-1031
(e) COUNTERPARTS. This Agreement may be executed concurrently in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(f) SEVERABILITY. If any term or provision of this Agreement is held to
be invalid or unenforceable, then the parties intend and agree that the
remaining portion of such term or provision shall remain in force and effect,
modified to the minimum extent required to comply with applicable law or
enforceability.
(g) SURVIVAL. The liability and obligations of PPC, Seller and
Purchasers under each of their respective representations and covenants,
including all indemnities, releases, and assumption of obligations contained in
this Agreement shall survive Closing and execution and delivery of the
assignments referenced herein and remain in force and effect.
(h) ENTIRE AGREEMENT. This Agreement and the schedules and exhibits
attached hereto constitute the entire agreement by and among PPC, Seller and
Purchasers with respect to the transactions contemplated herein, and supersede
all prior oral or written agreements, commitments, understandings, or
information otherwise furnished by PPC or Seller to Purchasers with respect to
such matters.
(i) EXPENSES. Each party shall pay its own attorneys fees, broker or
finders fees, fees of investment advisors and other expenses incurred in
connection with this Agreement and the transactions contemplated by this
Agreement, including all transfer, documentary, sales, use, stamp, registration
and other similar Taxes and fees assessed upon any such party in connection with
the transactions contemplated by this Agreement, and shall defend, indemnify and
hold harmless the other parties from all claims, demands, losses, liabilities
and causes of action related thereto.
(j) APPLICABLE LAW. This Agreement shall be governed by and interpreted
in accordance with the Laws of the State of Texas, without giving effect to any
principles of conflicts of law. All assignments and instruments of conveyance
executed in accordance with this Agreement shall be governed by interpreted and
enforced in accordance with the Laws of the state where the Subject Assets
conveyed thereby are located.
(k) HEADINGS. The article, paragraph and other headings contained in
this Agreement are inserted for convenience only and shall not affect in any way
the meaning or interpretation of this Agreement.
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(l) WAIVER AND AMENDMENT. Any of the terms or conditions of this
Agreement may be waived in writing at any time by the parties which are entitled
to the benefits thereof. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of such provisions at any time in
the future or a waiver of any other provision hereof. No amendment of this
Agreement shall be binding unless in writing and signed by representatives of
all parties. Purchasers hereby authorize NACoal to execute and deliver any and
all amendments and waivers on their behalf, and all such waivers and amendments
so executed and delivered shall be binding on each of Purchasers and enforceable
against each of Purchasers.
IN WITNESS WHEREOF, PPC, Seller, and Purchasers, acting through their
authorized representatives, do hereby execute and deliver this Agreement the
date first written above.
SELLER:
PHILLIPS COAL COMPANY
By: /s/ Paul M. Thompson
-----------------------------------------
Title: President
--------------------------------------
PPC:
PHILLIPS PETROLEUM COMPANY
By: /s/ Allyn W. Risley
-----------------------------------------
Title: Vice President
--------------------------------------
PURCHASERS:
THE NORTH AMERICAN COAL CORPORATION
By: /s/ Clifford R. Miercort
-----------------------------------------
Title: President and Chief Executive Officer
--------------------------------------
OXBOW PROPERTY COMPANY L.L.C.
By: /s/ Thomas A. Koza
-----------------------------------------
Title: Manager
--------------------------------------
RED HILLS PROPERTY COMPANY L.L.C.
By: /s/ Herschell A. Cashion
-----------------------------------------
Title: Manager
--------------------------------------
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