EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
This is an Asset Purchase Agreement (this "Agreement"), dated as of
February 8, 2008,
between (i) Xinergy
Corp., a Tennessee corporation (the
"Buyer"), and (ii)
National Coal
Corporation, a
Tennessee corporation,
(the
"Seller").
RECITALS
A. The
Seller, among other
things, is engaged in the business of
mining coal and activities directly or indirectly
relating thereto at
Seller's
Straight Creek operations located in Bell, Leslie and Harlan
Counties, Kentucky
(the "Business").
B. The
Seller desires to sell
to the Buyer all right, title and
interest of the Seller
in and to the
Purchased Assets
(defined below), for
consideration and upon the terms and conditions hereinafter set
forth.
C. The
Buyer desires to purchase the Purchased Assets and assume
the Assumed Liabilities (defined below) from the Seller,
and the Seller desires
to sell, convey, assign and transfer to the Buyer, the Purchased
Assets together
with the Assumed
Liabilities,
all in the manner and
subject to the terms
and
conditions set forth in this Agreement.
NOW THEREFORE,
in consideration of the mutual representations,
warranties, covenants
and agreements set
forth herein and of good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the
Seller and the Buyer agree as follows:
ARTICLE 1 - DEFINITIONS
1.1
Definitions. As used
herein, the following terms have the
meanings set forth below:
"Accounts Receivable"
means all accounts
receivable and the
right to payment
from customers of the Seller and the full benefit of all
security for
such accounts or debts including all accounts receivable
representing amounts
receivable in respect of goods shipped or products sold or
services rendered to customers.
"Affiliate" means,
with respect to a specific Person, any
Person that directly, or indirectly through one or more
intermediaries, controls
or is controlled by or is under common control with the Person
specified.
The
term "control" means the possession, direct or indirect, of the power
to direct
or cause the direction
of the management and policies of a Person, whether
through ownership, by contract or otherwise.
"Assignment of
Contracts"
means an Assignment of Contracts
substantially in the form attached hereto as EXHIBIT A.
"Assignment of
Leases" means an Assignment of Leases
substantially in the form attached hereto as EXHIBIT B.
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"Assumption of Liabilities" means an Assumption of Liabilities
substantially in the form attached hereto as EXHIBIT C.
"Bill of Sale" means
the Bill of Sale
between the Buyer
and
the Seller, substantially in the form attached hereto as EXHIBIT
D.
"Black Lung
Liabilities" shall
mean any Liability or benefit
obligations related to
black lung
claims and benefits under the Black Lung
Benefits Act of 1972, 30 U.S.C. ss.ss. 901 ET SEQ., the Federal
Mine Safety and
Health Act of 1977, 30 U.S.C. ss.ss. 801 ET SEQ., the Black Lung
Benefits Reform
Act of 1977, Pub. L.
No. 95-239,
92 Stat. 95 (1978),
the Black Lung
Benefits
Amendments of 1981, Pub. L. No. 97-119, Title 11, 95 Stat. 1643, in
each case as
amended, if applicable, and occupational pneumoconiosis, silicosis
or other lung
disease liabilities
and benefits
arising under state
law or regulation or any
other Federal law or regulation now or hereafter in existence.
"Business Days" means any day other than a Saturday, Sunday or
other day on which
national or state
banking associations are required or
permitted by law to be closed in Kentucky.
"Claim" means any written action, suit, Proceeding, hearing,
investigation, litigation, charge, complaint, claim, or demand.
"Code" means the Internal Revenue Code of 1986, as amended.
"Deed(s)" shall
mean
the Special Warranty Deed(s)
substantially in the form attached hereto as EXHIBIT E.
"Employees" means any and all employees of the Seller.
"Environmental Law"
means any applicable
federal, state or
local law, statute,
rule, regulation or
ordinance relating to
the regulation,
pollution,
preservation or protection of human health, safety, the
environment,
or natural
resources or to emissions, discharges, Releases or threatened
Releases of
pollutants,
contaminants,
Hazardous Materials or
wastes into the
environment (including
ambient air, soil surface water, ground water, wetlands,
land or subsurface strata).
"Environmental Permit" means any permit, approval,
certificate,
registration, license
or other authorization
required under any
Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Escrow Agreement" means the Escrow Agreement substantially in
the form of EXHIBIT F attached hereto.
"GAAP" means
generally accepted accounting principles,
consistently applied.
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"Governmental Authority"
means
any court, tribunal,
arbitrator, authority,
agency, commission, official or other instrumentality of
the United States, any foreign country or any domestic or foreign
state, county,
city or other political subdivision.
"Hazardous
Materials" means
(a) petroleum or petroleum
products, fractions,
derivatives
or additives, natural or synthetic gas,
asbestos, urea formaldehyde foam insulation, polychlorinated
biphenyls and radon
gas; (b) any
substances defined as
or included in the definition of "hazardous
wastes," "hazardous
materials,"
"extremely
hazardous wastes," "extremely
hazardous substances,"
"restricted hazardous wastes," "toxic substances," toxic
chemicals or "toxic
pollutants,"
"contaminants" or
"pollutants"
or words of
similar import
under any Environmental Law; (c) radioactive materials,
substances and waste,
and radiation; and (d)
any other substance
exposure to
which is regulated under any Environmental Law.
"Indebtedness" of any
Person means any
obligations
of such
Person, whether or not
contingent,
(a) for borrowed
money, (b) evidenced by
notes, bonds,
indentures or similar instruments, (c) for the deferred purchase
price of goods and services, other than trade payables incurred
in the ordinary
course of business, (d) under capital leases, and (e) in the nature of
guarantees of the obligations described in clauses (a) through
(d) above of any
other Person.
"Intellectual
Property" means all domestic patents and patent
rights, trademarks and
trademark rights, service marks and service mark rights,
service name and
service name
rights, brand names, inventions, processes,
formulae, copyrights, business and product names, logos, slogans,
trade secrets,
industrial models, designs, computer programs, business telephones, facsimile
and e-mail addresses,
websites and
technology,
and software
(including
all
source codes) and related documentation, drawings, know-how,
methods, processes,
technology,
engineering
specifications,
procedures, bills of
material, trade
secrets, all pending applications for and registrations of patents,
trademarks,
service marks and
copyrights
and any other intangible property used in or
associated with the
conduct of the Business and the ownership of the Purchased
Assets, including all of the Seller's rights to any such property
which is owned
by and licensed from others and any goodwill associated with any of the above;
provided, however,
that Intellectual Property shall not include the trade names
and trade name rights of any Seller.
"Knowledge of Seller"
with respect to any matter shall
mean
matters within
the actual knowledge of Daniel A. Roling, Charles W. Kite,
Michael R. Castle or William R. Snodgrass.
"Laws" means
all laws, statutes, rules, regulations,
ordinances and other
pronouncements
having the effect of law of the United
States, any foreign
country or any domestic or foreign state, county, city or
other political
subdivision
or of any Governmental Authority and includes,
without limitation, all Environmental Laws.
"Liabilities" means all Indebtedness, obligations, claims and
other liabilities of a Person, whether absolute, accrued,
contingent,
fixed or
otherwise or whether due or to become due.
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"Liens" means
any mortgage, pledge, assessment, security
interest, lease,
judgment lien, tax lien, mechanic's lien, materialman's lien,
other lien, adverse Claim, levy, charge, Option, right of first
refusal, charge,
debenture, indenture,
deed of trust, right-of-way, restriction, encroachment,
license, lease,
security agreement, or other encumbrance of any kind, and other
restrictions or limitations on the use or ownership of real or
personal property
or irregularities
in title thereto or
any conditional
sale contract, title
retention contract or other contract to give any of the
foregoing.
"Loss" means any loss,
Claim, damage, liability or expense
(including reasonable attorneys' fees).
"Material Adverse
Effect" means (a) an
adverse effect on the
validity or enforceability of this Agreement or any of the Related
Agreements in
any material respect,
(b) an adverse
effect on the
condition (financial or
other), business, assets, results of operations, ability to conduct business or
properties of the Seller or the Buyer (as applicable), or the Purchased Assets,
taken as a whole, in any material respect, or (c) an impairment of the
ability
of the Seller or the Buyer (as applicable) to fulfill its
obligations under this
Agreement or any of the Related Agreements in any material
respect.
"Order" means
any writ, judgment, decree, injunction, or
similar order
of any Governmental Authority, in each such case whether
preliminary or final.
"Permits Agreement"
means the Permits
Agreement in the
form
attached hereto as Exhibit G.
"Permitted Lien"
means any Lien (a) which is assumed or
consented to by the Buyer herein (including, without limitation, Liens
included
in the Assumed
Liabilities); (b)
created by the Buyer; (c) in favor of lessors
of any Purchased Asset; (d) constituting easements, rights-of-way,
restrictions
or minor defects or
irregularities in
title incurred in the ordinary course of
business and encumbrances consisting of zoning restrictions,
easements, licenses
or restrictions on the use of the Real Property or minor
imperfections in
title
thereto; or; (e)
imposed by Law which was incurred in the ordinary course of
business, such as carriers', warehousemens', landlords', and mechanics' Liens
and other similar Liens arising in the ordinary course of
business.
"Person" means
any natural person, corporation, limited
liability company,
general partnership,
limited partnership,
proprietorship,
other business organization, entity, trust, union, association or Governmental
Authority.
"Proceeding" means any action, suit, proceeding, arbitration,
investigation or audit, whether or not by any Governmental
Authority.
"Related
Agreements"
means the (a) the Assignment of
Contracts, (b) the Assignment of Leases, (c) the Assumption of
Liabilities, (d)
the Bill of Sale, (e)
the Deeds, (f) the
Escrow Agreement, (g) the Permits
Agreement and (h) any other agreement, certificate or similar document to be
executed by any party hereto in connection with this Agreement.
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"Release" means any release, issuance, disposal, discharge,
dispersal, leaching or
migration into the indoor or outdoor environment or into
or out of any property, including the movement of
Hazardous Materials
through
the air, soil, surface water, ground water or property other than as
specifically
authorized by and in compliance with all Environmental Laws and
Environmental Permits.
"Taxes" means
any and all taxes, fees, levies, duties,
tariffs, import and
other charges, imposed
by any taxing
authority,
together
with any related
interest, penalties or
other additions to
tax, or additional
amounts imposed by any taxing authority, and without limiting the
generality of
the foregoing, shall include net income alternative or add-on
minimum tax, gross
income, gross receipts, sales, use, ad valorem, value added,
franchise, profits,
license, transfer, recording, escheat, withholding, payroll,
employment, excise,
severance, stamp, occupation, premium, property, windfall profit,
environmental,
custom duty, or other tax, governmental fee or other like assessment or
charge
of any kind whatsoever.
"Tax Returns" means all federal, state, local, provincial and
foreign returns, declarations, claims for refunds, forms,
statements,
reports,
schedules, and
information returns or
statements, and any
amendments thereof
(including, without
limitation,
any related or supporting information or
Schedule attached
thereto) required to be filed with any
Taxing authority
in
connection with any Tax or Taxes.
1.2
RULES OF
INTERPRETATION.
(a) The
singular includes the plural and the plural
includes the singular.
(b) The word
"or" is not exclusive.
(c) A
reference to a Person includes its permitted
successors and permitted assigns.
(d) The words
"include,"
"includes" and
"including" are
not limiting.
(e) A
reference in a
document to an
Article, Section,
Exhibit, Schedule,
Annex or Appendix is to the Article, Section, Exhibit,
Schedule, Annex
or Appendix of such document unless otherwise indicated.
Exhibits, Schedules,
Annexes or
Appendices
to any document shall be deemed
incorporated by
reference in such
document. To the
extent that any disclosure
set forth in any particular Schedule is applicable to the
disclosure required to
be made in any other
Schedule, such disclosure shall for purposes of this
Agreement be deemed to be made on all relevant Schedules.
(f) References
to any document,
instrument or
agreement
(a) shall include all exhibits, schedules and other attachments thereto, (b)
shall include all
documents, instruments
or agreements
issued or executed
in
replacement thereof, and (c) shall mean such document, instrument or agreement,
or replacement or predecessor thereto, as amended, modified and supplemented
from time to time and in effect at any given time.
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(g) The words
"hereof," "herein" and "hereunder" and
words of similar
import when used in any document shall refer to such document
as a whole and not to any particular provision of such
document.
(h)
References
to "days" shall mean calendar days, unless
the term "Business Days" shall be used.
(i) This
Agreement is the result of negotiations among,
and has been reviewed by the parties hereto; accordingly, this Agreement shall
be deemed to be the product of all of the parties, and no ambiguity shall be
construed in favor of or against any party.
ARTICLE 2 - PURCHASE AND SALE OF ASSETS
2.1 PURCHASE
AND SALE OF ASSETS. Upon the terms and subject to the
conditions contained
in this Agreement, at
the Closing, the Seller shall sell,
assign, transfer and convey to the Buyer, and the Buyer shall
purchase, acquire
and accept from the Seller, all of the Seller's right,
title, and interest in
and to the following assets (the "Purchased Assets"):
(a) the
owned real property identified on Schedule
2.1(a)(i) (the "Owned Real Property") and the leased real property
identified on
Schedule 2.1(a)(ii)
(the "Leased Real
Property,"
and together with the
Owned
Real Property, the "Real Property);
(b) the
machinery,
equipment,
furniture,
fixtures,
vehicles, tools,
supplies, improvements and other tangible
personal property
owned by the Seller and identified on Schedule
2.1(b) (the "Owned
Equipment")
and, to the extent
transferable,
all rights of the
Seller to warranties
and
licenses received from manufacturers and sellers of the Owned
Equipment;
(c) the
machinery,
equipment,
furniture,
fixtures,
vehicles, tools,
supplies, improvements and other tangible
personal property
leased by the Seller and identified on Schedule 2.1(c) (the "Leased
Equipment",
and collectively with
the Owned Equipment,
the "Equipment") and, to the extent
transferable, all
rights of the Seller to warranties and licenses received from
manufacturers and lessors of the Leased Equipment;
(d) all
of the Seller's permits, approvals, orders,
authorizations,
consents, licenses, certificates, franchises, exemptions of, or
filings or registrations with or issued by any Governmental
Authority, including
all permits relating
to the reclamation of coal mining properties, which have
been issued
or granted to or are owned, used or held by the Seller in the
Business and all pending applications therefor (the "Permits"),
which are listed
on Schedule 2.1(d);
(e) all
Intellectual
Property owned or licensed by the
Seller or titled in any Affiliate of the Seller solely for use in
the conduct of
the Business;
(f) all
contracts,
including
Real Property leases,
equipment and personal property leases, the highwall miner operating
lease, all
capital leases
on the CAT equipment, and contracts for the sale of coal
(collectively, the "Contracts") which are listed on Schedule 2.1(f)
hereto;
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(g) all coal
and mineral
rights in all mineable coal
reserves described on Schedule 2.1(g) hereto (the "Reserves");
(h) all
extracted,
unsold
coal inventory, wherever
located, including stockpiled coal inventory, existing as of the Closing,
which
shall include
at least 10,000 marketable tons, with all tons of coal in
inventory in excess of
10,000 tons to be purchased by the Buyer at Closing at a
price of $42.00 per ton;
(i) all
rights of ingress and egress to all of the
Reserves and Real Property;
(j) all maps,
reserve studies,
engineering reports,
and
other records relating to the Purchased Assets; and
(k) all
other assets owned by Seller and used by the
Seller primarily at the Straight Creek operation, which are determined by Buyer
in its due diligence
investigation
to be necessary
for the operation of the
Business.
(l) The
Parties agree that the Purchased Assets include
both the highwall miner head currently in use, which is owned by
the Seller, and
the original head,
which is buried in the
mountain in the "Salt Trace" Permit
area. The Buyer
assumes all responsibility to GATX for the buried head
upon
termination or "buyout" of the GATX lease contract.
At the Closing, the
Purchased Assets will
be delivered free and clear
of all Liens,
except Permitted Liens and the liens and
encumbrances
on the
equipment and trucks acquired by the Buyer and the obligations relating to the
Contracts acquired
by the Buyer all of which will be assumed by the Buyer
subject to consent by the third party to such agreements.
2.2 EXCLUDED
ASSETS. Notwithstanding any provision of Section 2.1,
the Seller shall
retain all of its right, title and interest in the
following
assets (collectively,
the "Excluded
Assets") and the
definition of
Purchased
Assets shall not include any of the following:
(a) All
Accounts Receivable
and notes receivable
of the
Seller as of the Closing Date;
(b) All cash
and cash equivalents of the Seller as of the
Closing Date;
(c) All
performance
bonds for reclamation
or otherwise,
surety bonds or escrow
agreements
and any payment or prepayments made with
respect to, or certificates of deposit or other sums or amounts or
assets posted
by the Seller to secure any of the foregoing for reclamation or
otherwise;
(d) Any and
all prepaid items,
deposits, and
retainers,
excepting prepaid royalties;
(e) All
insurance policies and any rights or Claims
arising from such policies; and
(f) The
capital stock, corporate books and records of
Seller.
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(g) All
deposits and bonds.
Notwithstanding the
foregoing enumeration
of Excluded Assets,
Buyer
shall purchase, accept
and acquire only Purchased Assets expressly set forth in
Section 2.1.
2.3 ASSUMED
LIABILITIES.
(a) At the
Closing the Buyer shall assume all liabilities
of the Seller to the extent arising in connection with the Business, including
but not limited to the following Liabilities and obligations of the
Seller (the
"Assumed
Liabilities"),
but excluding
liabilities
to Guggenheim and its
successors (being Steelhead Offshore Capital, LP; J-K Navigator Fund, LP;
and
Big Bend 38 Investments, LP), and excluding the high yield bond fund
administered by Wells Fargo, NA:
(i) all
Liabilities
for and obligations of
the
Seller relating to the Purchased Assets arising, accruing or payable after the
Closing Date,
including all Liabilities and obligations arising in connection
with the Contracts, other than Liabilities and obligations arising
from breaches
thereof prior to the Closing Date; and
(ii)
all Liabilities
related to the Permits
for
reclamation prescribed by law, contract or otherwise, including but not limited
to the bond shown on Schedule 2.1(d); provided, however, that the
Seller and its
Affiliates shall retain the Liability for any fines and penalties
arising out of
notices of violation,
notices of
non-compliance or orders, in each case issued
prior to the Closing, and
(iii) all
bonds and obligations of whatever nature
relating to the real and personal property acquired by Buyer.
(b) The Buyer
is assuming only the
Assumed Liabilities
and is not assuming any other liability or obligation. All such other
liabilities and
obligations
shall be retained by
and remain liabilities
and
obligations of the Seller.
2.4
NON-ASSIGNMENT OF ASSETS. This Agreement shall not
constitute
an agreement
to assign or transfer
any assets of the
Seller, if an
attempted
transfer or assignment thereof, without the approval, authorization or consent
of, or granting or issuance of any license or permit by, any third
party thereto
(or with respect
thereto), would constitute a breach thereof or in any way
negatively affect the
rights of the Seller or the Buyer, as the assignee or
transferee of such asset, as the case may be, thereunder.
If the Closing
occurs
and such authorization, consent, approval, license or permit is
required for the
transfer or assignment of any asset of the Seller at or before the
Closing, but
not obtained,
the Seller will cooperate with the Buyer without further
consideration (other
than as provided in clause (b) of this Section 2.4) in any
arrangement reasonably acceptable to the Buyer and the Seller,
designed to both
(a) provide the Buyer
with the benefits
of any such asset,
and (b) cause the
Buyer to bear all costs and obligations of or under any such asset.
Any transfer
or assignment
to the Buyer of any asset that shall require the consent,
approval,
authorization of, or
granting of any
license or permit by any third
party for such assignment or transfer as aforesaid shall be made
subject to such
consent, approval, authorization, license or permit being
obtained.
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2.5 AMOUNTS
HELD IN TRUST. Any amounts received by the Buyer after
the Closing with
respect to any
Excluded Asset shall be held by the Buyer
in
trust for the Seller until promptly paid to the Seller.
Likewise, any amounts
received by the Seller
after the Closing with
respect to any
Purchased Asset
shall be held by the Seller in trust for the Buyer until promptly paid to the
Buyer. Any such
money received by Buyer or Seller shall be paid over to the
proper party within five (5) business days after receipt.
2.6 TRANSFER
TAXES. The Seller
shall be liable for all sales, use
and other transfer
Taxes and all filing
and recording
fees arising from or
relating to the consummation of the transactions contemplated by
this Agreement.
2.7 EXCLUDED
LIABILITIES.
The Buyer shall not assume or become
liable for, and the Assumed Liabilities shall not include, any Liabilities of
the Seller
or any Affiliate of the Seller to the extent not arising in
connection with the Business, except for those specifically
assumed pursuant to
Section 2.3 (the Liabilities of the Seller and its Affiliates not
assumed by the
Buyer or its
Affiliates are
referred to as
"Excluded
Liabilities").
Without
limiting the
generality of the
preceding sentence,
the Excluded
Liabilities
include:
(a) any
Liability related to
any accounts payable or any
indebtedness of the Seller or any Affiliate of the Seller arising,
accruable or
payable prior to the Closing Date;
(b) any
Liability with respect to any goods sold or
any
service provided
by the Seller or any
Affiliate of the Seller prior to the
Closing Date,
including any such Liability (i) pursuant to any express or
implied representation, warranty, agreement, coal
specification, undertaking or
guarantee made by the
Seller or any
Affiliate of the Seller or alleged to have
been made by the Seller or any Affiliate of the Seller, (ii)
imposed or asserted
to be imposed by operation of law or (iii) pursuant to any doctrine of
product
liability;
(c) any
Liability or obligation with respect to any
litigation arising from the operation of the Business prior to the
Closing Date,
except that any
Liability or obligation associated with or related to the
condition of the Real Property, Equipment and other tangible
personal property
as of the Closing
Date shall be an Assumed Liability and not an Excluded
Liability;
(d) any
Liability that relates
to any Employee or former
Employee or to any employee or former employee of any of the
Seller's Affiliates
(or any individual who
applied for employment
with the Seller or any Affiliate
of the Seller)
who does not
become an employee of the Buyer or any of its
Affiliates, other
than any liability or obligation arising as a result of
actions after the
Closing on the part of the Buyer that
constitute
tortious
conduct or that arise from the Buyer's relationship with such
Persons;
(e) any
Liability arising under or relating to any
employee benefit plan of the Seller; and
(f) any
Liability of the Seller or any Affiliates of the
Seller for Taxes.
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ARTICLE 3 - PURCHASE PRICE; CLOSING AND DELIVERIES
3.1 CLOSING.
The parties shall hold
a closing (the
"Closing") as
soon as practicable after satisfaction of the conditions to closing
set forth in
Article 7, but in no event later than March 31, 2008 (the "Closing
Date").
3.2 SELLER'S
DELIVERIES.
The sale, transfer, assignment and
delivery by the Seller of the Purchased Assets to the Buyer, as
herein provided,
shall be effected on the Closing Date by the Seller's execution and delivery of
the Related Agreements to which it is a party, and other
instruments of transfer
and conveyance reasonably satisfactory in form and substance
to counsel for the
Buyer and the Seller, which shall include, without limitation,
all documents of
title and instruments of conveyance necessary to transfer record and/or
beneficial ownership
to the Buyer of all
trucks, trailers which constitute
Purchased Assets, and any other property constituting Purchased Assets owned by
the Seller or its
Affiliates
which requires execution, endorsement and/or
delivery
