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EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
among
RAG COAL INTERNATIONAL AG
RAG AMERICAN COAL COMPANY
BTU WORLDWIDE, INC.
and
PEABODY ENERGY CORPORATION
dated as of
February 29, 2004
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ARTICLE I
DEFINITIONS..................................................................
1
1.1
Certain
Defined Terms................................................
1
1.2 Other
Interpretive Provisions........................................
11
ARTICLE II PURCHASE AND
SALE...........................................................
12
2.1 Purchase
and Sale of the Shares......................................
12
2.2
Consideration; Estimated Purchase Price
Adjustment................... 12
2.3 The
Closing..........................................................
12
2.4 Deliveries
at the Closing............................................
13
2.5 Closing
Payment Adjustments..........................................
13
2.6 Payments
On or Before Closing........................................
17
2.7 Form of
Payments.....................................................
17
ARTICLE III REPRESENTATIONS AND WARRANTIES
OF SELLER PARENT AND SELLER................. 17
3.1
Organization.........................................................
17
3.2
Authorization;
Enforceability........................................ 17
3.3 Capital
Stock........................................................
18
3.4 Ownership
of Shares..................................................
19
3.5 Ownership
of Seller; No Subsidiaries of the Companies................
19
3.6 Audited
Financial Statements.........................................
19
3.7 Absence of
Undisclosed Liabilities...................................
20
3.8 No
Conflicts or Approvals............................................
20
3.9
Governmental
Authorization...........................................
20
3.10
Compliance with Law; Mining Authorities; Companies' Surety
Bonds.....
20
3.11
Proceedings..........................................................
22
3.12
Absence of Certain
Changes........................................... 22
3.13
Tax
Matters..........................................................
22
3.14
Employee
Benefits....................................................
25
3.15
Labor and Employee
Relations......................................... 27
3.16
Intellectual
Property................................................
28
3.17
Contracts............................................................
28
3.18
Environmental
Matters................................................
30
3.19
Insurance............................................................
31
3.20
Personal Property
Assets............................................. 32
3.21
Real
Property........................................................
32
3.22
Customers and
Suppliers..............................................
33
3.23
Intercompany
Accounts................................................
33
3.24
No Brokers' or Other
Fees............................................ 33
3.25
Entire Business; Condition of
Assets................................. 33
3.26
Solvency.............................................................
33
3.27
Grants and
Allowances................................................
34
3.28
Illegal
Acts.........................................................
34
3.29
Offers...............................................................
34
3.30
Security
Interests...................................................
34
3.31
Forecasts............................................................
34
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3.32
No Other Representations or
Warranties............................... 34
ARTICLE IV REPRESENTATIONS AND WARRANTIES
OF PEABODY AND BUYER......................... 34
4.1
Organization.........................................................
34
4.2
Authorization;
Enforceability........................................ 35
4.3 No
Conflicts or Approvals............................................
35
4.4
Governmental
Authorization...........................................
35
4.5 No
Brokers' or Other Fees............................................
36
4.6 Permit
Blocking......................................................
36
4.7 Financial
Ability to Perform.........................................
36
4.8 No Other
Representations or Warranties...............................
36
ARTICLE V COVENANTS AND
AGREEMENTS.....................................................
36
5.1 Conduct of
Business Prior to the Closing.............................
36
5.2 Access to
Books and Records; Cooperation.............................
39
5.3 Tax
Matters..........................................................
39
5.4 Employees;
Benefit Plans.............................................
49
5.5 Further
Actions......................................................
51
5.6 Further
Assurances...................................................
52
5.7 Closing
Balance Sheet................................................
52
5.8
Nonsolicitation......................................................
52
5.9 Competing
Transaction; Return of Confidential Information............
53
5.10
Confidentiality......................................................
53
5.11
Intercompany Accounts; Affiliate
Agreements.......................... 55
5.12
Intercompany
Insurance...............................................
55
5.13
Name
Changes.........................................................
55
5.14
Proprietary MIS Software Rights; Transition
Services................. 56
5.15
Seller Guarantees; Seller
Bonds...................................... 57
5.16
Cooperation in
Financing............................................. 58
5.17
Mexico Agency
Agreement..............................................
58
ARTICLE VI CONDITIONS TO SELLER PARENT'S
AND SELLER's OBLIGATIONS...................... 59
6.1
Representations and
Warranties....................................... 59
6.2
Performance..........................................................
59
6.3 Officer's
Certificates...............................................
59
6.4
Governmental
Approvals...............................................
59
6.5 Bank
Approvals.......................................................
59
6.6 Seller
Guarantees and Seller Bonds Arrangements......................
59
6.7
Injunctions..........................................................
60
6.8 Closing
Deliveries...................................................
60
6.9 Australia
Transaction Closing........................................
60
ARTICLE VII CONDITIONS TO PEABODY'S AND
BUYER's OBLIGATIONS............................ 60
7.1
Representations and
Warranties....................................... 60
7.2
Performance..........................................................
60
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7.3 Officer's
Certificate................................................
60
7.4
Governmental
Approvals...............................................
60
7.5 Third
Party Approvals................................................
61
7.6
Injunctions..........................................................
61
7.7
Intercompany Accounts; Affiliate
Agreements.......................... 61
7.8 Absence of
Companies Material Adverse Effect.........................
61
7.9 Closing
Deliveries...................................................
61
7.10
Tax
Certificates.....................................................
61
7.11
Australia Transaction
Closing........................................ 61
ARTICLE VIII
TERMINATION...............................................................
61
8.1
Termination..........................................................
61
8.2 Procedure
and Effect of Termination..................................
62
ARTICLE IX
INDEMNIFICATION.............................................................
62
9.1
Indemnification......................................................
62
9.2 Treatment
of Indemnification Payments................................
66
ARTICLE X
MISCELLANEOUS................................................................
66
10.1
Fees and
Expenses....................................................
66
10.2
Governing
Law........................................................
66
10.3
Amendment............................................................
66
10.4
Assignment...........................................................
66
10.5
Waiver...............................................................
67
10.6
Notices..............................................................
67
10.7
Complete
Agreement...................................................
68
10.8
Counterparts.........................................................
68
10.9
Publicity............................................................
68
10.10
Headings.............................................................
69
10.11
Severability.........................................................
69
10.12
Third
Parties........................................................
69
10.13
Consent to Jurisdiction; Waiver of Jury
Trial........................ 69
10.14
Specific
Performance.................................................
69
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STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT, dated as of February 29, 2004,
among RAG Coal International AG, a company
incorporated under the laws of
Germany ("Seller Parent"), RAG American
Coal Company, a company incorporated
under the laws of the U.S. State of
Delaware ("Seller"), BTU Worldwide, Inc., a
company incorporated under the laws of the
U.S. State of Delaware ("Buyer") and
Peabody Energy Corporation, a company
incorporated under the laws of the U.S.
State of Delaware ("Peabody").
WHEREAS, Seller owns (i) 100 shares of common stock, par value
US$100.00 per share (the "Twentymile
Shares"), of Twentymile Coal Company, a
Delaware corporation ("Twentymile
Company"), (ii) 100 shares of common stock,
par value US$100.00 per share (the "Yampa
Shares"), of Colorado Yampa Coal
Company, a Delaware corporation ("Yampa
Company"), (iii) 100 shares of common
stock, par value US$1.00 per share (the
"Empire Shares"), of RAG Empire
Corporation, a Delaware corporation
("Empire Company") and (iv) 10,000 shares of
common stock, par value US$1.00 per share
(the "Shoshone Shares" and, together
with the Twentymile Shares, the Yampa
Shares and the Empire Shares, the
"Shares"), of RAG Shoshone Coal
Corporation, a Delaware corporation ("Shoshone
Company" and, together with Twentymile
Company, Yampa Company and Empire
Company, the "Companies", and each, a
"Company");
WHEREAS, Seller is a direct or indirect wholly-owned
subsidiary of Seller Parent; and
WHEREAS, Seller desires to sell, and Buyer desires to
purchase, the Shares, upon the terms and
subject to the conditions set forth in
this Agreement.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and
agreements herein contained and
intending to be legally bound hereby, the
parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
1.1 Certain
Defined Terms. As used in this Agreement, the
following terms shall have the following
meanings:
"Actual Knowledge of Seller" shall mean matters actually known
without specific investigation by any of
the Persons listed on Schedule 1.1(A),
and any matter qualified as being to the
Actual Knowledge of Seller shall be
deemed to be so qualified in respect of
Seller Parent.
"Adjusted Stockholder's Equity" shall mean, with respect to a
specific date, the result of (i)
Stockholder's Equity (as set forth on the
combined balance sheet of the Companies as
of such date, as determined in
accordance with GAAP, consistently
applied), (ii) plus Current liabilities-Due
to Parent (as set forth on the combined
balance sheet of the Companies as of
such date, as determined in accordance with
GAAP, consistently applied) and
(iii) minus Current
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assets-Due from Parent (as set forth on the
combined balance sheet of the
Companies as of such date, as determined in
accordance with GAAP, consistently
applied).
"Affiliate" shall mean, with respect to any specified Person,
any other Person that directly, or
indirectly through one or more
intermediaries, controls, is controlled by,
or is under common control with,
such specified Person.
"Affiliate Agreement" shall have the meaning set forth in
Section 3.17(a)(xiii).
"Affiliated Group" shall mean any affiliated group within the
meaning of Section 1504(a) of the Code or
any similar group defined under a
similar provision of state, local or
foreign law.
"Agreement" shall mean this Stock Purchase Agreement
(including the Schedules), as amended,
modified or supplemented from time to
time.
"Audited Balance Sheet" shall have the meaning set forth in
Section 2.5(a).
"Audited Financial Statements" shall have the meaning set
forth in Section 3.6.
"Australia Agreement" shall have the meaning set forth in
Section 6.9.
"Benefit Continuation Period" shall have the meaning set forth
in Section 5.4(a).
"Business Day" shall mean any day that is not a Saturday, a
Sunday or other day on which banks are
required or authorized by law to be
closed in the City of New York.
"Buyer" shall have the meaning set forth in the first sentence
of this Agreement.
"Buyer Indemnitees" shall have the meaning set forth in
Section 9.1(a).
"Buyer Pension Plan" shall have the meaning set forth in
Section 5.4(d).
"Buyer Pension Trust" shall have the meaning set forth in
Section 5.4(d).
"Buyer Representatives" shall have the meaning set forth in
Section 5.10(b).
"CA Acquisition Date" shall mean 12:01 a.m. on July 1, 1999.
"CA Tax Sharing Agreement" shall have the meaning set forth in
Section 5.3(g).
"Capital Expenditure Budget" shall have the meaning set forth
in Section 5.1(a).
"Closing" shall have the meaning set forth in Section 2.3.
"Closing Adjusted Stockholder's Equity Statement" shall have
the meaning set forth in Section
2.5(a).
"Closing Balance Sheet" shall have the meaning set forth in
Section 2.5(a).
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"Closing Date" shall have the meaning set forth in Section
2.3.
"Closing Debt Statement" shall have the meaning set forth in
Section 2.5(a).
"Closing Payment" shall have the meaning set forth in Section
2.2(a).
"Closing Shoshone Employee Benefits Net Liabilities Statement"
shall have the meaning set forth in Section
2.5(a).
"Closing Statements" shall have the meaning set forth in
Section 2.5(a).
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Common Parent" shall have the meaning set forth in Section
5.3(c)(i).
"Companies" shall have the meaning set forth in the recitals
to this Agreement.
"Companies Material Adverse Effect" shall mean any change,
occurrence or development that has a
material adverse effect on the business,
assets, Liabilities, results of operations
or financial condition of the
Companies, taken as a whole, but shall
exclude any effect (i) resulting from
changes in general economic and political
conditions (including, without
limitation, changes in commodity prices,
interest rates and/or currency exchange
rates), or applicable law and accounting
standards that do not
disproportionately affect the Companies or
(ii) resulting from changes affecting
companies in the United States coal mining
industry generally that do not
disproportionately affect the
Companies.
"Companies' Surety Bonds" shall have the meaning set forth in
Section 3.10(d).
"Company" shall have the meaning set forth in the recitals to
this Agreement.
"Company Employees" shall have the meaning set forth in
Section 3.14(a).
"Company Plans" shall have the meaning set forth in Section
3.14(a).
"Competing Transaction" shall have the meaning set forth in
Section 5.9(a).
"Competition Law" shall mean any Law that is designed or
intended to prohibit, restrict or regulate
antitrust, monopolization, restraint
of trade or competition.
"Confidential Information" shall have the meaning set forth in
Section 5.10(a).
"Confidentiality Agreement" shall mean the confidentiality
agreement between Seller Parent and
Peabody, dated October 10, 2003, as amended
by that certain Amended and Restated Heads
of Agreement, dated December 22,
2003, between Seller Parent and
Peabody.
"Coraza" shall have the meaning set forth in Section 5.17.
"Consent" shall mean any consent, approval, authorization,
consultation, waiver, permit, grant,
agreement, license, certificate, exemption,
order, registration, declaration, filing
or
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notice of, with or to any Person, or the
expiration or termination of the
waiting period under any Competition Law,
in each case required to permit the
consummation of any of the transactions
contemplated hereby.
"control" (including the terms "controlled by" and "under
common control with"), with respect to the
relationship between or among two or
more Persons, shall mean the possession,
directly or indirectly, of the power to
direct or cause the direction of the
affairs or management of a Person, whether
through the ownership of voting securities,
by contract or otherwise, including
the ownership, directly or indirectly, of
securities having the power to elect a
majority of the board of directors or
similar body governing the affairs of such
Person.
"Controlled Group" shall have the meaning set forth in Section
3.14(c).
"Debt" shall, as applied to any Person, mean, without
duplication:
(a) all indebtedness for borrowed money, including, without
limitation, all obligations evidenced by a
note, bond, debenture, letter of
credit, draft or similar instrument;
(b) that portion of obligations with respect to capital leases
that is properly classified as a Liability
on a balance sheet in conformity with
GAAP;
(c) Liabilities for interest rate swaps; and
(d) all indebtedness and obligations of the types described in
the foregoing clauses (a) through (c) to
the extent secured by any Encumbrance,
other than Permitted Encumbrances, on any
property or asset owned or held by
that Person, regardless of whether the
indebtedness secured thereby shall have
been incurred or assumed by that Person or
is otherwise nonrecourse to the
credit of that Person.
"E&Y" shall have the meaning set forth in Section 2.5(a).
"Empire Company" shall have the meaning set forth in the
recitals to this Agreement.
"Empire Company Securities" shall have the meaning set forth
in Section 3.3(c).
"Empire Shares" shall have the meaning set forth in the
recitals to this Agreement.
"Encumbrance" shall mean any security interest, pledge,
mortgage, lien, charge, option to purchase
or lease or otherwise acquire any
interest, conditional sales agreement,
claim, restriction, covenant, easement,
right of way, title defect, retention of
title, adverse claim of ownership or
use, interest created under any bill of
sale, trust or power or other
encumbrance of any kind.
"Environmental Claim" shall mean any notice or Proceeding by
any Person alleging Liability or potential
Liability (including Liability or
potential Liability for investigatory
4
<PAGE>
costs, cleanup costs, governmental response
costs, natural resource damages,
fines or penalties) relating to any
Environmental Losses or in respect of any
Environmental Laws.
"Environmental Law" shall mean any applicable Law relating to
remediation, restoration or protection of
the environment or natural resources
or other environmental matters, including
such Laws relating to storage,
treatment, management, generation,
transportation, land use, development,
pollution, waste disposal, toxic materials,
conservation of natural resources
and resource allocation (including any Law
relating to development or
exploitation of any natural resource) or
use or disposal of Hazardous Materials,
including applicable Governmental Approvals
pursuant to Environmental Laws and
including the Clean Air Act, 42 U.S.C.
Section 7401 et seq., the Comprehensive
Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601
et seq. ("CERCLA"), the Endangered Species
Act, 16 U.S.C. Section 1531 et seq.,
the Federal Land Policy and Management Act,
43 U.S.C. Section 1701 et seq., the
Federal Water Pollution Control Act, 33
U.S.C. Section 1251 et seq., the
Resource Conservation and Recovery Act, 42
U.S.C. Section 6901 et seq., the
Surface Mining Control and Reclamation Act,
30 U.S.C. Section 1201 et seq.
("SMCRA"), and the Toxic Substances Control
Act, 15 U.S.C. Section 2601 et seq.,
each as amended, and any similar state
Law.
"Environmental Losses" shall mean Losses arising from a
Release of Hazardous Materials or
noncompliance with or Liability under any
Environmental Law or Permits required
pursuant to any Environmental Law.
"ERISA" shall have the meaning set forth in Section 3.14(a).
"Estimated Closing Adjusted Stockholder's Equity Statement"
shall have the meaning set forth in Section
2.2(b).
"Estimated Closing Adjusted Stockholder's Equity" shall have
the meaning set forth in Section
2.2(b).
"FAS" shall have the meaning set forth in Section 2.5(a).
"Final Closing Adjusted Stockholder's Equity Statement" shall
have the meaning set forth in Section
2.5(c).
"Final Closing Balance Sheet" shall have the meaning set forth
in Section 2.5(c).
"Final Closing Debt Statement" shall have the meaning set
forth in Section 2.5(c).
"Final Closing Shoshone Employee Benefits Net Liabilities
Statement" shall have the meaning set forth
in Section 2.5(c).
"FIRPTA Certificate" shall have the meaning set forth in
Section 5.3(j).
"Former Shoshone Employees" shall mean all former employees
and retirees of, and current employees on
long-term disability or other leave of
absence from, Shoshone Company other than
those Former Shoshone Employees who,
subsequent to the cessation of their
employment by Shoshone Company, became
employed by any other Company.
5
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"GAAP" shall mean United States generally accepted accounting
principles and practices as in effect from
time to time.
"Governmental Approval" shall mean any Consent of, with or to
any Governmental Authority.
"Governmental Authority" shall mean any United States or other
federal, state, provincial or local
government or other political subdivision
thereof, any entity, authority, tribunal,
agency or body exercising executive,
legislative, judicial, regulatory, fiscal
or administrative functions of any
such government or political subdivision,
and any supranational organization of
sovereign states exercising such functions
for such sovereign states.
"Governmental Order" shall mean, with respect to any Person,
any judgment, order, writ, injunction,
decree, stipulation, agreement,
determination or award entered or issued by
or with any Governmental Authority
and binding on such Person.
"Hazardous Materials" shall mean any material or substance
defined as a "hazardous substance," "toxic
substance," "hazardous waste," "solid
waste," "pollutant" or "contaminant" or any
other term of similar import under
any Environmental Law or any other
materials which are regulated or give rise to
liability under Environmental Laws,
including petroleum (including crude oil or
any fraction thereof), asbestos and
asbestos-containing materials, acidic mine
drainage, radiation and radioactive
materials, lead-containing paints, molds and
other harmful biologic agents, and
polychlorinated biphenyls.
"Income Tax" shall mean any Tax based upon, measured by, or
calculated with respect to net income or
profits (including, but not limited to,
any capital gains or similar Tax).
"Income Tax Return" shall mean any Tax Return relating to
Income Taxes, including any schedule or
attachment thereto, and including any
amendment thereof.
"Indemnified Party" shall have the meaning set forth in
Section 9.1(d)(i).
"Indemnifying Party" shall have the meaning set forth in
Section 9.1(d)(i).
"Indemnity Termination Date" shall have the meaning set forth
in Section 9.1(c).
"Intellectual Property" shall mean all (i) patents, (ii)
inventions, discoveries, processes,
formulae, designs, models, industrial
designs, know-how, confidential
information, proprietary information and trade
secrets, whether or not patented or
patentable, (iii) trademarks, service marks,
trade names, brand names, trade dress,
slogans, logos and internet domain names,
(iv) copyrights and other copyrightable
works and works in progress, databases
and software, (v) all other intellectual
property rights and foreign equivalent
or counterpart rights and forms of
protection of a similar or analogous nature
or having similar effect in any
jurisdiction throughout the world, (vi) any
renewals, extensions, continuations,
divisionals, reexaminations or reissues or
equivalent or counterpart of any of the
foregoing in any jurisdiction throughout
the world, and (vii) all registrations and
applications for registration of any
of the foregoing.
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"Intercompany Account" means an intercompany balance between
Seller Parent, Seller or any of their
respective Affiliates (excluding the
Companies), on the one hand, and any
Company, on the other hand.
"Knowledge of Buyer" shall mean matters actually known after
reasonable investigation by any of the
Persons listed on Schedule 1.1(B).
"Knowledge of Seller" shall mean matters actually known after
reasonable investigation by any of the
Persons listed on Schedule 1.1(C), and
any matter qualified as being to the
Knowledge of Seller shall be deemed to be
so qualified in respect of Seller
Parent.
"Law" shall mean any applicable Governmental Order or any
applicable provision of any constitution,
law (including principles of the
common law), legally binding directive,
treaty, statute, rule, regulation or
order of any Governmental Authority.
"Leased Real Property" shall have the meaning set forth in
Section 3.21(a).
"Liabilities" shall mean any and all liabilities and
obligations of every kind and description
whatsoever, whether such liabilities
or obligations are known or unknown,
disclosed or undisclosed, matured or
unmatured, accrued, absolute, contingent or
otherwise.
"Losses" shall mean any and all claims, Liabilities, losses,
damages, fines, penalties and costs (in
each case including reasonable
out-of-pocket expenses (including
reasonable attorneys', accountants', technical
consultants', engineers' and experts' fees
and expenses)).
"Material Contracts" shall have the meaning set forth in
Section 3.17(a).
"Material Mining Applications" shall have the meaning set
forth in Section 3.10(c)(ii).
"Material Permits" shall mean all Permits that are material to
any Company.
"Mexico Agency Agreement" shall have the meaning set forth in
Section 5.17.
"Mining Authorization" shall mean the mining leases, licenses,
permits and other mining authorities held
by each of the Companies, and which
are listed on Schedule 1.1(D).
"Neutral Auditor" shall have the meaning set forth in Section
2.5(c).
"ordinary course of business" shall mean, the usual, regular
and ordinary course of a business
consistent with the past practice thereof.
"organizational document" shall mean, as to any Person, its
constitution, certificate or articles of
incorporation, its regulations or
by-laws or any equivalent documents under
the law of such Person's jurisdiction
of incorporation or organization.
"Owned Real Property" shall have the meaning set forth in
Section 3.21(b).
7
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"Participants" shall have the meaning set forth in Section
5.4(d).
"PBGC" shall have the meaning set forth in Section 3.14(e).
"Peabody" shall have the meaning set forth in the first
sentence of this Agreement.
"Permits" shall mean any consent, approval, authorization,
permit, license, certificate or exemption
which the Law requires any Company to
hold in order to develop and operate its
respective assets and conduct its
respective business.
"Permitted Encumbrance" shall mean, (i) liens for Taxes,
assessments and other charges of
Governmental Authorities not yet due and
payable or being contested in good faith by
appropriate proceedings during which
collection or enforcement against the
property is stayed, (ii) mechanics',
workmen's, repairmen's, warehousemen's,
carriers' or other like liens arising or
incurred in the ordinary course of business
or by operation of law if the
underlying obligations are not delinquent,
(iii) any conditions that may be
shown by a current, accurate survey, (iv)
easements, encroachments,
restrictions, rights of way and any other
non-monetary title defects, and (v)
zoning, building and other similar
restrictions; provided none of the foregoing
described shall individually or in the
aggregate impair the continued use and
operation or materially impair the value of
the property to which they relate in
the ordinary course of business of the
applicable Company.
"Person" or "person" shall mean any individual, partnership,
firm, corporation, association, trust,
unincorporated organization, joint
venture, limited liability company,
Governmental Authority or other entity.
"Post-Closing Tax Period" shall mean all taxable periods
beginning after the Closing Date.
"Pre-Closing Tax Period" shall mean all taxable periods ending
on or before the Closing Date.
"Proceeding" shall mean any action, claim, demand, suit,
proceeding, arbitration, citation, summons,
subpoena, inquiry or investigation
of any nature, civil, criminal, regulatory
or otherwise, in law or in equity, by
or before any Governmental Authority.
"Property Taxes" shall have the meaning set forth in Section
5.3(a)(iii)(A).
"Purchase Price" shall have the meaning set forth in Section
2.2(a).
"RAG Energy" shall have the meaning set forth in Section 5.17.
"Release" shall mean any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting,
escaping, leaching, dumping, or
disposing of Hazardous Materials into any
occupied structure or upon the
environment, including, surface water,
ground water, a drinking water supply,
land surface or subsurface strata or
ambient air (including the
8
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abandonment or discarding of barrels,
containers, and other closed receptacles
containing any Hazardous Material).
"Resolution Period" shall have the meaning set forth in
Section 2.5(b).
"Section 338 Allocation" shall have the meaning set forth in
Section 5.3(i).
"Section 338(h)(10) Election" shall have the meaning set forth
in Section 5.3(i).
"Seller" shall have the meaning set forth in the first
sentence of this Agreement.
"Seller Bonds" shall mean those deposits, trust funds, bid
bonds, performance bonds and surety bonds
(and all such similar undertakings)
set forth on Schedule 1.1(E).
"Seller Confidential Information" shall have the meaning set
forth in Section 5.10(b).
"Seller Guarantees" shall mean those guarantees, indemnities,
letters of credit, letters of comfort and
similar credit obligations set forth
on Schedule 1.1(F).
"Seller Indemnitees" shall have the meaning set forth in
Section 9.1(b).
"Seller Insurance Policies" shall have the meaning set forth
in Section 5.12.
"Seller Parent" shall have the meaning set forth in the first
sentence of this Agreement.
"Seller Pension Plans" shall have the meaning set forth in
Section 5.4(d).
"Seller Pension Trust" shall have the meaning set forth in
Section 5.4(d).
"Seller Representatives" shall have the meaning set forth in
Section 5.10(a).
"Shares" shall have the meaning set forth in the recitals to
this Agreement.
"Shoshone Company" shall have the meaning set forth in the
recitals to this Agreement.
"Shoshone Company Securities" shall have the meaning set forth
in Section 3.3(d).
"Shoshone Employee Benefits Net Liabilities" shall mean, with
respect to a specific date, the result of
(i) the amount of the liabilities,
obligations, costs and expenses to the
Companies, Peabody, Buyer or their
Affiliates relating to any and all
liabilities and obligations with respect to
all Former Shoshone Employees relating to
benefits under the Seller Pension
Plans, retiree healthcare benefits, black
lung benefits, long-term disability
benefits and workers compensation benefits
minus (ii) the amount of the Shoshone
Funded Pension Assets.
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"Shoshone Funded Pension Assets" shall mean the assets
transferred from Seller's Pension Trust to
Buyer's Pension Trust solely with
respect to the Former Shoshone Employees in
accordance with Section 5.4(d) of
this Agreement.
"Shoshone Shares" shall have the meaning set forth in the
recitals to this Agreement.
"Straddle Period" shall have the meaning set forth in Section
5.3(a)(iii).
"Subject Claims" shall have the meaning set forth in Section
5.12.
"Subject Liabilities" shall have the meaning set forth in
Section 5.12.
"subsidiaries" shall mean any and all corporations,
partnerships, limited liability companies
and other entities with respect to
which a company, directly or indirectly,
owns securities having the power to
elect a majority of the board of directors
or similar body governing the affairs
of such entity.
"Target Closing Adjusted Stockholder's Equity" shall have the
meaning set forth in Section 2.2(b).
"Tax" or "Taxes" shall mean any taxes of any kind, including
but not limited to:
(a) those measured on, measured by or referred to as, income,
alternative or add-on minimum, gross
receipts, escheat, capital, capital gains,
sales, use, ad valorem, franchise, profits,
license, privilege, transfer,
withholding, payroll, employment, social,
excise, severance, stamp, occupation,
premium, value added, goods and services,
property, environmental or windfall
profits taxes, customs, duties or similar
fees, assessments or charges of any
kind whatsoever; and
(b) any contractual obligation to indemnify another Person for
Taxes;
together with any interest and any
penalties, additions to tax or additional
amounts imposed by any Governmental
Authority or foreign Taxing Authority.
"Tax Claim" shall have the meaning set forth in Section
5.3(b)(i).
"tax reserve" shall have the meaning set forth in Section
5.3(f).
"Tax Return" shall mean any return, report, declaration, form,
election letter, statement or other
information or document required to be or
prepared by a Person, filed with any
Governmental Authority or foreign Taxing
Authority with respect to Taxes, including,
but not limited to, any schedule or
attachment thereto or amendment
thereof.
"Taxing Authority" shall mean, with respect to any Tax, the
Governmental Authority or foreign taxing
authority thereof that imposes such Tax
and the agency, court or other body (if
any) charged with the interpretation,
administration or collection of such Tax
for such Governmental Authority.
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"Third Parties" shall have the meaning set forth in Section
5.9(a).
"Third-Party Claim" shall have the meaning set forth in
Section 9.1(d).
"Towers Perrin Report" shall have the meaning set forth in
Section 5.4(d).
"Transition Information Software" shall have the meaning set
forth in Section 5.14(a)(ii).
"Transferred Employee" shall have the meaning set forth in
Section 5.4(a).
"Transfer Amount" shall have the meaning set forth in Section
5.4(d).
"Transfer Date" shall have the meaning set forth in Section
5.4(d).
"Transfer Taxes" shall have the meaning set forth in Section
5.3(h).
"Twentymile Company" shall have the meaning set forth in the
recitals to this Agreement.
"Twentymile Company Securities" shall have the meaning set
forth in Section 3.3(a).
"Twentymile Shares" shall have the meaning set forth in the
recitals to this Agreement.
"Yampa Company" shall have the meaning set forth in the
recitals to this Agreement.
"Yampa Company Securities" shall have the meaning set forth in
Section 3.3(b).
"Yampa Shares" shall have the meaning set forth in the
recitals to this Agreement.
1.2 Other
Interpretive Provisions. (a) The words
"hereof," "herein" and "hereunder" and
words of similar import when used in this
Agreement shall refer to this Agreement as
a whole (including any Schedules
hereto) and not to any particular provision
of this Agreement, and all Article,
Section, Schedule and Exhibit references
are to this Agreement unless otherwise
specified. The words "include," "includes"
and "including" shall be deemed to be
followed by the phrase "without
limitation." The meanings given to terms defined
herein shall be equally applicable to both
the singular and plural forms of such
terms. Whenever the context may require,
any pronoun shall include the
corresponding masculine, feminine and
neuter forms. All references to "dollars"
or "US$" shall be deemed references to the
lawful money of the United States of
America.
(b) The
disclosure of any matter on a Schedule shall not
be deemed to be an admission or
representation as to the materiality of the
matter so disclosed. Any matter disclosed
on a Schedule pursuant to any Section
of this Agreement shall be deemed to have
been disclosed for purposes of another
Section or Sections of this Agreement if
the relevance or applicability of
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such disclosure to the subject matter of
such other Section or Sections is clear
and apparent on the face of such
disclosure.
ARTICLE II
PURCHASE AND SALE
2.1 Purchase
and Sale of the Shares. On the Closing Date
and subject to the terms and conditions set
forth in this Agreement, Seller will
sell, convey, assign and transfer to Buyer,
and Buyer will purchase and acquire,
all of such Seller's right, title and
interest in and to the Shares, free and
clear of all Encumbrances.
2.2
Consideration; Estimated Purchase Price Adjustment.
(a) On the Closing Date and subject to the
terms and conditions set forth in
this Agreement, in reliance on the
representations, warranties, covenants and
agreements of the parties contained herein
and in consideration of the sale,
assignment and transfer of the Shares,
Buyer will (and Peabody will cause Buyer
to) on the Closing Date pay to Seller One
Hundred Ninety-One Million U.S.
Dollars (US$191,000,000), as adjusted in
accordance with Section 2.2(b) hereof
(the "Closing Payment"; and the Closing
Payment, as adjusted in accordance with
Section 2.5, the "Purchase Price").
(b) Not later
than three (3) Business Days prior to the
Closing Date, Seller shall deliver to Buyer
a statement (the "Estimated Closing
Adjusted Stockholder's Equity Statement")
setting forth Sellers' good faith
estimate of the Adjusted Stockholder's
Equity of the Companies as of the Closing
Date (the "Estimated Closing Adjusted
Stockholder's Equity"). At the Closing,
the amount of the Closing Payment that
Buyer shall pay shall be adjusted by the
difference between (i) the Estimated
Closing Adjusted Stockholder's Equity and
(ii) US$142,230,000 (the "Target Closing
Adjusted Stockholder's Equity"). If the
Estimated Closing Adjusted Stockholder's
Equity exceeds the Target Closing
Adjusted Stockholder's Equity, the amount
of the Closing Payment paid at the
Closing shall be increased
dollar-for-dollar by the amount of such excess; and,
if the Estimated Closing Adjusted
Stockholder's Equity is less than the Target
Closing Adjusted Stockholder's Equity, the
amount of the Closing Payment paid at
the Closing shall be decreased
dollar-for-dollar by such shortfall. The Closing
Payment shall thereafter be subject to
further adjustment as provided in Section
2.5.
2.3 The
Closing. Unless this Agreement shall have been
terminated pursuant to ARTICLE VIII,
subject to the satisfaction or waiver of
the conditions set forth in ARTICLES VI and
VII, the closing (the "Closing") of
the transactions contemplated by this
Agreement shall take place at the offices
of Simpson Thacher & Bartlett LLP, 425
Lexington Avenue, New York, New York
10017, on the later of (i) five (5)
Business Days following the satisfaction or
waiver of the conditions set forth in
Article VI and Article VII occurs and (ii)
April 15, 2004 (the later of (i) and (ii),
the "Closing Date"), or at such other
place and time as may be agreed upon by
Seller Parent, Seller, Peabody and
Buyer. Except as may otherwise be agreed to
by the parties, the Closing shall be
deemed effective for all purposes under
this Agreement as of 11:59 p.m., Eastern
Standard Time, on the Closing Date.
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<PAGE>
2.4 Deliveries
at the Closing. (a) At or prior to the
Closing, Seller shall (and Seller Parent
shall cause Seller to) deliver or cause
to be delivered, to Buyer:
(i) stock
certificates evidencing the Shares, duly
endorsed in blank, or accompanied by stock powers duly executed
in
blank and with any required stock transfer tax stamps affixed;
(ii)
a receipt from Seller for the Closing Payment;
(iii)
copies of the resolutions of the boards of directors
of Seller Parent and Seller and, where required, the stockholders
of
Seller Parent and Seller, authorizing and approving this Agreement
and
the transactions contemplated hereby, certified by the
corporate
secretary or other senior officer or officers reasonably acceptable
to
Buyer of Seller Parent and Seller, as applicable, to be true
and
complete and in full force and effect and unmodified as of the
Closing
Date;
(iv)
the certificates required by Section 7.3 and Section
7.10; and
(v) the
written resignations of all directors and
officers of each Company; each resignation to be effective on
the
Closing Date.
(b) At or
prior to the Closing, Buyer shall (and Peabody
shall cause Buyer to) deliver or cause to
be delivered to Seller the following:
(i) the
Closing Payment by wire transfer of immediately
available funds;
(ii)
a receipt from
Buyer for the Shares;
(iii)
copies of the resolutions of the board of directors
of Peabody and Buyer authorizing and approving this Agreement and
all
other transactions and agreements contemplated hereby, certified by
the
corporate secretary of Peabody and Buyer, as applicable, to be true
and
complete and in full force and effect and unmodified as of the
Closing
Date; and
(iv)
the certificate required by Section 6.3; and
(v) five (5)
copies of Form 8023 for each of the
Companies as described in Section 5.3(i).
2.5 Closing
Payment Adjustments. (a) Within thirty (30)
days after the Closing Date, Seller Parent
and Seller, at Seller's expense, will
prepare, or cause to be prepared, and will
deliver to Buyer, a combined balance
sheet of the Companies as of the Closing
Date (the "Closing Balance Sheet"). The
Closing Balance Sheet shall be prepared on
a combined basis in accordance with
GAAP, applied on a basis consistent with
the audited combined balance sheet of
the Companies as at December 31, 2003
included in the Audited Financial
Statements (the "Audited Balance Sheet"),
and shall be attested, in accordance
with GAAP, by Ernst & Young LLP
("E&Y"). For the avoidance of doubt, the Closing
Balance Sheet and Final Closing Balance
Sheet shall be prepared without taking
into account the accounting and Tax effects
or
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<PAGE>
consequences of the Section 338(h)(10)
Election. At the same time, Seller Parent
and Seller, at Seller's expense, will
prepare or cause to be prepared, and will
deliver to Buyer, a combined statement of
Adjusted Stockholder's Equity of the
Companies as of the Closing Date (the
"Closing Adjusted Stockholder's Equity
Statement"). The Closing Adjusted
Stockholder's Equity Statement shall be
prepared in accordance with the definition
of Adjusted Stockholder's Equity and
on a combined basis in accordance with
GAAP, applied on a basis consistent with
the Audited Balance Sheet, and shall be
attested, in accordance with GAAP, by
E&Y. At the same time, Seller Parent
and Seller, at Seller's expense, will
prepare, or cause to be prepared, and will
deliver to Buyer, a statement
containing a calculation of the Debt as of
the Closing Date (the "Closing Debt
Statement"). The Closing Debt Statement
shall be prepared in accordance with the
definition of Debt and on a combined basis
in accordance with GAAP, applied on a
basis consistent with the Audited Balance
Sheet, and shall be attested, in
accordance with GAAP, by E&Y. At the
same time, Seller Parent and Seller, at
Seller's expense, will prepare, or cause to
be prepared, and will deliver to
Buyer, a statement containing a calculation
of the Shoshone Employee Benefits
Net Liabilities as of the Closing Date (the
"Closing Shoshone Employee Benefits
Net Liabilities Statement" and, together
with the Closing Balance Sheet, the
Closing Adjusted Stockholder's Equity
Statement and the Closing Debt Statement,
the "Closing Statements"). The Closing
Shoshone Employee Benefits Net
Liabilities Statement shall be prepared in
accordance with the definition of
Shoshone Employee Benefits Net Liabilities
and in accordance with GAAP, applied
on a basis consistent with the Audited
Balance Sheet, and shall be attested, in
accordance with GAAP, by E&Y. For
purposes of preparation of the Closing
Shoshone Employee Benefits Net Liabilities
Statement, liabilities and
obligations relating to retiree healthcare
benefits, black lung benefits and
workers compensation benefits shall be
computed by calculating the accumulated
benefit obligation with respect to the
Former Shoshone Employees applying
methods, practices, assumptions, policies
and factors consistent with those used
in preparing the Statement of Financial
Accounting Standard ("FAS") No. 106 and
FAS No. 87 liability amounts included in
the Towers Perrin Report. For purposes
of preparation of the Closing Shoshone
Employee Benefits Net Liabilities
Statement, liabilities and obligations
relating to benefits under the Seller
Pension Plans shall determined by
calculating the accumulated benefit obligation
with respect to the Former Shoshone
Employees applying methods, practices,
assumptions, policies and factors
consistent with those used in preparing the
FAS No. 87 liability amounts included in
the Towers Perrin Report. For purposes
of preparation of the Closing Shoshone
Employee Benefits Net Liabilities
Statement, liabilities and obligations
relating to long-term disability benefits
shall be computed by calculating the
accumulated benefit obligation with respect
to the Former Shoshone Employees applying
methods, practices, assumptions,
policies and factors consistent with those
used in preparing the Audited Balance
Sheet. Peabody and Buyer will assist and
cooperate with Seller Parent and Seller
in the preparation of each of the Closing
Statements, including by providing
Seller Parent, Seller and E&Y with
reasonable access to the books and records of
the Company and to any other information
reasonably necessary to prepare each of
the Closing Statements.
(b) Peabody
and Buyer shall, within thirty (30) days
after the delivery by Seller Parent and
Seller of the Closing Statements,
complete their review of the Closing
Statements. Peabody, Buyer and their
accountants and actuaries shall be provided
with reasonable access to the
workpapers (including, without limitation,
census data, assumptions and methods
used to determine actuarial liabilities) of
E&Y and Seller's actuary in
connection with such review, subject to
Buyer's compliance with procedures
requested by E&Y and Seller's
14
<PAGE>
actuary that are reasonable and customary
under the circumstances. In the event
that Buyer determines that any of the
Closing Statements has not been prepared
on a basis consistent with the requirements
of Section 2.5(a), Buyer shall
deliver notice to Seller Parent and Seller
on or prior to the 30th day after
receipt of the Closing Statements
specifying in reasonable detail all disputed
items and the basis therefor. If Buyer so
notifies Seller Parent and Seller of
any objections to any of the Closing
Statements, Peabody, Buyer, Seller Parent,
and Seller shall, within thirty (30) days
following the date of such notice (the
"Resolution Period"), attempt to resolve
their differences and any written
resolution by them as to any disputed
amount shall be final, binding, conclusive
and nonappealable for all purposes under
this Agreement.
(c) If at the
conclusion of the Resolution Period
Peabody, Buyer, Seller Parent and Seller
have not reached an agreement on
Buyer's objections, then all amounts and
issues remaining in dispute shall be
submitted by Seller Parent, Seller, Peabody
and Buyer to PricewaterhouseCoopers
LLP or to another mutually acceptable
nationally recognized independent
accounting firm (the "Neutral Auditor") for
a determination resolving such
amounts and issues; provided, however, with
respect to the Closing Shoshone
Employee Benefits Net Liabilities
Statement, if following the Resolution Period
there do not remain in dispute amounts the
aggregate net amount of which exceed
One Hundred Thousand U.S. Dollars
(US$100,000.00), then all amounts remaining in
dispute regarding the Closing Shoshone
Employee Benefits Net Liabilities
Statement shall be deemed to have been
agreed by Peabody, Buyer, Seller Parent,
and Seller in favor of the such Closing
Statement delivered by Seller Parent and
Seller to Buyer. Each party agrees to
execute, if requested by the Neutral
Auditor, a reasonable engagement letter
with respect to the determination to be
made by the Neutral Auditor. All fees and
expenses relating to the work, if any,
to be performed by the Neutral Auditor
shall be borne one-half by Seller Parent
and Seller, on the one hand, and one-half
by Peabody and Buyer, on the other
hand. Except as provided in the preceding
sentence, all other costs and expenses
incurred by Peabody, Buyer, Seller Parent
and Seller in connection with
resolving any dispute hereunder before the
Neutral Auditor shall be borne by the
party incurring such cost and expense. The
Neutral Auditor shall determine only
those issues still in dispute at the end of
the Resolution Period and the
Neutral Auditor's determination shall be
based upon and be consistent with the
terms and conditions of this Agreement. The
determination by the Neutral Auditor
may be based on presentations with respect
to such disputed items by Peabody,
Buyer, Seller Parent and Seller to the
Neutral Auditor. Each of Peabody, Buyer,
Seller Parent and Seller shall use its
reasonable best efforts to make its
presentation as promptly as practicable
following submission to the Neutral
Auditor of the disputed items, and each
such party shall be entitled, as part of
its presentation, to respond to the
presentation of the other party and any
questions and requests of the Neutral
Auditor. In deciding any matter, the
Neutral Auditor (i) shall be bound by the
provisions of this Section 2.5(c) and
(ii) may not assign a value to any item
greater than the greatest value for such
item claimed by Peabody, Buyer, Seller
Parent or Seller or less than the
smallest value for such item claimed by
Peabody, Buyer, Seller Parent or Seller.
The Neutral Auditor's determination shall
be made within forty-five (45) days
after its engagement (which engagement
shall be made no later than five (5)
Business Days after the end of the
Resolution Period), or as soon thereafter as
possible, shall be set forth in a written
statement delivered to Seller Parent,
Seller, Peabody and Buyer and shall be
final, conclusive, nonappealable and
binding for all purposes hereunder, absent
manifest error. The term "Final
Closing Balance Sheet" shall mean the
definitive Closing Balance Sheet agreed to
by Seller Parent, Seller, Peabody and Buyer
in accordance with Section 2.5(b) or
the definitive Closing
15
<PAGE>
Balance Sheet resulting from the
determination made by the Neutral Auditor in
accordance with this Section 2.5(c). The
term "Final Closing Adjusted
Stockholder's Equity Statement" shall mean
the definitive Closing Adjusted
Stockholder's Equity Statement agreed to by
Seller Parent, Seller, Peabody and
Buyer in accordance with Section 2.5(b) or
the definitive Closing Adjusted
Stockholder's Equity Statement resulting
from the determination made by the
Neutral Auditor in accordance with this
Section 2.5(c). The term "Final Closing
Debt Statement" shall mean the definitive
Closing Debt Statement agreed to by
Seller Parent, Seller, Peabody and Buyer in
accordance with Section 2.5(b) or
the definitive Closing Debt Statement
resulting from the determination made by
the Neutral Auditor in accordance with this
Section 2.5(c). The term "Final
Closing Shoshone Employee Benefits Net
Liabilities Statement" shall mean the
definitive Closing Shoshone Employee
Benefits Net Liabilities Statement agreed
to by Seller Parent, Seller, Peabody and
Buyer in accordance with Section 2.5(b)
or the definitive Closing Shoshone Employee
Benefits Net Liabilities Statement
resulting from the determination made by
the Neutral Auditor in accordance with
this Section 2.5(c).
(d) (i) If the
calculation of the Closing Adjusted
Stockholder's Equity contained in the Final
Closing Adjusted Stockholder's
Equity Statement is less than the Estimated
Closing Adjusted Stockholder's
Equity, Seller shall (and Seller Parent
shall cause Seller to) pay to Buyer an
amount in cash equal to the amount of such
deficiency. If the calculation of the
Closing Adjusted Stockholder's Equity
contained in the Final Closing Adjusted
Stockholder's Equity Statement is greater
than the Estimated Closing Adjusted
Stockholder's Equity, Buyer shall (and
Peabody shall cause Buyer to) pay to
Seller an amount in cash equal to the
amount of such excess.
(ii)
If the calculation of the Debt contained in the Final
Closing Debt Statement is greater than zero, Seller shall (and
Seller
Parent shall cause Seller to) pay to Buyer an amount in cash equal
to
such amount greater than zero.
(iii) If
the calculation of the Shoshone Employee Benefits
Net Liabilities set forth on the Final
Closing Shoshone Employee Benefits Net
Liabilities Statement is greater than Three
Million U.S. Dollars (US$3,000,000),
Seller shall (and Seller Parent shall cause
Seller to) pay to Buyer an amount in
cash equal to the amount of such excess. If
the calculation of the Shoshone
Employee Benefits Net Liabilities set forth
on the Final Closing Shoshone
Employee Benefits Net Liabilities Statement
is less than Three Million U.S.
Dollars (US$3,000,000), Buyer shall (and
Peabody shall cause Buyer to) pay to
Seller an amount in cash equal to the
amount of such deficiency.
(e) All
amounts payable by Buyer or Seller, as the case
may be, pursuant to Section 2.5(d)(i), (ii)
or (iii), as the case may be, shall
be (i) netted against all amounts payable
to such party by the other party
pursuant to such Section, and (ii) paid
within three (3) Business Days after the
ultimate determination of the Final Closing
Adjusted Stockholder's Equity
Statement, the Final Closing Debt Statement
and the Final Closing Shoshone
Employee Benefits Net Liabilities Statement
as provided in Section 2.7.
(f)
Notwithstanding anything to the contrary in this
Agreement, the amount of any adjustment
made pursuant to this Section 2.5 in
respect of any item shall not be
recoverable
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more than once by the party to whom such
amount was paid or credited, whether
pursuant to this Section 2.5, Section 9.1
or otherwise.
2.6 Payments
On or Before Closing. In accordance with
Section 10.1 hereof, Seller shall (and
Seller Parent shall cause Seller to) pay
on or before the Closing all amounts
payable for investment banking fees and
legal and other similar fees and expenses
of any Company or for which any
Company may be liable related to the
transactions contemplated in this
Agreement, and any severance or bonus
payments for employees of any Company who
cease their employment as of or prior to
the Closing, and none of the Companies
shall have any liability in respect thereof
after the Closing.
2.7 Form of
Payments. All payments hereunder shall be
made by delivery to the recipient by
depositing, by bank wire transfer, the
required amount in U.S. dollars (in
immediately available funds) to an account
of the recipient, which account shall be
designated by the recipient in writing
at least three (3) Business Days prior to
the date of the required payment.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER PARENT AND SELLER
Seller Parent and Seller, jointly and severally, hereby
represent and warrant to Peabody and Buyer
as follows:
3.1
Organization. Each of Seller Parent, Seller, and the
Companies is a corporation duly
incorporated, validly existing and in good
standing under the Laws of its jurisdiction
of incorporation, formation or
organization. Each of Seller Parent, Seller
and the Companies has the requisite
corporate power and authority to own, lease
and operate its assets and to carry
on its business as now being conducted and
is duly qualified or licensed to do
business and is in good standing in the
jurisdictions in which the ownership of
its property or the conduct of its business
requires such qualification or
license, except where the failure to be so
qualified or licensed (i) would not
reasonably be expected, individually or in
the aggregate, to have a material
adverse effect on the ability of Seller
Parent or Seller to consummate the
transactions contemplated by this Agreement
or (ii) would not reasonably be
expected, individually or in the aggregate,
to have a Companies Material Adverse
Effect. Schedule 3.1 sets forth the
jurisdictions where each Company is
qualified or licensed to do business.
Seller has heretofore provided to Buyer a
complete and correct copy of the
organizational documents of each Company, as
currently in effect.
3.2
Authorization; Enforceability. Each of Seller Parent
and Seller has the requisite corporate
power and authority to execute and
deliver this Agreement and to perform its
obligations hereunder. The execution
and delivery of this Agreement by each of
Seller Parent and Seller, and the
performance of each of its obligations
hereunder, has been duly authorized by
all necessary corporate action on the part
of such party, and, upon such
authorization, no other corporate or
stockholder proceedings or actions are
necessary to authorize and consummate this
Agreement or the transactions
contemplated hereby. This Agreement has
been duly executed and delivered by each
of Seller Parent and Seller, and, assuming
due authorization, execution and
delivery by Peabody and Buyer, constitutes
a valid and binding agreement of each
of Seller
17
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Parent and Seller and is enforceable
against each of Seller Parent and Seller in
accordance with its terms, except as may be
limited by applicable bankruptcy,
insolvency, fraudulent conveyance,
reorganization, moratorium and other similar
Laws relating to or affecting creditors'
rights generally and general equitable
principles (whether considered in a
proceeding in equity or at law).
3.3 Capital
Stock. (a) The entire authorized capital
stock of Twentymile Company consists of 100
shares of common stock, par value
US$100.00 per share, of which 100 shares
are issued and outstanding. All of such
issued and outstanding shares were duly
authorized and have been validly issued,
are fully paid and nonassessable and have
not been issued in violation of any
preemptive or similar rights. Except for
the Twentymile Shares and except as set
forth in Schedule 3.3(a), there are no
outstanding (i) shares of capital stock
(preferred or otherwise) or voting
securities of Twentymile Company, (ii)
securities of Twentymile Company
convertible into or exercisable or exchangeable
for shares of capital stock (preferred or
otherwise) or voting securities of
Twentymile Company, (iii) options or other
rights or agreements to acquire from
Twentymile Company, or other obligations of
Twentymile Company to issue,
transfer or sell any shares of capital
stock, voting securities or securities
convertible into or exercisable or
exchangeable for shares of capital stock or
voting securities of Twentymile Company
(the items in clauses (i), (ii) and
(iii) being referred to collectively as
"Twentymile Company Securities"). There
are no (A) outstanding obligations of
Twentymile Company or any other Company to
repurchase, redeem or otherwise acquire any
Twentymile Company Securities or (B)
voting trusts, proxies or other agreements
or understandings with respect to or
concerning Twentymile Company
Securities.
(b) The entire
authorized capital stock of Yampa Company
consists of 100 shares of common stock, par
value US$100.00 per share, of which
100 shares are issued and outstanding. All
of such issued and outstanding shares
were duly authorized and have been validly
issued, are fully paid and
nonassessable and have not been issued in
violation of any preemptive or similar
rights. Except for the Yampa Shares and
except as set forth in Schedule 3.3(b),
there are no outstanding (i) shares of
capital stock (preferred or otherwise) or
voting securities of Yampa Company, (ii)
securities of Yampa Company convertible
into or exercisable or exchangeable for
shares of capital stock (preferred or
otherwise) or voting securities of Yampa
Company, (iii) options or other rights
or agreements to acquire from Yampa
Company, or other obligations of Yampa
Company to issue, transfer or sell any
shares of capital stock, voting
securities or securities convertible into
or exercisable or exchangeable for
shares of capital stock or voting
securities of Yampa Company (the items in
clauses (i), (ii) and (iii) being referred
to collectively as "Yampa Company
Securities"). There are no (A) outstanding
obligations of Yampa Company or any
other Company to repurchase, redeem or
otherwise acquire any Yampa Company
Securities or (B) voting trusts, proxies or
other agreements or understandings
with respect to or concerning Yampa Company
Securities.
(c) The entire
authorized capital stock of Empire Company
consists of 1,000 shares of common stock,
par value US$1.00 per share, of which
only 100 shares are issued and outstanding.
All of such issued and outstanding
shares were duly authorized and have been
validly issued, are fully paid and
nonassessable and have not been issued in
violation of any preemptive or similar
rights. Except for the Empire Shares and
except as set forth in Schedule 3.3(c),
there are no outstanding (i) shares of
capital stock (preferred or otherwise) or
voting
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securities of Empire Company, (ii)
securities of Empire Company convertible into
or exercisable or exchangeable for shares
of capital stock (preferred or
otherwise) or voting securities of Empire
Company, (iii) options or other rights
or agreements to acquire from Empire
Company, or other obligations of Empire
Company to issue, transfer or sell any
shares of capital stock, voting
securities or securities convertible into
or exercisable or exchangeable for
shares of capital stock or voting
securities of Empire Company (the items in
clauses (i), (ii) and (iii) being referred
to collectively as "Empire Company
Securities"). There are no (A) outstanding
obligations of Empire Company or any
other Company to repurchase, redeem or
otherwise acquire any Empire Company
Securities or (B) voting trusts, proxies or
other agreements or understandings
with respect to or concerning Empire
Company Securities.
(d) The entire
authorized capital stock of Shoshone
Company consists of 10,000 shares of common
stock, par value US$1.00 per share,
of which 10,000 shares are issued and
outstanding. All of such issued and
outstanding shares were duly authorized and
have been validly issued, are fully
paid and nonassessable and have not been
issued in violation of any preemptive
or similar rights. Except for the Shoshone
Shares and except as set forth in
Schedule 3.3(d), there are no outstanding
(i) shares of capital stock (preferred
or otherwise) or voting securities of
Shoshone Company, (ii) securities of
Shoshone Company convertible into or
exercisable or exchangeable for shares of
capital stock (preferred or otherwise) or
voting securities of Shoshone Company,
(iii) options or other rights or agreements
to acquire from Shoshone Company, or
other obligations of Shoshone Company to
issue, transfer or sell any shares of
capital stock, voting securities or
securities convertible into or exercisable
or exchangeable for shares of capital stock
or voting securities of Shoshone
Company (the items in clauses (i), (ii) and
(iii) being referred to collectively
as "Shoshone Company Securities"). There
are no (A) outstanding obligations of
Shoshone Company or any other Company to
repurchase, redeem or otherwise acquire
any Shoshone Company Securities or (B)
voting trusts, proxies or other
agreements or understandings with respect
to or concerning Shoshone Company
Securities.
3.4 Ownership
of Shares. Seller is the record, legal and
beneficial owner of, and has good and valid
title to, all of the issued and
outstanding Shares and, as of the Closing,
will be the record, legal and
beneficial owner of all of the issued and
outstanding Shares, in each case, free
and clear of any Encumbrances (or any
agreement, obligation or commitment to
give or create such Encumbrance), and will
transfer and deliver to Buyer at the
Closing good and valid title to such
Shares, free and clear of any Encumbrances
or third party interests or rights.
3.5 Ownership
of Seller; No Subsidiaries of the
Companies. Seller Parent, directly or
indirectly, owns all of the issued and
outstanding capital stock of, and other
equity and voting interests in, Seller.
No Company, directly or indirectly, owns
any voting, equity or other ownership
interest in any corporation, partnership or
other Person or entity.
3.6 Audited
Financial Statements. Schedule 3.6 sets forth
the audited combined balance sheets of the
Companies as at December 31, 2002 and
2003 and the related audited combined
statements of operations, stockholders'
equity and cash flows for the twelve-months
ended December 31, 2001, 2002 and
2003 (together, the "Audited Financial
Statements"). Each of the balance sheets
and statements of operations, stockholders'
equity and cash flows included in
the Audited Financial Statements (i) has
been prepared in accordance with GAAP,
applied on a consistent basis during the
periods involved and (ii) fairly
presents the
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combined financial position of the
Companies as of the dates thereof and their
combined results of operations and cash
flows for the periods then ended.
3.7 Absence of
Undisclosed Liabilities. None of the
Companies has any Liabilities, other than
Liabilities (i) reflected or reserved
against in Audited Balance Sheet or not
required by GAAP to be so reflected,
reserved or disclosed, (ii) incurred in the
ordinary course of business not in
breach of Section 5.1 of this Agreement
since the date of the Audited Balance
Sheet (and, if incurred prior to the date
hereof, would not have been in breach
of Section 5.1 of this Agreement if this
Agreement was in full force and effect
at such time) or (iii) disclosed on
Schedule 3.7.
3.8 No
Conflicts or Approvals. Except as set forth on
Schedule 3.8, the execution, delivery and
performance by Seller Parent and
Seller of this Agreement and the
consummation by Seller Parent and Seller of the
transactions contemplated hereby does not
and will not (i) violate, conflict
with or result in a breach by Seller
Parent, Seller or any of the Companies of
their respective organizational documents,
(ii) violate, conflict with or result
in a breach of, or constitute a default by
Seller Parent, Seller or any of the
Companies (or create an event which, with
notice or lapse of time or both, would
constitute a default) under, or require any
consent or other action by any
Person under, or give rise to any penalty,
right of termination, cancellation or
acceleration or loss of a material benefit
under, any note, bond, mortgage,
indenture, deed of trust, license,
franchise, permit, lease, contract, agreement
or other instrument to which any of Seller
Parent, Seller or any of the
Companies or any of their respective
properties or assets may be bound, (iii)
violate or result in a breach of any
Governmental Order or Law applicable to any
of Seller Parent, Seller or any of the
Companies or any of their respective
properties or assets or (iv) result in the
creation of any Encumbrance, other
than Permitted Encumbrances, upon any of
the properties or assets of Seller
Parent, Seller or any of the Companies,
except, with respect to the foregoing
clauses (ii), (iii) and (iv) above, as
would not be material to the Companies
taken as a whole and would not materially
adversely affect the ability of Seller
Parent or Seller to consummate the
transactions contemplated by this Agreement.
3.9
Governmental Authorization. The execution, delivery
and performance by Seller Parent and Seller
of this Agreement and the
consummation of the transactions
contemplated hereby, require no action by or in
respect of, or any Consent from, any
Governmental Authority, except with any
applicable requirements of the actions and
filings listed on Schedule 3.9 and
any such action or filing as to which the
failure to make or obtain would not be
material to the Companies taken as a whole
or materially adversely affect the
ability of Seller Parent or Seller to
consummate the transactions contemplated
hereby.
3.10
Compliance with Law; Mining Authorities; Companies'
Surety Bonds. (a) Except as set forth on
Schedule 3.10(a), each of the Companies
have conducted their respective businesses
and developed and operated their
assets in compliance with all Laws (except
for Laws covered by the
representation set forth in Sections
3.10(d) and (e)) and all Permits, except
where noncompliance would not interfere in
any material respect with the ability
of the Companies, taken as a whole, to
continue to operate their assets and
conduct their businesses as currently
conducted, and would not materially
adversely affect the ability of Seller
Parent or Seller to consummate the
transactions contemplated by this
Agreement.
20
<PAGE>
(b) Except as
set forth in Schedule 3.10(b), each of the
Companies possesses all Permits necessary
to own, lease, develop and operate its
assets and conduct their businesses in all
material respects as currently
conducted. None of the Companies has
received any communication alleging or
threatening that any such Permit may be
modified, suspended or revoked and, to
the Knowledge of Seller, there are no
circumstances or conditions providing
valid grounds for the same, except where
any such modification, suspension or
revocation would not interfere in any
material respect with the ability of the
Companies, taken as a whole, to continue to
operate their assets and conduct
their businesses as currently conducted,
and would not materially adversely
affect the ability of Seller Parent or
Seller to consummate the transactions
contemplated by this Agreement.
(c) (i) There
are no material mining leases, licenses,
permits or other mining authorities owned
by any of the Companies other than the
Mining Authorizations. The Companies hold
the legal or beneficial title to the
interest in each of the Mining
Authorizations.
(ii)
To the Knowledge of Seller, there are no material
applications for mining leases, licenses, permits and other
mining
authorities in the name of any of the Companies other than those
set
forth on Schedule 3.10(c)(ii) (the "Material Mining Applications");
and
the Companies will, on grant of any of such applications, hold a
legal
or beneficial title to the interest in each such application as
set
forth on Schedule 3.10(c)(ii). Each of the Material Mining
Applications
has been made in accordance with applicable Laws. None of Seller or
any
Company has received any written communication that indicates that
any
of the Material Mining Applications will not be granted; and, to
the
Knowledge of Seller, none of Seller or any Company has received
any
other communication that indicates that any of the Material
Mining
Applications will not be granted.
(iii) Each
Company has complied in all material respects
with the terms and conditions of the Mining Authorizations. There
are
no matters that adversely affect the title of any Company to any
Mining
Authorization, nor, to the Knowledge of Seller, which adversely
affect
the use of the Mining Authorizations for the purposes of the
business
of any Company and in accordance with their terms, which are
material
to the business of the Companies taken as a whole.
(d) Each of
the Companies has posted all deposits,
letters of credit, trust funds, bid bonds,
performance bonds, reclamation bonds
and surety bonds (and all such similar
undertakings) required to be posted in
connection with their operations. All
deposits, letters of credit, trust funds,
bid bonds, performance bonds, reclamation
bonds and surety bonds (and all such
similar undertakings) posted by each of the
Companies in connection with its
respective operations are listed on
Schedule 3.10(d)(i) (collectively, the
"Companies' Surety Bonds"). Except as
disclosed on Schedule 3.10(d)(ii): (A)
each of the Companies is in compliance in
all material respects with all
Companies' Surety Bonds applicable to it;
and (B) the operation of each
Company's coal mining and processing
operations and the state of reclamation
with respect to the Companies' Surety Bonds
are "current" or in "deferred
status" regarding reclamation obligations
and otherwise are in compliance with
all applicable mining, reclamation and
other analogous Laws, except where
noncompliance would not (i) have a material
adverse effect on the business,
assets, Liabilities, results of operations
or financial condition of the
Companies,
21
<PAGE>
taken as a whole, (ii) interfere in any
material respect with the ability of the
Companies, taken as a whole, to continue to
operate their assets and conduct
their businesses as currently conducted, or
(iii) would not materially adversely
affect the ability of Seller Parent or
Seller to consummate the transactions
contemplated by this Agreement.
(e) Each
Company has complied with all applicable human
health Laws, employee health Laws, and
workplace safety and health Laws,
including without limitation, the Mine
Safety and Health Act (30 U.S.C. Section
801 et seq.) and the Occupational Safety
and Health Act (29 U.S.C. Section 651
et seq.), except where noncompliance would
not (i) have a material adverse
effect on the business, assets,
Liabilities, results of operations or financial
condition of the Companies, taken as a
whole, (ii) interfere in any material
respect with the ability of the Companies,
taken as a whole, to continue to
operate their assets and conduct their
businesses as currently conducted, or
(iii) would not materially adversely affect
the ability of Seller Parent or
Seller to consummate the transactions
contemplated by this Agreement.
3.11
Proceedings. Except as set forth on Schedule 3.11,
(i) there are no Proceedings pending or, to
the Knowledge of Seller threatened,
involving Seller Parent, Seller, any
Company or any of their respective
properties or any of their respective
directors or officers in their capacities
as such that (i) involves or, if adversely
determined, would reasonably be
expected to involve an award of damages in
the excess of US$100,000 against any
Company or seeks to materially restrict the
operation of any Company in any
material respect, (ii) in any manner
challenges or seeks to prevent, enjoin,
alter or materially delay the transactions
contemplated by this Agreement or
(iii) are in respect of any Mining
Authorizations. There is no judgment, decree,
injunction or order of a Governmental
Authority outstanding against any of the
Companies or in respect of the Mining
Authorizations. None of the Companies have
received any written notification that any
such investigation or inquiry is
being conducted by any Governmental
Authority in respect of the business or
affairs of any of the Companies; and, to
the Knowledge of Seller, none of the
Companies has received any other
notification that any investigation or inquiry
is being conducted by any Governmental
Authority in respect of the business or
affairs of any of the Companies;
furthermore, to the Knowledge of Seller, there
is no basis for any such investigation or
inquiry that if determined adversely
to any of the Companies would be material
to any of the Companies.
3.12
Absence of Certain Changes. Except as disclosed in
Schedule 3.12, since December 31, 2003: (i)
there has not been any condition,
change or event which has had, or would
reasonably be expected to have,
individually or in the aggregate, a
Companies Material Adverse Effect; (ii) the
business of each Company has been conducted
only in the ordinary course of
business; and (iii) there has not been any
action taken by any Company that
would have been prohibited under Section
5.1 if such action had been taken by
any Company after the date hereof.
3.13
Tax Matters. Except as set forth in Schedule 3.13:
(a) In respect
of each Tax year beginning on or after the
CA Acquisition Date, all Tax Returns
required to be filed by or on behalf of
each Company prior to the Closing Date
(separately or as part of a consolidated,
combined or unitary group) have been or
shall be timely filed (subject to
permitted extensions applicable to such
filing), all such Tax Returns were
22
<PAGE>
correct and complete and all Taxes due
(whether or not shown as due) on such Tax
Returns have been or shall be paid within
the prescribed period or any extension
thereof, other than Taxes that are being
contested in good faith for which
adequate accruals or reserves will be
established on the Final Closing Balance
Sheet. In respect of each Tax year ending
prior to the CA Acquisition Date, to
the Actual Knowledge of Seller, all Tax
Returns required to be filed by or on
behalf of each Company prior to the Closing
Date (separately or as part of a
consolidated, combined or unitary group)
have been or shall be timely filed
(subject to permitted extensions applicable
to such filing), all such Tax
Returns were correct and complete and all
Taxes due (whether or not shown as
due) on such Tax Returns have been or shall
be paid within the prescribed period
or any extension thereof, other than Taxes
that are being contested in good
faith for which adequate accruals or
reserves will be established on the Final
Closing Balance Sheet. In respect of each
Company, since the CA Acquisition Date
no claim has been made by a Taxing
Authority in a jurisdiction where such
Company does not file Tax Returns that such
Company is or may be subject to
taxation by that jurisdiction and prior to
the CA Acquisition Date, to the
Actual Knowledge of Seller, no claim has
been made by a Taxing Authority in a
jurisdiction where such Company does not
file Tax Returns that such Company is
or may be subject to taxation by that
jurisdiction. With respect to any period
prior to and through the Closing Date for
which Taxes are not yet due and owing,
each Company has made or will make adequate
reserves or accruals for such Taxes
on the Final Closing Balance Sheet. Seller
has delivered or made available to
Buyer correct and complete copies of all
Tax Returns filed by, and examination
reports and statements of deficiencies
assessed against or agreed to by, any of
the Companies for Tax years beginning on or
after the CA Acquisition Date and
for periods ending prior to the CA
Acquisition Date, to the extent such Tax
Returns, examination reports and statements
of deficiencies are within the
possession of Seller and the applicable
statute of limitations has not expired
(or, in the case of any such Tax Return
filed for, and examination report or
statement of deficiency assessed against or
agreed to by, an Affiliated Group,
the portion of such Tax Return, assessment
or statement of deficiency relating
to or relevant to the determination of Tax
Liability for a Post-Closing Tax
Period or Straddle Period of any of the
Companies).
(b) There are
no Encumbrances relating to Taxes
encumbering any of the Shares, or any
assets or properties of any Company,
except Encumbrances for current Taxes not
yet due and payable or Taxes being
contested in good faith for which adequate
reserves or accruals have been
provided.
(c) There has
not been any audit of any Tax Return filed
by any Company or any Affiliated Group of
which any Company is currently a
member for any Tax year beginning on or
after the CA Acquisition Date and, to
the Actual Knowledge of Seller, there has
not been any audit of any Tax Return
filed by any Company on a separate return
basis for any Tax year ending prior to
the CA Acquisition Date. In respect of each
Company, there are no (i)
examinations, audits, Proceedings or
disputes relating to Taxes by or with, as
applicable, any Taxing Authority that are
pending or, to the Knowledge of
Seller, threatened by any Taxing Authority
against such Company, (ii) claims for
Taxes asserted or, to the Knowledge of
Seller, threatened to be asserted by any
Taxing Authority against such Company, or
(iii) unresolved claims in competent
authority pursuant to any income tax, trade
tax or social insurance tax treaty,
against any Company that, in each case,
would reasonably be expected to result
in Taxes of any Company for any taxable
period (or any portion thereof) ending
on or before the Closing Date.
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<PAGE>
(d) None of
the Companies is currently a beneficiary of
any extension of time within which to file
any Tax Return.
(e) All
material Taxes that each Company is or was
required by Law to withhold or collect have
been duly withheld or collected and,
to the extent required, have been paid to
the proper Governmental Authority.
(f) None of
the Companies has granted any extension or
waiver of the statute of limitations period
applicable to any material Tax or
Tax Return, or agreed to any extension of
time with respect to a Tax assessment
or deficiency, which period (after giving
effect to such extension or waiver)
has not yet expired.
(g) None of
the Companies is a party to, is bound by or
has any obligation under, any Tax sharing
agreement or similar contract or
arrangement or any agreement that obligates
it to make any payment computed by
reference to Taxes, taxable income or
taxable losses of any other Person.
(h) Each
Company has collected all sales and use Taxes
required to be collected, and has remitted
or will remit on a timely basis, such
amounts to the appropriate Governmental
Authorities, or have been furnished
properly completed exemption certificates.
Each Company (i) has in its
possession all records and supporting
documents required by all applicable sales
and use Tax statutes and regulations
regarding the collection and payment of all
sales and use Taxes required to be
collected and paid over and regarding all
exempt transactions for all periods open
under the applicable statute of
limitations, and (ii) has maintained all
such records and supporting documents
in the manner required by all applicable
sales and use Tax statutes and
regulations.
(i) No power
of attorney has been executed with respect
to any matter relating to Taxes of any
Company which is currently in force.
(j) Since the
CA Acquisition Date, none of the Companies
has been a member of an Affiliated Group
(other than the Affiliated Group of
which they are currently members and with
which they file a consolidated Tax
Return) filing a consolidated federal
Income Tax Return. None of the Companies
has any liability for the Taxes of any
Person (other than any Person that is or
was a member of the Affiliated Group of
which the Companies are currently
members) in respect of any Tax year
beginning on or after the CA Acquisition
Date, under Treasury Regulation Section
1.1502-6 (or any similar provision of
state, local or foreign tax law), as a
transferee or successor, by contract or
otherwise.
(k) None of
the Companies will be required to include in
a taxable period ending after the Closing
Date taxable income attributable to
income that accrued in a prior taxable
period but was not recognized in any
prior taxable period as a result of the
installment method of accounting, the
completed contract method of accounting,
the long-term contract method of
accounting, the cash method of accounting
or Section 481 of the Code (or any
comparable provisions of state, local or
foreign law).
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<PAGE>
(l)
Since the
CA Acquisition Date, none of the Companies
has distributed stock of another person, or
has had its stock distributed by
another person, in a transaction that was
purported or intended to be governed
in whole or in part by Section 355 or 361
of the Code.
(m) Seller is
not a "foreign person" as defined in
Treasury Regulation Section
1.1445-2(b)(2)(i) and will not be subject to
withholding under Section 1445 of the Code
and the Treasury Regulations
promulgated thereunder with respect to the
Shares.
(n) There is
no contract or agreement, plan or
arrangement by any of the Companies
covering any person that, individually or
collectively, could give rise to the
payment of any amount that would not be
deductible by any of the Companies by
reason of Section 280G of the Code.
(o) Seller and
each respective Company currently is and
on the Closing Date will be a member of a
consolidated group within the meaning
of Treasury Regulation Section
1.1502-1(h).
3.14
Employee Benefits. (a) Schedule 3.14(a) contains a
true and complete list of each "employee
benefit plan" (within the meaning of
Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended
("ERISA"), including, without limitation,
multiemployer plans within the meaning
of Section 3(37) of ERISA), and all stock
purchase, stock option, severance,
employment, change-in-control, fringe
benefit, collective bargaining, bonus,
incentive, deferred compensation, employee
loan and all other employee benefit
plans, agreements, programs, policies or
other arrangements, whether or not
subject to ERISA (including any funding
mechanism therefor now in effect or
required in the future as a result of the
transaction contemplated by this
Agreement or otherwise), whether formal or
informal, oral or written, legally
binding or not, under which (i) any current
or former employee, director or
consultant of any of the Companies (the
"Company Employees") has any present or
future right to benefits and which are
contributed to, sponsored by or
maintained by the Seller Parent, the Seller
or any of the Companies or (ii) any
of the Companies has had or has any present
or future liability. All such plans,
agreements, programs, policies and
arrangements shall be collectively referred
to as the "Company Plans".
(b) With
respect to each Company Plan, the Seller has
provided to the Buyer a current, accurate
and complete copy (or, to the extent
no such copy exists, an accurate
description) thereof and, to the extent
applicable: (i) any related trust agreement
or other funding instrument; (ii)
the most recent determination letter; (iii)
any summary plan description and
other written communications (and a
description of any oral communications that,
to the Knowledge of Seller, modify in any
material respect the rights under the
Company Plan document) by the Seller
Parent, the Seller or any of the Companies
to the Company Employees concerning the
benefits provided under a Company Plan;
(iv) a summary of any proposed amendments
or changes to the Company Plans which
are now under active consideration for
adoption within the twelve months
immediately following the date hereof; and
(v) for the three most recent years
(A) the Form 5500 and attached schedules,
(B) audited financial statements and
(C) actuarial valuation reports.
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<PAGE>
(c) (i) Each
Company Plan has been established and
administered in accordance with its terms,
and in material compliance with the
applicable provisions of ERISA, the Code
and other applicable Law; (ii) each
Company Plan which is intended to be
qualified within the meaning of Section
401(a) of the Code is so qualified and has
received a favorable determination
letter as to its qualification, and to the
Knowledge of Seller, nothing has
occurred, whether by action or failure to
act, that could reasonably be expected
to cause the loss of such qualification;
(iii) no event has occurred and, to the
Knowledge of Seller, no condition exists
(other than the status of any Company
as a "related person" as such term is
defined in the Coal Industry Retiree
Health Benefit Act of 1992) that would
subject any Company, either directly or
by reason of their affiliation with any
member of their "Controlled Group"
(defined as any organization which is a
member of a controlled group of
organizations within the meaning of
Sections 414(b), (c), (m) or (o) of the
Code), to any material tax, fine, lien,
penalty or other liability imposed by
ERISA, the Code or other applicable Law;
(iv) for each Company Plan with respect
to which a Form 5500 has been filed, no
material change has occurred with
respect to the matters covered by the most
recent Form since the date thereof;
(v) no "reportable event" (as such term is
defined in Section 4043 of the Code)
that could reasonably be expected to result
in liability, no non-exempt
"prohibited transaction" (as such term is
defined in Section 406 of ERISA and
Section 4975 of the Code) or "accumulated
funding deficiency" (as such term is
defined in Section 302 of ERISA and Section
412 of the Code (whether or not
waived)) has occurred with respect to any
Company Plan; (vi) no Company Plan is
a split-dollar life insurance program or
otherwise provides for loans to
executive officers (within the meaning of
The Sarbanes-Oxley Act of 2002).
(d) Except as
set forth on Schedule 3.14(d), with respect
to any multiemployer plan (within the
meaning of Section 4001(a)(3) of ERISA) to
which any of the Companies or any member of
their Controlled Group has any
liability or contributes (or has at any
time contributed or had an obligation to
contribute): (i) none of the Companies or
any member of their Controlled Group
has incurred any withdrawal liability under
Title IV of ERISA which remains
unsatisfied or would be subject to such
liability if, as of the Closing Date,
any of the Companies or any member of their
Controlled Group were to engage in a
complete withdrawal (as defined in Section
4203 of ERISA) or partial withdrawal
(as defined in Section 4205 of ERISA) from
any such multiemployer plan; and (ii)
no such multiemployer plan is in
reorganization or insolvent (as those terms are
defined in Sections 4241 and 4245 of ERISA,
respectively).
(e) Except as
set forth on Schedule 3.14(e), with respect
to any Company Plan, (i) no actions, suits
or claims (other than routine claims
for benefits in the ordinary course)
applicable to Company Employees are pending
or, to the Knowledge of Seller, threatened,
(ii) to the Knowledge of Seller, no
facts or circumstances exist that could
give rise to any such actions, suits or
claims, (iii) no written or, to the
Knowledge of Seller, oral communication has
been received from the Pension Benefit
Guaranty Corporation (the "PBGC") in
respect of any Company Plan subject to
Title IV of ERISA concerning the funded
status of any such plan or any transfer of
assets and liabilities from any such
plan in connection with the transactions
contemplated herein, and (iv) no
administrative investigation, audit or
other administrative proceeding by the
Department of Labor, the PBGC, the Internal
Revenue Service or other
governmental agencies are pending, in
progress or, to the Knowledge of Seller,
threatened (including, without limitation,
any routine requests for information
from the PBGC).
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(f) Except as
set forth on Schedule 3.14(f), no Company
Plan exists that, as a result of the
execution of this Agreement or the
transactions contemplated by this Agreement
(whether alone or in connection with
any subsequent event(s)), could result in
(i) the payment to any Company
Employee of any money or other property,
(ii) the provision of any benefits or
other rights of any Company Employee or
(iii) the increase, acceleration or
provision of any payments, benefits or
other rights to any Company Employee.
(g) Except as
set forth in Schedule 3.14(g), no Company
Plan is maintained outside the jurisdiction
of the United States, or covers any
employee residing or working outside the
United States.
(h) Except as
set forth in Schedule 3.14(h) no consultant
has been engaged by any Company to whom
annual payments could reasonably be
expected to exceed US$75,000 in the
aggregate. To the Knowledge of Seller, (i)
no consultancy arrangement, if any, between
any of the Companies, on the one
hand, and any Person, on the other hand,
who is not employed by any of the
Companies will be deemed to be, under any
Law, an employment agreement between
any of the Companies, on the one hand, and
the contractor or consultant, on the
other hand, and (ii) no contractor or
consultant has been determined, under any
Law, to have an employee status or request
to be recognized as an employee of
any of the Companies, in case of each of
clause(i) or (ii) above except as would
not reasonably be expected to result in a
Company Material Adverse Effect.
(i) Except as
otherwise provided in the agreements listed
in Schedule 3.14(i), the written contracts
of employment of the Company
Employees may be terminated by the employer
without damages or compensation
(other than that required by Law) by the
giving of not more than one month's
notice at any time.
(j) Except as
set forth in Schedule 3.14(j), each of
Seller and the Companies has, to the
Knowledge of Seller, complied in all
material respects with all employment
related Laws; provided, however, that the
representation set forth in this Section
3.14(j) is not intended to refer to the
matters listed in Section 3.10(d) or (e),
which are addressed solely in such
Section.
(k) Except as
set forth in Schedule 3.14(k)(i), no
employee of any Company is on leave of
absence, including, without limitation,
short- or long-term disability. Schedule
3.14(k)(ii) sets out a complete list of
the employees of each Company as of
February 1, 2004.
(l) All of the
Former Shoshone Employees have retired,
are terminated from service or are on
long-term disability.
3.15
Labor and Employee Relations. Except as set forth in
Schedule 3.15 or as otherwise permitted
pursuant to this Agreement, (i) none of
the Companies is a party to any written
collective bargaining agreement in
respect of the Company Employees (except as
set forth on Schedule 3.17(a)(xv))
and no such agreement is being negotiated
by any of the Companies, (ii) there is
no unfair labor practice charge or
comparable or analogous complaint pending
before any Governmental Authority or, to
the Knowledge of Seller, threatened
against any Company, (iii) there is no
written grievance, order, dispute,
arbitration hearing, or arbitration award
pending or, to the Knowledge of
Seller, threatened against any Company,
(iv) none of the
27
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Companies is in breach of any order by a
Governmental Authority relating to the
Company Employees, (v) within the past
year, there has been no labor strike,
slowdown, work stoppage, or lockout in
effect, or, to the Knowledge of Seller,
threatened against or otherwise affecting
any Company or the Company Employees
at any of their respective mines, (vi) none
of the Companies is a party to, or
otherwise bound by, any consent decree,
order, award with, or citation by, any
Governmental Authority relating to
employees or employment practices, (vii) each
of the Companies is in compliance with its
material obligations pursuant to the
Worker Adjustment and Retraining
Notification Act of 1988, (viii) there is no
actual or, to the Knowledge of Seller,
alleged breach of the material terms of
any contractual obligations governing the
employment of the Company Employees
which would reasonably be likely to lead to
the interference in any material
respect with the conduct of the business of
any of the Companies as currently
conducted, and (ix) to the Knowledge of
Seller, as of the date hereof, there is
no formal legal proceeding (for example,
petition for certification of
representation) to organize Company
Employees which is pending or, to the
Knowledge of Seller, threatened.
3.16
Intellectual Property. Except (a) as set forth in
Schedule 3.16, or (b) as would not
interfere in any material respect with the
conduct of the business of any of the
Companies as curr
