3 EXHIBIT C Highland APA Case 15-32450-KLP Doc 730-1 Filed 08/03/15 Entered 08/03/15 23:31 ...

188 Pages·2015·9.67 MB·English

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EXHIBIT C

Highland APA
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ASSET PURCHASE AGREEMENT
by and among
Highland Mining Company, LLC,
as Seller,
and
Prairie Mining Company, LLC,
as Buyer,
dated December 31, 2014
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS .................................................................................................. 1
Section 1.01 Defined Terms ............................................................................................ 1
Section 1.02 Rules of Construction ................................................................................. 1
ARTICLE II PURCHASE AND SALE OF PURCHASED ASSETS; ALLOCATION OF
LIABILITIES .................................................................................................... 2
Section 2.01 Purchased Assets ......................................................................................... 2
Section 2.02 Excluded Assets .......................................................................................... 2
Section 2.03 Assumed Liabilities; Retained Liabilities ................................................... 3
ARTICLE III PURCHASE PRICE AND CLOSING ............................................................. 5
Section 3.01 Purchase Price ............................................................................................. 5
Section 3.02 Time and Place of Closings ........................................................................ 5
Section 3.03 Ancillary Agreements ....................... ~ ......................................................... 5
Section 3. 04 Deliveries by Seller ..................................................................................... 5
Section 3.05 Deliveries by Buyer ...................... ;. ............................................................ 6
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER ........................... 7
Section 4.01 Organization and Authority of Seller .......................................................... 7
Section 4.02 No Breach; Approvals ................................................................................. 7
Section 4.03 Real Property Contracts .............................................................................. 7
Section 4.04 Permits ........................................................ :. .............................................. 8
Section 4.05 Taxes ........................................................................................................... 8
Section 4.06 Employee Benefits ...................................................................................... 8
Section 4.07 Labor ........................................................................................................... 9
Section 4.08 Rights in Properties; Liens ........................................................................ 10
Section 4.09 Facilities and Fixtures ............................................................................... 11
Section 4.10 Environmental Matters ............................................................................... 12
Section 4.11 Compliance with Law ............................................................................... 12
Section 4.12 Proceedings and Judgments ...................................................................... 13
Section 4.13 Absence of Certain Changes ..................................................................... 13
Section 4.14 No Undisclosed Relationship .................................................................... 13
Section 4.15 Intellectual Property .................................................................................. 13
Section 4.16 No Brokers ................................................................................................ 13
Section 4.17 Completeness of Statement; Effect of Representations and Warranties ... 13
Section 4.18 Disclaimer ................................................................................................. 13
ARTICLEV REPRESENTATIONS AND WARRANTIES OF BUYER .......................... 14
Section 5.01 Organization and Authority of Buyer ....................................................... 14
Section 5.02 No Breach; Approvals ............................................................................... 14
Section 5. 03 Proceedings and Judgments ...................................................................... 14
Section 5.04 No Brokers ........................................................· . ....................................... 14
Section 5.05 Buyer's Investigation ................................................................................ 15
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ARTICLE VI ADDITIONAL covenants of the parties ......................................................... 15
Section 6.01 Announcements ......................................................................................... 15
Section 6.02 Transition Period ....................................................................................... 15
Section 6.03 Transfer of Applicable Contracts .............................................................. 15
Section 6.04 Permits ...................................................................................................... 16
Section 6.05 Government Authority Reviews and Approvals ....................................... 16
Section 6.06 Commercially Reasonable Efforts ............................................................ 17
Section 6.07 Mine Closure ............................................................................................. 17
Section 6.08 Insurance ................................................................................................... 17
Section 6.09 Assumption of Coal Wage Agreement ..................................................... 17
Section 6.10 Consents .................................................................................................... 17
Section 6.11 Inspection .................................................................................................. 17
ARTICLE VII TAXES ............................................................................................................ 17
Section 7.01 Transfer Taxes .......................................................................................... 17
Section 7.02 Tax Apportionment ................................................................................... 18
Section 7.03 Refunds ..................................................................................................... 19
Section 7.04 Cooperation ............................................................................................... 20
Section 7.05 Tax Returns ............................................................................................... 20
ARTICLE VIII CONDITIONS ................................................................................................ 20
Section 8.01 Conditions to Each Party's Obligations under this Agreement ................ 20
Section 8.02 Conditions to Obligations of the Seller under this Agreement ................. 21
Section 8.03 Conditions to Obligations ofthe Buyer under this Agreement. ................ 21
ARTICLE IX TERMINATION ............................................................................................. 22
Section 9.01 Termination by Mutual Consent ............................................................... 22
Section 9.02 Termination by the Seller or the Buyer Prior to Closing .......................... 22
Section 9.03 Termination by the Seller Prior to Closing ............................................... 22
Section 9.04 Termination by the Buyer Prior to the Closing ......................................... 22
Section 9.05 Effect of Termination ................................................................................ 22
ARTICLE X INDEMNIFICATION ..................................................................................... 23
Section 10.01 Survival ..................................................................................................... 23
Section I 0.02 Indemnification ........................................................................................ 23
Section I 0.03 Procedures ................................................................................................. 24
Section I 0.04 Limitations on Indemnification Obligations ............................................. 25
Section I 0.05 Exclusive Remedy .................................................................................... 26
Section 10.06 Consequential and Punitive Damages ....................................................... 26
ARTICLE XI GENERAL TERMS ........................................................................................ 26
Section II.O I Costs and Expenses ................................................................................... 26
Section II.02 Further Assurances .................................................................................... 26
Section II.03 Notices ...................................................................................................... 26
Section II.04 Assignment ............................................................................................... 27
Section II.05 Governing Law; Consent to Jurisdiction; Equitable Remedies; Waiver of
Jury Trial ............................................................................................. 27
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Section 11.06 Entire Agreement and Modifications ........................................................ 28
Section 11.07 Parties in Interest. ...................................................................................... 28
Section 11.08 Severability ............................................................................................... 29
Section 11.09 Counterparts .............................................................................................. 29
Section 11.10 Confidentiality ............................................................................... , .......... 29
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SCHEDULES
Schedule l.Ol(A) Debt Encumbrances
Schedule 1.01(B) Permitted Encumbranc.es
Schedule 2.01(a) Owned Real Property
Schedule 2.01(b) Lease Agreements
Schedule 2.01(c) Permits
Schedule 2.01(d) Real Property Contracts
Schedule 2.01(e) Facilities and Fixtures
Schedule 2.02(g) Excluded Equipment, Fixtures and Infrastructure
Schedule 4.02 Consents
Schedule 4.04(a) Outstanding Notices of Violation
Schedule 4.04(c) All Permit Collateral
Schedule 4.06(a) Employee Benefit Plans
Schedule 4.07 (a) Coal Wage Agreement and Other Collective Bargaining
Agreements
Schedule 4.07(d) Grievances & Labor Arbitrations
Schedule 4.07(g) Labor Proceedings
Schedule 4.08 Encumbrances
Schedule 4.09(b) Major Equipment
Schedule 4.11 Potential Pattern of Violations
Schedule 4.12 Proceedings & Judgments
Schedule 4.14 Undisclosed Relationship
Schedule 6.04 Replacement Bonds
Schedule 6.10 Required Consents
EXHIBITS
Exhibit A Defined Terms
Exhibit B Map of Highland Mine Area
Exhibit C Deed
ExhibitD Assignment and Assumption Agreement (Lease Agreements)
Exhibit E Assignment and Assumption Agreement (Applicable Contracts)
Exhibit F Assignment and Assumption Agreement (Permits)
Exhibit G Bill of Sale and Assignment and Assumption Agreement
Exhibit H Opinion of Counsel to the Seller
Exhibit I Opinion of Counsel to the Buyer
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ASSET PURCHASE AGREEMENT
TIDS ASSET PURCHASE AGREEMENT (this "Agreement"), dated as ofDecember
31, 2014, by and among IDGHLAND MINING COMPANY, LLC, a Delaware limited
liability company ("Seller"), a wholly owned subsidiary of Patriot Coal Corporation ("Patriot"),
and PRAIRIE MINING COMPANY, LLC, a Delaware Limited Liability Company
("Buyer"), a wholly owned subsidiary of Prairie Investment Holdings, LLC.
RECITALS
1. Seller owns coal fee interests and coal lease interests in certain properties located in
western Kentucky, associated mining rights, surface property, above-ground facilities and
permits as more fully described herein.
2. Seller desires to sell and Buyer desires to purchase certain of the coal fee interests and
coal lease interests in certain properties located in western Kentucky, associated mining rights,
surface property, above-ground facilities and permits on the terms and subject to the conditions
set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises set forth in this
Agreement, the Parties hereby agree as follows with the intent to be legally bound:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms. As used in this Agreement, the capitalized terms shall
have the meanings set forth on Exhibit A. If a capitalized term is not set forth on Exhibit A but
is defined in this Agreement, it shall have the meaning as defined in this Agreement.
Section 1.02 Ru1es of Construction. For the purposes of this Agreement, unless the
context otherwise requires:
(a) General. In any provision, (i) an accounting term not otherwise defined
has the meaning assigned to it in accordance with generally accepted accounting principles in the
United States of America; (ii) words in the singular include the plural and words in the plural
include the singular; (iii) words in the mascu1ine include the feminine; (iv) any date specified for
any action that is not a Business Day means the first Business Day after such date; and (v) a
reference to a corporation, limited liability company or partnership includes its successors and
permitted assigns.
(b) Articles and Sections. . References to Articles and Sections without
identifying a specific agreement shall be deemed references to Articles and Sections in this
Agreement. The captions and headings of Articles and Sections are for convenience of reference
only and shall not be used in the interpretation of this Agreement.
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(c) Exhibits and Schedules. References in this Agreement to Exhibits and
Schedules mean the Exhibits and Schedules attached hereto, which are incorporated by
reference, unless otherwise expressly stated.
(d) Agreements and Instruments. References to this Agreement or any other
agreement or instrument shall be deemed references to such agreement or instrument as it may
from time to time be amended, and shall be deemed to include reference to any schedules,
exhibits or other materials incorporated into such agreement or instrument.
ARTICLE II
PURCHASE AND SALE OF PURCHASED ASSETS; ALLOCATION OF LIABILITIES
Section 2.01 Purchased Assets. Subject to the terms and conditions of this Agreement,
at the Closing, Seller will sell, grant, convey, transfer and assign to Buyer, and Buyer will
purchase, acquire and receive all right, title and interest of Seller in and to the following assets
including closed former mining operations, free and clear of all Encumbrances (except for the
Permitted Encumbrances) (collectively the "Purchased Assets"):
(a) all of the No. 9 seam coal interests owned by Seller as of Closing within the
boundaries of the Highland Mine area as depicted on Exhibit B (the "Highland Mine Area"),
and all ofthe surface property owned by Seller within the boundaries of the Highland Mine Area
(collectively, the "Owned Real Property"), in and under the instruments identified on Schedule
2.01(a);
(b) all of the No. 9 seam coal interests and surface interests controlled by Seller as of
Closing within the boundaries of the Highland Mine Area in and under the leases and subleases
(the "Leased Real Property") identified on Schedule 2.01(b) (the "Lease Agreements");
(c) the Permits identified on Schedule 2.01(c) (the "Permits");
(d) the Contracts incident to or affecting the Highland Mine Area that are
specifically described on Schedule 2.01(d) (the "Real Property Contracts");
(e) the above-ground facilities, equipment, and fixtures located at or within the
boundaries of the Highland Mine Area (the "Facilities and Fixtures"), including the above
ground facilities, equipment, and fixtures identified on Schedule 2.01(e); and
(f) copies of all Records related to or associated with the foregoing described
assets.
Section 2.02 Excluded Assets. Seller shall not sell, and Buyer shall not purchase,
acquire or accept from Seller, any assets not identified in Section 2.01 or, notwithstanding
anything to the contrary contained herein, any of the following assets or properties (the
"Excluded Assets"):
(a) Cash deposits associated with utility Contracts for electrical service and
similar arrangements;
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(b) Seller's cash deposits associated with reclamation bonds for the permits;
(c) The future income from overriding royalty agreements relative to the
owned and leased properties previously transferred or conveyed by Seller and/or its Affiliates;
(d) All real and personal property and other assets owned by Seller that are
being sold pursuant to other asset purchase agreements of even date herewith;
(e) All of Seller's corporate, coal sales, personnel and accounting records and
information technology systems and related equipment; and
(f) All Contracts not specifically listed on the Schedules referenced in Section
2.01(d); and
(g) The equipment, fixtures and mine infrastructure identified on Schedule
2.02(g),
Section 2.03 Assumed Liabilities; Retained Liabilities. Subject to the terms and
conditions of this Agreement, at the Closing, Buyer will contractually assume only the following
liabilities (the "Assumed Liabilities"):
(a) At the Closing, Buyer will assume:
(i) All Liabilities under the Applicable Contracts, including any extension or
amendment thereto, to the extent accruing or arising after the Closing Date, except to the
extent based upon a breach by Seller ofthe terms thereof prior to the Closing Date;
(ii) All Liabilities relating to or arising from the ownership, operation or use
of the Purchased Assets that accrue or arise after the Closing Date, but excluding the
Retained Liabilities;
(iii) All reclamation and other Liabilities arising under and pursuant to the
Permits; and
(iv) Subject to the Retained Liabilities, Buyer will assume the obligations of a
successor under the Coal Wage Agreement, if any, as applicable to the Purchased Assets.
(b) Buyer will not assume, and Seller shall remain liable with respect to, all other
Liabilities of Seller ("Retained Liabilities"), including, without limitation:
(i) Liabilities for subsidence claims arising from mining operations conducted
prior to the Closing Date;
(ii) Liabilities (including any post-Closing premium assessments for pre-
Closing periods) under applicable Workers' Compensation Acts and the federal black
lung Laws arising from or based upon Seller's employment of the Employees;
(iii) Liabilities arising from the Employee Plans, including all Liabilities
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ansmg from or related to benefits due from, contributions to, the termination of,
withdrawal from, or cessation of Seller's participation in, any Employee Plan, and all
Liabilities of Seller's ERISA Affiliates for benefits under, contributions to, the
termination of, and withdrawal from an Employee Plan or another pension plan or
multiemployer plan (as those terms are defined in Sections 3(2) and (37) of ERISA);
provided, however, that Seller shall not be responsible for the Liabilities, if any, that
Buyer incurs based on its own participation in, contributions to, or withdrawal from the
United Mine Workers of America 1974 Pension Plan after the Closing Date;
(iv) Liabilities for salaries, wages, bonuses, overtime payments, vacation days,
personal days, and similar forms of leave or compensation for or based upon Seller's
employment of the Employees;
(v) Liabilities under or based upon the WARN Act arising out of Seller's acts
or omissions prior to the Closing Date;
(vi) Liabilities arising out of compliance with Laws relating to Seller's
employment of the Employees and applicants for employment, including, but not limited
to, equal employment opportunity, discrimination, harassment, leaves of absence, returns
to work, wage payment, overtime compensation, immigration, and labor relations;
(vii) Liabilities for non-pension retiree benefits, including retiree medical
benefits, for the Employees (and their eligible dependents and beneficiaries);
(viii) Liabilities for unpaid Taxes with respect to any Tax year or portion thereof
ending on or before the Closing Date or for any Tax year beginning before and ending
after the Closing Date to the extent allocable to the portion of such period beginning
before and ending on the Closing Date;
(ix) Liabilities arising under or based upon the Coal Wage Agreement for or
with respect to:
(A) grievances that were filed prior to the Closing Date or, if filed after
the Closing Date, relate to events that occurred or failed to occur prior to the
Closing Date, including, but not limited to, the grievances identified on Schedule
4.07(d);
(B) Seller's employment, layoff, and termination of the Employees;
(C) the Covered Retirees (as defined in Article XX, Section (a)(4) of
the Coal Wage Agreement); and
(D) the Patriot Retirees VEBA, excluding royalties on coal produced
from the Purchased Assets after the Closing Date, which royalties, if any, Buyer
will pay to Patriot.
(x) Liabilities arising under or based upon the Coal Act including, but not
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