EXHIBIT 10.1

ASSET PURCHASE AGREEMENT

by and among

Ranger Energy Investments, LLC

National Coal Corporation,

a Tennessee Corporation

National Coal Corp.,

a Florida Corporation

Dated April 8, 2010

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ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (“Agreement”) is dated April 8, 2010, by and among
Ranger Energy Investments, LLC, a Delaware limited liability company (“Buyer”);
National Coal Corporation, a Tennessee corporation (“Seller”); National Coal
Corp., a Florida corporation (“Shareholder”).

RECITALS

A. Shareholder owns all of the shares of the common stock, no par value, of
Seller.

B. The Seller, among other things, is engaged in the business of mining coal and
activities directly or indirectly relating thereto at Seller’s Baldwin
operations located in Campbell County and Anderson County, Tennessee.

C. The Seller desires to sell to the Buyer all right, title and interest of the
Seller in and to the Assets (defined below), for the consideration and upon the
terms and conditions hereinafter set forth.

D. The Buyer desires to purchase the Assets and assume the Assumed Liabilities
(defined below) from the Seller, and the Seller desires to sell, convey, assign
and transfer to the Buyer, the Assets together with the Assumed Liabilities, all
in the manner and subject to the terms and conditions set forth in this
Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants and agreements set forth herein and of good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties, intending to be legally bound, agree as follows:

Article 1 Definitions and Usage

1.1 Definitions.

For purposes of this Agreement, the following terms and variations thereof have
the meanings specified or referred to in this Section 1.1:

“Appurtenances”—the privileges, rights, easements, hereditaments, surface rights
and appurtenances belonging to or for the benefit of the Land (specifically
excluding any such appurtenances related to the real property associated with
the Rail Line), including all easements appurtenant to and for the benefit of
any Land (a “Dominant Parcel”) for, and as the primary means of access between,
the Dominant Parcel and a public way, or for any other use upon which lawful use
of the Dominant Parcel for the purposes for which it is presently being used is
dependent, and all rights existing in and to any streets, alleys, passages and
other rights-of-way included thereon or adjacent thereto (before or after
vacation thereof) and vaults beneath any such streets. Appurtenances shall be
deemed to include an easement from the surface owner

 

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above the Mineral Rights, in form and substance satisfactory to Buyer, and the
buy back provisions set forth in Exhibit C to that certain Limited Warranty
Deed, dated July 21, 1994, between Tennessee Mining, Inc. and Champion
International Corporation. These rights are defined herein as the Coal Mineral
Rights.

“Assets”—as defined in Section 2.1.

“Assignment and Assumption Agreement”—as defined in Section 2.7(a)(ii).

“Assignment of Permits Agreement” –as defined in Section 2.7(a)(iii).

“Assumed Liabilities”—as defined in Section 2.4.

“Best Efforts”—the efforts that a prudent Person desirous of achieving a result
would use in similar circumstances to achieve that result as expeditiously as
possible without the expenditure of money or the incurrence or continuance of
any liability not agreed to by such Person in its sole discretion.

“Bill of Sale”—as defined in Section 2.7(a)(i).

“Board”—means the board of directors of Shareholder.

“Breach”—any breach of, or any material inaccuracy in, any representation or
warranty as of the Closing or any breach of, or failure to perform or comply
with, any covenant or obligation, in or of this Agreement or any other Contract,
or any event which with the passing of time or the giving of notice, or both,
would constitute such a breach, inaccuracy or failure.

“Business Day”—any day other than (a) Saturday or Sunday or (b) any other day on
which banks in Tennessee are permitted or required to be closed.

“Buyer”—as defined in the first paragraph of this Agreement.

“Buyer Indemnified Persons”—as defined in Section 11.2.

“Centaurus”— Centaurus Energy Master Fund, LP.

“Closing”—as defined in Section 2.6.

“Closing Date”—the date on which the Closing actually takes place.

“Coal Inventories” —as defined in Section 2.1(h).

“Coal Mineral Rights”—as defined in Section 2.7(a)(v).

“Code”—the Internal Revenue Code of 1986, as amended.

“Consent”—any approval, consent, ratification, waiver or other authorization.

 

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“Contemplated Transactions”—all of the transactions contemplated by any of the
Transaction Documents.

“Contract”—any agreement, contract, lease, consensual obligation, promise or
undertaking (whether written or oral and whether express or implied), whether or
not legally binding.

“Credit Agreement” – means that certain Revolving Credit Agreement, dated
April 9, 2009, among Shareholder, Seller and Centaurus, by assignment, and all
documents related thereto or consummated contemporaneously therewith.

“Damages”—as defined in Section 11.2.

“Disclosure Letter”—the disclosure letter delivered by Seller and Shareholder to
Buyer concurrently with the execution and delivery of this Agreement.

“Encumbrance”—any charge, claim, condition, equitable interest, lien, option,
pledge, security interest, mortgage, right of way, easement, encroachment,
servitude, right of first option, right of first refusal or similar restriction,
including any restriction on use, voting (in the case of any security or equity
interest), transfer, receipt of income or exercise of any other attribute of
ownership.

“Environment”—soil, land surface or subsurface strata, surface waters (including
navigable waters and ocean waters), groundwaters, drinking water supply, stream
sediments, ambient air (including indoor air), plant and animal life and any
other environmental medium or natural resource.

“Environmental, Health and Safety Liabilities”—any cost, damages, claim,
judgment, expense, fine, penalty, loss, liability, obligation or other
responsibility arising from or under any Environmental Law or Occupational
Safety and Health Law, including those consisting of or relating to:

(a) any environmental, health or safety matter or condition (including on-site
or off-site contamination, occupational safety and health and regulation of any
chemical substance or product);

(b) any fine, penalty, judgment, award, settlement, legal or administrative
proceeding, damages, loss, claim, demand or response, remedial or inspection
cost or expense arising under any Environmental Law or Occupational Safety and
Health Law;

(c) financial responsibility under any Environmental Law or Occupational Safety
and Health Law for cleanup costs or corrective action, including any cleanup,
removal, containment or other remediation or response actions (“Cleanup”)
required by any Environmental Law or Occupational Safety and Health Law (whether
or not such Cleanup has been required or requested by any Governmental Body or
any other Person) and for any natural resource damages; or

 

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(d) any other compliance, corrective or remedial measure required under any
Environmental Law or Occupational Safety and Health Law.

The terms “removal,” “remedial” and “response action” include the types of
activities covered by the United States Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (CERCLA).

(e) “Environmental Law”—any Legal Requirement pertaining to the protection,
preservation or conservation of the Environment; the generation, use, storage,
transportation, disposal or Release of any Hazardous Material; or the protection
or preservation of public or employee health and safety, including but not
limited to the Surface Mining Control and Reclamation Act of 1977, as amended,
30 U.S.C. § 1201 et seq. (“SMCRA”), the Mine Safety and Health Act of 1977, as
amended, 30 U.S.C. § 801 et seq., the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. § 9601 et seq.
(“CERCLA”), the Resources Conservation and Recovery Act of 1976, as amended, 42
U.S.C. § 6901 et seq. (“RCRA”), the Emergency Planning and Community Right to
Know Act, 42 U.S.C. § 11001 et seq. (“EPCRA”), the Clean Air Act, as amended, 42
U.S.C. § 7401 et seq., the Federal Water Pollution Act, as amended, 33 U.S.C. §
1251 et seq., the Toxic Substances Control Act, as amended, 15 U.S.C. § 2601 et
seq. (“TSCA”), the Safe Drinking Water Act, as amended, 42 U.S.C. § 300F et
seq., the Hazardous Materials Transportation Act, 49 U.S.C. § 5101 et seq., and
any similar federal, state, or local laws, statutes, ordinances, common law,
rules, or regulations.

“Excluded Assets” – as defined in Section 2.2.

“Facilities”—the real property Improvements and fixtures currently owned or
operated by Seller in Anderson County, Tennessee including the Baldwin
Preparation Plant, the 5A mine operations (excluding real property interests
associated with the 5A mine, which will be included in the Mineral Lease) and
the Tangible Personal Property specified in Part 2.1(b) used or operated by
Seller at the respective locations of the Real Property specified in Part 3.4.

“Fee Simple Land” –as defined in the definition of “Land”.

“Georgia Power Contract” – means that certain Coal Purchase and Sale Agreement,
dated April 1, 2008, among Georgia Power Company, Seller, and Converse and
Company, Inc., as amended by that certain amendment, dated February 25, 2010.

“Governing Documents”—with respect to any particular entity, (a) if a
corporation, the articles or certificate of incorporation and the bylaws; (b) if
a general partnership, the partnership agreement and any statement of
partnership; (c) if a limited partnership, the limited partnership agreement and
the certificate of limited partnership; (d) if a limited liability company, the
articles of organization and operating agreement; (e) if another type of Person,
any other charter or similar document adopted or filed in connection with the
creation, formation or organization of the Person; (f) all equityholders’
agreements, voting agreements, voting trust agreements, joint venture
agreements, registration rights agreements or other agreements or documents
relating to the organization, management or operation of any Person or relating
to the rights, duties and obligations of the equityholders of any Person; and
(g) any amendment or supplement to any of the foregoing.

 

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“Governmental Authorization”—any Consent, license, registration or permit
issued, granted, given or otherwise made available by or under the authority of
any Governmental Body or pursuant to any Legal Requirement, including mining
permits, related to the Real Property and the business conducted thereon.

“Governmental Body”—any federal, state, local, municipal, or foreign court,
administrative agency, commission, governmental or regulatory authority of
competent jurisdiction, or any non-governmental self-regulatory agency,
commission or authority having (through authority granted by a governmental
agency or commission) the force of law.

“Hazardous Activity”—the distribution, generation, handling, importing,
management, manufacturing, processing, production, refinement, Release, storage,
transfer, transportation, treatment or use (including any withdrawal or other
use of groundwater) of any Hazardous Material in, on, under, about or from any
of the Facilities or any part thereof.

“Hazardous Material”—any substance or material that is designated or defined
(either by inclusion on a list or by reference to characteristics), or regulated
by any Governmental Body, as hazardous, toxic, or dangerous, or as a pollutant,
contaminant, or waste, under any Environmental Law, and including petroleum,
petroleum products, asbestos, asbestos-containing material, urea formaldehyde
and polychlorinated biphenyls other than materials used and stored in compliance
with Legal Requirements.

“Improvements”—all buildings, structures, fixtures, Facilities, refuse areas,
impoundments and other real estate improvements located on (i) the Land
specifically to exclude any such improvements located on the real property
constituting the Rail Line or (ii) otherwise included in the Assets, including
those under construction.

“Indemnified Person”—as defined in Section 11.4.

“Indemnifying Person”—as defined in Section 11.5.

“Indenture” means that certain Indenture of the Shareholder, dated as of
December 29, 2005, governing the terms of Shareholder’s 10.5% notes, due
December 2010.

“IRS”—the United States Internal Revenue Service and, to the extent relevant,
the United States Department of the Treasury.

“Knowledge”—an individual will be deemed to have Knowledge of a particular fact
or other matter if:

(a) that individual is actually aware of that fact or matter; or

(b) a prudent individual could be expected to discover or otherwise become aware
of that fact or matter in the course of conducting a reasonably comprehensive
investigation regarding the accuracy of any representation or warranty contained
in this Agreement.

 

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A Person (other than an individual) will be deemed to have Knowledge of a
particular fact or other matter if any individual who is serving as a director,
officer, partner, executor or trustee of that Person (or in any similar
capacity) has, or at any time had, Knowledge of that fact or other matter (as
set forth above).

“Land”—the parcels and tracts of land located in (1) Anderson County Tennessee
and (2) that certain portion of land in Campbell County, Tennessee on and under
which is located Mine 5A, in each case as set forth on Part 3.4 which shall
denote whether such Land (i) is held by Seller in fee simple (the “Fee Simple
Land”) or (ii) consists of mineral rights (the “Mineral Rights”). The Land shall
not include the rail line owned by NC Railroad, Inc. as described in that
certain deed from Tennessee Railway Company, dated February 27, 2006, and
recorded in Book 1506, Pages 461-468, in the Register’s Office for Anderson
County, Tennessee (the “Rail Line”).

“Legal Requirement”—any federal, state, local, municipal, foreign,
international, multinational or other constitution, law, ordinance, principle of
common law, code, regulation, rule, statute or treaty.

“Liability”—with respect to any Person, any liability or obligation of such
Person of any kind, character or description, whether known or unknown, absolute
or contingent, accrued or unaccrued, disputed or undisputed, liquidated or
unliquidated, secured or unsecured, joint or several, due or to become due,
vested or unvested, executory, determined, determinable or otherwise, and
whether or not the same is required to be accrued on the financial statements of
such Person.

“Material Consents”—as defined in Section 3.2(c).

“Mineral Lease” – That certain lease agreement, dated             , 2010,
between Seller and Buyer granting a leasehold interest in the Mineral Rights.

“Mineral Rights” –as defined in the definition of “Land”.

“Occupational Safety and Health Law”—any Legal Requirement designed to provide
safe and healthful working conditions and to reduce occupational safety and
health hazards, including the Occupational Safety and Health Act, the Mine
Safety and Health Act, and the rules and regulations promulgated thereunder, any
similar federal, state, or local law, rule, or regulation, and any program,
whether governmental or private (such as those promulgated or sponsored by
industry associations and insurance companies), designed to provide safe and
healthful working conditions.

“Order”—any order, injunction, judgment, decree, ruling, assessment or
arbitration award of any Governmental Body or arbitrator.

“Ordinary Course of Business”—an action taken by a Person will be deemed to have
been taken in the Ordinary Course of Business only if that action:

(a) is consistent in nature, scope and magnitude with the past practices of such
Person and is taken in the ordinary course of the normal, day-to-day operations
of such Person;

 

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(b) does not require authorization by the board of directors or owners of such
Person (or by any Person or group of Persons exercising similar authority) and
does not require any other separate or special authorization of any nature; and

(c) is similar in nature, scope and magnitude to actions customarily taken,
without any separate or special authorization, in the ordinary course of the
normal, day-to-day operations of other Persons that are in the same line of
business as such Person.

“Part”—a part or section of the Disclosure Letter.

“Payables” –as defined in Section 2.3.

“Permitted Encumbrances”— shall mean (i) liens for ad valorem taxes and other
inchoate statutory liens not yet delinquent (ii) private, public and utility
easements, rights of way and roads and highways, encroachments, restrictions,
conditions and other similar encumbrances incurred or suffered in the ordinary
course of the coal mining business, which do not materially impair extraction of
coal, (iii) Governmental Authorizations, (iv) the rights of the owners of
natural gas or minerals other than coal in the Real Property; and (iv) the liens
arising under any surety agreement of any of Seller or Shareholder in connection
with any of the permits or bonds described on Part 3.5.

“Person”—an individual, partnership, corporation, business trust, limited
liability company, limited liability partnership, joint stock company, trust,
unincorporated association, joint venture or other entity or a Governmental
Body.

“Proceeding”—any action, arbitration, audit, hearing, investigation, litigation
or suit (whether civil, criminal, administrative, judicial or investigative,
whether formal or informal, whether public or private) commenced, brought,
conducted or heard by or before, or otherwise involving, any Governmental Body
or arbitrator.

“Premium Coal Contract” –means that certain Purchase Order No. 34596 between
Buyer and Seller dated September 21, 2009.

“Property Tax Payment” – is that certain amount of money equal to the
non-delinquent real estate taxes accrued as of Closing (based on a 365 day
pro-ration between Seller and Buyer) for the 2010 taxable year based on the most
recent available tax duplicate. Any delinquent real estate taxes and any
penalties or interest thereon outstanding as of Closing will be satisfied by
Seller.

“Purchase Price”—as defined in Section 2.3.

“Real Property”—the Land (including the Fee Simple Land and the Mineral Rights),
the Improvements located on the Land, the Facilities and all Appurtenances
thereto, including the Coal Mineral Rights.

“Record”—information that is inscribed on a tangible medium or that is stored in
an electronic or other medium and is retrievable in perceivable form.

 

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“Related Person”—

With respect to a particular individual:

(a) each other member of such individual’s Family;

(b) any Person that is directly or indirectly controlled by any one or more
members of such individual’s Family;

(c) any Person in which members of such individual’s Family hold (individually
or in the aggregate) a Material Interest; and

(d) any Person with respect to which one or more members of such individual’s
Family serves as a director, officer, partner, executor or trustee (or in a
similar capacity).

With respect to a specified Person other than an individual:

(a) any Person that directly or indirectly controls, is directly or indirectly
controlled by or is directly or indirectly under common control with such
specified Person;

(b) any Person that holds a Material Interest in such specified Person;

(c) each Person that serves as a director, officer, partner, executor or trustee
of such specified Person (or in a similar capacity);

(d) any Person in which such specified Person holds a Material Interest; and

(e) any Person with respect to which such specified Person serves as a general
partner or a trustee (or in a similar capacity).

For purposes of this definition, (a) “control” (including “controlling,”
“controlled by,” and “under common control with”) means the possession, direct
or indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise, and shall be construed as such term is used in the rules
promulgated under the Securities Act; (b) the “Family” of an individual includes
(i) the individual, (ii) the individual’s spouse, (iii) any other natural person
who is related to the individual or the individual’s spouse within the second
degree and (iv) any other natural person who resides with such individual; and
(c) “Material Interest” means direct or indirect beneficial ownership (as
defined in Rule 13d-3 under the Exchange Act) of voting securities or other
voting interests representing at least ten percent (10%) of the outstanding
voting power of a Person or equity securities or other equity interests
representing at least ten percent (10%) of the outstanding equity securities or
equity interests in a Person.

“Release”—any release, spill, emission, leaking, pumping, pouring, dumping,
emptying, injection, deposit, disposal, discharge, dispersal, leaching or
migration on or into the Environment or into or out of any property, whether
intentional or unintentional.

 

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“Representative”—with respect to a particular Person, any director, officer,
manager, employee, agent, consultant, advisor, accountant, financial advisor,
legal counsel or other representative of that Person.

“Seller”—as defined in the first paragraph of this Agreement.

“Seller Contract” —means those Contracts described on Part 3.9(a).

“Seller Indemnified Persons”—as defined in Section 11.3.

“Shareholder”—as defined in the first paragraph of this Agreement.

“Tangible Personal Property”—all machinery, equipment, tools, furniture, office
equipment, computer hardware, supplies, materials, vehicles and other items of
tangible personal property of every kind (other than coal inventory) owned or
leased by Seller related to Seller’s Anderson County and Mine 5A operations
(including the Baldwin Preparation Plant), together with any express or implied
warranty by the manufacturers or seller or lessors of any item or component part
thereof and all maintenance records and other documents relating thereto and
along with any necessary software or other licenses needed to operate such
Tangible Personal Property.

“Tax”—any federal, state, local or non-U.S. income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium, property,
environmental (including taxes under Code § 59A), windfall profit, customs
duties, vehicle, airplane, boat, vessel or other title or registration, capital
stock, franchise, profits, employees’ income withholding, foreign or domestic
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, value added, alternative or
add-on minimum, estimated or other tax, fee, assessment, levy, tariff, charge or
duty of any kind whatsoever, whether computed on a separate or consolidated,
unitary or combined basis or in any other manner, and any interest, penalty,
addition or additional amount thereon imposed, assessed or collected by or under
the authority of any Governmental Body or payable under any tax-sharing
agreement or any other Contract, whether disputed or not and including any
obligation to indemnify or otherwise assume or succeed to the Tax liability of
any other Person.

“Third Party”—a Person that is not a party to this Agreement.

“Third-Party Claim”—any claim against any Indemnified Person by a Third Party,
whether or not involving a Proceeding.

“Transaction Documents” —means this Agreement and all exhibits and schedules
thereto and hereto and any other documents or agreements executed in connection
with the transactions contemplated hereunder.

“Trustee Documents”—means those certain certificates, opinions and consents
delivered to or by Wells Fargo National Bank, N.A., as trustee for the lenders
under the Indenture in connection with the Contemplated Transactions

 

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1.2 Usage.

(a) Interpretation. In this Agreement, unless a clear contrary intention
appears:

(i) the singular number includes the plural number and vice versa;

(ii) reference to any Person includes such Person’s successors and assigns but,
if applicable, only if such successors and assigns are not prohibited by this
Agreement, and reference to a Person in a particular capacity excludes such
Person in any other capacity or individually;

(iii) reference to any gender includes each other gender;

(iv) reference to any agreement, document or instrument means such agreement,
document or instrument as amended or modified and in effect from time to time in
accordance with the terms thereof;

(v) reference to any Legal Requirement means such Legal Requirement as amended,
modified, codified, replaced or reenacted, in whole or in part, and in effect
from time to time, including rules and regulations promulgated thereunder, and
reference to any section or other provision of any Legal Requirement means that
provision of such Legal Requirement from time to time in effect and constituting
the substantive amendment, modification, codification, replacement or
reenactment of such section or other provision;

(vi) “hereunder,” “hereof,” “hereto,” and words of similar import shall be
deemed references to this Agreement as a whole and not to any particular
Article, Section or other provision hereof;

(vii) “including” (and with correlative meaning “include”) means including
without limiting the generality of any description preceding such term;

(viii) “or” is used in the inclusive sense of “and/or”;

(ix) with respect to the determination of any period of time, “from” means “from
and including” and “to” means “to but excluding”; and

(x) references to documents, instruments or agreements shall be deemed to refer
as well to all addenda, exhibits, schedules or amendments thereto.

(b) Accounting Terms and Determinations. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with United States
generally accepted accounting principles applied on a consistent basis during
the periods involved.

(c) Legal Representation of the Parties. This Agreement was negotiated by the
parties with the benefit of legal representation, and any rule of construction
or interpretation otherwise requiring this Agreement to be construed or
interpreted against any party shall not apply to any construction or
interpretation hereof.

 

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Article 2 Sale and Transfer of Assets; Closing.

2.1 Assets To Be Sold.

Upon the terms and subject to the conditions set forth in this Agreement, at the
Closing Seller shall sell, convey, assign, transfer and deliver to Buyer, and
Buyer shall purchase and acquire from Seller, free and clear of any Encumbrances
other than Permitted Encumbrances, all of Seller’s right, title and interest in
and to the following Assets:

(a) the Real Property constituting the Baldwin Preparation Plant as shown on
Exhibit 2.1(a);

(b) the Tangible Personal Property, including that described in Part 2.1(b);

(c) the Seller Contracts listed in Part 3.9(a);

(d) all Governmental Authorizations and all pending applications therefor or
renewals thereof listed in Part 3.7(b); and

(e) certain data and Records related solely to the Assets, including research
and development reports and Records, production reports and Records, service and
warranty Records, equipment logs, operating guides and manuals, studies,
reports, and other similar documents and Records;

(f) all insurance benefits, including rights and proceeds, arising from or
relating to the Assets or the Assumed Liabilities prior to the Effective Time,
unless expended in accordance with this Agreement;

(g) all claims of Seller against third parties to the extent relating to the
Assets, whether choate or inchoate, known or unknown, contingent or
noncontingent, including all such claims listed in Part 2.1(g);

(h) all extracted, unsold coal inventory, located at the Baldwin Preparation
Plant, including stockpiled coal inventory, existing as of the Closing,
including coal delivered thereto pursuant to the Premium Coal Contract but
excluding all other coal delivered thereto by Premium (the “Coal Inventories”);
and

(i) a leasehold interest in the Mineral Rights pursuant to the terms of the
Mineral Lease, in form and substance substantially identical to Exhibit 2.1(i).

All of the property and assets to be transferred to Buyer hereunder are herein
referred to collectively as the “Assets.”

Notwithstanding the foregoing, the transfer of the Assets pursuant to this
Agreement shall not include the assumption of any Liability related to the
Assets unless Buyer expressly assumes that Liability pursuant to Section 2.4.

 

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2.2 Excluded Assets.

Notwithstanding anything to the contrary contained in Section 2.1 or elsewhere
in this Agreement, the following assets of Seller (collectively, the “Excluded
Assets”) are not part of the sale and purchase contemplated hereunder, are
excluded from the Assets and shall remain the property of Seller after the
Closing:

(a) all minute books, stock Records and corporate seals;

(b) the shares of capital stock of Seller;

(c) all insurance policies and any rights or claims thereunder (except to the
extent specified in Section 2.1(f));

(d) all personnel Records and other Records that Seller is required by law to
retain in its possession;

(e) all claims for refund of Taxes and other governmental charges of whatever
nature;

(f) any and all prepaid items, deposits, and retainers, excepting prepaid
royalties;

(g) all performance bonds for reclamation or otherwise, surety bonds or escrow
agreements and any payment or prepayments made with respect to, or certificates
of deposit or other sums or amounts or assets posted by the Seller to secure any
of the foregoing for reclamation or otherwise;

(h) all deposits and bonds;

(i) the Rail Line;

(j) all surface rights owned by Seller in Anderson County other than the Fee
Simple Land;

(k) all rights of Seller under this Agreement, the Bill of Sale, the Assignment
and Assumption Agreement and the Assignment of Permits;

(l) intentionally deleted; and

(m) the property and assets expressly designated in Part 2.2(m).

2.3 Consideration.

(a) The consideration for the Assets (the “Purchase Price”) will be (a) an
amount in cash equal to the difference between Ten Million Dollars
($10,000,000.00) and the Payables; (b) assumption by Buyer of trade payables
(the “Payables”) owed by Seller to Premium as of the Closing, which amount shall
be reasonably determined by Premium on the Closing Date; (c) payment to Seller
from Buyer of $3.00 per ton for each ton of coal purchased from Buyer by Georgia
Power under the Georgia Power Contract to be paid in accordance with

 

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paragraph (b) below; and; (d) an amount in cash equal to $55 per ton of raw Coal
Inventories plus $60 per ton of clean Coal Inventories with the amount of each
to be determined by Buyer and Seller, jointly, or by use of a qualified surveyor
and engineer, if the parties can not agree, with the cost for such experts to be
split by the parties.

(b) Georgia Power Contract Override.

(i) Overriding Royalty. Buyer agrees to pay to Seller an overriding royalty of
Three Dollars ($3.00) for each ton of two thousand (2,000) pounds of coal
(collectively, the “Coal”) which is paid for by Georgia Power Company under the
Georgia Power Contract (the “Overriding Royalty”). The Overriding Royalty shall
be based upon the tons of coal purchased and paid for by Georgia Power Company
in accordance with the terms of the Georgia Power Contract. On or before the
twentieth (20th) day of the following calendar month, Buyer shall deliver to
Seller a statement or report showing the quantity of Coal paid for by Georgia
Power Company during the preceding month pursuant to the Georgia Power Contract,
together with payment for the amount of Overriding Royalty then due. To the
extent that the Georgia Power Contract has not been assigned to Buyer, Seller
shall have the right to obtain the Overriding Royalty from Converse and Company,
Inc. directly, subject to Section 10.7. Prior to such assignment, Buyer shall
have no obligation to pay the Overriding Royalty and Seller shall look solely to
Converse and Company, Inc. for payment of an amount equal to the Overriding
Royalty, which Buyer shall not contest, subject to the terms of Section 10.7.

(ii) Final Overriding Royalty. If the Georgia Power Contract is terminated,
surrendered, cancelled or rescinded, due to breach by Buyer (not as the result
of prior breaches by Seller) or other affirmative action of Buyer, prior to the
expiration of its term or prior to supplying the quantity of coal required to be
supplied by the agreement as of the Closing Date (the “Required Quantity”, which
such amount may not be reduced by any amendment or waiver of any provision of
the Georgia Power Contract), Buyer shall pay to Seller the Overriding Royalty on
the difference between the amount of Coal actually supplied under the Georgia
Power Contract and the Required Quantity (“Final Overriding Royalty”). Buyer
shall pay the Final Overriding Royalty within twenty (20) days of the date of
such termination, surrender, cancellation, rescission or modification of the
Georgia Power Contract.

(iii) Right of Audit. Seller and its agents shall have the right, upon
reasonable written notice, to audit the books and records of Buyer related to
the Georgia Power Contract to determine compliance with the terms of this
Agreement. Buyer shall make available such books and records at all reasonable
times during regular business hours.

(iv) Interest. Buyer shall pay to Seller interest at the rate of twelve
(12%) percent per annum for any amounts not paid when due under this paragraph
(b) until payment thereof. Interest on any late payment shall be due and payable
ten (10) days from the date of any statement or invoice therefore. The rights
afforded to Seller in this paragraph (b) are in addition to any other rights or
remedies available at law or in equity.

2.4 Assumed Liabilities. On the Closing Date, Buyer shall assume and agree to
discharge only the following Liabilities of Seller (the “Assumed Liabilities”):

(i) all Liability under the Seller Contracts arising out of performance to be
completed after the Closing pursuant to the terms of the Seller Contracts,
excluding any such obligations arising or to be performed prior to the Closing
or arising from any Breach by Seller of any Seller Contract before the Closing;

 

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(ii) all Liability under the Governmental Authorizations; provided, however,
that the Seller and its Affiliates shall retain the Liability for any
violations, fines and penalties to the extent arising out of notices of
violation, notices of non-compliance or orders, in each case issued prior to the
Closing (subject to Buyer’s obligations pursuant to the Assignment of Permits);
and

(iii) any Liability of Seller described in Part 2.4(iii).

2.5 Allocation.

The Purchase Price (and all other capitalized costs) shall be allocated in
accordance with Exhibit 2.5. After the Closing, the parties shall make
consistent use of the allocation, fair market value and useful lives specified
in Exhibit 2.5 for all Tax purposes and in all filings, declarations and reports
with the IRS and any other Governmental Body in respect thereof, including the
reports required to be filed under Section 1060 of the Code. Buyer shall prepare
and deliver IRS Form 8594 to Seller within forty-five (45) days after the
Closing Date to be filed with the IRS. In any Proceeding related to the
determination of any Tax, neither Buyer, Seller, nor Shareholder shall contend
or represent that such allocation is not a correct allocation.

2.6 Closing.

The purchase and sale provided for in this Agreement (the “Closing”) shall take
place at the offices of Buyer’s counsel at 250 West Main Street, Lexington,
Kentucky 40507 as soon as practicable after satisfaction or waiver of all
conditions precedent listed in Article 7 and Article 8, unless Buyer and Seller
otherwise agree, but in no event later than April 15, 2010. Subject to the
provisions of Article 9, failure to consummate the purchase and sale provided
for in this Agreement on the date and time and at the place determined pursuant
to this Section 2.6 will not result in the termination of this Agreement and
will not relieve any party of any obligation under this Agreement, including the
obligation to consummate the sale as set forth above. In such a situation, the
Closing will occur as soon as practicable, subject to Article 9.

2.7 Closing Obligations.

In addition to any other documents to be delivered under other provisions of
this Agreement, at the Closing:

(a) Seller and Shareholder, as the case may be, shall deliver to Buyer together
with funds sufficient to pay all Taxes, if any, imposed on Seller in connection
with the transfer of the Real Property and the other Assets:

(i) a bill of sale for all of the Assets that are Tangible Personal Property in
the form of Exhibit 2.7(a)(i) (the “Bill of Sale”) executed by Seller;

 

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(ii) an assignment of all of the Assets that are intangible personal property in
the form of Exhibit (ii), which assignment shall also contain Buyer’s
undertaking and assumption of the Assumed Liabilities (the “Assignment and
Assumption Agreement”) executed by Seller;

(iii) an Assignment of Permits Agreement in the form attached hereto as Exhibit
2.7(a)(iii) (the “Assignment of Permits Agreement”) executed by Seller together
with any payment due thereunder;

(iv) for each interest in Real Property identified on Part 3.4, other than the
Mineral Rights, a recordable special warranty deed, each in form and substance
satisfactory to Buyer and its counsel and executed by Seller and an executed
copy of the Mineral Lease in form and substance satisfactory to Buyer and an
executed, recordable short form of the Mineral Lease;

(v) a Partial Assignment of Coal Mineral Rights which shall include assignment
of all repurchase rights held by Buyer regarding the surface over the Real
Property and a prospective assignment of an easement to be obtained from the
surface owner of the Real Property (collectively, and as further described in
the definition of “Appurtenances”, the “Coal Mineral Rights”) in the form
attached hereto as Exhibit 2.7(a)(v) (the “Assignment of Coal Mineral Rights”)
executed by Seller;

(vi) such other deeds, bills of sale, assignments, certificates of title,
documents and other instruments of transfer and conveyance as may reasonably be
requested by Buyer, each in form and substance satisfactory to Buyer and its
legal counsel and Seller and its legal counsel and executed by Seller,

(vii) intentionally deleted;

(viii) the Trustee Documents;

(ix) a certificate executed by Seller and Shareholder as to the accuracy of
their representations and warranties, as of the Closing in accordance with
Section 7.1 and as to their compliance with and performance of their covenants
and obligations to be performed or complied with at or before the Closing;

(x) a certificate of the Secretary of Seller certifying, as complete and
accurate as of the Closing, attached copies of the Governing Documents of
Seller, certifying and attaching all requisite resolutions or actions of
Seller’s board of directors, the Board and Shareholder approving the execution
and delivery of this Agreement and the consummation of the Contemplated
Transactions and certifying to the incumbency and signatures of the officers of
Seller executing this Agreement and any other document relating to the
Contemplated Transactions;

(xi) mortgage, lien releases and consents to lease and subordination,
non-disturbance and attornment agreements, executed by the necessary parties,
necessary for the conveyance of the Assets and execution of the Mineral Lease
free and clear of Encumbrances; and

 

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(xii) an assignment of the Railroad Transportation Contract between Seller and
R. J. Corman Railroad in a form approved by Buyer and a Track Use Agreement
between Seller and Buyer (the “Track Use Agreement”) in a form approved by
Buyer, each executed by Seller.

(b) Buyer shall deliver to Seller and Shareholder, as the case may be:

(i) an amount in cash equal to the difference between (a) Ten Million Dollars
($10,000,000.00) and (b) the Payables plus payment for the Coal Inventories as
agreed to by the parties or as determined by the surveyor and engineer, by wire
transfer pursuant to a funds flow memorandum agreed upon by Buyer and Seller
prior to the Closing Date;

(ii) an assumption of the Payables and release by Premium of such Payables with
respect to Seller and termination of the Premium Coal Contract in the form
attached hereto as Exhibit 2.7(b)(ii);

(iii) the Assignment and Assumption Agreement executed by Buyer;

(iv) the Assignment of Permits Agreement executed by Buyer;

(v) the Assignment of Coal Mineral Rights executed by Buyer;

(vi) an executed copy of the Mineral Lease and an executed, recordable short
form of the Mineral Lease;

(vii) an assignment of the Railroad Transportation Contract between Seller and
R. J. Corman Railroad in a form approved by Buyer and the Track Use Agreement in
a form approved by Buyer, each executed by Buyer;

(viii) a certificate executed by Buyer as to the accuracy of its representations
and warranties as of the Closing in accordance with Section 8.1 and as to its
compliance with and performance of its covenants and obligations to be performed
or complied with at or before the Closing; and

(ix) a certificate of the Secretary of Buyer certifying, as complete and
accurate as of the Closing, attached copies of the Governing Documents of Buyer,
certifying and attaching all requisite resolutions or actions of Buyer’s board
of managers approving the execution and delivery of this Agreement and the
consummation of the Contemplated Transactions and certifying to the incumbency
and signatures of the officers of Buyer executing this Agreement and any other
Transaction Document.

Article 3 Representations and Warranties of Seller and Shareholder.

Seller and Shareholder jointly and severally, make the following representations
and warranties to Buyer as of the Closing.

 

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3.1 Organization And Good Standing.

(a) Seller is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, with full
corporate power and authority to conduct its business as it is now being
conducted, to own or use the properties and assets that it purports to own or
use, and to perform all its obligations under the Seller Contracts.

3.2 Enforceability; Authority; No Conflict.

(a) This Agreement constitutes the legal, valid and binding obligation of Seller
and Shareholder, enforceable against each of them in accordance with its terms.
Upon the execution and delivery by Seller and Shareholder of the Bill of Sale,
the Assignment and Assumption Agreement, the deeds, the Mineral Lease, the
Assignment of Permits and each other agreement to be executed or delivered by
any or all of Seller and Shareholder at the Closing (collectively, the “Seller’s
Closing Documents”), each of Seller’s Closing Documents will constitute the
legal, valid and binding obligation of each of Seller and the Shareholder,
enforceable against each of them in accordance with its terms, subject to
applicable bankruptcy, insolvency and other similar laws affecting the
enforceability of creditors’ rights generally, general equitable principles and
the discretion of courts in granting equitable remedies. Seller has all
requisite corporate power and authority to execute and deliver this Agreement
and the Seller’s Closing Documents to which it is a party and to perform its
obligations under this Agreement and the Seller’s Closing Documents, and such
action has been duly authorized by all necessary action by Seller’s board of
directors, Shareholder and the Board. Shareholder has all necessary legal
capacity to enter into this Agreement and the Seller’s Closing Documents to
which Shareholder is a party and to perform its obligations hereunder and
thereunder.

(b) Except as set forth in Part 3.2(b), neither the execution and delivery of
this Agreement nor the consummation or performance of any of the Contemplated
Transactions will, directly or indirectly (with or without notice or lapse of
time):

(i) Breach (A) any provision of any of the Governing Documents of Seller or
(B) any resolution adopted by the board of directors or the Shareholder of
Seller;

(ii) Breach any Legal Requirement or any Order to which Seller or any
Shareholder, or any of the Assets, may be subject;

(iii) Breach any provision of, or give any Person the right to declare a default
or exercise any remedy under, or to accelerate the maturity or performance of,
or payment under, or to cancel, terminate or modify, any Contract;

(iv) Result in any shareholder of the Seller or the Shareholder having the right
to exercise dissenters’ appraisal rights or other remedies; or

(v) Result in the imposition or creation of any Encumbrance upon or with respect
to any of the Assets.

(c) Except as set forth in Part 3.2(c) (the “Material Consents”), neither Seller
nor any Shareholder is required to give any notice to or obtain any Consent from
any Person in connection with the execution and delivery of this Agreement or
the consummation or performance of any of the Contemplated Transactions.

 

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3.3 Location Of Assets.

Except as set forth in Part 3.3, the Assets constitute all of the real and
personal property necessary to operate Seller’s business in Anderson County,
Tennessee, the Baldwin Preparation Plant and the 5A mine in Campbell County,
Tennessee in the manner presently operated by Seller and as operated by Seller
on the mines covered by the Governmental Authorizations. All tangible Assets are
located on the Real Property. At the Closing, all Tangible Personal Property
shall be located on the Real Property.

3.4 Description Of Owned Real Property.

Part 3.4 lists the Land by conveyance date, legal description, recordation book
and page, and grantor. Part 3.4 also includes maps depicting, to Seller’s
Knowledge, in all material respects, the Real Property location and the type of
estate owned, whether fee, mineral or surface. The maps attached to Part 3.4
also depict the Rail Line.

3.5 Title to Assets; Encumbrances.

(a) Subject to the Permitted Encumbrances, the Seller, or its Affiliates, as the
case may be, will have good and marketable title to the Real Property at the
Closing free and clear of the claims of all persons claiming under or through
Seller, and good and marketable title to the other Assets. Except as set forth
on Part 3.5(a), at the Closing, the Seller will have the right to transfer the
Assets to the Buyer free and clear of all Encumbrances, other than Permitted
Encumbrances.

(b) There are no outstanding options or rights to purchase any Real Property or
any interest therein. There is no pending, or to the knowledge of the Seller
threatened, dispute relating to boundary lines, ingress and egress, adverse
possession, trespass, lack of mining rights or mining related rights, breach of
the terms of the applicable agreements, or similar issues with respect to the
Real Property. There does not exist as of the date of this Agreement any pending
condemnation, eminent domain or similar proceedings. All royalties, rents,
overrides or other similar payment obligations related to use of the Real
Property or extraction of coal therefrom are set forth on Part 3.5(b). True and
complete copies of (A) all deeds, existing title insurance policies and surveys
of or pertaining to the Real Property and (B) all instruments, agreements and
other documents evidencing, creating or constituting any Real Property
Encumbrances have been delivered to Buyer.

(c) Part 3.5(c) describes each Facility (including all preparation plants, rail,
barge or truck loading facilities, mine portals and permanent office locations)
on the Real Property and references the applicable Real Property on which such
improvements are situated. The buildings, improvements, loadout facilities,
preparation plants, structures and other fixtures owned or used by Seller and
located on the Real Property are in good an operating condition and state of
repair, normal wear and tear excepted.

(d) The Real Property includes all rights necessary to conduct mining on the
premises as currently permitted under the Governmental Authorizations and as
mining has been conducted in the past twenty-four months. The Real Property
includes all mining related rights necessary for the mining of the reserves
located on the Real Property, including, but not limited

 

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to, rights to construct all necessary haul roads, refuse structures, ponds,
ditches and other mining related improvements or alterations to the Real
Property and the right to wheelage across the subject property. All necessary
mining related waivers have been obtained from any owners of surface property.

(e) To the Knowledge of Seller, the maps attached hereto as Part 3.4 accurately
depict the location, boundaries and interest (including an indication of whether
surface or mineral is owned and including a notation if control of mineral is
limited by seam) of the Real Property and the locations of Facilities thereon.

(f) To the Knowledge of Seller, the obligations of Seller with regard to
applicable covenants, easements and restrictions against the Real Property have
been and are being performed in a proper and timely manner in all material
respects.

3.6 Condition of Facilities.

(a) Use of the Real Property for the various purposes for which it is presently
being used is permitted as of right under all applicable zoning legal
requirements and is not subject to “permitted nonconforming” use or structure
classifications. To the Knowledge of Seller, all Improvements are in compliance
with all applicable Legal Requirements, including those pertaining to zoning,
and building, are in good repair and in good condition, ordinary wear and tear
excepted, and are free from latent and patent defects. Except as set forth in
Part 3.6(a), no part of any Improvement encroaches on any real property not
included in the Real Property, and there are no buildings, structures, fixtures
or other improvements primarily situated on adjoining property which encroach on
any part of the Land. The Land for each owned Facility abuts on and has direct
vehicular access to a public road or has access to a public road via a
permanent, irrevocable, appurtenant easement benefiting such Land and comprising
a part of the Real Property, is supplied with public or quasi-public utilities
and other services appropriate for the operation of the Facilities located
thereon and is not located within any flood plain or area subject to wetlands
regulation or any similar restriction. There is no existing or proposed plan to
modify or realign any street or highway or any existing or proposed eminent
domain proceeding that would result in the taking of all or any part of any
Facility or that would prevent or hinder the continued use of any Facility as
heretofore used in the conduct of the business of Seller and located on the Real
Property.

(b) Each item of Tangible Personal Property is in good repair and good operating
condition, ordinary wear and tear excepted, is suitable for immediate use in the
Ordinary Course of Business. No item of Tangible Personal Property is in need of
repair or replacement other than as part of routine maintenance in the Ordinary
Course of Business. Except as disclosed in Part 3.6(b), all Tangible Personal
Property used in Seller’s business in Anderson County, Tennessee and the 5A mine
in Campbell County, Tennessee, is in the possession of Seller and located on the
Real Property.

3.7 Compliance With Legal Requirements; Governmental Authorizations.

(a) Except as set forth in Part 3.7(a):

(i) Seller has not received written notice of any violation of any Legal
Requirement, nor is the Seller in default with respect to any Order, applicable
to the Assets;

 

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(ii) To the Knowledge of Seller, no event has occurred or circumstance exists
with respect to the Assets that (with or without notice or lapse of time)
(A) may constitute or result in a violation by Seller of, or a failure on the
part of Seller to comply with, any Legal Requirement or (B) may give rise to any
obligation on the part of Seller to undertake, or to bear all or any portion of
the cost of, any remedial action of any nature other than reclamation
obligations in the Ordinary Course of Business of Seller and Shareholder; and

(iii) Seller has not received any written notice from any Governmental Body or
any other Person with respect to the Assets regarding (A) any actual, alleged,
possible or potential material violation of, or material failure to comply with,
any Legal Requirement or (B) any actual, alleged, possible or potential
obligation on the part of Seller to undertake, or to bear all or any portion of
the cost of, any remedial action of any nature other than notices of violation
which have been abated in the Ordinary Course of Business.

(b) Part 3.7(b) contains a complete and accurate list of each Governmental
Authorization that is held by Seller related to the Assets, Facilities,
Improvements, preparation plant and mines on the Real Property, whether such
mines are currently active or not, and such Governmental Authorizations are all
of the Governmental Authorizations needed to conduct the business currently
being conducted on the Real Property and needed to conduct the business operated
on the Real Property in the past Twenty-Four (24) months. Each Governmental
Authorization listed or required to be listed in Part 3.7(b) is valid and in
full force and effect. Except as set forth in Part 3.7(b):

(i) To the Knowledge of Seller, Seller is in material compliance with all of the
terms and requirements of each Governmental Authorization identified or required
to be identified in Part 3.7(b);

(ii) To the Knowledge of Seller, no event has occurred or circumstance exists
that may (with or without notice or lapse of time) (A) constitute or result
directly or indirectly in a violation of or a failure to comply with any term or
requirement of any Governmental Authorization listed or required to be listed in
Part 3.7(b) or (B) result directly or indirectly in the revocation, withdrawal,
suspension, cancellation or termination of, or any modification to, any
Governmental Authorization listed or required to be listed in Part 3.7(b);

(iii) Seller has not received any written notice or, to the Knowledge of Seller,
other communication from any Governmental Body or any other Person regarding
(A) any actual, alleged, possible or potential material violation of or failure
to comply with any term or requirement of any Governmental Authorization or
(B) any actual, proposed, possible or potential revocation, withdrawal,
suspension, cancellation, termination of or modification to any Governmental
Authorization; and

(iv) All applications required to have been filed for the renewal of the
Governmental Authorizations listed or required to be listed in Part 3.7(b) have
been duly filed on a timely basis with the appropriate Governmental Bodies, and
all other filings required to have been made with respect to such Governmental
Authorizations have been duly made on a timely basis with the appropriate
Governmental Bodies.

 

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The Governmental Authorizations listed in Part 3.7(b) collectively constitute
all of the Governmental Authorizations necessary to permit Seller to lawfully
conduct and operate its coal mining business and the preparation plant on the
Real Property in the manner in which it currently conducts and operates such
business and to permit Seller to own and use the Assets in the manner in which
they currently own and use such assets. The Seller has posted and maintained in
full force and effect all surety bonds, reclamation bonds, letters of credit and
similar instruments required by such Permits, which such amounts and types of
collateral are set forth on Part 3.7(b). Part 3.7(b) also includes a description
of the permitted property or facility covered by each Governmental
Authorization.

3.8 Legal Proceedings; Orders.

(a) Except as set forth in Part 3.8(a), there is no pending or, to Seller’s
Knowledge, threatened Proceeding:

(i) by or against Seller that relates to or may affect the Assets; or

(ii) that challenges, or that may have the effect of preventing, delaying,
making illegal or otherwise interfering with, any of the Contemplated
Transactions.

To the Knowledge of Seller, no event has occurred or circumstance exists that is
reasonably likely to give rise to or serve as a basis for the commencement of
any such Proceeding. Seller has delivered to Buyer copies of all pleadings,
correspondence and other documents relating to each Proceeding listed in Part
3.8(a). There are no Proceedings listed or required to be listed in Part 3.8(a)
that could have a material adverse effect on the business, operations, assets,
condition or prospects of Seller or upon the Assets.

(b) Except as set forth in Part 3.8(b):

(i) there is no Order to which Seller is subject with respect to any of the
Assets; and

(ii) to the Knowledge of Seller, no officer, director, agent or employee of
Seller is subject to any Order that prohibits such officer, director, agent or
employee from engaging in or continuing any conduct, activity or practice
relating to use of the Assets.

(c) Except as set forth in Part 3.8(c):

(i) Seller is, and, at all times has been in compliance with all of the terms
and requirements of each Order to which any of the Assets is or has been
subject;

(ii) To the Knowledge of Seller, no event has occurred or circumstance exists
that is reasonably likely to constitute or result in (with or without notice or
lapse of time) a violation of or failure to comply with any term or requirement
of any Order to which Seller or any of the Assets is subject; and

 

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(iii) Seller has not received any written notice or, to the Knowledge of Seller,
other communication from any Governmental Body or any other Person regarding any
actual, alleged, possible or potential violation of, or failure to comply with,
any term or requirement of any Order to which Seller or any of the Assets is or
has been subject.

3.9 Contracts; No Defaults.

(a) Part 3.9(a) contains an accurate and complete list and Seller has delivered
to Buyer accurate and complete copies, of each Seller Contract.

(b) Except as set forth in Part 3.9(b) with respect to each Seller Contract:

(i) such Seller Contract is in full force and effect and is valid and
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency and other similar laws affecting the enforceability of creditors’
rights generally, general equitable principles and the discretion of courts in
granting equitable remedies;

(ii) such Seller Contract is assignable by Seller to Buyer without the consent
of any other Person;

(iii) no rights of any other Person will be triggered, accelerated or created
pursuant to such Seller Contract because of the Contemplated Transactions,
except to the extent waivers of such rights are being obtained by Seller; and

(iv) to the Knowledge of Seller, no such Seller Contract will upon completion or
performance thereof have a material adverse affect on the business, assets or
condition of Seller or the business to be conducted by Buyer with the Assets.

(c) Except as set forth in Part 3.9(c):

(i) Seller is, and at all times since has been, in material compliance with all
applicable terms and requirements of each Seller Contract;

(ii) To the Knowledge of Seller, each other Person that has or had any
obligation or liability under any Seller Contract is in material compliance with
all applicable terms and requirements of such Contract;

(iii) To the Knowledge of Seller, no event has occurred or circumstance exists
that (with or without notice or lapse of time) may contravene, conflict with or
result in a Breach of, or give Seller or other Person the right to declare a
default or exercise any remedy under, or to accelerate the maturity or
performance of, or payment under, or to cancel, terminate or modify, any Seller
Contract;

(iv) No event has occurred or circumstance exists under or by virtue of any
Seller Contract that (with or without notice or lapse of time) would cause the
creation of any Encumbrance affecting any of the Assets; and

 

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(v) Seller has not given to or received from any other Person any written notice
or, to the Knowledge of Seller, other communication regarding any actual,
alleged, possible or potential violation or Breach of, or default under, any
Seller Contract.

(d) Except as disclosed on Part 3.9(d), there are no renegotiations of, attempts
to renegotiate or outstanding rights to renegotiate any material amounts paid or
payable to Seller under current or completed Seller Contracts with any Person
having the contractual or statutory right to demand or require such
renegotiation and no such Person has made written demand for such renegotiation.

(e) Each Seller Contract relating to the sale of coal by Seller has been entered
into in the Ordinary Course of Business of Seller and has been entered into
without the commission of any act alone or in concert with any other Person, or
any consideration having been paid or promised, that is or would be in violation
of any Legal Requirement.

3.10 Environmental Matters.

Except as disclosed in Part 3.10, to the Knowledge of Seller:

(a) Seller and the Assets are, and at all times has been, in full compliance
with, and have not been and are not in violation of or liable under, any
Environmental Law. Seller has obtained, has complied with, and are in possession
of and in full compliance with all Governmental Authorizations required by any
applicable Environmental Laws for the ownership and operation of the Assets, the
Facilities, and the Seller’s business. Neither Seller nor any Shareholder has
any basis to expect, nor has any of them or any other Person for whose conduct
they are or may be held to be responsible received, any actual or threatened
order, notice or other communication from (i) any Governmental Body or private
citizen acting in the public interest or (ii) the current or prior owner or
operator of any Facilities, of any actual or potential violation or failure to
comply with any Environmental Law, or of any actual or threatened Environmental,
Health and Safety Liabilities with respect to any of the Assets, the operation
of the business of Seller, any Facility, or any other property or asset (whether
real, personal or mixed) in which Seller has or had an interest, or with respect
to any property or Facility at or to which Hazardous Materials were generated,
manufactured, refined, transferred, imported, used, released, disposed, or
processed by Seller or any other Person for whose conduct they are or may be
held responsible, or from which Hazardous Materials has been transported,
treated, stored, handled, transferred, disposed, released, recycled or received.

(b) There are no pending or, to the Knowledge of Seller, threatened claims,
Encumbrances, or other restrictions of any nature resulting from any
Environmental, Health and Safety Liabilities or arising under or pursuant to any
Environmental Law with respect to or affecting the Seller’s operation of their
business, any Facility or any other property or asset (whether real, personal or
mixed) in which Seller has or had an interest.

(c) Neither Seller nor Shareholder has any Knowledge of or any basis to expect,
nor has any of them, or any other Person for whose conduct they are or may be
held responsible, received, any citation, directive, inquiry, notice, Order,
summons, warning or other communication that relates to Hazardous Activity,
Hazardous Materials, or any alleged, actual,

 

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or potential violation or failure to comply with any Environmental Law, or of
any alleged, actual, or potential Environmental, Health and Safety Liabilities
with respect to any of the Assets, the operation of the business of Seller, any
Facility, or any property or asset (whether real, personal or mixed) in which
Seller has or had an interest, or with respect to any property or facility to
which Hazardous Materials generated, manufactured, refined, transferred,
imported, used, released, disposed, or processed by Seller or any other Person
for whose conduct they are or may be held responsible, has been transported,
treated, stored, handled, transferred, disposed, released, recycled or received.

(d) Neither Seller nor any other Person for whose conduct they are or may be
held responsible have any Environmental, Health and Safety Liabilities with
respect to any Facility or, to the Knowledge of Seller, with respect to any
other property or asset (whether real, personal or mixed) in which Seller (or
any predecessor) has or had an interest or at any property geologically or
hydrologically adjacent to any Facility or any such other property or asset.

(e) There are no Hazardous Materials present on or in the Environment at any
Facility or at any geologically or hydrologically adjacent property, including
any Hazardous Materials contained in barrels, aboveground or underground storage
tanks, landfills, land deposits, dumps, equipment (whether movable or fixed) or
other containers, either temporary or permanent, and deposited or located in
land, water, sumps, or any other part of the Facility or such adjoining
property, or incorporated into any structure therein or thereon, except for such
Hazardous Materials as are present in the ordinary course of business and in
full compliance with all applicable Environmental Laws. Neither Seller nor any
Person for whose conduct they are or may be held responsible, or to the
Knowledge of Seller, any other Person, has permitted or conducted, or is aware
of the conduct of, any Hazardous Activity at, on, in, under, from, or in
connection with, any Facility or any other property or assets (whether real,
personal or mixed) in which Seller has or had an interest except in full
compliance with all applicable Environmental Laws.

(f) There has been no Release or, to the Knowledge of Seller, Threat of Release,
of any Hazardous Materials at or from any Facility; any other location where any
Hazardous Materials generated, manufactured, refined, transferred, produced,
imported, used, or processed by Seller or any other Person for whose conduct
they are or may be held responsible, has been transported, treated, stored,
handled, transferred, disposed, recycled, or received; or any other property or
asset (whether real, personal or mixed) in which Seller has or had an interest,
or to the Knowledge of Seller any geologically or hydrologically adjacent
property, whether by Seller or any other Person.

(g) Seller has delivered to Buyer true and complete copies and results of any
reports, studies, analyses, tests, or monitoring possessed or initiated by
Seller pertaining to Hazardous Materials or Hazardous Activities in, on, or
under the Facilities, or concerning compliance, by Seller or any other Person
for whose conduct it is or may be held responsible, with Environmental Laws.

(h) The Facilities do not contain any waters of the United States, as defined in
the Clean Water Act and regulations promulgated thereunder, or similar Legal
Requirements, or other especially sensitive or protected areas or species of
flora or fauna.

 

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3.11 Solvency.

(a) Seller is not now insolvent nor will be rendered insolvent by any of the
Contemplated Transactions. As used in this section, “insolvent” means that the
sum of the debts and other probable Liabilities of such Seller exceeds the
present fair saleable value of such Seller’s assets.

(b) Immediately after giving effect to the consummation of the Contemplated
Transactions: (i) Seller will be able to pay its Liabilities as they become due
in the usual course of its business; (ii) Seller will not have unreasonably
small capital with which to conduct its present or proposed business;
(iii) Seller will have assets (calculated at fair market value) that exceed its
Liabilities; and (iv) taking into account all pending and threatened litigation,
final judgments against Seller in actions for money damages are not reasonably
anticipated to be rendered at a time when, or in amounts such that, Seller will
be unable to satisfy any such judgments promptly in accordance with their terms
(taking into account the maximum probable amount of such judgments in any such
actions and the earliest reasonable time at which such judgments might be
rendered) as well as all other obligations of Seller.

3.12 Permit Blocking. Neither the Seller, Shareholder nor any Person “owned or
controlled” by the Seller or Shareholder, have been notified by any Governmental
Authority administering SMCRA, as amended, or any comparable state statute, that
such party is currently (a) ineligible to receive additional surface mining
Governmental Authorizations, or (b) under investigation to determine whether its
eligibility to receive such Governmental Authorizations should be revoked. As
used in this Section 3.12, “owned or controlled” shall be defined as set forth
in 30 C.F.R. Section 773.5.

3.13 No Undisclosed Liabilities. Seller does not have Knowledge of any fact that
has specific application to Seller (other than general economic or industry
conditions) and that may materially adversely affect the assets, business,
prospects, financial condition or results of operations of Seller that has not
been set forth in this Agreement or the Disclosure Letter.

3.14 Brokers Or Finders.

Except as provided in Part 3.14, neither Seller nor any of its Representatives
have incurred any obligation or liability, contingent or otherwise, for
brokerage or finders’ fees or agents’ commissions or other similar payments in
connection with the sale of the Assets or the Contemplated Transactions.

3.15 Inventories.

To the Knowledge of Seller, all Coal Inventories consist of a quality usable and
saleable, in the Ordinary Course of Business.

3.16 Converse Arrangement.

Attached hereto as Part 3.16 are true and complete copies of all agreements and
understandings between Converse and Company, Inc. and Seller or Shareholder with
respect to the factoring of receivables under, or as otherwise related to, the
Georgia Power Contract.

 

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Converse and Company, Inc. has no right of set off or other claims against
Seller or Shareholder that would permit Converse and Company, Inc. to fail to
immediately pay Seller for receivables created under the Georgia Power Contract.
There are no defaults, events of defaults or other events which, immediately, or
upon the passage of time, would create a default, breach or event of default,
under the agreements between Seller, Shareholder and Converse and Company, Inc.

3.17 DISCLAIMER OF OTHER REPRESENTATIONS AND WARRANTIES

EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, SELLER, SHAREHOLDER AND BUYER
MAKE NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, IN
RESPECT OF THE ASSETS (INCLUDING ANY EQUIPMENT, OTHER TANGIBLE PERSONAL PROPERTY
OR REAL PROPERTY), LIABILITIES OR OPERATIONS, INCLUDING, WITHOUT LIMITATION,
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO MERCHANTABILITY, FITNESS FOR ANY
PARTICULAR PURPOSE OR PROSPECTS OR OPPORTUNITIES OF THE BUSINESS, OR ASSETS, AND
ANY SUCH REPRESENTATIONS OR WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED.

Article 4 Representations and Warranties of Buyer

Buyer represents and warrants to Seller and Shareholder as follows:

4.1 Organization And Good Standing.

Buyer is a limited liability company duly organized, validly existing and in
good standing under the laws of the State of Delaware and qualified to do
business in the State of Tennessee, with full power and authority to conduct its
business as it is now conducted.

4.2 Enforceability; Authority; No Conflict.

(a) This Agreement constitutes the legal, valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms. Upon the execution and
delivery by Buyer of the Assignment and Assumption Agreement, and each other
agreement to be executed or delivered by Buyer at Closing (collectively, the
“Buyer’s Closing Documents”), each of the Buyer’s Closing Documents will
constitute the legal, valid and binding obligation of Buyer, enforceable against
Buyer in accordance with its respective terms, subject to applicable bankruptcy,
insolvency and other similar laws affecting the enforceability of creditors’
rights generally, general equitable principles and the discretion of courts in
granting equitable remedies. Buyer has all requisite corporate power and
authority to execute and deliver this Agreement and the Buyer’s Closing
Documents and to perform its obligations under this Agreement and the Buyer’s
Closing Documents, and such action has been duly authorized by all necessary
action by Buyer’s shareholders and board of directors.

(b) Neither the execution and delivery of this Agreement by Buyer nor the
consummation or performance of any of the transactions contemplated hereby by
Buyer will give any Person the right to prevent, delay or otherwise interfere
with any of the Contemplated Transactions pursuant to:

(i) any provision of Buyer’s Governing Documents;

 

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(ii) any resolution adopted by the management of Buyer;

(iii) any Legal Requirement or Order to which Buyer may be subject; or

(iv) any Contract to which Buyer is a party or by which Buyer may be bound.

Buyer is not and will not be required to obtain any Consent from any Person in
connection with the execution and delivery of this Agreement or the consummation
or performance of any of the Contemplated Transactions other than with respect
to the permits to be conveyed hereunder and under the Assignment of Permits
agreement.

4.3 Certain Proceedings.

There is no pending Proceeding that has been commenced against Buyer and that
challenges, or may have the effect of preventing, delaying, making illegal or
otherwise interfering with, any of the Contemplated Transactions. To Buyer’s
Knowledge, no such Proceeding has been threatened.

4.4 Brokers Or Finders.

Neither Buyer nor any of its Representatives have incurred any obligation or
liability, contingent or otherwise, for brokerage or finders’ fees or agents’
commissions or other similar payment in connection with the Contemplated
Transactions for which Seller or Shareholder will be held liable.

4.5 Financing.

The Buyer has obtained a commitment for financing for the entire Purchase Price,
on terms and conditions satisfactory to Buyer.

4.6 Payables.

The Payables represent all of the Liabilities due and owing to Premium from
Seller. Upon the Closing, there shall be no Liabilities owing to Buyer or
Premium pursuant to the Premium Coal Contract.

4.7 Acquisition of Notes and Credit Agreement.

An affiliate of Buyer has entered into binding and enforceable agreements to
(i) acquire $30.3 million of 10.5% senior secured notes issued pursuant to the
Indenture from Centaurus and (ii) assume all rights and obligations of the
lenders from Centaurus pursuant to the Credit Agreement. To Buyer’s Knowledge,
no event has occurred or circumstance exists that (with or without notice or
lapse of time) may contravene, conflict with or result in a Breach of, or give
Buyer’s affiliate, Centaurus or other Person the right to declare a default or
exercise any remedy under, or to cancel, terminate or modify, such agreements.

 

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Article 5 Covenants of Seller Prior to Closing

5.1 Required Approvals.

As promptly as practicable after the date of this Agreement, Seller shall make
all filings required by Legal Requirements to be made by it in order to
consummate the Contemplated Transactions. Seller and Shareholder also shall
cooperate with Buyer and its Representatives with respect to all filings that
Buyer elects to make or, pursuant to Legal Requirements, shall be required to
make in connection with the Contemplated Transactions. Seller and Shareholder
also shall cooperate with Buyer and its Representatives in obtaining all
Material Consents and other pre-closing contingency deliverables.

5.2 Payment of Liabilities.

Seller shall pay or otherwise satisfy in the Ordinary Course of Business all of
its current Liabilities and obligations.

5.3 Conditions.

Seller and Shareholder shall use Best Efforts to cause the conditions in Article
7 and, with respect to those matters which may be satisified prior to Closing,
the covenants in Article 10, to be satisfied.

Article 6 Covenants of Buyer Prior to Closing

6.1 Required Approvals.

As promptly as practicable after the date of this Agreement, Buyer shall make,
or cause to be made, all filings required by Legal Requirements to be made by it
to consummate the Contemplated Transactions, subject to the terms and timing set
forth in the Assignment of Permits. Buyer also shall cooperate, and cause its
Related Persons to cooperate, with Seller (a) with respect to all filings Seller
shall be required by Legal Requirements to make and (b) in obtaining all
Consents identified in Part 3.9(b) and other pre-closing contingency
deliverables.

6.2 Conditions.

Buyer shall use commercially reasonable efforts to cause the conditions in
Article 8 to be satisfied and, with respect to those matters which may be
satisified prior to Closing, the covenants in Article 10, to be satisfied.

 

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Article 7 Conditions Precedent to Buyer’s Obligation to Close

Buyer’s obligation to purchase the Assets and to take the other actions required
to be taken by Buyer at the Closing is subject to the satisfaction, at or prior
to the Closing, of each of the following conditions (any of which may be waived
by Buyer, in whole or in part):

7.1 Accuracy Of Representations.

All of Seller’s and Shareholder’ representations and warranties in this
Agreement (considered collectively), and each of the representations and
warranties (considered individually), shall have been accurate, and shall be
accurate at the Closing, in all material respects as of the time of the Closing
(it being understood that, for purposes of determining the accuracy of such
representations and warranties, all qualifications based on the word “material”
or similar phrases contained in such representations and warranties shall be
disregarded).

7.2 Seller’s Performance.

All of the covenants and obligations that Seller and Shareholder are required to
perform or to comply with pursuant to this Agreement at or prior to the Closing
(considered collectively), and each of the covenants and obligations (considered
individually), shall have been duly performed and complied with in all material
respects.

7.3 Release of Encumbrances.

All Encumbrances on the Assets, all of which are described on Part 3.2(b), shall
have been released and shall no longer be in effect.

7.4 Additional Documents.

Seller and Shareholder shall have caused the documents and instruments required
by Section 2.7(a) and the following documents to be delivered (or tendered
subject only to Closing) to Buyer:

(a) An opinion of counsel(s), reasonably acceptable to Buyer, dated the Closing
Date, including substantially the following opinions:

(i) The Assets are being conveyed free and clear of all perfected liens and
mortgages (other than the Mineral Lease);

(ii) The sale of assets pursuant to the Transaction Documents, along with the
sale of the Rail Line, does not constitute a sale of substantially all assets
requiring shareholder approval under applicable Florida law;

(iii) Shareholder was incorporated and is validly existing and with active
status as a corporation under the laws of the State of Florida;

(iv) Based solely on its Certificate of Existence, Seller is a corporation duly
incorporated and validly existing under the laws of the State of Tennessee;

(v) Each of Seller and Shareholder has all requisite corporate power to execute
and deliver, and to perform its obligations under, each Transaction Document;

(vi) The execution and delivery by Seller and Shareholder of, and its incurrence
and performance of its obligations under, each Transaction Document to which it
is party have been duly authorized by all necessary corporate action by or on
behalf of each of Seller and Shareholder;

 

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(vii) Each Transaction Document to which Seller or Shareholder is party has been
duly executed and delivered by or on behalf of each;

(viii) Each Transaction Document constitutes the legal, valid and binding
obligation of each of Seller and Shareholder, as applicable, enforceable against
it in accordance with its terms;

(ix) The execution and delivery by each of Seller and Shareholder of, its
performance of its obligations under, and its consummation of the other
transactions contemplated by, the Transaction Documents to which it is party do
not:

(A) violate any provision of the charter or bylaws of Seller or the certificate
of incorporation or bylaws of Shareholder;

(B) violate any order, writ, ruling, injunction or decree of any court or
governmental or regulatory authority or agency of the State of Tennessee or
State of Florida or any arbitral award applicable to either Seller or
Shareholder or its subsidiaries of which the opinion giver has knowledge; or

(C) (i) result in a breach of, (ii) constitute a default under (or an event
that, with notice or lapse of time or both, would constitute a default),
(iii) require any consent under, (iv) result in the acceleration or required
prepayment of any indebtedness under, (v) accelerate the performance required by
either Seller or Shareholder under, or excuse performance by any Person of any
of its obligations under, or (vi) cause a change in the rights of any Person
under, the Credit Agreement or the Indenture; and

(x) The instruments of conveyance, transfer and assignment to be delivered by
Seller to Buyer are in form legally sufficient to convey to Buyer all right,
title and interest of Seller in and to the Assets. Such instruments are in form
sufficient for recordation or filing where such is necessary in order to effect
such conveyance, transfer and assignment as against third parties;

(b) Lien releases from the holder of each note, mortgage or other encumbrance,
dated the Closing Date, releasing any lien or Encumbrance on the Assets,
including releases of each mortgage of record and re-conveyances of each deed of
trust with respect to each parcel of real property included in the Assets and
all necessary consents required for the Mineral Lease including subordination,
non-disturbance and atornment agreements, executed by the necessary parties,
necessary for the conveyance of the Assets and execution of the Mineral Lease
free and clear of Encumbrances; and

(c) Such other documents as Buyer may reasonably request for the purpose of:

(i) evidencing the accuracy of any of Seller’s representations and warranties;

 

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(ii) evidencing the performance by Seller or any Shareholder of, or the
compliance by Seller or any Shareholder with, any covenant or obligation
required to be performed or complied with by Seller or such Shareholder;

(iii) evidencing the satisfaction of any condition referred to in this Article
7; or

(iv) otherwise facilitating the consummation or performance of any of the
Contemplated Transactions.

7.5 No Proceedings. Since the date of this Agreement, there shall not have been
commenced or threatened against Buyer, or against any Related Person of Buyer,
any Proceeding (a) involving any challenge to, or seeing Damages or other relief
in connection with, any of the Contemplated Transactions or (b) that may have
the effect of preventing, delaying, making illegal, imposing limitations or
conditions on or otherwise interfering with any of the Contemplated
Transactions.

7.6 Title Insurance and Appraisal.

Buyer shall have received from Tennessee Valley Title Company, unconditional and
binding commitments to issue policies of title insurance with respect to the
Real Property, dated the Closing Date, in an aggregate amount equal to the
amount of the Purchase Price allocated to the Real Property, deleting all
requirements listed in ALTA Schedule B-1, amending the effective date to the
date and time of recordation of the deed transferring title to the Real Property
to Buyer with no exception for the gap between closing and recordation,
attaching all endorsements reasonably required by Buyer and otherwise in form
satisfactory to Buyer. Seller shall have delivered to Buyer an appraisal by
Marshall Miller of the Assets indicating that their value is equal to, or less
than, the full Purchase Price. The legal fees of Tennessee Valley Title Company
shall be split by Buyer and Seller and paid at Closing.

Article 8 Conditions Precedent to Seller’s Obligation to Close

Seller’s obligation to sell the Assets and to take the other actions required to
be taken by Seller at the Closing is subject to the satisfaction, at or prior to
the Closing, of each of the following conditions (any of which may be waived by
Seller in whole or in part):

8.1 Accuracy of Representations.

All of Buyer’s representations and warranties in this Agreement (considered
collectively), and each of the representations and warranties (considered
individually), shall has been accurate in all material respects as of the date
of this Agreement and shall be accurate in all material respects as of the time
of the Closing as if then made.

8.2 Acquisition of Notes and Credit Agreement.

An affiliate of Buyer shall have (i) acquired $30.3 million of 10.5% senior
secured notes issued pursuant to the Indenture from Centaurus and (ii) assumed
all rights and obligations of the lenders from Centaurus pursuant to the Credit
Agreement.

 

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8.3 Buyer’s Performance.

All of the covenants and obligations that Buyer is required to perform or to
comply with pursuant to this Agreement at or prior to the Closing (considered
collectively), and each of the covenants and obligations (considered
individually), shall have been duly performed and complied with in all material
respects.

8.4 No Proceedings. Since the date of this Agreement, there shall not have been
commenced or threatened against Seller, or against any Related Person of Seller,
any Proceeding (a) involving any challenge to, or seeing Damages or other relief
in connection with, any of the Contemplated Transactions or (b) that may have
the effect of preventing, delaying, making illegal, imposing limitations or
conditions on or otherwise interfering with any of the Contemplated
Transactions.

Article 9 Termination

9.1 Termination Events. By notice given prior to or at the Closing, subject to
Section 9.2, this Agreement may be terminated as follows:

(a) by Buyer if a material Breach of any provision of this Agreement has been
committed by Seller or Shareholder and such Breach has not been waived in
writing by Buyer;

(b) by Seller if a material Breach of any provision of this Agreement has been
committed by Buyer and such Breach has not been waived in writing by Seller;

(c) by mutual consent of Buyer and Seller; or

(d) by Buyer or Seller if the Closing has not occurred on or before April 30,
2010, or such later date as the parties may agree upon, unless the Buyer or
Seller, as applicable, is in material Breach of this Agreement.

9.2 Effect Of Termination.

Each party’s right of termination under Section 9.1 is in addition to any other
rights it may have under this Agreement or otherwise, and the exercise of such
right of termination will not be an election of remedies. If this Agreement is
terminated pursuant to Section 9.1, all obligations of the parties under this
Agreement will terminate, except that the obligations of the parties in this
Section 9.2 will survive, provided, however, that, if this Agreement is
terminated because of a Breach of this Agreement by the non-terminating party or
because one or more of the conditions to the terminating party’s obligations
under this Agreement is not satisfied as a result of the party’s failure to
comply with its obligations under this Agreement, the terminating party’s right
to pursue all legal remedies will survive such termination unimpaired.

 

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Article 10 Additional Covenants

10.1 Payment Of All Taxes Resulting From Sale Of Assets By Seller.

Buyer and Seller shall each pay in a timely manner all Taxes imposed on them,
respectively, resulting from or payable in connection with the sale of the
Assets pursuant to this Agreement. Buyer and Seller shall prorate the Property
Tax Payment for the Real Property for the fiscal year which includes the Closing
Date.

10.2 Reports and Returns.

Seller and Buyer shall each promptly after the Closing prepare and file all
reports and returns required of them, respectively, by Legal Requirements
relating to the business of Seller or Buyer as conducted or to be conducted
using the Assets, to and including the Closing Date.

10.3 Payment Of Other Retained Liabilities.

In addition to payment of Taxes pursuant to Section 10.1, Seller shall pay, or
make adequate provision for the payment, in full all of the Liabilities in the
Ordinary Course of Business to the extent such Liabilities may impair Buyer’s
use or enjoyment of the Assets. If any such Liabilities are not so paid or
provided for and Buyer reasonably determines that failure to make any payments
will impair Buyer’s use or enjoyment of the Assets, Buyer may, at any time after
the Closing Date, elect to make all such payments directly (but shall have no
obligation to do so) and obtain from Seller and Shareholder reimbursement of all
such payments.

10.4 Assistance in Proceedings.

Seller and Buyer will each use its commercially reasonable efforts to cooperate
with the other and its counsel in the contest or defense of any Proceeding
involving or relating to (a) any transaction contemplated by this Agreement or
(b) any action, activity, circumstance, condition, conduct, event, fact, failure
to act, incident, occurrence, plan, practice, situation, status or transaction
on or before the Closing Date involving the Assets. Neither Seller nor Buyer
shall be required to expend funds in the course of such cooperation.

10.5 Retention Of And Access To Records.

After the Closing Date, Buyer shall retain for a period consistent with Buyer’s
record-retention policies and practices those Records of Seller delivered to
Buyer. Buyer also shall provide Seller and Shareholder and their Representatives
reasonable access thereto, during normal business hours and on at least three
days’ prior written notice, to enable them to prepare financial statements or
tax returns or deal with tax audits.

10.6 Indebtedness.

Seller and Shareholder shall repay all outstanding indebtedness under the Credit
Agreement in connection with the Closing and obtain the release of all
Encumbrances securing the indebtedness under the Credit Agreement. As soon as
practicable, but in no event more than thirty (30) days following the Closing,
Seller and Shareholder shall obtain an amendment to the Indenture and its
related documents, as necessary, reducing the First Lien Credit Facility (as
defined therein) to a maximum of $3,000,000.00. Buyer covenants that its
affiliate, as a “Super-Majority” holder (as defined therein) of the 10.5% senior
secured notes issued pursuant to the Indenture, shall cooperate with Seller and
Shareholder in connection with their efforts to obtain

 

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such amendment, including providing any necessary consents to allow the
$3,000,000.00 First Lien Credit Facility to mature on or before December 15,
2011. Until the time such amendment is obtained, Seller and Shareholder jointly
agree that they shall not permit any liens or Encumbrances to be created that
are senior in priority to the Encumbrances securing the indebtedness under the
Indenture. Further, until such time as the indebtedness under the Indenture is
repaid in full, refinanced, satisfied, or otherwise extinguished, Seller and
Shareholder jointly agree that they shall not permit any liens or Encumbrances
to be created other than those permitted by the First Lien Credit Facility or
otherwise permitted under the Indenture that are senior in priority to the
Encumbrances securing the indebtedness under the Indenture. Buyer may waive its
rights under this covenant in its sole discretion.

10.7 Further Assurances.

Subject to the proviso in Section 6.1, the parties shall cooperate reasonably
with each other and with their respective Representatives in connection with any
steps required to be taken as part of their respective obligations under this
Agreement, and shall (a) furnish upon request to each other such further
information; (b) execute and deliver to each other such other documents; and
(c) do such other acts and things, all as the other party may reasonably request
for the purpose of carrying out the intent of this Agreement and the
Contemplated Transactions.

If there are any Material Consents that have not yet been obtained (or otherwise
are not in full force and effect) as of the Closing, in the case of each Seller
Contract as to which such Material Consents were not obtained (or otherwise are
not in full force and effect) (the “Restricted Material Contracts”), Buyer
hereby waives the closing conditions as to any such Material Consent and Seller
shall use Best Efforts to obtain the Material Consents.

In such circumstance, neither this Agreement nor the Assignment and Assumption
Agreement nor any other document related to the consummation of the Contemplated
Transactions shall constitute a sale, assignment, assumption, transfer,
conveyance or delivery or an attempted sale, assignment, assumption, transfer,
conveyance or delivery of the Restricted Material Contracts, and following the
Closing, the Seller shall use Best Efforts to obtain the Material Consent
relating to each Restricted Material Contract as quickly as practicable. Pending
the obtaining of such Material Consents relating to any Restricted Material
Contract, the parties shall cooperate with each other in any reasonable and
lawful arrangements designed to (i) provide to Buyer the benefits of use of the
Restricted Material Contract for its term (or any right or benefit arising
thereunder, including the enforcement for the benefit of Buyer of any and all
rights of Sellers against a third party thereunder); (ii) cause the Buyer to
bear all costs, obligations and other Liabilities of or under any such
Restricted Material Contract, and (iii) cause Converse & Company, Inc. to make
all payments normally payable to Seller directly to Buyer and obtain an executed
writing from Converse & Company, Inc. to that effect, including a statement by
Converse and Company, Inc. that it has no right to set off or otherwise not
factor and promptly purchase receivables created under the Georgia Power
Contract. Prior to receipt of such letter, Seller shall have no right to obtain
payment of the Overriding Royalty if and to the extent Converse and Company,
Inc. exercises any right of set-off or otherwise takes action that results in a
reduction in amounts to which Buyer is entitled under the Georgia Power
Contract, and to the extent payment is received, Seller shall immediately
forward all such payment to Buyer. Upon receipt of such letter, and payment to
Buyer of all amounts withheld from Buyer

 

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by Converse and Company, Inc., Buyer shall refund to Seller an amount equal to
the Overriding Royalty arising out of the coal shipments which gave rise to such
payments. Once a Material Consent for the sale, assignment, assumption,
transfer, conveyance and delivery of a Restricted Material Contract is obtained,
Seller shall promptly assign, transfer, convey and deliver such Restricted
Material Contract to Buyer, and Buyer shall assume the obligations under such
Restricted Material Contract assigned to Buyer from and after the date of
assignment to Buyer pursuant to a special-purpose assignment and assumption
agreement substantially similar in terms to those of the Assignment and
Assumption Agreement (which special-purpose agreement the parties shall prepare,
execute and deliver in good faith at the time of such transfer, all at no
additional cost to Buyer). Seller shall keep the Georgia Power Contract in full
force and effect during its term and not commit any breach thereunder. Seller
shall make no amendment to the Georgia Power Contract or the agreement with
Converse & Co., Inc., or send correspondence to Georgia Power, without the
consent of Buyer, which shall not be unreasonably withheld. Seller shall provide
Buyer with copies of all correspondence sent or received concerning the Georgia
Power Contract.

If Buyer waives any other condition precedent to its obligation to close, Seller
and Shareholder shall continue to use Best Efforts subsequent to Closing to do
all things within their power to cause such actions, documents or deliverables
to be taken or provided after the Closing. Buyer can waive its conditions
precedent in its sole and absolute discretion, and Seller is unconditionally
bound to consummate the sale of Assets, only subject to the provisions of
Section 2.7(b), Article 8 and Section 9.1(b) and (d).

This covenant survives closing, as do all covenants in Article 10.

10.8 Deliveries. From and after the date of this Agreement, Seller and
Shareholder shall use their Best Efforts to cause the following documents to be
delivered, before or after the Closing (or tendered subject only to Closing):

(a) an Estoppel Agreement and Easement from the State of Tennessee in form and
substance reasonably acceptable to Buyer with the rights thereunder to have been
prospectively, partially assigned to Buyer pursuant to the Assignment of Coal
Mineral Rights; and

(b) an Assignment of the Georgia Power Contract, with such amendments and
waivers from Georgia Power Company as are acceptable to Buyer and executed by
Georgia Power Company and the other parties to the Georgia Power Contract. Buyer
shall also provide any information requested by Georgia Power and will cooperate
in any reasonable way in obtaining the consent of Georgia Power.

10.9 Bankruptcy Provisions.

(a) Seller and Shareholder agree that in the event that Seller or Shareholder
becomes a debtor under the United States Bankruptcy Code, each of Seller and
Shareholder on behalf of its self and its bankruptcy estate: (i) waives any
right that Seller or Shareholder may have under the United States Bankruptcy
Code or applicable state law to bring an action against Buyer to seek to
(x) avoid the transaction that is the subject of this Agreement and/or (y) avoid

 

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and/or recover any asset transferred from Seller to Buyer pursuant to this
Agreement; (ii) to the extent that performance remains to be performed under
this Agreement, at the election of Buyer, to immediately file a motion with the
Bankruptcy court having jurisdiction over the Seller and/or Shareholder to
immediately assume this Agreement under the United States Bankruptcy Code and
applicable law and to consummate the Contemplated Transactions set forth in this
Agreement; and (iii) waives any right that Seller and/or Shareholder may have
under the United States Bankruptcy Code and applicable law to seek to reject,
breach or terminate this Agreement under the United States Bankruptcy Code and
applicable law or to seek to avoid, amend or waive any of the provisions of this
Agreement, without the express written consent of Buyer.

(b) Seller and Shareholder acknowledge and agree that the Buyer has provided
significant consideration to the Seller and Shareholder under this Agreement and
as a consequence, Seller and Shareholder acknowledge and agree that there is
adequate and fair consideration for the protections afforded to Buyer in this
Agreement.

(c) Seller and Shareholder further acknowledge and agree that Buyer has provided
reasonably equivalent value for the Assets conveyed pursuant to the terms of
this Agreement and contemplated by the Contemplated Transactions.

Article 11 Indemnification; Remedies

11.1 Survival.

All representations, warranties, covenants and obligations in this Agreement,
the Disclosure Letter, the certificates delivered pursuant to Section 2.7 and
any other certificate or document delivered pursuant to this Agreement shall
survive the Closing and the consummation of the Contemplated Transactions
without termination at any time, except that the representations and warranties
shall survive for a period of eighteen (18) months, and thereafter (together
with any indemnification related thereto) be of no further force or effect
whatsoever. The right to indemnification, reimbursement or other remedy based
upon such representations, warranties, covenants and obligations shall not be
affected by any investigation (including any environmental investigation or
assessment) conducted with respect to, or any Knowledge acquired (or capable of
being acquired) at any time, whether before or after the execution and delivery
of this Agreement or the Closing Date, with respect to the accuracy or
inaccuracy of or compliance with any such representation, warranty, covenant or
obligation. The waiver of any condition based upon the accuracy of any
representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification,
reimbursement or other remedy based upon such representations, warranties,
covenants and obligations.

11.2 Indemnification and Reimbursement By Seller and Shareholder.

Seller and Shareholder, jointly and severally, will indemnify and hold harmless
Buyer, and its Representatives, owners, subsidiaries and Related Persons
(collectively, the “Buyer Indemnified Persons”), and will reimburse the Buyer
Indemnified Persons for any loss, liability, claim, damage, expense (excluding
incidental and consequential damages, indirect, punitive or other special
damages which are hereby waived), (including costs of investigation and defense
and reasonable attorneys’ fees and expenses), or diminution of value whether or
not involving a Third-Party Claim (collectively, “Damages”), arising from or in
connection with:

(a) any Breach of any representation or warranty made by Seller or any
Shareholder in (i) this Agreement (giving effect to the Disclosure Letter as
supplemented to account for the events arising after date first set forth
above), (ii) the certificates delivered pursuant to Section 2.7 (for this
purpose, each such certificate will be deemed to have stated that Seller’s and
Shareholder’s representations and warranties in this Agreement fulfill the
requirements of Section 7.1 as of the Closing Date as if made on the Closing
Date), (iii) any transfer instrument or (iv) any other certificate, document,
writing or instrument delivered by Seller or any Shareholder pursuant to this
Agreement;

 

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(b) any Breach of any covenant or obligation of Seller or any Shareholder in
this Agreement or in any other certificate, document, writing or instrument
delivered by Seller or any Shareholder pursuant to this Agreement;

(c) any brokerage or finder’s fees or commissions or similar payments based upon
any agreement or understanding made, or alleged to have been made, by any Person
with Seller or any Shareholder (or any Person acting on their behalf) in
connection with any of the Contemplated Transactions;

(d) any coal shipped, or any services provided by, Seller, in whole or in part,
prior to the Closing Date other than the Assumed Liabilities;

(e) any noncompliance with any fraudulent transfer law in respect of the
Contemplated Transactions; or

(f) any damages arising out of the encroachment identified on Part 3.6(a).

provided, however, neither Seller nor Shareholder shall have any obligation to
indemnify the Buyer Indemnified Persons from and against any Damages until the
Buyer Indemnified Persons have suffered Damages by reason of all such
indemnifiable causes in excess of a $150,000 aggregate threshold (at which point
Seller and/or Shareholder will be obligated to indemnify the Buyer Indemnified
Persons from and against all such Damages relating back to the first dollar);
provided, further, that the aggregate of such indemnification obligation under
this Section 11.2 shall not exceed $3,000,000; provided, further, however, that
the deductible and cap shall have no application to Claims or Damages arising
out of breaches of covenants, representations with respect to title to the
Assets and Encumbrances on the Assets, claims for fraud and damages arising out
of the encroachment identified on Part 3.6(a).

11.3 Indemnification And Reimbursement By Buyer.

Buyer will indemnify and hold harmless Seller, and its Representatives,
subsidiaries and Related Persons (the “Seller Indemnified Persons”), and will
reimburse the Seller Indemnified Persons, for any Damages arising from or in
connection with:

(a) any Breach of any representation or warranty made by Buyer in this Agreement
or in any certificate, document, writing or instrument delivered by Buyer
pursuant to this Agreement;

 

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(b) any Breach of any covenant or obligation of Buyer in this Agreement or in
any other certificate, document, writing or instrument delivered by Buyer
pursuant to this Agreement;

(c) any Liability arising out of the ownership or operation of the Assets
following the Closing Date, including but not limited to the Assumed
Liabilities;

(d) any claim by any Person for brokerage or finder’s fees or commissions or
similar payments based upon any agreement or understanding alleged to has been
made by such Person with Buyer (or any Person acting on Buyer’s behalf) in
connection with any of the Contemplated Transactions; or

(e) any Assumed Liabilities.

Buyer shall have no obligation to indemnify the Seller Indemnified Persons from
and against any Damages until the Seller Indemnified Persons have suffered
Damages by reason of all such indemnifiable causes in excess of a $150,000
aggregate threshold (at which point Buyer will be obligated to indemnify the
Buyer Indemnified Persons from and against all such Damages relating back to the
first dollar); provided, further, that the aggregate of such indemnification
obligation under this Section 11.3 shall not exceed $3,000,000; provided,
further, however, that the deductible and cap shall have no application to
Claims or Damages arising out of breaches of covenants and claims for fraud.

11.4 Reductions of Indemnity Amounts

After taking into account any costs of collection (including reasonably
attorney’s fees) with respect to any amounts collected from any insurer or third
party, the amount of any Damages payable hereunder shall be reduced by any
insurance proceeds which the Indemnified Person receives with respect to the
event or occurrence giving rise to such Damages and shall be reduced by any
amounts which the Indemnified Person receives from third parties in connection
with Damages for which indemnification is sought under this Agreement. If the
Indemnified Person both receives proceeds from any insurance company or third
party and receives a payment from the Indemnifying Person, and the sum of such
proceeds and payment is in excess of the amount payable with respect to the
matter that is the subject of the indemnity, then the Indemnified Person shall
promptly refund to the Indemnifying Person the amount of such excess.

11.5 Third-Party Claims.

(a) Promptly after receipt by a Person entitled to indemnity under Section 11.2
or 11.3 (an “Indemnified Person”) of notice of the assertion of a Third-Party
Claim against it, such Indemnified Person shall give notice to the Person
obligated to indemnify under such Section (an “Indemnifying Person”) of the
assertion of such Third-Party Claim, provided that the

 

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failure to notify the Indemnifying Person will not relieve the Indemnifying
Person of any liability that it may have to any Indemnified Person, except to
the extent that the Indemnifying Person demonstrates that the defense of such
Third-Party Claim is prejudiced by the Indemnified Person’s failure to give such
notice.

(b) If an Indemnified Person gives notice to the Indemnifying Person pursuant to
Section 11.5(a) of the assertion of a Third-Party Claim, the Indemnifying Person
shall be entitled to participate in the defense of such Third-Party Claim and,
to the extent that it wishes (unless (i) the Indemnifying Person is also a
Person against whom the Third-Party Claim is made and the Indemnified Person
determines in good faith that joint representation would be inappropriate or
(ii) the Indemnifying Person fails to provide reasonable assurance to the
Indemnified Person of its financial capacity to defend such Third-Party Claim
and provide indemnification with respect to such Third-Party Claim), to assume
the defense of such Third-Party Claim with counsel reasonably satisfactory to
the Indemnified Person. After notice from the Indemnifying Person to the
Indemnified Person of its election to assume the defense of such Third-Party
Claim, the Indemnifying Person shall not, so long as it diligently conducts such
defense, be liable to the Indemnified Person under this Article 11 for any fees
of other counsel or any other expenses with respect to the defense of such
Third-Party Claim, in each case subsequently incurred by the Indemnified Person
in connection with the defense of such Third-Party Claim, other than reasonable
costs of investigation. If the Indemnifying Person assumes the defense of a
Third-Party Claim, (i) such assumption will conclusively establish for purposes
of this Agreement that the claims made in that Third-Party Claim are within the
scope of and subject to indemnification, and (ii) no compromise or settlement of
such Third-Party Claims may be effected by the Indemnifying Person without the
Indemnified Person’s Consent unless (A) there is no finding or admission of any
violation of Legal Requirement or any violation of the rights of any Person;
(B) the sole relief provided is monetary damages that are paid in full by the
Indemnifying Person; and (C) the Indemnified Person shall have no liability with
respect to any compromise or settlement of such Third-Party Claims effected
without its Consent. If notice is given to an Indemnifying Person of the
assertion of any Third-Party Claim and the Indemnifying Person does not, within
ten (10) days after the Indemnified Person’s notice is given, give notice to the
Indemnified Person of its election to assume the defense of such Third-Party
Claim, the Indemnifying Person will be bound by any determination made in such
Third-Party Claim or any compromise or settlement effected by the Indemnified
Person.

(c) Notwithstanding the foregoing, if an Indemnified Person determines in good
faith that there is a reasonable probability that a Third-Party Claim may
adversely affect it or its Related Persons other than as a result of monetary
damages for which it would be entitled to indemnification under this Agreement,
the Indemnified Person may, by notice to the Indemnifying Person, assume the
exclusive right to defend, compromise or settle such Third-Party Claim, but the
Indemnifying Person will not be bound by any determination of any Third-Party
Claim so defended for the purposes of this Agreement or any compromise or
settlement effected without its Consent (which may not be unreasonably
withheld).

(d) Notwithstanding the provisions of Section 12.3, the parties hereby consent
to the nonexclusive jurisdiction of any court in which a Proceeding in respect
of a Third-Party Claim is brought against any Indemnified Person for purposes of
any claim that a Indemnified Person may have under this Agreement with respect
to such Proceeding or the matters alleged therein and agree that process may be
served on the parties with respect to such a claim anywhere in the world.

 

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(e) With respect to any Third-Party Claim subject to indemnification under this
Article 11: (i) both the Indemnified Person and the Indemnifying Person, as the
case may be, shall keep the other Person fully informed of the status of such
Third-Party Claim and any related Proceedings at all stages thereof where such
Person is not represented by its own counsel, and (ii) the parties agree (each
at its own expense) to render to each other such assistance as they may
reasonably require of each other and to cooperate in good faith with each other
in order to ensure the proper and adequate defense of any Third-Party Claim.

(f) With respect to any Third-Party Claim subject to indemnification under this
Article 11, the parties agree to cooperate in such a manner as to preserve in
full (to the extent possible) the confidentiality of all confidential
information and the attorney-client and work-product privileges. In connection
therewith, each party agrees that: (i) it will use its Best Efforts, in respect
of any Third-Party Claim in which it has assumed or participated in the defense,
to avoid production of confidential information (consistent with applicable law
and rules of procedure), and (ii) all communications between any party hereto
and counsel responsible for or participating in the defense of any Third-Party
Claim shall, to the extent possible, be made so as to preserve any applicable
attorney-client or work-product privilege.

11.6 Other Claims.

A claim for indemnification for any matter not involving a Third-Party Claim may
be asserted by notice to the party from whom indemnification is sought and shall
be paid promptly after such notice.

11.7 Indemnification In Case Of Strict Liability Or Indemnitee Negligence.

THE INDEMNIFICATION PROVISIONS IN THIS Article 11 SHALL BE ENFORCEABLE
REGARDLESS OF WHETHER THE LIABILITY IS BASED UPON PAST, PRESENT OR FUTURE ACTS,
CLAIMS OR LEGAL REQUIREMENTS (INCLUDING ANY PAST, PRESENT OR FUTURE BULK SALES
LAW, ENVIRONMENTAL LAW, FRAUDULENT TRANSFER ACT, OCCUPATIONAL SAFETY AND HEALTH
LAW OR PRODUCTS LIABILITY, SECURITIES OR OTHER LEGAL REQUIREMENT) AND REGARDLESS
OF WHETHER ANY PERSON (INCLUDING THE PERSON FROM WHOM INDEMNIFICATION IS SOUGHT)
ALLEGES OR PROVES THE SOLE, CONCURRENT, CONTRIBUTORY OR COMPARATIVE NEGLIGENCE
OF THE PERSON SEEKING INDEMNIFICATION OR THE SOLE OR CONCURRENT STRICT LIABILITY
IMPOSED UPON THE PERSON SEEKING INDEMNIFICATION.

11.8 Tax Treatment of Payment.

Any payment made by Buyer or Seller pursuant to this Article 11 will be treated
as an adjustment to the Purchase Price for all Tax purposes.

 

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Article 12 General Provisions

12.1 Expenses.

Except as otherwise provided in this Agreement, each party to this Agreement
will bear its respective fees and expenses incurred in connection with the
preparation, negotiation, execution and performance of this Agreement and the
Contemplated Transactions, including all fees and expense of its
Representatives. Buyer will pay the premium on any title insurance policy to the
title insurer it selects to provide any title commitments and/or title policy,
including premiums (including premiums for endorsements), with respect to the
Real Property. If this Agreement is terminated, the obligation of each party to
pay its own fees and expenses will be subject to any rights of such party
arising from a Breach of this Agreement by another party. All other payments to
Tennessee Valley Title Company shall be split by Buyer and Seller.

12.2 Notices.

All notices, Consents, waivers and other communications required or permitted by
this Agreement shall be in writing and shall be deemed given to a party when
(a) delivered to the appropriate address by hand or by nationally recognized
overnight courier service (costs prepaid); (b) sent by email or facsimile with
confirmation of transmission by the transmitting equipment; or (c) received or
rejected by the addressee, if sent by certified mail, return receipt requested,
in each case to the following addresses, facsimile numbers or e-mail addresses
and marked to the attention of the person (by name or title) designated below
(or to such other address, facsimile number, e-mail address or person as a party
may designate by notice to the other parties):

Seller and Shareholder:

National Coal Corp.

8915 George Williams Road

Knoxville, TN 37923

Attn: Daniel A. Roling, President and CEO

Fax no.: 865-691-9982

E-mail address: droling@nationalcoal.com

with mandatory copies to:

Stubbs, Alderton & Markiles, LLP

15260 Ventura Blvd., 20th Fl

Sherman Oaks, CA 92401

Attention: John McIlvery, Esq.

Fax no.: 818-444-6302

E-mail address: jmcilvery@biztechlaw.com

and

National Coal Corp.

8915 George Williams Road

Knoxville, TN 37923

 

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Attn: Tim Jones, Corporate Counsel

Fax no.: 865-691-9982

E-mail address: tjones@nationalcoal.com

Buyer:

Ranger Energy Investments, LLC

c/o James C. Justice Companies, Inc.

106 Lockheed Dr.

PO Box 20178

Beaver, WV 25813

Attention: James C. Justice

Fax no.: 304-255-3865

E-mail address:                     

with a mandatory copy to:

Frost Brown Todd LLC

Lexington Financial Center

250 West Main Street, Suite 2800

Lexington, KY 40507-1749

Attention: Paul Sullivan, Esq.

Fax no.: 859-231-0011

E-mail address: psullivan@fbtlaw.com

12.3 Jurisdiction; Service Of Process.

Any Proceeding arising out of or relating to this Agreement or any Contemplated
Transaction may be brought in the Delaware Chancery Courts and each of the
parties irrevocably submits to the non-exclusive jurisdiction of each such court
in any such Proceeding, waives any objection it may now or hereafter have to
venue or to convenience of forum, agrees that all claims in respect of the
Proceeding shall be heard and determined only in any such court and agrees not
to bring any Proceeding arising out of or relating to this Agreement or any
Contemplated Transaction in any other court. The parties agree that either or
both of them may file a copy of this Section with any court as written evidence
of the knowing, voluntary and bargained agreement between the parties
irrevocably to waive any objections to venue or to convenience of forum. Process
in any Proceeding referred to in the first sentence of this section may be
served on any party anywhere in the world.

12.4 Enforcement of Agreement.

Seller and Shareholder acknowledge and agree that Buyer would be irreparably
damaged if any of the provisions of this Agreement are not performed in
accordance with their specific terms and that any Breach of this Agreement by
Seller or Shareholder could not be adequately compensated in all cases by
monetary damages alone. Accordingly, in addition to any other right or remedy to
which Buyer may be entitled, at law or in equity, it shall be entitled to
enforce any provision of this Agreement by a decree of specific performance and
to temporary, preliminary and permanent injunctive relief to prevent Breaches or
threatened Breaches of any of the provisions of this Agreement, without posting
any bond or other undertaking.

 

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12.5 Waiver; Remedies Cumulative.

The rights and remedies of the parties to this Agreement are cumulative and not
alternative. Neither any failure nor any delay by any party in exercising any
right, power or privilege under this Agreement or any of the documents referred
to in this Agreement will operate as a waiver of such right, power or privilege,
and no single or partial exercise of any such right, power or privilege will
preclude any other or further exercise of such right, power or privilege or the
exercise of any other right, power or privilege. To the maximum extent permitted
by applicable law, (a) no claim or right arising out of this Agreement or any of
the documents referred to in this Agreement can be discharged by one party, in
whole or in part, by a waiver or renunciation of the claim or right unless in
writing signed by the other party; (b) no waiver that may be given by a party
will be applicable except in the specific instance for which it is given; and
(c) no notice to or demand on one party will be deemed to be a waiver of any
obligation of that party or of the right of the party giving such notice or
demand to take further action without notice or demand as provided in this
Agreement or the documents referred to in this Agreement.

12.6 Entire Agreement and Modification.

This Agreement supersedes all prior agreements, whether written or oral, between
the parties and between the parties and their affiliates and owners with respect
to its subject matter (including any letter of intent and any confidentiality
agreement between Buyer and Seller) and constitutes (along with the Disclosure
Letter, Exhibits and other documents delivered pursuant to this Agreement) a
complete and exclusive statement of the terms of the agreement between the
parties with respect to its subject matter. This Agreement may not be amended,
supplemented, or otherwise modified except by a written agreement executed by
the party to be charged with the amendment.

12.7 Disclosure Letter.

The information in the Disclosure Letter constitutes (i) exceptions to
particular representations, warranties, covenants and obligations of Seller and
Shareholder as set forth in this Agreement or (ii) descriptions or lists of
assets and liabilities and other items referred to in this Agreement. If there
is any inconsistency between the statements in this Agreement and those in the
Disclosure Letter (other than an exception expressly set forth as such in the
Disclosure Letter with respect to a specifically identified representation or
warranty), the statements in this Agreement will control. The statements in the
Disclosure Letter, and those in any supplement thereto, relate only to the
provisions in the Section of this Agreement to which they expressly relate and
not to any other provision in this Agreement

12.8 Assignments, Successors and No Third-Party Rights.

No party may assign any of its rights or delegate any of its obligations under
this Agreement without the prior written consent of the other parties, except
that Buyer may assign any of its rights and delegate any of its obligations
under this Agreement to any Subsidiary of Buyer and may collaterally assign its
rights hereunder to any financial institution providing

 

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financing in connection with the Contemplated Transactions. Subject to the
preceding sentence, this Agreement will apply to, be binding in all respects
upon and inure to the benefit of the successors and permitted assigns of the
parties. Nothing expressed or referred to in this Agreement will be construed to
give any Person other than the parties to this Agreement, the Buyer Indemnified
Persons and the Seller Indemnified Persons any legal or equitable right, remedy
or claim under or with respect to this Agreement or any provision of this
Agreement, except such rights as shall inure to a successor or permitted
assignee pursuant to this Section 12.8.

12.9 Severability.

If any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

12.10 Construction.

The headings of Articles and Sections in this Agreement are provided for
convenience only and will not affect its construction or interpretation. All
references to “Articles,” “Sections” and “Parts” refer to the corresponding
Articles, Sections and Parts of this Agreement and the Disclosure Letter.

12.11 Time of Essence.

With regard to all dates and time periods set forth or referred to in this
Agreement, time is of the essence.

12.12 Governing Law.

This Agreement will be governed by and construed under the laws of the State of
Delaware without regard to conflicts-of-laws principles that would require the
application of any other law.

12.13 Execution of Agreement.

This Agreement may be executed in one or more counterparts, each of which will
be deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement. The exchange
of copies of this Agreement and of signature pages by facsimile transmission
shall constitute effective execution and delivery of this Agreement as to the
parties and may be used in lieu of the original Agreement for all purposes.
Signatures of the parties transmitted by facsimile shall be deemed to be their
original signatures for all purposes.

 

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12.14 Shareholder Obligations.

The liability of Shareholder hereunder shall be joint and several with Seller.
Where in this Agreement provision is made for any action to be taken or not
taken by Seller, Shareholder undertakes to cause Seller to take or not take such
action, as the case may be. Without limiting the generality of the foregoing,
Shareholder shall be jointly and severally liable with Seller for the
indemnities set forth in Article 11.

12.15 Risk of Loss. The risk of Loss or damage or destruction to any of the
Assets to be transferred to Buyer hereunder from fire or other casualty or
cause, shall be borne by Seller at all times prior to the Closing.

12.16 Attorneys Fees. If any breach occurs under this Agreement, and this
Agreement, then the non-prevailing party in any litigation arising therefrom
shall pay to the prevailing party its reasonable attorney fees and legal costs
incurred in enforcing or attempting to enforce this Agreement or enforcing its
rights hereunder, to the fullest extent allowed by the laws of the State of
Delaware.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

 

Buyer: RANGER ENERGY INVESTMENTS, LLC By:  

/s/ Stephen W. Ball

Name:   Stephen W. Ball Title:   President Shareholder: NATIONAL COAL CORP. By:
 

/s/ Daniel A. Roling

Name:   Daniel A. Roling Title:   President & CEO Seller: NATIONAL COAL
CORPORATION By:  

/s/ Daniel A. Roling

Name:   Daniel A. Roling Title:   President & CEO

 

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