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EXHIBIT 99.3
THIS SUBLEASE, Made as of the 31st day of May, 2001, ("Sublease" or
"Agreement") by and between Penn Virginia Coal Company, a Virginia corporation
with an address at 0000 Xxxx-Xxxx Xxxx, X.X. Xxx 000, Xxxxxxxx, XX 00000,
hereinafter referred to as "Sublessor"; and Pen Land Company, a Delaware
corporation with an address of 0000 Xxxxxxxx Xxx, Xxxxx 000, Xxxxxxxxx, XX
00000, hereinafter referred to as "Sublessee".
W I T N E S S E T H:
That for and in consideration of the premises and of the sum of Ten
Dollars, cash in hand paid by Sublessee to Sublessor, the receipt and
sufficiency of which is hereby acknowledged, and of the rents and royalties
herein provided to be paid, and of the mutual covenants and promises hereinafter
set forth, the parties hereto do hereby agree as follows:
1. Subleased Coal; Subleased Premises.
a. Subject to the exceptions, reservations, and conditions
hereinafter set out, Sublessor does hereby SUBLEASE, SUBLET, and ASSIGN unto
Sublessee upon the terms and conditions hereinafter set forth the exclusive
right and privilege to mine and take away by any current or future surface and
underground mining methods all of the coal in all seams or to otherwise mine
such coal or use such surface rights and/or underground rights as are granted to
Sublessor and which Sublessor, by virtue of its rights to sublease or assign,
herein or hereafter subleases and assigns to Sublessee, mining or other rights
on certain tracts of land (collectively, the "Subleased Premises"), a general
description of such lands shown on a map of the Subleased Premises marked
Exhibit 1 and a further description of the various underlying agreements on a
schedule marked "Exhibit 2" each attached hereto and made a part hereof. Certain
other tracts are subject to an option agreement, ("Option") by which Sublessor
may acquire such certain property rights, and which property rights shall
thereafter be included in this Sublease and be a part of the Subleased Premises,
a more definite description of such Option also shown on Exhibit 1 and a further
description of such option described on a schedule marked "Exhibit 3" attached
hereto and made a part hereof. If Sublessor elects not to exercise such option,
Sublessor hereby agrees to assign the right to exercise such option to Sublessee
at least fifteen (15) days prior to the expiration of the option period provided
in the Option. Highwall and auger mining may be conducted on the Subleased
Premises upon written consent by Sublessor with respect to specific mining plan
proposals submitted by Sublessee, which consent may not be unreasonably withheld
by Sublessor. Any dispute regarding reasonableness of Sublessor's denial of
approval for highwall and/or auger mining under this paragraph 1(a) shall be
resolved pursuant to the provisions of paragraph 47 of this Sublease. The leases
and agreements listed in Exhibits 2 and 3 by which Sublessor is granted rights
to the Subleased Premises are referred to herein as the "Prime Lease(s)".
Sublessee acknowledges receipt of copies of the Prime Leases and agrees to be
bound by the terms and conditions thereof, and further agrees that Sublessee
shall be responsible for compliance with all the provisions
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of the Prime Leases, except with respect to payments to be made to the Lessor
under the Prime Leases, which shall be the responsibility of Sublessor.
Sublessee agrees that it will reimburse Sublessor for all payments required to
be made by Sublessor to Lessors with the exception of production royalty
payments, payment for which shall be made by Sublessee to Sublessor as specified
herein.
NOTWITHSTANDING ANY PROVISION IN THIS SUBLEASE OR ANY AGREEMENT
REFERRED TO HEREIN OR ATTACHED HERETO, SUBLESSOR MAKES NO WARRANTY, EXPRESS OR
IMPLIED, WHETHER OF MERCHANTABILITY, QUALITY, QUANTITY, RECOVERABILITY, TITLE OR
OTHERWISE AS TO THE SUBLEASED PREMISES, THE SUBLEASED COAL OR INTERESTS THEREIN,
OR COAL RESERVES, OR MINING OR OTHER RIGHTS OWNED BY SUBLESSOR, OR AS TO THE
CONDITION OF THE SUBLEASED PREMISES OR SUBLEASED COAL, AND SUBLESSEE SHALL RELY
UPON ITS OWN EXAMINATION THEREOF THROUGH ENGINEERS AND OTHER REPRESENTATIVES
SELECTED AND EMPLOYED SOLELY BY SUBLESSEE.
2. Term. The term of this Sublease shall be as follows:
a. The "Primary Term", with respect to each Prime Lease shall
commence on the date hereof and continue until the earlier of (i) termination of
such Prime Lease, (ii) termination of the Lease between Sublessor as Lessor and
Sublessee as Lessee of even date as this Sublease(the "Lease"), (iii) ten years
from the date hereof or (iv) until the removal of all mineable and merchantable
coal in the Subleased Premises. Sublessee shall have the option to extend the
Primary Term of this Sublease in accordance with the same term as Sublessor is
permitted to extend the term of the Prime Lease, provided that, in no event
shall the rights assigned with respect to any Prime Lease hereunder survive
termination of the respective Prime Lease and provided further that Sublessee is
not in breach hereof beyond any applicable notice and grace periods hereunder
and is either (i) actively engaged in mining operations on the Subleased
Premises or any area covered by the Lease, or (ii) prevented from mining at the
time of such renewal by an event of force majeure as provided in paragraph 7(a)
hereunder, it being understood that, subject to clauses (i) and (ii) above, if
Lessee is in breach hereof beyond any applicable notice and grace periods
hereunder and there is a Permitted Mortgage then in effect, the Primary Term
shall nonetheless automatically extend (in accordance with the succeeding
sentence), provided that the Permitted Mortgagee is entitled to cure the breach
pursuant to the terms of paragraph 49 hereof. The option to extend the Primary
Term of this Sublease for the additional periods described above shall be
automatic without any notice required from Sublessee provided, however, if
Sublessee elects not to extend this Sublease at the end of the Primary Term or
any extended term, then Sublessee shall provide, by mailing notice thereof, as
hereinafter provided, to Sublessor at least sixty (60) days prior to the date of
expiration of the then current term, further provided however, that such notice
not to renew must be accompanied by a written consent thereto by the Permitted
Mortgagee, as hereinafter defined in paragraph 27(b), such consent to be
required only if a Permitted Mortgage is in effect at the time of such renewal.
b. The "Remainder Term" shall commence at the end of the Primary
Term or any extended term, as applicable, and shall continue until Sublessee
shall have fully
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complied with all of its reclamation, environmental and other obligations
hereunder.
Mineable and merchantable coal, as used herein, means coal that can
be mined and marketed at a reasonable profit to Sublessee when reached in the
normal course of mining by the use of modern practical and efficient machinery,
facilities, methods and management.
3. Rights; Failure of Title.
a. Sublessee shall have, so long as this Sublease remains in effect,
all the mining rights and privileges owned by Sublessor appurtenant to the coal
or other rights existing in the Subleased Premises and incident to the Prime
Lease thereof. The Sublessee shall have the exclusive right and privilege of
mining, extracting, removing, and marketing all of the mineable and merchantable
coal contained on the Subleased Premises. Further, Sublessor does hereby grant
unto Sublessee all necessary and convenient rights for the development of the
mineable and merchantable coal including, without limitation, the right to enter
in, upon, and under such lands and erect or place thereon such buildings,
machinery, plants, and other structures, roads, tramways, airshafts, power
lines, substations, drains, drain ways; and the right to operate the same
therein and thereunder to such extent as may be necessary or convenient for the
mining, extracting, removing, and preparing of coal for marketing. The Sublessor
hereby consents to Sublessee's use of any surface rights owned and/or controlled
by Sublessor within the Subleased Premises. Sublessee is granted the right of
ingress, egress, and regress over and through said lands for mining purposes all
as may be necessary and in so far as Sublessor has the right to grant said
privileges under the leases or other instruments under which it holds rights.
b. In the event any part of the Subleased Premises is lost after
final adjudication or settlement to the holder of any outstanding superior
title, the minimum rental described in Article 6(e) hereof shall be reduced by
the same amount of reduction received by Sublessor under the Prime Lease. If
such loss is substantial and, if Sublessee has mined and removed a part or all
of the coal therefrom and paid Sublessor therefore on the royalty basis,
Sublessor agrees to repay to Sublessee the amount of royalty so paid, without
interest, provided however, such repayment shall be made only to the extent that
Sublessor receives repayment from the Lessor under the Prime Lease. Sublessor
shall not be otherwise liable for any damage on account of the mining and
removing of said coal by Sublessee, and Sublessee shall protect and save
harmless Sublessor from and indemnify Sublessor for all suits, actions, damages
or claims whatsoever resulting or arising therefrom.
c. Notwithstanding the statement of anything herein to the contrary,
this Sublease shall not be construed to grant to Sublessee any rights or
privileges in addition to those rights and privileges granted to Sublessor under
the Prime Lease.
4. Wheelage Rights. Sublessee shall reimburse to Sublessor for the said
right to transport coal across any Subleased Premises where the Prime Lease
requires any type of such Wheelage Payment to be made. Such payment shall be in
addition to any other type of Wheelage Payment to be made with regard to any
other Prime Lease.
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5. Exceptions and Reservations. There is excepted and reserved, from
the operation of this Sublease, the entire ownership and control of the
Subleased Premises and the coal, stone, sand, water, timber, coal and other
minerals, rights and products therein and thereon for all purposes other than
those for which this Sublease is made, including without limitation the
following:
a. The right to cut, prepare, use or remove all the timber on the
Subleased Premises;
b. The right of searching for oil, gas, coal, coal bed methane not
released in the ordinary course of mining ("CBM") and other minerals and
products other than the coal hereby Subleased and removing the same when found,
the right to bore for and produce the oil and gas, including CBM, found in the
Subleased Premises, the right to store and transport, through pipelines or
otherwise, such gas and oil, and gas and oil from any other lands, the right to
prospect, mine, produce, store and transport any minerals other than the coal
hereby Subleased found in, on or underlying the Subleased Premises and the right
to store and transport any minerals from other lands;
c. The right of draining water, transmitting electrical energy,
steam and heat, and of transporting coal or coke or other products and minerals
and goods of all other kinds from the Subleased Premises or any other land over,
across or through the Subleased Premises;
d. The right of using the stone, earth, water and other minerals and
products in and on the Subleased Premises, of making excavations and sinking or
boring slopes, shafts, drifts, tunnels and walls, of erecting buildings,
structures, machinery and other improvements, of constructing and maintaining
ditches, transmission lines, telegraph and telephone lines, railroads or other
roads, tramways, tubing, pipelines or other means of drainage, transmission,
communications or transportation over, upon or beneath the surface of the
Subleased Premises, and of selecting and granting to others rights of way
therefor;
e. The right of granting and conveying, from time to time, any
rights of way through and over the Subleased Premises, provided however,
Sublessor shall consult with Sublessee and shall obtain the consent of
Sublessee, which consent shall not be unreasonably withheld, prior to granting
rights of way through and over any portion of the Subleased Premises which is
included in any of Sublessee's reclamation permits
f. Rights of ingress and egress as may be necessary or convenient in
the proper development of the Subleased Premises or other lands or in the proper
exercise of the rights hereby excepted and reserved; and
g. All outstanding rights of any person or entity under existing
Subleases, deeds or other instruments evidenced by recorded instruments or
visible on the ground.
Notwithstanding the terms and provisions of this paragraph 5, Sublessee's rights
herein
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granted shall be the dominant estate with respect to rights granted by Sublessor
hereafter and Sublessor's exercise of any excepted and reserved rights shall not
unreasonably interfere with the rights herein granted to Sublessee. With regard
to any rights on the Subleased Premises granted to others after the date hereof,
Sublessor shall require the grantee of such rights to agree to (i) indemnify and
hold harmless Sublessee and the permitted Mortgagee with respect to acts and
omissions of such grantee with respect to grantees operations on the Subleased
Premises, and, (ii) where grantee shall be conducting mining, commercial or
industrial operations thereunder, (A) name Sublessee as an additional insured
with respect to such grantees operations on the Subleased Premises and, (B)
maintain reasonable commercial limits of insurance.
6. Payments; Abatement.
a. Sublessee shall pay to Sublessor for each ton of coal mined and
sold hereunder from the Subleased Premises, a tonnage royalty equal to the
greater of the "Fixed Rate" or the percentage of the gross sales price (the
"Percentage Rate") each as specified below.
For coal mined by underground mining methods:
Seam Fixed Rate Percentage Rate
---- ---------- ---------------
Any $2.00 per ton the greater of 7% of Gross Sales Price
or rate established by Prime Lease plus
2% (Two Percent) override
For Coal mined by surface mining methods, including highwall and/or auger mining
methods:
Seam Fixed Rate Percentage Rate
---- ---------- ---------------
Any $2.00 per ton the greater of 7 1/2% of Gross Sales Price
or rate established by Prime Lease plus
2% (Two Percent) override
b. Sublessee also shall pay to Sublessor a Wheelage Fee on coal
mined from lands other than the Subleased Premises and transported on, over or
through the Subleased Premises an amount equal to the amount required to be paid
under the Prime Lease, if so required. If a Wheelage Fee is not required under
the Prime Leases, then no Wheelage Fee shall be due under this Sublease.
c. As used in this Sublease, the following terms shall be defined as
follows. (i) The term "coal" shall include any low coal content merchantable
product that is sometimes sold and shipped under various trade names including,
but not limited to, bone, coal, fuel and middlings. (ii) The term "ton" shall
mean 2,000 pounds. (iii) The term "gross sales price" shall refer to the total
average amount receivable, F.O.B. railroad car at the Fork Creek Preparation
Plant, or F.O.B. truck at the loading point on the Leased or Subleased Premises
for each ton of coal, directly or indirectly, by Sublessee or any affiliate of
Sublessee in an arms length transaction. It is understood that the gross sales
price shall be determined without any deductions or offsets whatsoever, except
that Sublessee may deduct any actual transportation costs incurred for
transporting coal from the Fork Creek Preparation Plant to any other shipping
point. (iv) The term "Affiliate" shall mean any person or entity that directly
or indirectly controls, is controlled by or is under common control with
Sublessee. For purposes of this paragraph, a person or entity shall
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be deemed to "control" another person or entity if such controlling person or
entity owns 25% of the equity of the controlled person or entity.
d. During the Term of this Sublease, Sublessee shall pay to
Sublessor, as a minimum rental for each tract of land subleased hereunder, the
full amount of any minimum rental or other fee payment required under the Prime
Lease and Sublessee shall Pay to Sublessor such payment at least five (5) days
prior to the due date under the Prime Lease.
e. Sublessee may recoup any minimums/rentals paid hereunder
consistent with the provisions of the Prime Lease.
f. Payment of tonnage royalty, if any shall be due after applying
the foregoing provisions, shall be made monthly on or before the 25th day of
each calendar month with respect to coal mined and sold from the Subleased
Premises during the preceding month. Each payment of royalty shall be
accompanied by a statement showing the coal mined and sold during the period for
which the payment is tendered, the unsold inventory at the beginning and end of
the month, the gross sales price per ton as defined herein, the number of tons
sold at that sales price, and the royalty due thereon. Payment of Wheelage Fees,
if any, shall be made monthly, on or before the 25th day of each calendar month
with respect to coal transported during the preceding calendar month. Any coal
sales agent of Sublessee is hereby authorized, and Sublessee shall instruct such
agent, to furnish to Sublessor upon Sublessor's written request to such sales
agent (with a copy of such request to Sublessee) any information desired by
Sublessor with regard to the quantities and the gross sales price of the coal
with respect to which Sublessor is to receive a payment hereunder. Where payment
under any of the Prime Leases is due on or before the 25th of the month,
Sublessee shall provide Sublessor with a statement showing the royalty or other
payment to be paid under the Prime Lease no less than five (5) days prior to the
date on which such payment is due. Sublessor shall keep and cause any other
party that reviews Sublessee's records on behalf of Sublessor to keep all
information disclosed to Sublessor pursuant to this paragraph 6(f) in strict
confidence and shall not disclose such information to any other party without
the prior written consent of Sublessee, except as may be required by law.
g. Sublessee shall pay full tonnage royalty at the rate herein
stipulated upon all mineable and merchantable coal, whether in place or mined,
which is burned, lost, destroyed, abandoned, or injured by fire or explosion
("lost coal"), when such loss is caused by negligence of Sublessee, its agents
or employees or the failure of Sublessee to properly mine or provide for the
mining of said coal by standard methods of mining. Lost coal shall be paid for
according to the following formula: (Sublease royalty rate) X (average gross
sales price) X (recoverable tons). The Sublease royalty rate is provided in
Article 6(a). The average gross sales price as used in this paragraph is the
average of the gross sales prices for all coal sold during the month preceding
the month of the occurrence of lost coal during which coal was actually sold
pursuant to this Sublease. Recoverable tons is defined as ninety percent (90%)
of tons in place for surface mineable coal, fifty-five percent (50%) of tons in
place for underground mineable coal, and thirty-five percent (35%) of tons in
place for highwall miner or auger mineable coal. The number of tons of lost coal
in place is calculated by multiplying four-hundredths (.04) times the square
foot area of lost coal times the thickness in feet for the lost coal.
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Payment for lost coal shall be made by Sublessee to Sublessor within one (1)
month following such loss.
h. For each month during the Remainder Term and until termination of
this Sublease, Sublessee shall pay to Sublessor as rent the sum of $10.00 per
month, but in no event less that the amount required to be paid by Sublessor to
Lessor under the Prime Lease, payable monthly in advance on or before the first
day of each month.
i. All payments to be made hereunder by Sublessee to Sublessor shall
be wire transferred in immediately available funds to such account as Sublessor
may from time to time designate in writing to Sublessee, or in such manner as
Sublessor may from time to time designate in writing. Any late payment shall
bear interest at the rate of eight percent (8%) compounded annually on all
amounts not paid when due.
7. Mining Operations
a. Sublessee shall, where mining rights are granted by the Prime
Lease, enter upon the Subleased Premises and mine and remove coal thereon in an
approved, skillful and workmanlike manner, utilizing a mine plan reviewed by
Sublessor, so as to recover the greatest possible amount of mineable and
merchantable coal from the Subleased Premises employing modern machinery and
equipment and good mining and reclamation practices and in accordance with the
plans submitted by Sublessee to Sublessor pursuant to Article 8(b) hereunder,
having due regard for the value of the Subleased Premises as a coal producing
property so as to avoid damage to and waste of any seams of coal, whether
granted as a part of the Subleased Premises or not so granted, and to continue
mining the same with due diligence during the term of this Sublease; subject
only to "force majeure" (as hereinafter defined).
If Sublessee is unable, wholly or in part, by reason of force
majeure from carrying on its coal mining operations under this Sublease,
Sublessee shall give Sublessor prompt written notice of the force majeure with
reasonable detail concerning it. Thereupon, the obligation of Sublessee to make
minimum rental payments shall be suspended during the continuance of the force
majeure, but such suspension of minimum rental payments shall not exceed four
(4) aggregate months in any calendar year.
For the purpose of this Sublease, the term "force majeure" shall
mean any act or occurrence, beyond Sublessee's reasonable control and which is
not caused by the negligence or willful misconduct of the Sublessee, its agents
or employees, that prevents the mining, processing, transportation or delivery
of coal including fire, natural flood, damage to or destruction of Sublessee's
mines, improvements or machinery, riot, strikes, acts of God, serious accident,
non-approval of government or regulatory environmental permits required for
mining operations provided Sublessee has done all things reasonably necessary to
secure such permits, or other cause beyond the reasonable control of the
Sublessee. Sublessee shall, however, upon the happening of any event of force
majeure, use all reasonable efforts to remove as promptly as possible the cause
of the inability to mine and ship coal.
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b. Sublessor shall at all times have the right to enter the
Subleased Premises and workings and mines of Sublessee in order to audit,
review, examine, survey, and/or measure the same, or any part thereof, to
determine that all the terms and conditions of this Sublease are fully complied
with and for these purposes to use freely the means of access to the Subleased
Premises and workings thereon without hindrance, but in such manner as not
unreasonably to interfere with Sublessee's operations. Sublessor shall be
responsible for the acts and omissions of its agents and while on the Subleased
Premises.
c. If Sublessor finds and reports to Sublessee in writing that, in
the progress of the work, any areas of merchantable and mineable coal of
workable thickness have been passed by with the result that coal has not been
removed, which, in accordance with good mining practices should have been
removed, Sublessee agrees to return to such areas and remove the coal therefrom,
or pay for the coal under the lost coal provision as provided in Article 6(g).
Any dispute under this paragraph 7(c) shall be resolved pursuant to the
provisions of paragraph 47 of this Sublease.
d. Sublessee shall maintain such possession and control of the mines
operated hereunder as may be necessary to prevent trespass thereon or therein
and shall, at its own expense, do whatever is necessary to prevent such
trespass, and shall also at its own expense and in its own name (and in the name
of Sublessor when specifically authorized by Sublessor), initiate and conduct
all proceedings necessary to that end.
e. Sublessee shall use all reasonable care and precaution to prevent
the occurrence of fires in timber or forest growth on the surface overlying the
Subleased Premises and to prevent mine fires in the coal seams on the Subleased
Premises; and to pursue the prompt extinguishment of any such fires caused by
its activities. Sublessee shall also cooperate with Sublessor and its other
Sublessees in extinguishing such fires on the Subleased Premises and on
adjoining lands that may be liable to spread to or over the Subleased Premises.
Sublessee shall be responsible for all injuries and damages caused by fire that
result from the negligent acts of Sublessee on the Subleased Premises including,
but not limited to, damages to timber and property and injuries to persons on
the Subleased Premises and adjoining lands.
f. Sublessee agrees that if, in the prosecution of its mining
operations hereunder, it encounters or leaves unmined, any part or portion of
the coal covered hereby (it being understood that such coal can only be left as
unmineable and unmerchantable with the consent of the Sublessor, or after it has
been determined as a matter of fact to be unmineable and unmerchantable) and the
operations of Sublessee hereunder have advanced to the point where it is no
longer practicable to mine such coal, or the coal is inaccessible to Sublessee,
and to the point where such removal of such coal will not injure or damage
Sublessee's mine operations, then in that event, Sublessor at its election, may
declare in writing such coal so left as no longer being a part of the Subleased
Premises and may mine and remove such coal or Sublease the same to another for
the purpose of mining and removing the same as though it had not been included
in this Sublease in the first instance; provided that such mining is done in
such a manner as not to unreasonably interfere with Sublessee's mining
operations under this Sublease. Sublessor shall give Sublessee at least ninety
(90) days advance
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written notice of its intention to invoke this paragraph (f), identifying the
areas to be deleted from the Subleased Premises.
g. Sublessee shall mine through portions of the coal seams that are
faulty or would yield unmerchantable coal, if the amount and quality of coal
lying beyond the fault appears economically justifiable. Sublessee shall give to
Sublessor at least 30 days prior notice in writing of its intention so to do
before removing the pillars protecting main haulways and main air courses in the
Subleased Premises. Any dispute under this paragraph 7(g) shall be resolved
pursuant to the provisions of paragraph 47 of this Sublease.
h. If, at any time after the tenth year of this Sublease, Lessee
under the Lease does not produce from the Leased Premises (as defined in the
Lease) at the rate necessary to recoup the total minimum royalty payments due
for the most recent Lease year, and a third party proposes to develop any area
of the Subleased Coal in which (i) Sublessee is not currently operating or has
not obtained or has not submitted a then current application for a surface
disturbance permit from the West Virginia Division of Environmental Protection,
or, (ii) because of its location with respect to Sublessee's existing and
proposed operations or other condition which, in Sublessor's reasonable opinion,
makes it appear unlikely that such area will be mined by Sublessee, then
Sublessee, after 90 days notice of such third party's proposal, may elect to
release such area from the Sublease, with a commensurate reduction, on a pro
rata basis, of the then current minimum rental with respect to the affected
Prime Lease, or in the event Sublessee elects not to release such area,
Sublessee shall either commence and diligently pursue Mining Operations, as
hereinafter defined, in such area within two years or Sublessee shall be deemed
to have irrevocably acknowledged that such area is indeed mineable and
merchantable and agrees to pay for such area as lost coal as defined herein if
Sublessee does not mine such area prior to termination hereof. If Mining
Operations commence within such two (2) year period but the condition of the
area is found to be such that the coal is not mineable and merchantable, Lessee
shall have no obligation regarding lost coal under this Sublease with respect to
such area. If Sublessee elects to surrender such coal to enable a Sublease to
such third party, Sublessee also, upon request of Sublessor, promptly shall
transfer to such third party any of its permits that uniquely apply to such coal
and otherwise shall grant such permit rights as are necessary to allow such
third party to develop a mine as proposed. Sublessee shall be relieved of and
from any duties and obligations it would otherwise have regarding the area or
coals totally released by it pursuant to this Article. Sublessee shall be
reimbursed by Sublessor for reasonable documented costs incurred in the
development of any mining permit required to be transferred as a result of this
provision, except that with respect to jointly used haulroads, reimbursement
shall be limited to the subsequent maintenance cost thereof which shall be
apportioned among the users on the basis of tonnages hauled over said jointly
used roads. Any such designee shall agree to comply with the insurance and other
requirements under paragraph 5 with respect to rights granted hereafter. For
purposes of this paragraph 7(h), "Mining Operations" shall mean any activity
necessary or incidental to the actual removal of coal in the normal course of
events including core drilling, prospecting, obtaining additional required
rights, permitting, providing for electrical power or other utilities,
construction of roads, face-ups, and providing supporting fixtures and the
mining and removal of coal. Any dispute under this paragraph 7(h) shall be
resolved pursuant to the provisions of paragraph 47 of this Agreement.
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8. Surveys, Maps, and Permits.
a. Sublessee shall at its expense employ a competent, registered
professional mining engineer, whose duty it shall be to plan and project in
advance the coal mining operations to be conducted on the Subleased Premises in
an efficient and practicable manner, according to accepted and approved
engineering practices for the development of coal mines by the methods of mining
herein provided for.
b. The registered mining engineer shall lay out plans for
development of the mining and cause maps on a scale of six hundred (600) feet to
one (1) inch, or such other scale as Sublessor may deem acceptable, to be made,
which maps shall show thereon, fully and accurately, mining plans and proposals
for mining, all improvements and surface structures to be made in conjunction
with the mining of the coal, reclamation methods after removal of said coal,
elevation of the coal seam, total coal thickness, total seam thickness, contour
above sea level, West Virginia State Plane Coordinate system, and Sublessee
shall, thirty (30) days before the commencement of any mining operation, furnish
a copy of such maps and electronic files in a format acceptable to Sublessor.
Sublessee shall also provide to Sublessor with further request therefor a copy
of the most current approved permit proposal/drainage map and subsidence control
map and, upon reasonable notice, a copy of all mine permit applications and
documents shall be available for Sublessor review.
c. Sublessee agrees to give Sublessor reasonable notice of its or
any contractor's intention to permit (under applicable state law) any area on or
in the Subleased Premises.
d. No later than the 1st day of March and September of each year,
and as often as once every thirty days if requested by Sublessor, Sublessee
shall furnish Sublessor maps and electronic files in a format acceptable to
Sublessor, which accurately show workings and extension of Sublessee's mining
operations on the Subleased Premises during the six (6) month period ending
December 31 and June 30, respectively, and any other reasonable information
requested by Sublessor. The maps shall be on a scale of six hundred (600) feet
to one (1) inch (three sets) and one hundred (100) feet to one (1) inch (one
set) or such other scale as requested in writing by Sublessor and shall be based
on tied surveys of all workings utilizing the West Virginia State Plane
Coordinate System and shall be delivered to Sublessor at its designated office.
Sublessee agrees to provide any additional maps or documentation that may be
required by the Prime Lease in a timely manner so as to allow Sublessor to
review said documents and timely submit to Lessor.
e. Sublessor itself, or through its agents, shall at all times have
access to the plans, permit applications (amendments and completions), maps,
electronic files, exploration and quality data in a form acceptable to
Sublessor, and tracings of Sublessee and may take therefrom copies of such
portions as Sublessor or its agents may desire. If Sublessee fails to furnish
maps or other records as herein provided for and continues not to furnish such
maps or documents for a period of twenty (20) days after written demand by
Sublessor, Sublessor may employ a competent engineer to make a survey of the
mining developments of Sublessee as herein provided and the
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expense thereof shall be paid by Sublessee within 10 days after written demand.
f. Sublessee shall furnish Sublessor on or before the 1st day of
March of each year and at such other times as may be fixed by law or required
for tax assessments, a statement of and maps showing the acreage of the
Subleased seams of coal that were mined, abandoned, and/or lost by tax tract
during the preceding year and the estimated remaining Subleased reserves.
Sublessee shall cooperate fully with Sublessor in any effort by Sublessor during
a reappraisal or otherwise to reduce or minimize any taxes, fees, levies or
other assessments on all or any part of the Subleased Premises.
9. Taxes. Sublessee, during the term hereof, shall promptly and
properly, in accordance with all statutes, regulations, rulings and case law,
pay at the times they become due and payable, all taxes, fees, levies,
assessments, including, but not limited to, black lung benefits and assessments,
ad valorem, excise, license, privilege or severance taxes, and any other charges
whether imposed by the United States, any State, or any political subdivision
thereof, or by any municipal corporation upon or with respect to: (1) the fee
estate or other interests of Sublessor in the Subleased Premises; (2)
Sublessee's interest in this Sublease; (3) the Subleasehold estate hereby
created; (4) all coal mined and produced from the Subleased Premises by
Sublessee and the products thereof; (5) the exercise of any right or privileges
in connection with Sublessee's operations hereunder; so that Sublessor shall be
entirely relieved from such charges; provided, however, if any other seam or
seams of coal upon the Subleased Premises shall be operated by others, proper
allowances shall be made for Sublessee in settlement of the tax to be paid by it
under this Article. Sublessee shall also promptly and properly, in accordance
with all statutes, regulations, rulings and case law, pay at the times they
become due and payable all taxes, fees, levies, assessments, including, but not
limited to, black lung benefits and assessments, excise, license and privilege
taxes, and any other charges whether imposed by the United States, any State, or
any political subdivision thereof, or by any municipal corporation upon
buildings, structures, improvements, equipment and property of any kind used in,
on or about the Subleased Premises, whether owned by Sublessee or Sublessor
(collectively "Taxes"). Sublessee shall be required to pay the Taxes only with
respect to the periods during the term of this Sublease for which the tax is
assessed. If this Sublease begins or ends during a period for which a tax is
assessed, then such tax shall be pro-rated between Sublessee and Sublessor.
If Sublessor makes any payment, either voluntarily or as required by
law, on account of any or all of the above, then the amount thereof shall be
repaid by Sublessee to Sublessor within ten (10) days after the date Sublessor
submits a written statement to Sublessee.
Notwithstanding the foregoing, it is not intended that Sublessee shall
pay, or be required to pay, any so-called income, profits, excise, occupational
or privilege taxes levied or assessed upon the income of Sublessor, nor is it
intended that Sublessee shall pay any taxes attributable to the oil and gas
estate, nor to the timber on the Subleased Premises, but, subject to such
exceptions, Sublessee agrees to save and forever hold Sublessor harmless from
and to exonerate and indemnify Sublessor for any and all Taxes. Sublessee shall
provide to Sublessor any filings prepared for
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submission to the West Virginia State Tax Department with respect to the
Subleased Coal reserves and Sublessee's mining activity thereon.
Sublessor agrees that Sublessee shall have the right to protest any
taxes that Sublessee is required to pay under this paragraph 9, provided
Sublessor is not adversely affected by Sublessee's actions. Any such protest
shall be at the sole cost of Sublessee and Sublessee shall be responsible for
payment of all penalties and interest due on such Taxes.
10. Engineering Audit.
a. Sublessor, its agents, engineers or other persons on Sublessor's
behalf, with their assistants, shall have the right to enter at all times the
Subleased Premises and mining operations of Sublessee in order to audit,
examine, select samples of coal, survey or measure the same or any part thereof,
for the purpose of ascertaining the condition of the mines, the methods
practiced, as well as the amount of coal removed, or for any other lawful
purpose, and Sublessor shall have the right to place and keep an auditor or
other representative upon any tipples, docks or loading facilities at the mines
of Sublessee for the purpose of checking the weights, measures, accounts and
mining methods of Sublessee and for these purposes to use freely the means of
access to the said mines and works without let, hindrance, or molestation.
b. Sublessor, or any person acting on its behalf, shall also have
the right to enter the Subleased Premises at all reasonable times to inspect for
or prevent any trespass; provided, however, that Sublessor shall not be
obligated to make such inspections nor will Sublessor be responsible in any
manner for any such trespass. Sublessee will use its best efforts to keep
trespassers off of the Subleased Premises, and may limit access to the Subleased
Premises to authorized persons only. Sublessor shall comply with Sublessee's
reasonable safety and security policies regarding use of haulroads on the
Subleased Premises.
Sublessor shall be responsible for the acts and omissions of its agents and
employees acting on Sublessor's behalf while exercising the rights under this
paragraph 10.
11. Damages. Sublessee shall conduct its mining operations so as not to
violate any rights of lateral and subjacent support or other rights belonging to
the owners of other estates on, adjacent to and near the Subleased Premises.
Sublessee shall notify Sublessor within twenty-four (24) hours of any action
instituted against Sublessee for the recovery of damages aforesaid.
12. Weights.
a. All payments for coal mined from the Subleased Premises shall be
paid for by Sublessee on the basis of railroad or barge weights as the case may
be. Such coal shipped by truck or conveyor or by other than rail or water
transportation, or used by Sublessee for its own purposes, shall be weighed by
Sublessee on accurate scales which shall be inspected and approved as accurate
by a qualified agency and payments for such coal shall be made based on such
weights. If actual weights are not immediately available, estimated weights will
be utilized and adjusted when actual weights become available.
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b. To the extent reasonably possible, Sublessee shall provide
suitable, accurate, tested scales and shall weigh separately before commingling
all coal mined from the Subleased Premises; and Sublessee shall provide a plan
or method, which is satisfactory to Sublessor, whereby accurate weights, quality
and gross sales price of each can be determined. The said method or plan shall
be submitted to and approved in writing by Sublessor before any such coal is
commingled. At the time of each payment hereunder, Sublessee shall furnish to
Sublessor a report in form approved by Sublessor showing the information
required above. Where scales are not available to determine weights prior to
commingling of coals, Sublessee shall propose a plan or method of determining
such raw coal weights and shall submit such plan to Sublessor, which Sublessor's
approval therefor shall not be unreasonably denied. Any dispute under this
paragraph 12(b) shall be resolved pursuant to the provisions of paragraph 47 of
this Sublease.
13. Accounting for Commingled Coal. In addition to the foregoing, if
coal from the Subleased Premises is to be commingled with coal from other lands,
Sublessee shall no less frequently than semi-annually calculate by cubic
measurement the coal mined during the preceding six month period in accordance
with a plan or method, which is satisfactory to Sublessor, whereby accurate
weights of coal mined from the Subleased Premises and accurate weights of coal
mined from other lands can be determined. Sublessee shall on or before the 20th
day of January and July, and at other times as reasonably requested by
Sublessor, during the term of this Sublease, furnish to Sublessor a report in
form approved by Sublessor, showing separately (i) the total quantity of coal
mined from the Subleased Premises and (ii) the total quantity of any coal mined
from other premises and commingled with coal mined from the Subleased Premises
determined in accordance with the provisions of this paragraph. The report shall
also show in what manner the coal was shipped, the certified weights of the
coal, and a record of the representative samples for float and sink tests or
other appropriate tests as approved by Sublessor with analysis of said coal made
or caused to be made by Sublessee bi-weekly before the said coal is commingled.
The purpose of this paragraph 13 shall be to permit Sublessee to allocate the
coal shipped from the Fork Creek Preparation Plant to coal mined from the
Subleased Premises and from other sources. Any dispute under this paragraph 13
shall be resolved pursuant to the provisions of paragraph 47 of this Sublease.
14. Exploration Data. Sublessee promptly shall furnish Sublessor with
true and complete copies of any and all data which Sublessee may obtain, by
drilling or other means, with respect to the existence, location, quantity,
quality, depth, and thickness of coal in the Subleased Premises and with respect
to the existence, location, quantity, quality, depth and thickness of any oil,
gas, casinghead gas, clay or other mineral strata, in the Subleased Premises.
15. Records. Sublessee will keep and cause to be kept during the term
hereof and for not less than three years after the termination of the Sublease
accurate records showing separately the quantities of coal with respect to which
Sublessor is to receive a payment hereunder and the gross sales price of all of
each such coal. Sublessor, its agents, engineers, attorneys or other persons in
its behalf shall have access at any and all reasonable times to all records
containing facts necessary for a just accounting of
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amounts due Sublessor hereunder and to the offices where such records are kept,
for the purpose of inspecting, auditing and making copies thereof; and, for like
purposes, Sublessee, to the extent Sublessee has the right and only to such
extent, does hereby authorize Sublessor to request and/or require of any
railroad company, barge company, trucking company or any mode of transportation
of such coal an inspection of their books and records, showing the detailed
weight and quantity of all such coal and other products and pertinent
information in relation thereto; and the said carriers and their agents are
hereby authorized and requested to show Sublessor and its agents all such
records when requested, and to furnish all such information on request. At the
time of each payment of royalty, a full and accurate statement showing the
information required above and such other data as shall be reasonably requested
by Sublessor shall be delivered to Sublessor. Sublessee also shall furnish to
Sublessor, upon request, from time to time, an itemized statement of all
property and equipment being used by Sublessee in its mining operations on the
demised premises, indicating therein that owned by the Sublessee, that not owned
by the Sublessee, and stating the liens thereon and the names of the lien
holders, if any there are. The confidentiality obligations imposed on Sublessor
under paragraph 6(f) herein apply to this paragraph 15.
16. Permits and Reclamation.
a. In all mining and other activities undertaken by Sublessee in and
upon the Subleased Premises, Sublessee will in all material respects comply with
the applicable laws and statutes of the United States of America and the State
of West Virginia and that State's political subdivisions which may be in effect
at the time of mining and all valid rules, regulations and orders thereunder
regulating such mining and related activities. Copies of all such permits or
other authorizations issued by any governmental authority shall be furnished to
Sublessor immediately after they are received by Sublessee. All such permits or
other authorizations shall be obtained by and at the expense of Sublessee.
Sublessee shall post, or cause to be posted, such bonds as may be required in
connection with the issuance of such permits or other authorizations. Sublessee
shall conduct all mining activities in accordance with such permits or other
authorizations. Sublessor shall have the right to inspect and copy at reasonable
times and intervals, all inspection reports and compliance, noncompliance and
other orders issued by any governmental authority.
b. Sublessee shall pay, or shall cause to be paid, all reclamation
fees, and shall otherwise be entirely responsible for the complete performance
of reclamation obligations hereunder relating to Sublessee's operations on the
Subleased Premises. Sublessee shall perform all reclamation work as soon as
reasonably possible after completion or cessation of the activities which
establish the need or obligation to perform reclamation or shutdown work and
shall at all times keep such work current. Sublessee shall pay, or cause to be
paid, all fines which may be levied or assessed in connection with the mining
operations of Sublessee by the State of West Virginia or any other governmental
authority. Notwithstanding the foregoing, Sublessee may contest or appeal the
levy or assessment of any fine to the full extent permitted by law, provided
Sublessor has received assurances satisfactory to it that failure to pay the
fine pending the outcome of the contest or appeal shall not adversely affect
Sublessor.
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c.
i) At such time as Sublessee shall have mined and removed all
of the mineable and merchantable coal in the Subleased Coal underlying
the Subleased Premises or upon termination of Sublessee's right to
mine, process and ship coal as provided herein or upon termination of
this Sublease, at Sublessor's election made within 180 days thereof,
Sublessee either (a) shall fully reclaim and restore the Subleased
Premises in accordance with all applicable laws, regulations and
permits or (b) shall leave the Subleased Premises in such condition
that mining or other activities by another may begin immediately after
termination hereof, each as hereinafter more fully described. Sublessor
in its sole discretion may elect option (a) for parts or portions of
the Subleased Premises and option (b) for other parts or portions of
the Subleased Premises.
ii) If Sublessor elects to have any part of the Subleased
Premises reclaimed and restored, Sublessee at its sole cost and expense
shall reclaim and restore such Subleased Premises as required by
applicable laws, regulations and permits and shall initiate and
diligently pursue and complete all things necessary to terminate all
permits and authorizations held by Sublessee regarding such Subleased
Premises.
iii) If Sublessor elects to have Sublessee leave any part of
the Subleased Premises in such condition that mining or other
activities by another may begin immediately, Sublessee, at its sole
cost and expense, promptly upon receipt of notice of such election,
shall initiate and diligently pursue and complete all things necessary,
effective as soon as possible after such election is made, to
accommodate Sublessor's election. Sublessee shall do all things
requested by Sublessor, if such request be made, to permit immediate
mining or other activities by another, including but not limited to the
transfer or assignment to Sublessor or its designee of applicable
permits subject to the replacement of all bonds required to be posted
in connection with such permits, except to the extent Sublessee is not
in compliance with such permits. The parties agree that any
noncompliance by Sublessee under any applicable laws or permits shall
be determined by a final inspection by the State compliance
inspector(s) as close as possible to, but prior to, the time of
transfer. Once the activity, if any, which is not in compliance, has
been corrected by Sublessee, such transferee shall be responsible for
all future obligations with respect to such activity.
iv) To the extent that Sublessor exercises any of its rights
under paragraphs 16(c) and/or 16(d) of this Sublease to require
Sublessee to permit a transferee, designee, or other third party to
operate on and/or assume any permits of Sublessee, then such
transferee, designee, and/or third party shall be solely responsible
for all acts and omissions other than acts or omissions of Sublessee on
that portion of the Subleased Premises subject to such transfer and
shall indemnify, defend, and hold harmless the Sublessee and the
Permitted Mortgagee from any and all such claims pertaining thereto.
Sublessor shall cause such transferee, designee, or other third party
to agree to comply with the insurance and other requirements of
paragraph 5 hereunder.
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d. During the Remainder Term hereof, if Sublessor so requests,
Sublessee agrees to transfer any permit that it then holds on the Subleased
Premises to any designee thereof or to permit such designee thereof to overbond
any permit area which may be necessary for any type of development or other
activity as Sublessor may request. In such case, Sublessee, upon completion of
such permit transfer or overbonding and permitting, shall no longer be
responsible for such areas hereunder.
17. Indemnity. Sublessee does hereby indemnify, defend, and save
harmless Lessor, Sublessor, its parent, subsidiaries and affiliates and its and
their respective officers, directors, employees, agents, successors and assigns
(collectively, the "Indemnified Parties") from and against any and all claims,
losses, liabilities, damages, demands, obligations, fines, or civil penalties,
regardless of when made or arising, by and on behalf of any person, firm,
corporation, or governmental agency, arising from or growing out of or in
connection with Sublessee's operations on or in or with respect to the Subleased
Premises, specifically including without limitation, any and all claims for
personal injury, including death, and property damage and for salaries and wages
and employee or former employee medical, retirement and all other benefits, and
any claim rising from Sublessee's noncompliance of any environmental or other
law, regulation or order or any permit, together with all costs, fees, and
expenses (including but not limited to court costs and reasonable attorney's
fees) connected with any of the above ("Damages").
In case any action or proceeding is brought against any of the
Indemnified Parties by reason of any such claim, etc. described above, Sublessee
will at its sole cost and expense using counsel reasonably acceptable to
Sublessor resist and defend such action or proceeding and satisfy any order or
judgment against any of the Indemnified Parties resulting therefrom.
Notwithstanding the foregoing, Sublessor shall have the right using its own
counsel at its expense to defend such action upon written notice to Sublessee.
Sublessee's indemnity obligations under this Sublease shall survive
termination of this Sublease.
18. Workers' Compensation; Black Lung.
a. Without limiting the generality of Sublessee's obligation to
conduct its operations hereunder in conformity with present and future laws of
the State of West Virginia and the United States and the valid regulations of
the various agencies of both, Sublessee agrees that it will become and remain a
subscriber to the Workers' Compensation Fund of the State of West Virginia or
otherwise provide workers' compensation coverage for its employees in accordance
with applicable laws.
b.
i) Without limiting the generality of Sublessee's obligations
to conduct its operations hereunder in conformity with present and future laws
of the State of West Virginia and the United States and the valid regulations of
the various agencies of both, Sublessee agrees that it shall comply with all of
the terms and provisions of the Federal Coal Mine Health and Safety Act of 1969,
as amended by the Black Lung
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Benefits Act of 1972, the Federal Mine Safety and Health Act of 1977, the Black
Lung Benefits Act of 1977 and the Black Lung Benefits Reform Act of 1977, as now
or hereafter amended and all rules and regulations adopted pursuant thereto
("Acts").
ii) Sublessee acknowledges that, as between Lessor, Sublessor
and Sublessee and for the purposes of this Sublease, Sublessee is, and shall be
deemed to be, the operator of any coal mine for the mining of coal from the
Subleased Coal in the Subleased Premises and of all related activities engaged
in by Sublessee or persons under contract with Sublessee pursuant to the terms
of this Sublease with respect to any claim for black lung benefits or any other
"social benefit" ("benefits") or any other "social benefit" filed by or on
account of its employees or former employees pursuant to the Act, the Coal
Industry Retiree Health Benefits Act of 1992 (the "Coal Act") or any similar or
successor statute or amendment to the Acts or the Coal Act. Sublessee shall
secure and shall require any other person or entity who operates, controls, or
supervises a coal mine on the Subleased Coal in the Subleased Premises or
performs services of construction, transportation or other activities related to
coal mining under the terms of this Sublease, or who otherwise may be liable for
the payment of benefits, to secure the payment of such benefits to or on account
of their employees or their former employees in accordance with all applicable
laws and regulations and shall provide Sublessor at least annually and more
often upon request, with appropriate certification that each of them has
provided security in compliance with all applicable laws and regulations for the
payment of such benefits. Sublessee shall notify Sublessor immediately in
writing of any changes or alterations in the status of any such security.
iii) Without limiting the generality of Sublessee's
obligations to comply with all other provisions of this Sublease, Sublessee
agrees that it will secure and guarantee the payment of all benefits required to
be paid under the Acts or the Coal Act or any similar act or successor statute
or amendment to the Acts or the Coal Act by reason of said mining, construction,
transportation and related activities pursuant to this Sublease, and Sublessee
does hereby agree that it will indemnify and hold Lessor and Sublessor harmless
from any Damages which Lessor or Sublessor may suffer directly or indirectly, as
a result of or with respect to any claim for benefits filed by or on account of
any of Sublessee's employees or former employees or employees or former
employees of others for whom Sublessee may be required to secure the payment of
benefits under paragraph (ii) above.
iv) Sublessee acknowledges that Lessor and Sublessor has
reserved certain rights and imposed certain requirements under the terms of this
Sublease solely for the purpose of assuring that the coal in and on the
Subleased Premises is recovered in accordance with the terms and conditions of
this Sublease so as to prevent waste and protect the reserved rights of Lessor
and Sublessor, however, such reserved rights shall in no event cause Lessor or
Sublessor to be or be considered an operator as defined in the Acts with respect
to Sublessee's employees or the employees of others.
19. Insurance. Without limiting Sublessee's under-taking to protect,
indemnify, hold harmless, and defend the Indemnified Parties as provided in this
Sublease, and without limiting the generality of Sublessee's obligation to
conduct its operations hereunder in conformity with present and future laws of
the State of West Virginia and the
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United States and valid regulations of the various agencies of both, Sublessee
agrees at its own cost to procure and maintain at all times during the term of
this Sublease from insurance companies (or statutory funds) reasonably
acceptable to Sublessor, the insurance coverages as hereinafter set forth:
a. Workers' Compensation and Employers Liability
i) Workers' Compensation coverage for occupational injury and
disease in accordance with requirements imposed by applicable state and Federal
laws, rules and regulations.
ii) Employers Liability coverage with limits of not less than
$3,000,000 per occurrence including coverage for claims arising under W. Va.
Code ss. 00-0-0 ("Xxxxxxxxxx" coverage).
b. Liability Insurance as is afforded under a policy of Commercial
General Liability, with endorsements or under other policies as may be
appropriate, with limits of not less than $5,000,000 (except for the Pollution
Liability Coverage required in subsection (iii), below, which shall be in the
amount of $1,000,000) combined single limits in any one occurrence, for
liability arising from injury to or death of one or more persons, and for
liability arising out of damage to or destruction of property, including loss of
use thereof and downtime, and including the following:
i) Blanket Contractual Liability
ii) Bodily Injury Liability
iii) Pollution Liability Coverage
iv) Owners and Contractors Protective Liability
v) Broad Form Property Damage Liability
vi) Explosion and Collapse Hazards
c. Auto Liability Insurance covering owned, non-owned and hired
motor vehicles which may be used in any connection with the operations
contemplated hereunder with limits of not less than $5,000,000 combined single
limits in any one occurrence, for all liability arising out of injury to or
death of one or more persons, and for all liability arising out of damage to or
destruction of property, including loss of use thereof and downtime.
d. Property Insurance in amounts equal to the full replacement cost
(or the highest insurable value if coverage for replacement cost is not
available) covering all real and personal property and fixtures now on the
Subleased Premises or which the Sublessee places on the Subleased Premises
during the term of this Sublease, against loss or damage by fire, lightening,
explosion or other hazards covered under extended coverage insurance. The
proceeds of any loss payable under such policies as above required shall be used
by Sublessee in the restoration, repair, or replacement of the
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destroyed or damaged property to the extent required by Sublessee for the
performance of its obligations under this Sublease.
e. All policies and endorsements providing the insurance required
under subparagraphs (a), (b), (c) and (d) above shall:
i) be occurrence coverage except for the (1) Pollution
Liability coverage under subparagraph (b)(iii); or (2) insurance required under
subparagraph (d) above;
ii) be endorsed to include liability assumed by Sublessee
under this Sublease;
iii) name the Permitted Mortgagee, Lessor and Sublessor and
the other Indemnified Parties as Additional Insureds;
iv) be primary to any and all other insurance of Lessor or
Sublessor and the Indemnified Parties with respect to any and all claims and
demands which may be made against them for bodily injury or death to lessor's,
Sublessor's or Sublessee's employees, contractors, agents, servants, invitees
and guests, and for property damage, including damage to Lessor's. Sublessor's
or Sublessee's property, caused by or alleged to have been caused by any act
omission or default, negligent or otherwise, of Sublessee by reason of the
mining or other activities under this Sublease;
v) provide that it applies separately to each insured against
which claim is made or suit is brought, however in no event for more than the
limit of liability of the applicable policy; and,
vi) be endorsed to provide that, except in cases where damage
or injury is the result of the sole negligence of Sublessor or the Indemnified
Parties, all rights of subrogation against Sublessor and the Indemnified Parties
and their insurers are expressly waived.
The limits of liability required above may be provided by a combination
of primary and excess policies as long as all requirements and coverages are
provided thereunder. The foregoing minimum requirements shall not limit
Sublessee's liability to Lessor or Sublessor in any manner.
f. Prior to commencement of any operations under this Sublease,
Sublessee shall provide to Sublessor acceptable evidence in the form of an
original certificate or certificates of insurance from the respective insurance
companies confirming that all coverages and policies required hereinbefore are
in full force and effect in the form required, that Sublessor and the
Indemnified Parties have been included as additional insureds where required,
and confirming that Sublessor will be notified in writing not less than 30 days
prior to the cancellation or non renewal of any such insurance. Upon request of
Sublessor, Sublessee shall provide duplicate originals of such policies to the
Sublessor. Sublessee shall require its contractors, subcontractors and other
agents performing any work in the Subleased Coal or on or in the Subleased
Premises to obtain
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and maintain insurance for the risks and in accordance with all the terms in
this Section but at reasonable limits designated by Sublessee.
20. Liens and Encumbrances. Except for certain liens and encumbrances
that Sublessor consents to in writing, Sublessee shall not permit any lien or
encumbrance to accrue on the Subleased Premises or any part thereof, except a
lien for ad valorem property taxes not due or payable. Should any non-permitted
encumbrance or lien on the Subleased Premises or appurtenances accrue, Sublessee
shall cause the same to be promptly discharged and removed. If Sublessee fails
to discharge or remove any such lien or encumbrance, Sublessor shall have the
right but not the obligation to take such action as may be necessary to remove
or satisfy the same; and Sublessee shall be obligated to reimburse Sublessor for
any expense, disbursements or attorney's fees necessarily incurred in protecting
the Subleased Premises from such liens and encumbrances and shall pay the same
at the next succeeding payment of royalty. Sublessee, however, shall have the
right to contest in the courts or otherwise the validity of any such lien.
21. Environmental Damage. Sublessee, for itself and its contractors,
subcontractors and other agents performing work hereunder, shall indemnify and
hold Sublessor and the other Indemnified Parties harmless from any and all
environmental damages resulting from or connected with its and their mining and
other activities under this Sublease. Without limiting the generality of
Sublessee's indemnification against environmental damages, Sublessee agrees that
its mining operations on the Subleased Premises will be conducted in such manner
as to absolve the Indemnified Parties from liability due to pollution or
discoloration of streams fed by waters from the Subleased Premises, or because
of interference with the present bed of such streams or their natural flow; and
Sublessee further agrees that it will conduct all of its operations hereunder in
a careful and prudent manner and in such a way as to absolve Indemnified Parties
from any liability arising therefrom, and Sublessee shall be solely responsible
for treatment of any water discharges arising out of, connected with or related
to its mining or other activities hereunder in the Subleased Coal and in, on or
under the Subleased Premises or adjacent lands, to the full extent required by
present or future law or regulation, which responsibility of Sublessee as well
as the aforesaid indemnification shall survive termination of this Sublease. The
obligations of Sublessee under this Section are in addition to, not in lieu of,
other sections of this Sublease regarding indemnification, insurance and
Sublessee's other obligations.
22. Boundary Coal. If Sublessee shall acquire other coal properties
which adjoin and have common boundary with the Subleased Premises, in order to
avoid unnecessary loss of coal, Sublessor waives any present or future
requirement of law relating to the leaving of coal at or near boundaries, and
consents to the mining and removal of all the coal within any distance of any
boundary between the Subleased Premises and other coal lands and coal leaseholds
now or hereafter owned by Sublessee provided that Sublessee must also obtain a
similar waiver from the owners of such other coal lands.
23. Condemnation.
a. Should any governmental agency indicate a desire to bring or
formally begin condemnation proceedings related to the Subleased Coal or the
Subleased
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Premises, Sublessor and Sublessee shall jointly resist and/or negotiate with the
condemnation.
b. In the event any part of the Subleased Coal or Subleased Premises
is taken by eminent domain or condemnation, Sublessor shall not in any manner be
liable to Sublessee for untimely termination of this Sublease or the
consequential inability of Sublessee or its successors to conduct mining
operations at all or on the scale anticipated by Sublessee before such eminent
domain or condemnation proceedings were exercised, nor for any loss or liability
for any reduction in anticipated profit by Sublessee resulting as a consequence
of the attempted and/or actual condemnation. The minimum royalty required under
this Sublease shall be reduced by the amount of reduction available to Sublessor
under any applicable Prime Lease.
c. If a part or all of the Subleased Premises is taken or condemned,
each of the Sublessor and Sublessee shall pursue its own claim for compensation,
provided, however, Sublessor and Sublessee shall cooperate in their efforts to
maximize each parties' compensation award.
24. Substances Mixed With Coal. Sublessee covenants and agrees that it
will not mine from the Subleased Premises any substances mixed with the coal,
except to the extent such necessarily must be removed in Sublessee's ordinary
mining process and that such substances shall not be removed and sold unless and
until there is mutual agreement regarding division of proceeds received
therefrom.
25. Timber. In conducting operations on the surface of the Subleased
Premises, Sublessee shall use reasonable care to do as little damage to the
timber and surface as is practicable consistent with its obligation to mine all
mineable and merchantable coal. Sublessee agrees to delineate on the ground or
on trees by paint marks or ribbons, the limitations of ground surface to be
disturbed by surface operations and to give notice to both Sublessor and Lessor
under the Prime Lease at least 90 days in advance of any such operations which
will require the removal of any timber or would result in damage thereto so as
to permit Lessor or Sublessor, its agents, contractors or assigns to cut and
remove the timber in question. If Lessor or Sublessor does not remove the timber
which is the subject of such notice, Sublessee may remove and/or destroy such
timber without any obligation to Sublessor for the value of the timber, provided
however, Sublessee shall reimburse Sublessor for any costs incurred by Sublessor
as a result of such actions with respect to the Prime Lease.
26. Roads. Sublessee is granted the non-exclusive right to use existing
roads on the Subleased Premises and adjoining property of Sublessor. Sublessor
reserves for itself and its other existing and future lessees, sublessees, and
other designees the non-exclusive right to use existing roads and roads
hereafter constructed by Sublessee, and to the extent Sublessee's consent is
required therefor, Sublessee shall provide such consent. Where, in the conduct
of its activities pursuant to this Sublease, it is necessary for Sublessee to
alter or destroy existing roads, Sublessee shall provide substantially
equivalent alternate access needed by road users. Sublessee shall, at its own
expense, keep and maintain all the roads used by it on the Subleased Premises in
usable condition and repair, and in at least as good condition as the same now
are. To the extent such existing roads or roads constructed hereafter are used
by Sublessee, Sublessor, or other
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grantees of Sublessor with respect to such other grants made after the date of
this Sublease, all such users of the roads shall share, on an equitable basis
based upon the total tonnage hauled over such roads, or some other mutually
acceptable method, by such user, in the cost of maintaining such roads as are
commonly used, and users thereof shall keep such records as are necessary to
ascertain the proper apportionment of the costs therefor. The users of such
roads shall establish between themselves the necessary agreements to accomplish
the mutual sharing of such costs. Notwithstanding any of the other terms and
provisions of paragraph 26, the parties understand and agree that Sublessee's
use of any existing or future roads constructed by Sublessee shall have priority
over any other use of such roads and that any other parties use of such roads
shall not unreasonably interfere with Sublessee's use of such roads in its
operations hereunder.
27. Assignment Prohibited.
a. Sublessee agrees that it will not assign, let, mortgage or
otherwise transfer its rights hereunder, either voluntarily or by operation of
law, without the prior written consent of, where required, Lessor and Sublessor,
which consent of Sublessor shall not be unreasonably withheld, provided,
however, such consent may be conditioned upon, inter alia, Sublessee's agreement
to continue to be responsible to Sublessor for the full and timely performance
of obligations under this Sublease and to indemnify, defend and save harmless
Sublessor and Indemnified Parties for the acts and omissions of any such
transferee and any violation of the terms and provisions of this paragraph by
Sublessee shall, at the option of Sublessor, automatically forfeit and terminate
this Sublease. Sublessee shall also comply with the provisions of the Prime
Lease regarding any lessor consent to any assignment(s). Nothing herein
contained shall prevent or hinder the right of Sublessee to contract any part or
portion of its mining operations under this Sublease in the usual and ordinary
course of its business, provided any such contractor agrees to and does provide,
obtain and maintain Workers' compensation and black lung coverage, insurance and
indemnification under terms (except insurance limits) equal to those contained
in this Sublease, all for the benefit of Sublessor and the other Indemnified
Parties, and provided such contracting or subcontracting shall not release or
relieve Sublessee or any permitted assignee thereof from any of their
obligations or liabilities under this Sublease. A transfer, other than by death,
in one or more transactions designed to effect such transfer, of more than 50%
of the stock in Sublessee or any entity in control of Sublessee to a person(s)
or entity(s) not an equity owner as of the date hereof shall constitute an
assignment within the meaning of this provision provided that the transfer(s) of
more than 50 percent of stock or other interest in an entity in control of any
Permitted Mortgagee which is a Successor Sublessee for a legitimate business
purpose, rather than for the purpose of effecting a transfer of this Sublease
shall not consitute an assignment within the meaning of this provision.
b. Sublessor, except where prohibited from doing so in the Prime
Lease, hereby consents to the granting of the lien of a first deed of trust on
the Subleasehold interest of Sublessee in the Subleased Premises (or the lien of
two deeds of trust on such interest, provided that the lien of such deeds of
trust is held collaterally and/or directly by the same person or entity), which
deed(s) of trust may, from time to time, be modified, refinanced, extended,
assigned or restated (such deed(s) of trust as the same may be modified,
refinanced, extended, assigned or restated, the "Subleasehold
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Mortgage"; and the person(s) or entity(ies) holding the same, the "Permitted
Mortgagee"). The parties hereto acknowledge that the present Permitted Mortgagee
is Ablelco Finance LLC, as collateral agent for the lenders under that certain
Second Amended and Restated Credit Agreement, dated as of the date hereof, among
Ableco Finance LLC, Pen Holdings, Inc. and others (as the same may be, amended,
modified, restated and/or assigned, the "Credit Agreement"). The Permitted
Mortgagee shall have the right to foreclose or otherwise realize upon its
Subleasehold Mortgage and succeed to Sublessee's estate hereunder (either
directly or through an entity controlled directly or indirectly by the Permitted
Mortgagee) without Sublessor's consent. For purposes of this Section 27, a
Permitted Mortgagee shall have the right to assume ownership and/or control of
Sublessee without Sublessor's consent under this Sublease and, in such event,
the Permitted Mortgagee shall be deemed to have succeeded to Sublessee's
Subleasehold estate in compliance with the provisions of this Section 27 and the
other provisions of this Sublease. From and after a default by Sublessee
hereunder or an Event of Default by Pen Holdings, Inc. under the Credit
Agreement as a result of which the Permitted Mortgagee succeeds to the rights of
Sublessee under this Sublease through possession, foreclosure action, delivery
of a deed (or assignment of this Sublease in lieu of foreclosure), the Permitted
Mortgagee shall be entitled to exercise all of the rights of Sublessee
hereunder, including, without limitation, the right to manage, operate and take
control of the Subleased Property through a court appointed receiver or in any
other manner permitted by law, it being understood that the Permitted Mortgagee
shall hold harmless, indemnify and defend Sublessor from and against all
lawsuits, claims, actions, damages and liabilities incurred by Sublessor that
are caused by the actions of Permitted Mortgagee or its agents with regard to
the Subleased Premises as though a Sublessee as provided in this Sublease.
28. Additional Property Rights. Sublessor shall have hereunder an
option to acquire from Sublessee any additional property rights which Sublessee
may acquire for use in connection with its mining operations on the Subleased
Premises and are located contiguous to the Subleased Premises. An option to
acquire such rights, whether they are owned or leased, shall be presented to
Sublessor by Sublessee with sixty (60) days of the acquisition thereof, which
option shall be offered at a cost of $100.00. If Sublessor elects to accept the
option, Sublessee and Sublessor shall, within sixty (60) days of such election,
execute a recordable option that becomes exercisable upon demand by Sublessor at
any time during the thirty (30) day period that commences on the date of
termination of the Sublease for any such property rights, Sublessor shall pay
Sublessee only for Sublessee's actual cost of the acquisition of such rights,
which shall be specified in the option. Sublessee shall be responsible to assure
that any leased rights subject to this provision are assigned to Sublessor
pursuant to such option.
29. Collection of Rents - Rights Reserved. All rents and royalties
hereinbefore provided to be paid to the Sublessor shall be deemed and considered
as rent reserved for the Subleased Premises and Sublessor shall have for the
collection thereof all the rights and remedies which landlords may now or
hereafter have for the collection of rent reserved upon contract under the laws
of the State of West Virginia.
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30. Default; Forfeiture; Remedies Cumulative.
a. In any of the following events, that is to say:
i) Sublessee shall fail to pay any rent or royalty for
fifteen days after the same is due hereunder; or
ii) Sublessee shall fail on more than three occasions
within any consecutive 12 month period to timely pay
any installment of rent, royalty, or other payment
due under Article 6 hereof within ten days after
first due and payable; or
iii) Sublessee shall fail for a period of 30 days after
written demand therefor to pay or repay any sums due
for taxes as provided herein; or
iv) Sublessee shall abandon the Subleased Premises; or
v) Sublessee shall fail to
a. Comply with the provisions hereof in the
paragraph hereof captioned "Exceptions and
reservations", or otherwise impede Sublessor
in the exercise of Sublessor's rights
thereunder, or
b. diligently commence and continue its
operations as required in all provisions of
the paragraph hereof captioned "Mining
Operations"; or
c. provide the plan of development or other
maps to Lessor as required in the paragraph
hereof captioned "Surveys, Maps, and
Permits"; or
d. provide such information and access as is
required by Sublessor in its conduct of an
Engineering Audit as specified in the
paragraph hereof captioned "Engineering
Audit", or
e. conduct its mining operations in compliance
with the paragraph hereof captioned
"Damages", or
f. provide documentation as required hereunder
for proper determination of the amount of
coal mined and shipped as required in the
paragraph hereof captioned " Weights", or
g. provide documentation as required hereunder
for proper determination of allocation of
coal when coal is commingled as required in
the paragraph hereof captioned "Accounting
for Commingled Coal", or
h. provide such copies of data as is required
in the paragraph hereof captioned
"Exploration Data", or
i. keep and cause to be kept such data as is
required in the paragraph hereof captioned
"Records", or
j. comply with the provisions as required in
the paragraph
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hereof captioned "Permits and Reclamation",
or
k. comply with the provisions as required in
the paragraph hereof captioned "Indemnity",
or
l. provide workers' compensation and black lung
coverage and insurance as required in the
paragraphs hereof captioned "Workers
Compensation; Black Lung" and "Insurance",
or
m. prevent any lien or encumbrance prohibited
in the paragraph hereof captioned "Liens and
Encumbrances, or
n. comply with the provisions as required in
the paragraph hereof captioned
"Environmental Damage", or
o. comply with the provisions as required in
the paragraph hereof captioned "Substances
Mixed With Coal", or
p. comply with the provisions as required in
the paragraph hereof captioned "Timber", or
q. comply with the provisions as required in
the paragraph hereof captioned "Roads, or
r. comply with the provisions as required in
the paragraph hereof captioned "Assignment
Prohibited", or
s. comply with the provisions as required in
the paragraph hereof captioned "Additional
Property Rights", or
t. comply with the provisions as required in
the paragraph hereof captioned "Dispute
Settlement and Arbitration"
u. keep and perform any of the other terms,
conditions, covenants and agreements of this
Sublease to be kept and performed;
and if any such failure as provided in this subpart
(v) is not cured or reasonable efforts to cure such
failure are not commenced, and diligently prosecuted
thereafter, within 30 days after the Sublessor shall
have given written notice of such default to the
Sublessee and the Permitted Mortgagee; or
vi) Sublessee be adjudicated a bankrupt or discharged by
the Court as an insolvent debtor, or if any receiver
or assignee or other person or persons be appointed
by any court to take charge of the Subleased Premises
or the property of Sublessee, or the mines and
equipment upon the same (in each case other than on
behalf of a Permitted Mortgagee or its affiliates);
then in any such event all rights of the Sublessee hereunder to mine, process
and ship coal as provided herein, shall at the option of the Sublessor, (except
for an event specified in (vi) immediately above, which event shall cause a
forfeiture and termination ipso facto), become forfeited and cease and
determine, and Sublessor shall have the right to reenter the Subleased Premises
and to exclude Sublessee therefrom, and to hold the Subleased Premises free of
any claims of Sublessee, anything herein contained to the contrary
notwithstanding; provided that Sublessee shall thereafter fully comply with,
perform and complete all of its reclamation, environmental and other
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obligations hereunder and Sublessee shall have reasonable access to the
Subleased Premises for such purpose.
b. Upon any declaration of forfeiture, all estate, rights and
privileges of Sublessee to mine, process and ship coal as provided herein shall
cease and determine, and Sublessor may thereupon or at any time thereafter,
without further notice, demand or action by any of its agents, reenter and take
possession of the Subleased Premises, or any part thereof in the name of the
whole, and Sublessor in making said reentry and taking possession of the
Subleased Premises shall have the right to do so without legal action, or
without notice or process, as may be required by the laws of the State of West
Virginia, as amended. In case Sublessor exercises the right herein provided to
declare such forfeiture, it shall not be liable to Sublessee for any injury or
damage by reason thereof, and Sublessee hereby expressly waives and releases any
and every claim for any such injury or damage.
c. All provisions herein contained for the collection of rents,
royalties or other payments, or concerning the remedy of Sublessor in case of
breach by Sublessee of any condition, covenant or agreement herein contained,
shall be deemed to be cumulative and not exclusive, and shall not deprive
Sublessor of any of its other legal or equitable remedies which may now or
hereafter be provided under the laws of the State of West Virginia.
d. No delay or omission of Sublessor to exercise any right, remedy
or lien accruing upon any default or forfeiture hereunder, or otherwise
available to it, shall impair, prejudice or waive any such right, remedy or
lien, but every such right, remedy and lien may be exercised by Sublessor on
account of any subsequent breach in the same manner and to the same extent as if
such delay or omission had not occurred.
31. Removal of Property Upon Termination. Unless specified otherwise in
the Prime Lease, when Sublessee shall have paid to Sublessor all the royalties,
rentals and other monies required to be paid hereunder and shall have otherwise
complied with all the covenants and agreements contained herein on the part of
Sublessee to be kept and performed, then, unless this Sublease is terminated by
forfeiture as herein provided, Sublessee shall have 180 days within which to
remove all of its property, except that the time allowed for removal of the coal
preparation plant, loadout facilities and railroad tracks shall be 360 days,
whether affixed or not, from the Subleased Premises. Any such property not so
removed by Sublessee within said applicable period shall, at the election of
Sublessor, become the absolute property of Sublessor. Notwithstanding anything
aforesaid to the contrary, in the event Sublessee has not removed the aforesaid
property from the Subleased Premises within said applicable period, Sublessor
may require Sublessee to remove all or any portion of the said property from the
Subleased Premises as soon as reasonably possible after said termination.
Sublessee may leave in the Subleased Premises such of its property as may be
required to complete or comply with valid governmental reclamation or
environmental or other requirements for such period of time as may be reasonably
necessary for such completion or compliance. As consideration for the extended
time periods allowed for removal of property, Sublessee grants unto Sublessor a
right of first refusal to purchase the coal preparation plant and/or loadout
facility. Should the Sublessee receive a bona-fide offer for the purchase of
said property with terms acceptable to Sublessee, Sublessee shall, within five
(5) days of such
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offer present to Sublessor the terms of said offer and Sublessor shall have
thereafter thirty (30) days within which to advise Sublessee that Sublessor will
exercise its option to purchase either or both of the coal preparation plant or
loadout facility at the terms contained in such offer and the parties shall
close such sale with sixty (60) days after the date Lessor provides notice of
its intention to purchase such assets. Notwithstanding anything to the contrary
contained herein, the Permitted Mortgagee may, from time to time, enter on the
Subleased Premises and remove therefrom any current improvements, structures,
and fixtures thereon and further improvements, structures, and fixtures
constructed thereon by or on behalf of Sublessee and the appurtenances related
only to such improvements, structures, and fixtures, including, without the
limitation, the aforesaid coal preparation plant, railroad car loadout
facilities, and railroad tracks, provided that such removal is performed
pursuant to the terms of the Credit Agreement. If the Permitted Mortgagee elects
to remove such items pursuant to the terms of the Credit Agreement, then (i)
Permitted Mortgagee shall be entitled to effect such removal free and clear of
all of Sublessor's right, title and interest in such items, including, without
limitation, the right of first refusal, and (ii) upon the removal of such items,
Sublessor shall no longer have any right, title or interest therein; and (iii)
Sublessor shall, upon the request of Permitted Mortgagee, execute an instrument
confirming clauses (i) and (ii) above.
32. Release Upon Termination. Upon the termination of this Sublease,
Sublessee shall execute and deliver to Sublessor in such form as will permit
recordation of the same, a written release and relinquishment of all the right,
title and interest acquired under this Sublease in and to the Subleased
Premises, including such property as Sublessee is hereby required to leave on
the Subleased Premises.
33. Disclaimer of Warranty. Sublessee has examined the Subleased
Premises and the coal existing on the Subleased Premises, accepts the same in
their present condition and assumes all risks incident thereto, to the mining
and removal of coal therefrom and therewith and to any and all activities of its
contractors, agents, employees, invitees or licensees. Sublessee shall in no way
be considered an agent, contractor or employee of Sublessor. Sublessee agrees
that Sublessor makes no covenant to Sublessee for quiet enjoyment of the
Subleased Premises and that Sublessor has made no representations or warranties
with respect to the Subleased Premises, including, without limitation, the
condition thereof, the quantity, quality, depth or thickness of the coal therein
or the condition of Sublessor's title thereto.
34. Waiver. No failure or delay on the part of either the Sublessor or
Sublessee in exercising any of their respective rights hereunder upon any
failure by the other party to perform or observe any condition, covenant or
provision herein contained shall operate as a waiver thereof, nor shall any
single or partial exercise of any such rights preclude any other or further
exercise thereof or the exercise of any other right hereunder.
35. Successors Bound. All covenants and agreements herein contained
shall inure to the benefit of and shall be binding upon and fully performed by
the respective parties hereto and their respective successors and assigns.
36. Notices. All requests, statements, notices and demands shall be
deemed given and served when presented for delivery by the postal authorities if
sent by
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registered or certified mail, postage and registration or certification fee
prepaid, return receipt requested, or overnight delivery, addressed as follows
For Sublessor,
Penn Virginia Coal Company
Xxxxx 000, Xxx Xxxxxx Xxxxxx,
Xxxxxxxxxx, XX 00000
with a copy to:
Penn Virginia Coal Company
0000 Xxxx-Xxxx Xxxx
X.X. Xxx 000
Xxxxxxxx, XX 00000
For Sublessee,
Pen Land Company
0000 Xxxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
or to such other person or address as either party from time to time by written
notice to the other party may prescribe. Notwithstanding the foregoing, any
notice to or demand upon Sublessee may be served or given in the manner required
by the laws of the State of West Virginia for service of process.
37. Dispute Settlement and Arbitration. If at any time during the
continuance of this Sublease, or any renewal thereof, any dispute shall arise
between Sublessor and Sublessee under this Sublease or under any of the terms
and provisions hereof which cannot be agreed upon by the parties hereto, except
for the disputes to be resolved under paragraph 47 of this Sublease, then such
dispute shall be referred to a board of arbitrators (the "Board"). Such Board
shall be composed of a representative of Sublessor and a representative of
Sublessee, to be selected by them, respectively, and a third arbitrator who
shall be chosen by the two (2) arbitrators herein provided for. In case the two
(2) arbitrators are unable to agree within ten (10) days upon a third
arbitrator, then the American Arbitration Association shall designate a
disinterested person to act as such arbitrator; and, in case either of the
parties should, for a period of ten (10) days after receipt of the notice below
referred to, fail to select and make known in writing to the other party the
arbitrator selected by it, the said American Arbitration Association shall
designate two (2) disinterested persons, who together with the person selected
by the party desiring the arbitration, shall constitute the Board. Either party
may at any time serve upon the other a notice setting forth the point or points
upon which the decision of said Board is desired and the other party may, within
ten (10) days thereafter, serve a counter-notice specifying any additional
points or differences arbitrable hereunder upon which such other party may
desire a decision. The Board shall give ten (10) days written notice of the time
and place of hearing to the respective parties, and shall determine questions
submitted to it for arbitration, and shall make its decision and award in
writing within 45 days of said hearing. The decision and award of a majority of
the arbitrators shall be final, conclusive and obligatory upon the said parties
to this Sublease, their successors and assigns, and without appeal, and each
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party hereto agrees to abide by and comply with every such decision and award.
Those costs of any such arbitration shall in the first instance be paid by the
party requesting the same, but if such party substantially prevails therein it
shall be reimbursed therefor by the other party, and this question of costs
shall in each case be determined by the Board when it renders its decision on
the question or questions submitted to it. The foregoing notwithstanding, the
costs of arbitration in respect of the imposition or adjustment of royalties,
Minimum Rentals or charges for transporting coal on the Subleased Premises, and
valuation upon termination, shall be shared equally by the parties hereto.
Should the award of the Board declare that any violation hereof or default
hereunder exists, it shall also provide the time within which the party
committing such default shall pay the award and cure the breach which it
decrees.
38. Relationship Between the Parties. Nothing herein contained or
hereby implied including, without limitation, rights reserved by Sublessor to
use the Subleased Premises for purposes other than those which are granted to
Sublessee, to receive and examine development plans and maps, to review
Sublessee's records and otherwise audit and inspect Sublessor's operations and
their impact on the Subleased Coal and Subleased Premises shall be construed as
creating or constituting by implication or otherwise, an obligation of or right
in Sublessor to control or otherwise correct Sublessee's acts and omissions or a
lessening of Sublessee's duties to indemnify Sublessor and provide insurance
herein required or any relationship or partnership, mining partnership, joint
venture, agency or of employer and employee between Sublessor on the one hand
and Sublessee on the other hand, it being understood that the relationship
between them is solely that of Sublessor and Sublessee.
39. Power of Attorney. Sublessee acknowledges that pursuant to certain
provisions hereof, it is required to provide upon request of Sublessor certain
consents, waivers, transfers, assignments and other documentation. Accordingly,
in the event Sublessee fails to deliver any such consent within 30 days after
written demand therefore, which demand shall describe the provisions hereof
requiring such and the circumstances which provide the basis for such demand,
Sublessee may elect to submit such matter to arbitration as herein provided. In
the event that Sublessee fails to submit such matter for arbitration, or,
Sublessee, after submitting such matter to arbitration and receiving a decision
in favor of the Sublessor, fails to comply with a decision of the Board
directing it to provide such consents, waivers, transfers, assignments or other
documentation within 30 days after such decision, in further consideration of
this Sublease does hereby irrevocably designate any officer of Sublessor as its
attorney-in-fact with the power and authority to execute and deliver on behalf
of Sublessee such consents, waivers, transfers, assignments and other
documentation which are the subject of the written demand given by Sublessor to
Sublessee, and presentation of an executed copy of this Sublease and a copy of
the written demand, or if arbitrated, a written decision of the Board shall
constitute sufficient evidence of the nature and extent of this designation by
Sublessee.
40. Headings. Paragraph headings used herein are for convenience of
reference only and shall not affect the meaning or construction of any provision
hereof.
41. Applicable Law. This Sublease shall be construed, enforced and
performed in accordance with the laws of the State of West Virginia.
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42. Severability. If any provisions of this Sublease shall be held to
be invalid, void, or unenforceable, the remaining provisions hereof shall in no
way be affected or impaired and such remaining provisions shall remain in full
force and effect.
43. Representations and Warranties of Sublessee. Sublessee represents
and warrants as follows:
a. Sublessee is a corporation duly organized, validly existing and
in good standing under the laws of the State of West Virginia and has the
corporate power to perform its obligations under this Sublease and the other
documents delivered pursuant hereto or referred to herein and to carry on its
business as now conducted and as contemplated by this Sublease and the documents
referred to herein.
b. Neither the execution nor delivery by Sublessee of this Sublease,
nor consummation of the transactions contemplated by this Sublease, will (i)
conflict with, violate or result in the breach of or constitute a default under
Sublessee's articles of incorporation or bylaws, or any applicable law,
regulation, order, writ, injunction, decree, determination or award of any
court, any governmental department, board, agency or instrumentality, domestic
or foreign, or any arbitrator; (ii) conflict with, result in the material breach
of any term or provision of, termination of, or acceleration or permit the
acceleration of the performance required by the terms of, or give rise to any
right of termination or cancellation under, any loan agreement, indenture,
mortgage, deed of trust or other contract, to which Sublessee is a party or by
which it may be bound.
c. The execution and delivery of this Sublease by Sublessee and of
the other documents referred to herein, and the performance by it of the
transactions herein and therein contemplated, have been duly authorized by all
necessary corporate approvals required and no further authorization with respect
to Sublessee is required.
d. These representations and warranties shall remain in full force
and effect and shall survive for two years following termination of this
Sublease.
44. Entire Agreement. This Sublease (together with the documents
referred to herein) constitutes all the agreements, conditions, understandings,
representations and warranties made between the parties hereto, and supersedes
all prior or contemporaneous agreements, whether written or oral with respect to
the subject matter hereof. This Sublease may not be modified orally or in any
manner other than by an agreement in writing signed by both parties hereto.
45. No Recordation. This Sublease shall not be recorded absent mutual
agreement between the parties hereto, but the parties agree each shall execute
and that either may file for record a memorandum of Sublease in the form
attached hereto and made a part hereof as Exhibit 4.
46. No Disclosure. Without the prior written consent of the other
party, and except to the extent required by applicable law or regulations or
order of a court of competent jurisdiction, neither Sublessor nor Sublessee will
disclose to any person the terms and conditions of this Sublease. Disclosure of
the terms of this Sublease may be made as
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required to secure financing required by the Sublessee to acquire the necessary
equipment and credit necessary to perform its obligations hereunder, but
Sublessee shall receive the assurance of such lender that such information shall
be held in confidence.
47. Alternative Dispute Resolution. Whenever the parties have a dispute
pursuant to paragraphs 1(a), 7(c), 7(g), 7(h), 12(b), or 13 above, Sublessor and
Sublessee shall each designate an engineer (preferably an employee or engineer
normally retained by such party) to investigate the dispute and review any data
relating thereto submitted by the parties. The investigation and review shall
occur within five (5) days of either Sublessor or Sublessee's initial notice
under this paragraph 47. The engineers will in good faith attempt to resolve the
dispute in question. If the engineers cannot agree to a resolution of any such
dispute within five (5) days of their investigation and review, then: (1) the
parties shall submit the question to a panel consisting of the two engineers
appointed by the parties and a mutually acceptable, disinterested registered
Professional Engineer who is knowledgeable about coal mining in southern West
Virginia, and (2) agree in writing prior to the selection of the disinterested
registered Professional Engineer that the decision of a majority of the panel
shall be conclusive and binding upon the parties. If the parties submit any
question to this alternative dispute resolution mechanism but cannot agree on a
disinterested registered Professional Engineer, then either party may request
that the chief judge for the United Stated District Court for the Southern
District of West Virginia appoint the third disinterested registered
Professional Engineer. The Panel shall determine the disputed issue within
twenty (20) days after the appointment of the disinterested registered
Professional Engineer. Each party shall bear one-half the cost of the
disinterested registered Professional Engineer and its own other costs and
expenses associated with the alternative dispute resolution.
48. No Rights in Third Parties. The provisions of this Lease are not
intended and do not confer upon any persons other than the parties hereto and
the Permitted Mortgagee, their permitted successors and assigns any rights or
remedies under or by reason of this Lease.
49. Subleasehold Mortgage
a. Right to Mortgage. Sublessee shall have the right to mortgage its
estate hereunder in accordance with Article 27(b) hereof, and, upon written
notice to Sublessor that Sublessee's estate has been mortgaged to a Permitted
Mortgagee, such Permitted Mortgagee shall be entitled to the rights, privileges
and protections afforded under this Sublease, subject to the obligations
provided in, Article 27(b) and 49 hereof; provided, however, that Sublessor
shall in no event be required to subordinate its fee interest in the Subleased
Premises to the lien of any mortgage on Sublessee's estate hereunder.
b. Estoppel Certificate. Sublessor hereby agrees that it shall,
within ten (10) business days following a written request from Sublessee or a
Permitted Mortgagee, execute an estoppel certificate (as ground Sublessor)
indicating whether the Sublease is in full force and effect, that the Sublease
has not been modified or amended except as specified, that, to Sublessor's
knowledge, there has been no default in the performance of the Sublease by
Sublessee, that no event has occurred or condition arisen which, to the
knowledge of Sublessor, would with the passage of time or giving of notice
constitute an event of default by Sublessee under the Sublease, and that
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royalties and all other charges due under the Sublease have been paid through a
specified date.
c. Default and Foreclosure. Sublessor further agrees as follows:
(i) Notice. Sublessor will provide to Permitted Mortgagee
at 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000,
Attn: Xxxxx X. Genda (or to such other single
Permitted Mortgagee or other address as Permitted
Mortgagee may, from time to time, provide to
Sublessor in writing) a copy of each notice of
default (a "Default Notice") given to Sublessee at
the same time and in the same manner as such Default
Notice is given to Sublessee. In addition, Sublessor
shall notify the Permitted Mortgagee of the
occurrence of any of the default, described in
clauses (i) through (iv) of paragraph 30(a) of this
Sublease.
(ii) Right to Cure Defaults. A Permitted Mortgagee shall
have the right, at its option, to cure any event of
default hereunder within the applicable cure period
afforded to Sublessee hereunder (or in the case of
the events of default described in clauses (i)
through (iv) of paragraph 30(a), within twenty days
after notice to Permitted Mortgagee thereof), and
Sublessor shall accept timely performance by or on
behalf of a Permitted Mortgagee of Sublessee's
obligations hereunder with the same effect as though
Sublessee had performed such obligations. In the case
of events of default that cannot be cured by the
Permitted Mortgagees until such time as the Permitted
Mortgagees have obtained possession and control of
the Subleased Premises through foreclosure or
otherwise (a "Foreclosure Default"), the following
procedure shall apply:
1. A Permitted Mortgagee shall notify Sublessor
in writing (a "Foreclosure Notice") if the
Permitted Mortgagee elects to exercise its
remedies under the Subleasehold Mortgage
within thirty (30) days of Permitted
Mortgagee's receipt of a Default Notice;
2. If a Foreclosure Notice has been timely
given, the cure period afforded the
Permitted Mortgagee to cure the Foreclosure
Default described in such Foreclosure Notice
shall be extended for the Extended Cure
Period (as defined below); provided,
however, that notwithstanding the foregoing,
the Permitted Mortgagees shall be limited to
not more than two Extended Cure Periods in
any eight year period it being agreed that
any event of default occurring after the
extension of a second Extended Cure Period
during any eight-year period must be cured
by Sublessee (or by the Permitted Mortgagees
if they so desire) with in the cure periods
provided in this Sublease, provided that if,
at any time, from time to time, (i) an
Extended Cure Period occurs, and (ii) the
Permitted Mortgagee or the
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Sublessee in place for such Extended Cure
Period (or any portion thereof) is
succeeded, in compliance with the terms of
this Sublease, by a new Permitted Mortgagee
or Sublessee, then the aforesaid eight year
measuring period shall reset so that the
Extended Cure Period described in clause (i)
and all prior Extended Cure Periods which
have then occurred hereunder shall be deemed
not to have occurred for purposes of
determining whether the aforesaid limit of
no more than two Extended Cure Periods in
any eight year period has been exceeded. For
purposes, of this Sublease, the term
"Extended Cure Period" shall mean a period
commencing on the date the applicable Notice
of Default is given to Permitted Mortgagee
and ending on the earlier of (i) the ninth
month after such date and (ii) the date the
Foreclosure Default described in such Notice
of Default is cured. Notwithstanding the
foregoing, each Extended Cure Period shall
extend beyond the nine month period provided
for above, provided that, and only for so
long as, (i) mining operations continue at
the Subleased Property in accordance with
the terms of Paragraph 7 hereof and at a
rate sufficient enough to cover the then
current minimum rentals payable under this
Sublease, but in no event less than a rate
comparable to the rate which such mining
operations were proceeding prior to the
applicable default, (ii) Sublessee or the
Permitted Mortgagee pays all rent, royalties
and other charges accruing hereunder to
Sublessor, (iii) Sublessor is not subject to
any criminal liability on account of the
continuance of such default, and (iv)
Permitted Mortgagee provides reasonable
security for the civil liability to which
Sublessor may be subject on account of the
continuation of such default.
3. During each Extended Cure Period, the
Permitted Mortgagees shall (for so long as
the Permitted Mortgagee desires to keep this
Sublease in full force and effect) pay or
cause to be paid all amounts due under the
Sublease as the obligation to pay such
amounts accrues, including, but not limited
to, all tonnage royalties for coal actually
mined on the Subleased Premises during such
Extended Cure Period, minimum rentals due
during such Extended Cure Period, Wheelage
Fees for coal actually transported through
or underlying the Subleased Premises during
such Extended Cure Period, Processing Fees
for coal actually processed on the Subleased
Premises during such Extended Cure Period,
and the amount of any property taxes
accruing on the Subleased Premises for each
month during such Extended Cure Period and
shall (for so long as the Permitted
Mortgagee desires to keep this Sublease in
full force and effect) fulfill all other
obligations of Sublessee under the Sublease
(to the extent Permitted Mortgage may
reasonably perform such obligations given
the extent of its access and ability to
control the Subleased Premises during such
Extended
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Cure Period), including but not limited to,
maintaining or causing to be maintained
insurance on the Subleased Premises, as
provided in the Sublease, and making
reasonable efforts to protect the Subleased
Premises from weather, vandalism or theft.
So long as the Permitted Mortgagees are
paying such amounts or causing such amounts
to be paid and fulfilling such obligations
(to the extent required by the preceding
sentence), Sublessor will not take any
action to terminate the Sublease (or
otherwise exercise any of its rights under
Paragraph 30 hereof) if the Permitted
Mortgagees are diligently proceeding to
exercise their remedies under the
Subleasehold Mortgage during the Extended
Cure Period (unless the Permitted Mortgagee
is precluded from doing so pursuant to a
stay issued in a bankruptcy or other
proceeding) and if, by the end of such
Extended Cure Period, the Permitted
Mortgagees shall have cured or caused to be
cured each default under the Sublease.
4. In the event that the Permitted Mortgagee
shall, during any Extended Cure Period, not
diligently proceed to exercise its remedies
under the Subleasehold Mortgage, unless the
Permitted Mortgagee has been stayed from
exercising its remedies under the
Subleasehold Mortgage as the result of any
bankruptcy or other proceeding, the
Sublessor shall be entitled to exercise all
of its rights under Paragraph 30 hereof.
(iii) Changes to Sublease. No agreement between Sublessor
and Sublessee modifying, amending, canceling,
terminating or surrendering the Sublease, or any part
thereof, and no exercise by Sublessee of any right to
terminate this Sublease or resublease any portion of
the Subleased Premises from this Sublease shall be
effective without the prior written consent of the
Permitted Mortgagee (if any), which consent shall not
be unreasonably withheld, it further being
Sublessee's obligation to use best efforts to obtain
such reasonable consent from the Permitted Mortgagee
(if any).
(iv) No Merger of Estates. So long as there is a Permitted
Mortgage outstanding, there shall be no merger of
estates if Sublessee acquires a fee interest in the
Subleased Premises or if Sublessor acquires
Sublessee's Subleasehold interest other than through
the expiration or termination of the Sublease.
(v) Sublease Superior to Mortgages. Sublessor agrees that
the Sublease is superior to any and all mortgages,
hypothecations or pledges now encumbering Sublessor's
fee interest in the Subleased Premises and that the
Sublease shall remain superior to all such fee
mortgages hereafter encumbering the Sublessor's fee
interest in the Land.
d. Successor Sublessees. If a Permitted Mortgagee (or an entity
directly or indirectly controlled by a Permitted Mortgagee) shall succeed to the
rights of Sublessee under this Sublease through possession, foreclosure action,
delivery of a deed (or
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assignment of this Sublease in lieu of foreclosure), or otherwise, or if a
third-party purchases this Subleasehold estate from a Permitted Mortgagee (or an
entity directly or indirectly controlled by a Permitted Mortgagee) upon or
following foreclosure (or assignment of this Sublease in lieu of foreclosure),
then, at the request of the Permitted Mortgagee (or an entity directly or
indirectly controlled by a Permitted Mortgagee) (Permitted Mortgagee, any entity
directly or indirectly controlled by a Permitted Mortgagee and such purchaser,
each being a "Successor Sublessee"), Sublessor shall, subject to Article 49(e)
hereof, recognize Successor Sublessee as Sublessor's Sublessee under this
Sublease and shall promptly execute and deliver any instrument that Successor
Sublessee may reasonably request to evidence such recognition of its status as
Sublessee under this Sublease as if it were a direct Sublease between Successor
Sublessee and Sublessor, upon all of the terms, conditions and covenants set
forth in this Sublease. Successor Sublessee shall not be entitled to succeed to
Sublessee's interest hereunder unless Sublessee cures all events of default
reasonably susceptible of being cured, and shall not be subject to any off-set,
defense or counterclaim which shall have therefore accrued to Sublessor against
Sublessee. For purposes of this Sublease an event of default is "reasonably
susceptible of being cured" if (i) the cure thereof can be made with the payment
of money or (ii) the cure thereof could be a cured by any Sublessee in
possession of the Premises, as opposed to merely by the particular Sublessee
which has defaulted hereunder. No appointment of any Successor Sublessee shall
be deemed a release of Sublessee of its obligations under the Sublease, and
Sublessor expressly reserves the right to enforce against Sublessee, at any time
before or after the appointment of a Successor Sublessee, the obligations of the
Sublessee under the Sublease for any cause of action arising during any period
prior to the time the Sublease is assumed by a Successor Sublessee.
e. Third Party Successor Sublessees. If at any time any Permitted
Mortgagee (which has succeeded to Sublessee's Subleasehold estate) desires to
sell or otherwise transfer such Subleasehold estate to a third party (a "Third
Party Successor Sublessee"), such Permitted Mortgagee shall so notify Sublessor
in writing. Within 5 business days after receipt of such notice, Sublessor shall
notify such Permitted Mortgagee in writing of the identity of two coal operators
which would be unacceptable to Sublessor as a Third Party Successor Sublessee
(the "Unacceptable Sublessees"). Such Permitted Mortgagee shall not be entitled
to sell or otherwise transfer such Subleasehold estate to either Unacceptable
Sublessee and shall cooperate in good faith with Sublessor to identify an
acceptable Third Party Successor Sublessee. Such Permitted Mortgagee shall,
however, be entitled to sell or otherwise transfer such Subleasehold estate,
without Sublessor's consent, to any experienced, reputable and prudent coal
mining company (other than an Unacceptable Sublessee) doing business in Central
Appalachia which has mined not less than 5 million tons of coal on an annualized
basis over the two years immediately preceding the date on which such Third
Party Successor Sublessee becomes a Successor Sublessee hereunder and which is
financially capable of performing the obligations of a Sublessee under this
Sublease. Sublessor acknowledges that at no time may there be more than two
Unacceptable Sublessees.
f. Anything herein or in the Sublease to the contrary
notwithstanding, in the event that a Permitted Mortgagee shall acquire title to
the Subleasehold estate of the Subleased Premises, such Permitted Mortgagee
shall have no obligation, nor incur any
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liability, beyond its then interest, if any, in the Subleased Premises, and
Sublessor shall look exclusively to such interest, if any, of such Permitted
Mortgagee in the Subleased Premises for the payment and discharge of any
obligations imposed upon such Permitted Mortgagee hereunder. Sublessor agrees
that with respect to any money judgment which may be obtained or secured by
Sublessor against such Permitted Mortgagee, Sublessor shall look solely to the
estate or interest owned by such Permitted Mortgagee in the Subleased Premises,
and Sublessor will not collect or attempt to collect any such judgment out of
any other assets of such Permitted Mortgagee.
g. Landlord agrees that all insurance proceeds and condemnation
awards (to the extent such awards would be payable hereunder to Sublessee) with
respect to the Subleased Premises shall be deposited with Permitted Mortgagee
and same shall be applied and disbursed solely in accordance with the terms and
provisions set forth in the Mortgage. Landlord further agrees that Permitted
Mortgagee may participate in any suits or proceedings relating to such insurance
or condemnation proceeds, causes of action, claims, awards or recoveries and
that the Permitted Mortgagee is authorized to adjust any loss covered by an
insurance policy maintained by Sublessee or any condemnation claim made by
Sublessee pursuant to the terms of this Sublease. and to settle or compromise
any such claim in connection therewith.
h. In the case of termination of this Sublease by reason of
rejection of this Sublease by Sublessee in a bankruptcy proceeding, an event of
default pursuant to clause (vi) of paragraph 30(a), or by reason of any event of
default by Sublessee which is not reasonably susceptible to cure by the
Permitted Mortgagee, Sublessor shall give prompt notice thereof to the Permitted
Mortgagee. Sublessor, on written request of the Permitted Mortgagee made any
time within thirty (30) days after the giving of such notice by Sublessor, shall
promptly execute and deliver a new Sublease of the Subleased Premises to the
Successor Sublessee (subject to the requirements of Article 49(e) hereof) for
the remainder of the term of this Sublease upon all of the covenants,
conditions, limitations and agreements contained in this Sublease, provided that
such Successor Sublessee (i) shall pay to Sublessor, simultaneously with the
delivery of such new Sublease, all accrued but unpaid royalties and other
amounts then due under this Sublease, and (ii) shall cure all then existing
defaults under this Sublease reasonably susceptible of being cured by such
Successor Sublessee.
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WITNESS the following signatures:
PENN VIRGINIA COAL COMPANY,
a Virginia corporation
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------------
Its: Vice President
-------------------------------------
PEN LAND COMPANY,
A Delaware Corporation
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
Its: SVPO
-------------------------------------
STATE OF WEST VIRGINIA,
COUNTY OF KANAWHA, to-wit:
The foregoing instrument was acknowledged before me this 1st day of
June, 2001, by Xxxxx X. Xxxxxxx, the Vice President of Penn Virginia Coal
Company, a Virginia corporation, on behalf of the corporation.
My commission expires 01-29-2007.
Xxxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Notary Public
37
00
XXXXX XX XXXX XXXXXXXX,
XXXXXX XX XXXXXXX, to-wit:
The foregoing instrument was acknowledged before me this 1st day of
June, 2001, by Xxxxxxx X. Xxxxxxx, the Senior Vice President of Pen Land
Company, a Delaware corporation, on behalf of the corporation.
My commission expires 01-29-2007.
Xxxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Notary Public
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39
SUBLEASE
between
PENN VIRGINIA COAL COMPANY
and
PEN LAND COMPANY
Dated as of May 31st, 2001
40
TABLE OF CONTENTS
Page
----
1. Subleased Coal Subleased Premises ...................... 1
2. Term ................................................... 2
3. Rights; Failure of Title ............................... 3
4. Wheelage Rights ........................................ 3
5. Exceptions and Reservations ............................ 4
6. Payments; Abatement .................................... 5
7. Mining Operations ...................................... 7
8. Surveys, Maps, and Permits ............................. 10
9. Taxes .................................................. 11
10. Engineering Audit ...................................... 12
11. Damages ................................................ 12
12. Weights ................................................ 12
13. Accounting for Commingled Coal ......................... 13
14. Exploration Data ....................................... 13
15. Records ................................................ 13
16. Permits and Reclamation ................................ 14
17. Indemnity .............................................. 16
18. Workers' Compensation; Black Lung ...................... 16
19. Insurance .............................................. 17
20. Liens and Encumbrances ................................. 20
21. Environmental Damage ................................... 20
22. Boundary Coal .......................................... 20
23. Condemnation ........................................... 20
24. Substances Mixed With Coal ............................. 21
25. Timber ................................................. 21
26. Roads .................................................. 21
27. Assignment Prohibited .................................. 22
28. Additional Property Rights ............................. 23
29. Collection of Rents - Rights Reserved .................. 23
30. Default; Forfeiture; Remedies Cumulative ............... 24
31. Removal of Property Upon Termination ................... 26
32. Release Upon Termination ............................... 27
33. Disclaimer of Warranty ................................. 27
34. Waiver ................................................. 27
35. Successors Bound ....................................... 27
36. Notices ................................................ 27
37. Dispute Settlement and Arbitration ..................... 28
38. Relationship Between the Parties ....................... 29
39. Power of Attorney ...................................... 29
40. Headings ............................................... 29
41. Applicable Law ......................................... 29
42. Severability ........................................... 30
43. Representations and Warranties of Sublessee ............ 30
44. Entire Agreement ....................................... 30
45. No Recordation ......................................... 30
46. No Disclosure .......................................... 30
47. Alternative Dispute Resolution ......................... 31
48. No Rights in Third Parties ............................. 31
49. Subleasehold Mortgage .................................. 31
41
EXHIBIT 1
TO
MAY 31, 2001 SUBLEASE
BETWEEN
PENN VIRGINIA COAL COMPANY
&
PEN LAND COMPANY
42
EXHIBIT 2
LEASES AND AGREEMENTS
X.X. XXXXXXXXX - Dated January 14, 2000
Lessor......................... X. X. Xxxxxxxxx Xx. Trust
Leased Premises................ 000 Xxxxx xx Xxx Xxxxxx Xxxxxx, Xxxxx Xx. XX
Rights Leased.................. All deep and Surface Mineable Rights,
all mineable and merchantable coal, all
methods
XXXXXX 80.33 ACRE & 553 ACRE TRACTS - dated June 6, 1998
Lessor......................... Xxxxxx Properties, LLC.
(Xxxxxx X. &Agnes Xxxxxx)
Leased Premises ............... Strip of land forty (40) feet wide for
haulroad across leased tracts - approx
9,500 feet from Corridor G toward Prep
Plant - to Elkhorn Property Line
Rights Leased.................. Surface rights only for forty (40) foot
haulroad and additional areas as needed to
be in compliance for the haulroad.
XXXXXX LEASES - all dated May 12, 2001
Lessor......................... Xxxxxx Properties, LLC.
(Xxxxxx X. & Xxxxx Xxxxxx)
Leased Premises................ Surface of 553 Acre Tract of land on Little
Coal River, in Kanawha County
Rights Leased.................. Surface rights only, except prohibited from
importing material from other properties
without consent of Lessor.
Lessor......................... Xxxxxx Properties, LLC.
(Xxxxxx X. & Xxxxx Xxxxxx)
Leased Premises................ 553 Acre Tract of land on Little Coal River,
in Kanawha County
Rights Leased.................. Deep and surface mining rights for all
seams above the cedar Grove Seam
Lessor......................... Xxxxxx Properties, LLC.
(Xxxxxx X. & Xxxxx Xxxxxx)
Leased Premises................ 553 Acre Tract of land on Little Coal River,
in Kanawha County
Rights Leased.................. Deep mining rights for the Cedar Grove and
all seams below
43
EXHIBIT 2
LEASES AND AGREEMENTS (CONT.)
Easement and Right-of-Way Agreement dated February 22, 1999 between Xxxxxx and
Xxxxx Xxxxxxxx, et al, as Grantors and Fork Creek Mining Company as Grantee.
Easement and Right-of-Way Agreement dated June 6, 1999 between Xxxxxx and
Xxxxxxxx Xxxxxx as Grantors and Fork Creek Mining Company as Grantee.
Easement and Right-of-Way Agreement dated June 16, 1999 between Xxxxxx and Xxxxx
Xxxxxxx as Grantors and Fork Creek Mining Company as Grantee.
Agreement dated August 11, 1989 between Xxxxxxxx Company and the State of West
Virginia.
License Agreement effective March 25, 0000 xxxxxxx Xxxxx Xxxxx xxx xxx Xxxxx xx
Xxxx Xxxxxxxx.
44
EXHIBIT 3
OPTION
X. X. XXXXXX 904 & 19 ACRE TRACTS (DEED ACREAGE) - dated July 24, 2000
Owner.......................... X. X. Xxxxxx, Inc.
Optioned Premises.............. 904 Acre & 19 Acres tracts on White Oak
Branch, Xxxxx Co. WV
Optioned Rights................ All deep and surface mining rights, all
mineable and merchantable coal, all methods
45
EXHIBIT 4
MEMORANDUM OF SUBLEASE
THIS MEMORANDUM OF SUBLEASE, made and entered into by and between PENN
VIRGINIA COAL COMPANY, a Virginia corporation, hereinafter referred to as the
"Sublessor" and PEN LAND COMPANY, a Delaware corporation, hereinafter referred
to as the "Sublessee."
R E C I T A L
The parties entered into a coal Sublease and Agreement (the "Sublease")
dated as of the 31st day of May, 2001, involving several tracts of land in
Xxxxx, Kanawha and Lincoln Counties, West Virginia (the "Subleased Premises")
which are the subject of several leases, rights of way and other easements and
property rights which are listed on Exhibits 1, 2, and 3 attached hereto and by
reference made a part thereof.
The parties hereto desire to make this Memorandum of Sublease as
permitted by W. Va. Code ss. 40-1-8.
WITNESSETH THE FOLLOWING:
1. The parties to the Sublease are as set forth in the caption hereof
as "Sublessor" and "Sublessee." Each having the following address:
Sublessor
Penn Virginia Coal Company
Xxxxx 000
Xxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Sublessee
Pen Land Company
0000 Xxxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, XX 00000
2. The Sublease is dated as of May 31 , 2001, and was executed by the
Sublessee on ________, 2001 and by the Sublessor on _______, 2001.
3. A description of the Subleased premises in the form contained in the
Sublease is attached hereto as Exhibits 1, 2 and 3.
4. The Term of the Sublease commences on May 31st, 2001, and, continues
until all the mineable and merchantable coal is removed or for ten (10) years,
subject to four (4) extensions of five years each, and thereafter for a
Remainder Term until Sublessee concludes the work on the Subleased Premises.
46
WITNESS THE FOLLOWING SIGNATURES:
PENN VIRGINIA COAL COMPANY
a Virginia corporation
By:
----------------------------------------
Its:
----------------------------------------
PEN LAND COMPANY
A Delaware corporation
By:
----------------------------------------
Its:
----------------------------------------
00
XXXXX XX XXXX XXXXXXXX,
XXXXXX XX XXXXXXX, to-wit:
The foregoing instrument was acknowledged before me this __ day of
______, 2001, by ___________________, the _________________ of Penn Virginia
Coal Company, a Virginia corporation, on behalf of the corporation.
My commission expires _____________________.
-----------------------------------
Notary Public
STATE OF _____________________,
COUNTY OF ___________________, to-wit:
The foregoing instrument was acknowledged before me this __ day of
_______, 2001, by _________________________, the ________________________ of Pen
Land Company, a Delaware corporation, on behalf of the corporation.
My commission expires _____________________.
-----------------------------------
Notary Public
This document prepared by:
Xxxxx X. Xxxxxxx
Xxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
