Exhibit 10.12
COAL MINING LEASE
THIS COAL MINING LEASE ("Lease") dated April 9, 2003, effective as of
April 1, 2003, by and between CSTL LLC ("Lessor"), a Delaware limited liability
company, and ALPHA LAND AND RESERVES, LLC ("Lessee"), a Delaware limited
liability company.
SECTION 1. LEASE FOR COAL MINING PURPOSES.
In consideration of the terms, conditions, and stipulations set forth to
be performed and observed by Lessee, Lessor, acting on its own behalf and with
the intention of exercising any right, option or power held by it on behalf of
any other person or entity, does, to the extent that it now or hereafter owns or
controls same, hereby demise, lease and let to Lessee, the coal (the "Leased
Coal") within those certain seams lying in, on or under the premises obtained by
Lessor in the deeds (the "Source Deeds") described on Exhibit A hereto, and
hereinafter referred to as the "Leased Premises", together with the sole and
exclusive right of mining and removing all of the Leased Coal and together
further with the sole and exclusive right to exercise and enjoy all such other
rights in or relating to the Leased Premises obtained by Lessor in the Source
Deeds as may be necessary or convenient for the mining, preparation, loading,
removal, transportation and shipping of the Leased Coal, Foreign Coal (as
hereinafter defined), including the products and by-products of each and
synthetic fuel produced from each, and the reclamation of the Leased Premises in
connection therewith in accordance with applicable law, subject to the
Restrictions, as hereinafter defined, and the reservations and exceptions
expressly set forth in Section 2 of this Lease.
"Foreign Coal," as used in this Lease, shall mean any coal mined from any
lands other than the Leased Premises, and "foreign coal refuse," as used in this
Lease, shall mean refuse resulting from the processing of Foreign Coal.
Lessee has reviewed and is familiar with the restrictions, conditions,
reservations, obligations, notice requirements and deadlines (the
"Restrictions") contained in the Source Deeds, and all rights to mine the Leased
Premises which are granted herein are granted only to the extent Lessor obtained
such rights and properties in the applicable Source Deed.
Subject to the limitations contained above and without limiting the
foregoing, to the extent that Lessor now or hereafter owns or controls same,
Lessee shall have all and exclusive coal and mining rights in, on and under the
Leased Premises and shall also have, subject to the provisions hereof, the right
to use as much of the surface of the Leased Premises, and the right to take and
use stone, soil and water thereon, as may be necessary for, or incident to, (a)
the mining, preparation, loading, removal, transportation and shipping of Leased
Coal and Foreign Coal; (b) the construction, maintenance and use of all
structures, fixtures, equipment, plant or facilities deemed necessary or
convenient by Lessee, including without limitation, preparation facilities,
synthetic fuel facilities, buildings, offices, impoundments, valley fills,
tipples, roads, railroads, utilities, pipelines, conveyors and other structures,
facilities and improvements necessary for, or incident to, the purposes of this
Lease; (c) storage of all such coal, any mine refuse and any equipment,
materials and supplies; (d) the dumping of rock, slate, overburden, fill
material and other refuse (including foreign coal refuse); (e) the pumping,
discharge,
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
deposit, treatment, diversion and draining of water; and (f) the unrestricted
right of ingress and egress to and from the Leased Premises for any purposes
incidental to the above.
Subject to the provisions and limitations contained above, Lessee shall
have the right to mine the Leased Coal by all mining methods now existing or
hereafter developed, including surface mining methods (including contour strip
mining, mountaintop removal, area mining, and highwall mining), and underground
mining methods (including room and pillar and longwall mining methods);
provided, however, that Lessee shall not mine any Leased Coal by the auger
mining method without first obtaining the prior written consent of Lessor, which
consent shall not be unreasonably withheld, delayed or conditioned. To the
extent that Lessor has the right to grant same, Lessor hereby waives the right
to lateral and subjacent support and any claim or liability for damages to the
surface or subsurface or water thereon or therein, and grants Lessee the right
to subside the surface and overlying strata, including water, without liability
to Lessor therefor.
Subject to the above limitations and to the extent that Lessor owns and
can grant same, Lessee is hereby granted the right to store upon and transport
through, over, across or under the Leased Premises Foreign Coal, and men,
materials, timber, supplies and equipment in connection with mining on or
removal of timber from the Leased Premises or any other lands. The above
transportation rights are granted at no additional cost to Lessee.
SECTION 2. RESTRICTIONS, RESERVATIONS AND EXCEPTIONS.
All rights, title and interest in or to the Leased Premises described on
Exhibit A hereto as Area 1, vested in Lessor and not herein granted to Lessee
are reserved to Lessor, its successors and assigns.
Without limiting the generality of this reservation, there are hereby
expressly excepted from this Lease, with respect to the Leased Premises
described on Exhibit A hereto as Area 1, and reserved to Lessor, its successors
and assigns and further subject to the extent such rights are vested in the
Lessor:
(1) all existing licenses, easements and rights-of-way to third parties
for railroad or other purposes heretofore granted by or otherwise
lawfully acquired from Lessor or its predecessors in title;
(2) all oil, gas (including gas and/or methane in the Leased Coal,
provided, however, that Lessee shall have the right to vent,
liberate or otherwise remove such gas or methane in the course of
mining operations pursuant hereto or pursuant to any other deed,
lease, license, agreement or easement, without liability or payment
therefor), timber (provided, however, that Lessee shall have the
right to remove trees or timber growing on the Leased Premises as
necessary or convenient to its mining operations, after giving
Lessor at least six months' advance written notice thereof), and
minerals other than coal;
(3) the following rights and privileges in and respecting the Leased
Premises:
(a) the right at all reasonable times to enter upon the Leased
Premises, and to drill, bore, excavate, cut, remove, develop, store,
and market (or to lease or license to others said rights), all such
oil, gas, timber and other minerals hereinabove excepted;
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
(b) the right to construct and operate railroads, roads, structures,
and appliances which may be necessary for the removal or processing
of such oil, gas, timber and other minerals, or to serve other
properties of the Lessor;
(c) the right and privilege of leasing to tenants the surface of the
Leased Premises for the purposes of occupying and farming said
surface or of constructing thereon such facilities as may be needed
for the removal or processing of said oil, gas, timber and other
minerals; provided, however that, notwithstanding anything in this
Lease to the contrary, Lessor shall not without Lessee's consent,
which consent shall not be unreasonably withheld, enter into leases
for surface occupation, residential purposes, farming or business
development on property (i) within the Permitted Areas or (ii)
within areas reasonably designated by Lessee as likely to be
affected by Lessee's operations; and
(d) the right to grant and convey from time to time to any electric
or other power company, pipeline, gas, oil, mining or railroad
company, so much of the surface of the Leased Premises as may be
required for rights-of-way by such company or companies; provided
that Lessor shall use its commercially reasonable efforts to ensure
that such rights of way shall include, for the benefit of Lessor and
Lessee, the right to demand relocation thereof at no cost in
connection with operations pursuant to this Lease.
Lessee recognizes and acknowledges that the Source Deeds contain certain
Restrictions that relate to the surface, timber, oil and gas estates in or on
the Leased Premises, and Lessee hereby accepts this Lease subject to those
Restrictions and agrees to be bound by said Restrictions and to comply with same
(including any requirements to give notice to the beneficiary of such
Restrictions, providing a simultaneous copy to the Lessor) in all its activities
hereunder. Further, in the event the Restrictions require the payment of monies
relative to any of the matters contained therein and Lessee's activities under
this Lease cause the requirement to pay such monies, then and in that event, the
parties shall negotiate in good faith for the appropriate allocation and payment
of such monies; provided, however, that Lessee shall be entitled to exercise any
such rights and pay such monies pending determination of such allocation.
In the event Lessor desires to exercise any of the rights reserved herein
and such exercise shall include operations to be conducted on a portion of the
Leased Premises with regard to which Lessee has posted a reclamation or
performance bond or has received a permit or other authorization from, or has a
pending permit application with, any federal, state, local or other governmental
agency to conduct operations on such portion of the Leased Premises or on any
area within three hundred (300) feet of any exterior permit boundary
(collectively "Permitted Areas"), then Lessor shall give Lessee at least thirty
(30) days prior written notice thereof, and shall not exercise any such rights
with respect to any Permitted Areas without Lessee's prior written consent,
which consent shall not be unreasonably withheld, delayed or conditioned.
Without limiting the above, such consent can be conditioned upon Lessor or its
subsequent lessee or assign agreeing to remove any equipment, material or
fixtures that any of them might have installed that subsequently interfere with
Lessee's mining operations under this Lease. Lessor shall, within 30 days after
receiving Lessee's invoice, reimburse Lessee for all costs added by Lessor's
operations to Lessee's costs of compliance with such bonds, permits, and/or
other authorizations and for costs related to accommodation of Lessor's
operations. Any lease, assignment or
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
other transfer of the rights retained by Lessor hereby shall contain provisions
that expressly incorporate the provisions set forth above and shall require the
holder of such rights to likewise reimburse Lessee.
To the extent that Lessor has the right to grant same, but notwithstanding
anything herein to the contrary, the rights granted to Lessee by this Lease are
dominant, and the rights and privileges hereby excepted and reserved in this
Section shall be exercised in such manner as to not interfere with Lessee's
exercise of its rights hereunder or with Lessee's mining operations in
connection therewith, having due regard for the requirements, convenience, and
safety of said rights and operations; and provided further, that Lessor shall
indemnify Lessee for all direct costs and liabilities incurred by Lessee
resulting from Lessor's exercise of such rights and privileges (including claims
of personal injury or property damage resulting from the activities of Lessor or
any of Lessor's lessees, licensees, invitees, contractors or subcontractors);
provided, further, however, that it is not the intent of this sentence that
Lessee shall be entitled to charge Lessor any usage fees for the exercise of
reserved rights.
SECTION 3. TERM.
The initial term (the "Initial Term") of this Lease shall be for a period
of ten (10) years from the effective date set forth in the preamble paragraph
hereto (hereinafter, the "anniversary date"), unless sooner terminated as
hereinafter provided. This Lease shall be automatically extended upon the
expiration of the Initial Term for consecutive terms of five (5) years each, up
to a maximum of fifty (50) years from the expiration of the Initial Term,
subject to the right of Lessee to terminate this Lease on the expiration of the
Initial Term or the expiration of any subsequent five year extension period by
delivering written notice of its desire to do so to Lessor at least ninety (90)
days prior to such termination date. For purposes of this Lease, "Lease Year"
shall mean the period beginning on the effective date hereof and ending on
December 31, 2003 with respect to the first Lease Year, and thereafter the
twelve-month period beginning on each January 1 so long as this Lease remains in
effect.
In the event all the mineable and merchantable coal underlying the Leased
Premises shall have been mined and removed from the Leased Premises pursuant to
the provisions of this Lease and mining operations by Lessee have ceased upon
the Leased Premises, then this Lease shall cease and terminate upon the date
when all such coal shall have been mined and removed and such mining operations
have ceased. Notwithstanding anything herein to the contrary, (a) the term of
this Lease may be extended beyond such date by Lessee to the extent reasonably
required by Lessee to continue the operation of any facilities that are located
on the surface of the Leased Premises that are useful for the handling or
processing of any Foreign Coal, provided that Lessee shall pay Lessor $[***] in
annual rental at the same time and in the same manner that Minimum Annual
Royalty would have been payable hereunder; and (b) Lessee shall have the right
to enter upon the Leased Premises after the termination or forfeiture of this
Lease, without rental, (i) for the purpose of removing all of Lessee's
buildings, structures, machinery, equipment and other property from any part of
the Leased Premises following the termination of this Lease in accordance with
Section 14 hereof; and (ii) for the purpose of conducting reclamation activities
on the Leased Premises or on any other lands and complying with applicable law,
provided that if Lessee exercises its rights pursuant to this subparagraph (b),
the provisions of the last four paragraphs of Section 5 shall apply during said
time. As used in this Lease, "mineable and merchantable coal" shall mean coal
that can be mined at a reasonable profit to Lessee, using modern mining methods
and equipment, when reached in the ordinary course of Lessee's operations.
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
SECTION 4. ROYALTIES.
(a) Lessee shall pay to Lessor, CSTL LLC, X.X. Xxx 0000, Xxxxxxxx, Xxxx
00000 or at such other places as Lessor may from time to time designate in
writing, during the term of this Lease, a Tonnage Royalty in the amount of the
greater of [***] percent ([***]%) of the gross selling price or $[***] per ton
for the coal mined from the Leased Premises and sold during each calendar month
of the term hereof, to be received by Lessor within twenty (20) days from the
end of the month to which payment applies. In the event Lessor consents to
mining on the Leased Premises by the auger mining method, then the royalty
attributable to all coal so mined by the auger mining method shall be [***]
percent ([***]%) of the gross selling price.
(b) Beginning April 1, 2003, Lessee shall pay to Lessor a Minimum Annual
Royalty in the amount of $[***] for the first Lease Year. Beginning on January
1, 2004 and thereafter during the Initial Term hereof, as same may be extended,
Lessee shall pay to Lessor a Minimum Annual Royalty in the amount of $[***], and
for each Lease Year during any extension of the Term, a Minimum Annual Royalty
in the amount of $[***]. Each payment shall be made in advance, in equal
quarterly installments, with each installment equal to one-fourth of the Minimum
Annual Royalty, on the first day of January, April, July and October of each
Lease Year. Each quarterly payment shall hereinafter be referred to as a
"Quarterly Payment". Lessee shall have the right to recoup a Quarterly Payment
at any time after payment of same, by deducting the amount of such payment from
Tonnage Royalty payments due, at any time, so long as this Lease remains in
effect. Notwithstanding anything herein to the contrary, upon the payment by the
Lessee of Tonnage Royalties and a Quarterly Payment or Quarterly Payments in any
Lease Year, which equal or exceed, in the aggregate, the Minimum Annual Royalty
due for such Lease Year, no further Quarterly Payment shall be due or payable
during such Lease Year.
If at any time after the Initial Term, in the opinion of Lessor's engineer
or an independent professional engineer mutually acceptable to Lessor and
Lessee, upon the request of Lessee, the amount of mineable and merchantable
Leased Coal is not sufficient to provide enough Tonnage Royalty to recoup all
unrecouped Minimum Annual Royalty previously paid under this Lease, then the
obligation to pay Minimum Annual Royalty or any subsequent Quarterly Payment
thereof shall immediately cease.
The term "coal" referred to herein shall include any low-coal content
merchantable product that is sometimes sold and shipped under various trade
names including bone, coal, fuel and middlings, and, for purposes of this Lease,
synthetic fuel produced by Lessee from Leased Coal. The term "ton" referred to
herein shall mean 2,000 pounds.
Subject to the qualification hereinafter stated in this paragraph, "gross
selling price" of coal shall, for all purposes under this Lease, be the amount
received, by Lessee, upon sale thereof after preparation and/or tippling, to an
unaffiliated third party purchaser f.o.b. railroad cars, trucks or other
transport at the loading point at which Leased Coal mined hereunder has been
prepared and loaded for shipment to such unaffiliated third party purchaser,
without any deduction for selling expense or sale commission but with proper
deduction for transportation costs incurred in the instances where the f.o.b.
selling point is different than the loading point. It is this section's intent
that the gross selling price be the price received by Lessee or its affiliates,
in the last arm's length transaction between an unaffiliated third party
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
purchaser and Lessee or its affiliates for such Leased Coal. If Lessee or any
affiliate of Lessee shall consume any of the Leased Coal, the price of the
Leased Coal as consumed shall be considered equal to (1) the average gross
selling price of Leased Coal of comparable quality and as is then being sold to
unaffiliated third party purchasers, or (2) if there are no unaffiliated third
party purchasers, the average gross selling price of comparable coal in the open
market.
Lessee shall furnish to Lessor on or before the 20th day of each calendar
month the railroad and truck scale weights showing the quantity of Leased Coal
shipped from the Leased Premises and weights of Leased Coal, if any, consumed on
the Leased Premises or at the preparation plant or tipple by Lessee or its
affiliates during the preceding calendar month. Lessee shall comply with all
reasonable rules and regulations that may reasonably be prescribed by Lessor's
engineer for the ascertainment of and payment of tonnage royalties on the Leased
Coal mined and sold or consumed under this Lease. Lessee shall keep accurate and
correct books of account showing all coal mined, and all coal consumed on,
transported, or shipped from the Leased Premises or elsewhere, together with the
correct weights and gross selling price thereof, to which books and records
Lessor shall at all reasonable times and with reasonable notice have access for
verification of statements to be furnished by Lessee for a period of five (5)
years from the date of payment.
Lessor, for like purposes, is hereby authorized to demand and require of
any railroad company or other agents transporting the products of the Leased
Premises, inspection of its books and records, showing the weight and quantity
of such products and pertinent information in relation thereto. Lessee hereby
authorizes and requests such carriers and other agents to show Lessor, or its
agents, all such books and records and to furnish all such information when
requested.
In the event it shall be necessary or reasonably convenient in mining
Leased Coal to load the same over a tipple or tipples over which other coal is
loaded, thereby mixing the Leased Coal with other coal, Lessee shall keep a
strict account of the tonnage of Leased Coal as well as a strict account of the
tonnage of other coal being loaded over the same tipple or tipples. Before other
coal may be mixed with Leased Coal, the method of determining these respective
tonnages shall be approved in writing by the Engineer of Lessor consistent with
standard industry practice, which approval shall not be unreasonably withheld,
delayed or conditioned.
In the event Leased Coal is so commingled, then the gross selling price,
as set forth in Section 4 hereof, shall be the average gross selling price for
all coal with which such Leased Coal is commingled, to the end that unless the
Leased Coal is mined, processed, stored and sold separately from all other
coals, then the gross selling price shall be the average gross selling price for
all coal sold from the Lessee's facility with which Leased Coal is commingled.
It is the intent of this Lease to allow monthly royalty payments to be
paid on either a sales or production basis in Lessee's sole discretion; however,
all coal produced from the Leased Premises shall be reconciled to total sales
along with any Foreign Coal that is commingled with coal from the Leased
Premises. This reconciliation shall be done monthly for coal reported and
royalty paid on a sales basis and not less than annually for coal reported and
royalty paid on a production basis. The only allowable adjustment to total sales
is a reduction for Foreign Coal segregated and not commingled at any time with
coal from the Leased Premises. Lessor's portion of total sales shall be prorated
based on Lessor's percentage of total production since the last reconciliation
and adjustments made, plus or minus, at that
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
time. There will be no other adjustments to sales tons or methods used to
reconcile Lessor's royalty payments unless expressly agreed to in writing, in
advance, by Lessor.
SECTION 5. TAXES AND INSURANCE.
Lessor will, in the first instance, pay all the taxes, levies and
assessments on or in respect of Lessor's ownership of the Leased Premises and,
during the continuance of this Lease, Lessee shall reimburse to Lessor the
amount of such taxes, levies, and assessments attributable to the Leased Coal
and the Leased Premises, but excluding taxes attributable to all rights excepted
and reserved, if separately assessed, including taxes attributable to timber,
oil, gas and other minerals, after Lessee's receipt of Lessor's statement
therefor, such amounts to constitute and be treated as additional rental
hereunder; provided that the obligation of Lessee shall be prorated for any
partial calendar years for the first year and the last year of this Lease.
Lessee shall promptly pay at the several times they become due and payable all
taxes levied or assessed upon coal mined from or products manufactured from coal
upon the Leased Premises. Lessee shall also pay any and all taxes due to the
state and/or its subdivision for severing, removing, processing, or preparing of
said coal, except for taxes on gross or net income of Lessor on receipt of
royalties, and Lessee shall also pay all royalties for removal of coal required
by any existing or future labor agreements of lessee, its agents, operators or
affiliates. If Lessor fails to pay the taxes, levies and assessments set forth
above or if there are any taxes or encumbrances due on the Leased Premises, then
Lessee may pay the same and any penalties, or redeem the Leased Premises from a
tax sale, and deduct the amount expended attributable to taxes attributable to
all rights excepted or reserved, if separately assessed, as well as penalties
and interest assessed due to Lessor's failure to timely pay any taxes, levies
and assessments, from any rents and royalties subsequently accruing.
Lessee may, at any time during the continuance of this Lease, at its own
cost and expense, and after reasonable notice to Lessor of its intention so to
do, contest any of the taxes, levies, or assessments to be borne by Lessee as
above provided. In the event of any such contest, Lessee is authorized to
proceed in the name of Lessor with respect to the reversionary interest of
Lessor in the Leased Premises, but Lessee shall indemnify Lessor against any
costs, penalties, expenses, or interest charges arising out of such contest.
Lessee shall submit to Lessor, for its review, a copy of annual coal
appraisal reports or returns prepared pursuant to laws or regulations in the
Commonwealth of Virginia with respect to Lessor's ownership prior to the filing
with any governmental agency. It is understood and agreed that the taxes levied
or assessed from such reports are based, in part, upon the permitting and/or
production of Lessee and for that reason, Lessee's payments to Lessor as
provided for in this section shall continue and survive any termination of this
Lease until the earlier of such time as (a) said taxes levied or assessed are
not based on production or the designation of the Leased Coal as mineral under
development, (b) the Leased Coal is leased to any third parties (or if partially
leased, to the extent so leased); or (c) one year following termination of this
Lease. Notwithstanding the foregoing, after termination of the Lease, Lessee's
responsibilities for payment of taxes shall be limited to the incremental
difference between the amount of taxes due based on the designation of coal
reserves as mineral under development and the amount of taxes that would be due
if such reserves were not under development. Lessor shall use its commercially
reasonable efforts to minimize all taxes payable by Lessee under this Lease.
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
Lessee agrees that it shall comply with all of the terms and provisions of
the black lung laws (defined below) and will secure the payment of black lung
benefits (defined below) as hereinafter provided. "Black lung laws" mean the
Black Lung Benefits Act, Title IV of the Federal Mine Safety and Health Act of
1977, 30 U.S.C. 901 et seq., and the Internal Revenue Code, 26 U.S.C. 1 et seq.,
Black Lung Benefits Reform Act of 1977 (P.L. 95-239), Black Lung Benefits
Revenue Act of 1977 (P.L. 75-227), Black Lung Benefits Revenue Act of 1981 (P.L.
97-119), as now or hereafter amended, and all rules and regulations adopted
pursuant thereto. "Black lung benefits" means any and all benefits payable
pursuant to the black lung laws. Lessee acknowledges that, as between itself and
Lessor, it is, and shall be deemed to be, the operator of any coal mine or coal
preparation facility or facility used for the extraction, preparation or
transportation of Leased Coal and of all related activities, including, but not
limited to, coal mine construction or maintenance, engaged in by Lessee pursuant
to the terms of this Lease with respect to any claim for black lung benefits
filed by or on account of any of its employees or former employees. To the
extent required under the black lung laws, Lessee shall secure and shall require
any other person or entity who operates, controls or supervises a coal mine or
coal preparation facility on the Leased Premises or performs services of
construction, maintenance, transportation, or other activities related to coal
mining or preparation associated with this Lease, and who otherwise is liable
for the payment of black lung benefits, to secure the payment of such black lung
benefits to or on account of employees or former employees in accordance with
the black lung laws and shall provide Lessor, upon request, with appropriate
certification that each of them has provided security in compliance with all
black lung laws for the payment of such black lung benefits. Without limiting
the generality of Lessee's obligations to comply with all other provisions of
this Lease, Lessee agrees that it will secure and guarantee the payment of all
black lung benefits required to be paid under the black lung laws by reason of
mining, construction, transportation, and related activities under this Lease,
and Lessee does hereby agree that it will indemnify and hold Lessor harmless
from any liability or expenses, including reasonable attorney fees and expenses,
which Lessor may suffer directly or indirectly, as a result of or with respect
to any claim for black lung benefits filed by or on account of any of Lessee's
employees or former employees, or employees or former employees of others
operating on the Leased Premises pursuant to this Lease who may be required to
secure the payment of black lung benefits as provided above. Notwithstanding
anything in this Lease to the contrary, this Lease does not empower Lessor to
make any decisions and Lessor hereby expressly waives and disclaims any right to
make any decisions with respect to the terms and conditions under which the
leased coal is extracted or prepared, such as, but not limited to, the manner of
extraction or preparation or the amount of leased coal to be produced at any
particular time, all within the meaning of the black lung laws. The parties
hereto acknowledge, however, that Lessor has reserved certain rights and has
imposed certain requirements under the terms of this Lease solely for the
purpose of preventing waste and protecting the reserved rights of Lessor.
Lessee further covenants and agrees that all employees of Lessee and/or
any and all other persons performing work on the Leased Premises pursuant to the
rights granted in this Lease will be fully covered by or insured at all times by
Workers' Compensation, and to that end Lessee shall comply with all applicable
Workers' Compensation laws, rules and regulations and shall make all necessary
contributions and/or premium or other payments.
Lessee covenants and agrees to indemnify and save harmless Lessor, its
owners and its or their partners (general and limited), officers, directors,
agents, employees, successors and assigns from and against (a) any and all
claims, demands, actions or causes of action by or on behalf of any person,
firm,
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
corporation or governmental body for damages, injuries, deaths, penalties,
fines, assessments or otherwise caused by, arising out of, resulting from or as
a consequence of, in whole or in part, (i) any acts or omissions of Lessee, its
officers, directors, employees, sublessees, contractors, subcontractors,
licensees, invitees, engineers, agents, successors, assigns or parent or
affiliated corporations or any other persons or entities acting by direct or
indirect authority of Lessee, or pursuant to any rights granted in this Lease or
(ii) the use and enjoyment of the Leased Premises pursuant to this Lease, or
(iii) the approval by Lessor of any Mine Plans (as hereafter defined) and (b)
any and all costs, counsel fees, expenses and liabilities reasonably incurred in
or about any such claim or action brought thereon. Notwithstanding anything
herein to the contrary, Lessee shall not be liable for special, consequential or
punitive damages incurred by Lessor, but as between Lessor and Lessee, Lessee
shall be liable for special, consequential or punitive damages incurred by
unaffiliated third parties as a result of Lessee's actions on the Leased
Premises.
During the term of this Lease, Lessee shall carry, and shall require any
sublessees or contractors to carry, with a limit of $l million per person and $5
million per occurrence, general liability, including contractual liability,
insurance. Lessor shall be named as an additional insured and provided a
certificate of insurance reflecting such coverage, which shall not be cancelable
except after thirty (30) days' notice to Lessor. Such insurance shall be written
on an "occurrence" basis unless the policy is available only on a "claims made"
basis, in which case such "claims made" insurance coverage shall be maintained
in effect for a period of at least five (5) years after the termination of this
Lease, or until final release of Lessee's environmental reclamation bonds
required by any regulatory authority, whichever shall last occur.
SECTION 6. METHOD OF OPERATION.
Upon termination of this Lease for any reason, Lessee shall, at Lessor's
option, to be exercised within thirty (30) days, if at all, sell and convey to
Lessor, at fair market value, any real property owned by Lessee or its
affiliates within the Controlled Properties Boundary as depicted on Exhibit B.
Lessee covenants and agrees that when it commences operation in any of the seams
leased herein it will thereafter prosecute its operations hereunder utilizing
modern mining equipment and to conduct such operations in a careful, skillful,
and workmanlike manner, and in compliance with the present and any future laws
of the Commonwealth of Virginia and of the United States, and also according to
the rules and practices of good mining and with due regard for the value of the
Leased Premises. Minimum Annual Royalty paid hereunder shall be in lieu of any
implied covenant of diligent development.
Lessee shall be responsible for complying with all present and future laws
and governmental regulations, including environmental laws and regulations,
related to or controlling mining and related operations by Lessee, its
sublessees and contractors, on the Leased Premises, which responsibility shall
survive termination of this Lease. If Lessee violates, or is claimed to have
violated, laws or governmental regulations, then Lessee shall indemnify Lessor
and hold it harmless from any penalties, fines, costs, and expenses, including
reasonable legal fees and court costs, imposed upon or incurred by Lessor as a
result of said claim, violation or violations.
Notwithstanding Lessee's obligation to comply with all laws, rules,
regulations and orders as set forth above, Lessor shall not declare a default
hereunder solely as a result of one or more operational violations which Lessee
cures or abates as promptly as practical. Lessee shall be solely responsible for
treatment of any water discharge caused by its operations, if required by
present or future law or
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
regulation, which responsibility shall survive termination of this Lease. Lessor
shall consent to Lessee's election of post-mining land uses (including
post-mining retention of roads and ponds in place to the extent allowed by
applicable law) and shall execute all consents, waivers and authorizations
reasonably requested by Lessee with respect thereto.
Lessee agrees that it will work and mine the coal in accordance with
general and detail maps and plans of mining and descriptions to be prepared by
Lessee (hereinafter collectively called "Mine Plans") and will submit a copy of
same to the Lessor. Said Mine Plans shall take into consideration the entire
area proposed to be developed by Lessee, and shall make suitable provisions for
(1) the proper protection of overlying and underlying seams of Leased Coal
consistent with the terms of this Lease and (2) the reasonable and proper
removal of all the mineable and merchantable coal within such Mine Plans. No
Mine Plan shall be proposed which, if adopted, and Lessor may refuse to approve
any Mine Plan that, would render any substantial portion of otherwise mineable
and merchantable coal unmineable or unmerchantable or substantially more
difficult or expensive to mine. The Mine Plans shall be submitted to the Lessor
at least thirty (30) days prior to the commencement of any operation on the
Leased Premises. In the event Lessor determines, in the reasonable exercise of
its discretion, that the Mine Plans submitted by Lessee fail to comply with any
of the terms of this Lease, Lessor shall so notify Lessee, in which event Lessee
will make reasonable attempts to modify the Mine Plans to comply with the terms
and conditions hereof. No material change in, modification of, or departures
from any Mine Plans so approved shall be made in the development or operation of
the mine or mines except pursuant to modified Mine Plans submitted by Lessee to
Lessor for the purpose of allowing Lessor to determine, in the reasonable
exercise of its discretion, that said modification complies with the terms of
this Lease. Lessor's right to notify Lessee that proposed mining plans fail to
comply with this Lease is a right reserved solely to protect Lessor's interest
in the Leased Premises and to prevent waste and is not intended to give and
shall not be construed to give Lessor any control over Lessee's operations.
Lessor shall have no authority to determine the manner in which or the methods
by which any of Lessee's mining operations are to be conducted, all of which
shall be solely determined by Lessee. Lessor acknowledges its approval of all
Mine Plans of Lessee which show an approval date on the front thereof as of
April 1, 2003 and made available to Lessor during Lessor's due diligence review
related to the transaction described in that certain Purchase and Sale Agreement
of even date herewith between Lessee and Lessor or which were approved pursuant
to a lease dated effective December 1, 2002 covering a part of the Leased
Premises. All Mine Plans submitted by Lessee to Lessor shall be deemed, for all
purposes under this Lease, approved by Lessor, unless Lessor disapproves any
such Mine Plan in writing, within 30 days after Lessor's receipt thereof.
Lessor's approval of Mine Plans submitted by Lessee pursuant to this Lease shall
not be unreasonably withheld, delayed or conditioned.
Anything contained in this Lease to the contrary notwithstanding, for
those Leased Premises described on Exhibit A hereto as Area 1, the Lessee shall
give notice in writing to the Lessor at least six (6) months prior to the start
of any operations authorized herein which would require or result in the
displacement or removal of trees or timber on the surface of the Leased Premises
where said surface is owned by Lessor. Lessor may, at its election, remove such
trees or timber. Lessor shall make all reasonable efforts to complete any
harvesting operations for trees or timber sold "on the xxxxx" prior to start-up
operations by Lessee, but it is understood that both activities may continue
simultaneously, provided such continuance does not unreasonably interfere with
Lessee's operations. Notwithstanding the foregoing, if Lessor has not removed
timber within such six (6) month period, Lessee may remove or destroy such
timber without liability or payment therefor. As an additional option, Lessee
may give
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
written notice to Lessor and elect to reimburse Lessor for such trees and timber
at the fair market value and dispose of such trees or timber in any manner
Lessee shall deem appropriate or necessary and upon Lessee making payment in
full to Lessor, the Lessor shall execute and deliver to Lessee any and all
documents necessary to convey title to such trees and timber to Lessee or
Lessee's assignee, and the Lessee shall not have any further obligation to the
Lessor with respect to such trees and timber or the disposition thereof.
Lessee may conduct its operations under this Lease through its contractors
or agents, provided in any case Lessee shall be and remain liable to Lessor for
all obligations of the Lessee under this Lease.
If it is found and reported to Lessee in writing by Lessor that in the
progress of the work any areas of mineable and merchantable coal, which Lessee
had planned to mine pursuant to a Mine Plan approved by the Lessor, have been
passed by or abandoned with the result that mineable and merchantable coal has
not been mined and removed, which in accordance with good mining practice should
have been mined and removed, it shall be the duty of Lessee to return as soon as
reasonably practicable to such areas and mine and remove the mineable and
merchantable coal therefrom, or failing so to do, Lessee shall account for the
mineable and merchantable coal contained therein and pay the royalty therefor
the same as though it had been mined. If Lessee subsequently mines and removes
any coal that has been bypassed and paid for within the contemplation of this
Section, Lessee shall not be liable for any additional royalty for such coal.
Lessee shall employ a competent mining engineer, duly registered in the
Commonwealth of Virginia, whose duty it shall be to keep up the mine surveys and
make accurate maps thereof, which maps shall at all reasonable times and upon
reasonable notice be subject to the inspection of Lessor, or its duly authorized
agents, and copies furnished to the Engineer of Lessor on or before February 1
and August 1 of each year. Such maps shall show the location of the coal section
numbers obtained by Lessor during mine inspections, in a form convenient to
Lessee and acceptable to the Engineer of Lessor.
Lessee shall furnish Lessor copies of data derived from any and all future
coal exploration activities within the Leased Premises, including, but not
limited to, driller's logs, geophysical logs, and coal laboratory analyses of
core holes and associated geological maps.
Upon request of Lessor, Lessee shall make available for Lessor's
inspection and copying any and all laboratory analyses made of coal mined from
the Leased Premises.
Upon request of Lessor, Lessee shall make available for Lessor's
inspection, at all reasonable times and upon reasonable notice, and copying any
and all Lessee's correspondence with government agencies or departments which
pertain to the Leased Premises, or to operations undertaken or to be undertaken
thereon.
Lessor, through its duly authorized agents, shall at all reasonable times,
upon reasonable notice and at its own risk have the right to enter said mines,
inspect the same, and have surveys made thereof to determine if all the terms
and conditions of this Lease are fully complied with, and for these purposes to
use freely the means of access to said mines and the workings thereof without
hindrance, but in such manner as not unreasonably to interfere with the
operation thereof. Lessor shall indemnify and hold Lessee, its members,
managers, officers, employees, contractors, agents and permitted sublessees,
successors and assigns harmless from and against any and all claims, demands,
causes of action, costs
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
and liabilities due to personal injury, death, property damage or loss arising
from or in connection with the entrance in or upon said mines by Lessor or its
duly authorized agents or contractors.
Lessor shall maintain all records furnished or made available pursuant
hereto in confidence.
Lessor acknowledges that it has received a copy of that certain Contract,
dated April 25, 2001 (the "A & G Contract"), between Lessee's affiliate
sublessee and A & G Coal Corporation ("A & G"), and consents to the terms
thereof, including A & G's rights under Section 23 of the A & G Contract. To the
extent the A & G Contract grants or conveys more extensive or broader rights
than granted by this Lease, Lessee is nevertheless deemed to have the authority
and power to grant such rights with respect to the property affected by the A &
G Contract, and Lessee shall not be in default as a result thereof or as a
result of the exercise of such more extensive or broader rights by Lessee or A &
G. Additionally, notwithstanding anything in this Lease to the contrary, Lessor
hereby grants Lessee the mining and other rights granted under the A & G
Contract (including the customary practice of cutting timber and retaining the
proceeds therefrom and the right to grant the same rights as set forth in
Section 23 of the A & G Contract), and similar rights with respect to the areas
identified on the map attached hereto as Exhibit B (the "Contract Mine Areas").
Notwithstanding anything in this Lease to the contrary, Lessee shall be
entitled to enter into contract mining agreements and subleases with any mining
contractor or sublessee, without Lessor's consent, for mining of the Leased
Coal, upon any terms and conditions chosen by the Lessee; provided that the
Lessee shall remain obligated to the Lessor for compliance with all the terms
and conditions of this Lease; and provided further that any such subleases shall
not sublease the Leased Premises in its entirety.
SECTION 7. REMEDIES OF LESSOR.
All payments hereunder required to be made by Lessee to Lessor shall be
deemed and considered as rent reserved upon contract, and all remedies now or
hereafter given by the laws of the Commonwealth of Virginia for the collection
of rent are reserved to Lessor in respect of the sums so payable, and a lien is
hereby reserved upon this Lease and the leasehold estate hereby created, to
secure the payment of any and all sums.
If default be made by Lessee in the payment of the rentals and royalties
herein reserved, or in the performance of any of the other terms or conditions
hereof required to be kept or performed by Lessee, and such default shall
continue for a period of ten (10) days with respect to payment of rentals and
royalties, or thirty (30) days with respect to performance of any of the other
terms or conditions, after written notification thereof has been received by
Lessee, then in such event and as often as the same occurs, Lessor may, at its
option, terminate this Lease without any further notice and re-enter upon and
take possession of the Leased Premises and hold and possess the same as its
absolute property free and clear of any claims of, by, or through Lessee, and
pursue any and all other remedies available under the laws of the Commonwealth
of Virginia for violation of any covenant or condition hereof, and all such
remedies shall be deemed cumulative and not exclusive. Notwithstanding the
foregoing, should physical conditions on the Leased Premises prohibit cure of
any default (other than payment of rental or royalty) by Lessee within the
prescribed thirty (30) day period, then Lessee shall be required to have
diligently and in good faith commenced curative measures and shall within ten
(10) days of notice of default advise
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
Lessor in detail in writing as to what physical conditions are prohibiting
completion of such cure and setting forth a timetable for such cure. Such notice
by Lessee to Lessor shall toll the thirty (30) day curative time until physical
conditions permit completion of curative work in a diligent good faith fashion.
No action by Lessor pursuant to this Section 7 shall impair the right to rental
and royalties due or accrued up to the time of termination and re-entry
hereunder, but none shall be charged for any period thereafter
Lessee further agrees that if the interest of Lessee in the Leased
Premises shall be sold on execution or judicial sale, or if bankruptcy
proceedings be begun by Lessee, or if Lessee be adjudged a bankrupt, or it makes
an assignment for the benefit of creditors, or a receiver be appointed for it or
for the Leased Premises, or if an assignment occurs by operation of law, then,
and in any such event, this Lease shall forthwith terminate and be forfeited and
the Leased Premises and all improvements thereon shall forthwith become the
property of Lessor, without compensation to Lessee, and without refund of any
royalties paid hereunder.
SECTION 8. ASSIGNMENT.
Lessee covenants and agrees that it will not, except as expressly
permitted in this Lease, sell, assign, mortgage, pledge or otherwise transfer or
encumber (collectively "transfer") this Lease or any rights, interests or
estates created by this Lease or all or any portion of the Leased Premises,
either voluntarily or by operation of law, without having first obtained the
written consent of Lessor (which consent shall not be unreasonably withheld,
delayed or conditioned) and in the case of an assignment, without obtaining and
presenting to Lessor a covenant of assumption by the assignee, wherein such
assignee expressly agrees to and with Lessor to assume and be bound by all of
the covenants, terms, conditions and provisions hereof to the same extent as if
said assignee had been named as the original Lessee. Notwithstanding anything
herein to the contrary, Lessee may assign this Lease, or any rights, interests
or estates created by this Lease or all or any portion of the Leased Premises to
an entity affiliated with Lessee, its permitted successors or assigns, without
consent
Any transfer of this Lease or any portion thereof to an entity affiliated
with Lessee or any sublease of any portion of the Leased Premises to any entity
pursuant to Section 6 shall not relieve Lessee from its obligations to comply
with all the covenants, terms, conditions and provisions of this Lease, and to
assure that the said assignee or sublessee complies with the covenants, terms,
conditions and provisions of this Lease, unless otherwise agreed in writing by
Lessor. In the event Lessor consents to any transfer, such consent shall not
relieve Lessee and/or any transferee from securing Lessor's written consent to
any further transfer, nor shall any such consent be construed as a consent to
any further transfer or as a waiver of any portion of this section or of
Lessor's rights hereunder.
A transfer of control of Lessee's membership interests, either voluntarily
or by operation of law, shall constitute a "transfer" of the Lease under this
section. "Transfer of Control" as used in the foregoing shall include, without
limitation, (a) an outright sale, assignment or transfer of sufficient
percentages of Lessee's membership interests to vest 51% or more of Lessee's
membership interests in persons or entities controlled directly or indirectly by
persons or entities, some or all of whom are different than those persons or
entities which directly or indirectly control 51% or more of Lessee's membership
interests as of the effective date of this Lease, or (b) a sale, assignment or
other transfer of
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
shares of the capital stock or ownership interest in any corporation,
partnership or other entity, which, as of the effective date of this Lease,
owns, separately or jointly with others, directly or indirectly, 51% or more of
Lessee's capital stock, where such transfer is sufficient to vest 51% or more of
such capital stock or ownership interest in persons or entities, some or all of
whom are different than those persons or entities owning such shares or
ownership interest as of the effective date of this Lease. Accordingly, a
"transfer of control" shall have occurred whenever 51% or more of Lessee's
membership interests shall become subject to the direct or indirect control of
persons or entities, some or all of whom are different than those persons or
entities which directly or indirectly control that portion of Lessee's
membership interests as of the effective date of this Lease. Notwithstanding
anything herein to the contrary, the Transfer of Control of a publicly traded
entity that directly or indirectly controls 51% or more of Lessee's capital
stock or the issuance of publicly traded stock by Lessee or any entity directly
or indirectly controlling Lessee shall not constitute a transfer requiring
consent hereunder.
Lessee shall have the right, without Lessor's consent, to assign, pledge
or mortgage all of Lessee's rights and interests under this Lease to any
provider of construction, interim, or long-term financing (including a leveraged
lease), or any refinancing thereof, and any trustee or agent acting on their
behalf ("Lenders") as security for Lessee's obligations under all documents and
instruments evidencing, guaranteeing or executed by Lessee in connection with
any financing ("Financing Documents"). Such assignment, pledge or mortgage shall
be in writing, and Lessee shall furnish a copy of such assignment, pledge or
mortgage to Lessor. In the event of such an assignment, pledge or mortgage and
upon occurrence of an event of default by Lessee under this Lease or the
Financing Documents, as the case may be, the Lenders shall have the right (but
not the obligation) to assume, all of the rights, interests and obligations of
Lessee thereafter arising under this Lease. Lessor or Lessee, upon request of
the other shall promptly execute and deliver to the requesting party, and/or
their Lenders a written consent to any such assignment, pledge or mortgage of
this Lease and such written certificates as to the due authorization, execution
and delivery by the executing party, and enforceability against Lessor or Lessee
of this Lease as Lessor or Lessee and/or their Lenders may reasonably request.
Provided, however, in no event and under no circumstances shall any assignment,
pledge or mortgage of Lessee's rights and interests under this Lease to Lenders
be superior to any pledge or mortgage of the properties leased hereunder by
Lessor to a current or future lender who has or will supply financing or
refinancing (short or long-term) to Lessor or to a pledge or grant of the Lease
to said Lessor's Lender as security for said financing or refinancing, and,
accordingly, Lessee acknowledges that any assignment, pledge or mortgage of this
Lease to Lenders will be subordinate to Lessor's financing and the rights
thereunder, whether entered into now or at any time in the future.
Upon the occurrence of any transfer requiring the prior written consent of
Lessor, without the prior written consent of Lessor, Lessor shall have the
option to terminate this Lease pursuant to Section 7 of this Lease.
SECTION 9. WAIVERS AND RELEASES, ETC.
No waiver, release, modification, or amendment of any of the terms,
conditions, or provisions of this Lease shall be valid or set up or relied upon
by Lessor or Lessee, unless the same is in writing duly executed by Lessor and
Lessee. The failure to exercise any right upon nonperformance shall not be
construed as a waiver of the right to insist on subsequent performance of the
terms and conditions hereof.
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
SECTION 10. ARBITRATION.
In the event of a dispute between the parties hereto with respect to the
terms of or performance under this Lease, such dispute shall be submitted to
three competent and disinterested arbitrators in the following manner. The party
desiring such arbitration shall select its arbitrator and give written notice
thereof to the other party, and shall in such notice state precisely the matter
or matters which it is proposed to bring before the arbitrators, and only the
matters so stated shall be considered and decided by them. If the party
receiving such notice shall fail to name an arbitrator within thirty (30) days
after notice as aforesaid has been received by it, the Chief Judge of the
District Court of the United States for the Western District of Virginia shall
name and appoint an arbitrator for and in behalf of the party so in default, and
the arbitrator so named and appointed shall have the same power and authority as
if he had been appointed by such party. The arbitrators so chosen shall appoint
a third arbitrator, and in the event they are unable to agree on such
appointment, the appointment of the third arbitrator may be made by the Chief
Judge of the District Court of the United States for the Western District of
Virginia on the application of either of the parties hereto. The three
arbitrators shall immediately upon their selection hear and decide the question
or questions submitted for arbitration and shall give to each of the parties
hereto reasonable notice of the time and place of their meetings, and reasonable
opportunity for the production of evidence. Each party shall set forth its
position in writing. After hearing both parties, the arbitrators shall promptly
make an award in writing upon the question or questions submitted and shall
serve a copy of such award upon each party hereto. The award of such
arbitrators, or a majority of them, shall be final and binding upon the parties
hereto, and the said arbitrators or a majority of them, shall, in their award
and as a part thereof, decide by whom and in what proportion the costs of such
arbitration shall be borne and paid and the amount of such costs. In its
determination, the arbitrators in their award shall adopt the position of one of
the parties. Neither party hereto shall have or enforce any right or remedy
against the other in respect of any matter herein made the subject of
arbitration, until such matter shall have been submitted to and decided by
arbitration in the manner above provided, and then only in accordance with such
decision in arbitration. Notwithstanding the above, either Party may appeal
manifest errors of law to the District Court of the United States for the
Western District of Virginia.
SECTION 11. NOTICES.
Until written notice of a different address, all notices which are
anywhere in this Lease provided to be given shall be effective upon receipt and
shall be served upon or mailed to Lessee at 000 Xxxx Xxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxx 00000, and to Lessor at Xxxx Xxxxxx Xxx 0000; Xxxxxxxxxx, Xxxx Xxxxxxxx
00000-0000. Notices may also be served via facsimile transmission,, provided
that the sender has written confirmation that the transmission was successful.
SECTION 12. WARRANTY.
The Lessor, for itself, its successors and assigns, does hereby covenant
and agree with the Lessee, subject to the exceptions and reservations herein set
forth, and subject to such limitations, restrictions and defects in Lessor's
title to the Leased Premises as were in existence at the time of Lessor's
acquisition of title to the various tracts comprising the Leased Premises, and
subject to the Restrictions contained above, that upon the payment of the
rentals and royalties and the performance of all and singular the covenants and
agreements aforesaid, said Lessee shall and may peaceably and quietly have and
enjoy said Leased Premises for and during the term aforesaid, and for the
purposes aforesaid,
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
free from any let or hindrance by the Lessor, its successors and assigns. Lessor
does not warrant generally its title to the Leased Premises but warrants only
that it has done no act to encumber the title that it acquired to the various
tracts comprising the Leased Premises since its acquisition of said tracts. In
the event that Lessee did not have the right to mine coal in any part of the
Leased Premises because of the rights of a holder of an outstanding superior
title antedating Lessor's acquisition of title to the tract or tracts in
question, if the Lessee has mined and removed a part or all of the coal
therefrom and paid the Lessor therefor on the royalty basis, the Lessor agrees
to repay to the Lessee the amount of royalty so paid, without interest, but the
Lessor shall not be otherwise liable for any damage to Lessee on account of the
mining and removing of said coal by the Lessee.
SECTION 13. SUCCESSORS AND ASSIGNS.
All covenants, agreements, and conditions herein set forth to be performed
by or on behalf of Lessor or Lessee shall bind their respective successors and
assigns, whether so expressed or not, and shall inure to the benefit not only of
Lessor and Lessee, but also the benefit of their respective successors and
assigns; but this Section 13 shall not be construed as in anywise modifying the
provisions of Section 8 hereof.
SECTION 14. REMOVAL OF PROPERTY.
Lessee, having performed all the terms and conditions of this Lease to be
by it performed, may, for a period of twelve (12) months following termination
or expiration, remove any and all equipment and personal property owned by
Lessee, and may remove from the surface overlying the Leased Premises any and
all improvements, buildings, or other structures placed thereon by Lessee during
the term hereof. If the Lessee shall fail to remove any of the equipment and
personal property described above within said twelve (12) months, then at
Lessor's option the same shall thereupon be and become the absolute property of
Lessor.
SECTION 15. MISCELLANEOUS.
Unless expressly provided for elsewhere in this Lease, this Lease shall be
interpreted in accordance with the following provisions:
(a) Whenever the context may require, any pronoun used in this Lease
shall include the corresponding masculine, feminine, or neuter forms, and the
singular form of nouns, pronouns and verbs shall include the plural and vice
versa.
(b) If a word or phrase is defined, its other grammatical forms have
a corresponding meaning.
(c) A reference to a person, corporation, trust, estate,
partnership, or other entity includes any of them.
(d) The headings contained in this Lease are for reference purposes
only and shall not affect the meaning or interpretation of this Lease.
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
(e) A reference to legislation or to a provision of legislation
includes a modification or reenactment of it, a legislative provision
substituted for it and a regulation or statutory instrument issued under it.
(f) A reference to a writing includes a facsimile transmission of it
and any means of reproducing of its words in a tangible and permanently visible
form.
(g) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Lease shall refer to this Lease as a whole and
not to any particular provision of this Lease, and article, section, subsection,
schedule and exhibit references are to this Lease unless otherwise specified.
(h) The word "including" shall mean including without limitation.
(i) The Exhibits identified in this Lease are incorporated herein by
reference and made a part of this Lease.
(j) The parties have participated jointly in the negotiation and
drafting of this Lease. In the event an ambiguity or question of intent or
interpretation arises, this Lease shall be construed as if drafted jointly by
the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Lease.
(k) Lessor and Lessee agree to execute and record a short-form or
memorandum of lease for the purpose of providing record notice of this Lease.
IN TESTIMONY WHEREOF, the parties hereto have caused this Lease to be
executed in their respective names by their respective representatives thereunto
duly authorized, all as of the day and year first above written.
Executed in duplicate.
CSTL LLC
By NRP (Operating) LLC
Its Sole Operating Manager
By /s/ Xxxx Xxxxxx
Xxxx Xxxxxx, Its President and Manager
ALPHA LAND AND RESERVES, LLC
By /s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, Its President and Manager
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
STATE OF West Virginia
COUNTY OF Xxxxxx, XX:
The foregoing instrument was acknowledged before me this 9th day of April, 2003,
by Xxxx Xxxxxx, President and Manager of NRP (Operating) LLC, sole operating
manager of CSTL LLC, on behalf of CSTL LLC, a limited liability company.
My commission expires November 1, 2008.
/s/ Paddy Xxx Xxx
Notary Public
(S E A L)
STATE OF Virginia
COUNTY OF Washington, SS:
The foregoing instrument was acknowledged before me this 9th day of April, 2003,
by Xxxxxxx X. Xxxxx, as President and Manager of ALPHA LAND AND RESERVES, LLC,
on behalf of ALPHA LAND AND RESERVES, LLC, a limited liability company.
My commission expires 03/31/2005.
/s/ Xxxxxx X. Xxxxxxx
Notary Public
(S E A L)
Leases/modellse
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
THIS PARTIAL SURRENDER AGREEMENT made and entered into this 12th day of
December, 2003, effective as of December 1, 2003, by and between ACIN LLC, a
Delaware limited liability company, successor in interest to CSTL LLC through
merger, (hereinafter referred to as "Lessor"), and ALPHA LAND AND RESERVES, LLC,
a Delaware limited liability company (hereinafter referred to as "Lessee").
WHEREAS, by Coal Mining Lease dated April 9, 2003, effective as of April
1, 2003 (the "Lease"), Lessor did demise, lease and let to Lessee the Leased
Premises (all capitalized terms used herein shall have the meaning given in the
Lease), for the purpose of mining, preparation, loading, removal, transportation
and shipping of coal, as more fully set forth in the Lease; and
WHEREAS, said Coal Mining Lease was amended by First Amendment to Coal
Mining Lease dated September 30, 2003, effective April 1, 2003; and
WHEREAS, Lessor and Lessee desire to further amend the Lease by
surrendering a portion of the Leased Premises as hereinafter set forth.
WITNESSETH:
That for and in consideration of the terms, conditions and stipulations
embodied within the Lease, as amended, to be performed and observed by Lessor
and Lessee, the sufficiency of which is hereby acknowledged, Lessor and Lessee
do hereby agree that the area shown colored in blue on the map attached hereto
and made a part hereof as Exhibit A is surrendered from the Leased Premises.
Lessor's acceptance of this surrender shall in no way relieve Lessee of
any of its obligations or liability accruing under the Lease with respect to the
surrendered portion of the Leased Premises prior to the effective date hereof.
All other terms and conditions of the Lease, as previously amended, not
inconsistent herewith, shall remain in full force and effect, without
modification or amendment.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Partial
Surrender Agreement to be executed as of the day and year first above
written.
ACIN LLC, a Delaware limited liability
company, By NRP (Operating) LLC, a Delaware
limited liability company and its Sole
Operating Manager
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx, Its President and Chief
Operating Officer
ALPHA LAND AND RESERVES, LLC
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx, Its President and Manager
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
STATE OF WEST VIRGINIA
COUNTY OF XXXXXX, to-wit:
The foregoing instrument was acknowledged before me this 23rd day of
December, 2003, by Xxxx Xxxxxx, President and Chief Operating Officer of NRP
(Operating) LLC, a Delaware limited liability company and the sole operating
manager of ACIN LLC, on behalf of ACIN LLC, a Delaware limited liability
company.
/s/ Paddy Xxx Xxx
Notary Public
My commission expires: November 1, 2008
[SEAL]
STATE OF Virginia
COUNTY OF Washington, to-wit:
The foregoing instrument was acknowledged before me this 12th
day of December 2003, by Xxxxxx X. Xxxxxx, as President and Manager of ALPHA
LAND AND RESERVES, LLC, on behalf of ALPHA LAND AND RESERVES, LLC, a Delaware
limited liability company.
/s/ Xxxxxxx Xxxxxx Xxxxx
Notary Public
My commission expires: 11-30-05
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
THIS FIRST AMENDMENT TO COAL MINING LEASE (this "Amendment") made and
entered into this 30th day of September, 2003, effective as of April 1, 2003, by
and between ACIN LLC, a Delaware limited liability company, successor by merger
with CSTL LLC, a Delaware limited liability company (hereinafter referred to as
"Lessor"), and ALPHA LAND AND RESERVES, LLC, a Delaware limited liability
company (hereinafter referred to as "Lessee").
WHEREAS, by Coal Mining Lease dated April 9, 2003, effective as of April
1, 2003 (the "Lease"), Lessor did demise, lease and let to Lessee the Leased
Premises (all capitalized terms used herein shall have the meaning given in the
Lease), for the purpose of mining, preparation, loading, removal, transportation
and shipping of coal, as more fully set forth in the Lease; and
WHEREAS, Lessor and Lessee desire to amend the Lease as hereinafter set
forth.
WITNESSETH:
That for and in consideration of the terms, conditions and stipulations
embodied within the
Lease, as amended hereby, to be preformed and observed by Lessor and Lessee, the
sufficiency of which is hereby acknowledged, Lessor and Lessee do hereby agree
that the first paragraph and only the first paragraph of Section 4(b) of the
Lease is hereby deleted and replaced with the following:
(b) Beginning April 1, 2003, and continuing through the Initial Term
of this Lease, Lessee shall pay to Lessor a Minimum Royalty or Minimum
Annual Royalty, as the case may be, in the following amounts:
QUARTERLY
PERIOD MINIMUM PAYMENT
------ ------- -------
April 1, 2003 through December 31, 2003 $[***] $[***]
January 1, 2004 through December 31, 2012 $[***] per calendar year $[***]
January 1, 2013 through March 31, 2013 $[***] $[***]
In the event this Lease is extended beyond the Initial Term, beginning on
April 1, 2013 and continuing thereafter during such extension or
extensions of the Term, Lessee shall pay to Lessor a Minimum Royalty or
Minimum Annual Royalty, as the case may be, in the following amounts:
QUARTERLY
PERIOD MINIMUM PAYMENT
------ ------- -------
April 1, 2013 through December 31, 2013 $[***] $[***]
January 1, 2014 and thereafter $[***] per calendar year $[***]
Each payment shall be made in advance, in equal installments, for each
calendar quarter that this Lease remains in effect during the applicable
period, on or before the first day of each such quarter. Each quarterly
payment shall hereinafter be referred to as a "Quarterly Payment". Lessee
shall have the right to recoup a Quarterly Payment at any time after
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
payment of same, by deducting the amount of such payment from Tonnage
Royalty payments due, at any time, so long as this Lease remains in
effect. Notwithstanding anything herein to the contrary, upon the payment
by the Lessee of Tonnage Royalties and a Quarterly Payment or Quarterly
Payments with respect to any period, which equal or exceed, in the
aggregate, the Minimum Royalty or Minimum Annual Royalty, as the case may
be, due for such period, no further Quarterly Payment shall be due or
payable with respect to such period.
The remainder of Section 4(b) and all other terms and conditions of the
Lease, not inconsistent herewith, shall remain in full force and effect, without
modification or amendment.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Amendment to be
executed as of the day and year first above written.
ACIN LLC, a Delaware limited liability
company, By NRP (Operating) LLC, a Delaware
limited liability company and its Sole
Operating Manager
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx, Its President and Chief
Operating Officer
ALPHA LAND AND RESERVES, LLC
By: /s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, Its President and Manager
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
STATE OF WEST VIRGINIA
COUNTY OF XXXXXX, to-wit:
The foregoing instrument was acknowledged before me this 29th
day of September 2003, by Xxxx Xxxxxx, President and Chief Operating Officer of
NRP (Operating) LLC, a Delaware limited liability company and the sole operating
manager of ACIN LLC, on behalf of AC1N LLC, a Delaware limited liability
company.
/s/Paddy Xxx Xxx
Notary Public
My commission expires November 1, 2008
[NOTARY SEAL]
STATE OF Virginia
COUNTY OF Washington, to-wit:
The foregoing instrument was acknowledged before me this 30th
day of September 2003, by Xxxxxxx X. Xxxxx, as President and Manager of ALPHA
LAND AND RESERVES, LLC, on behalf of ALPHA LAND AND RESERVES, LLC, a Delaware
limited liability company.
/s/Xxxxx X. Xxxxxx
Notary Public
My commission expires: 6-30-07
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
SECOND AMENDMENT TO COAL MINING LEASE
THIS SECOND AMENDMENT TO COAL MINING LEASE (this "Amendment") made and
entered into this 15th day of December, 2003, effective as of December 15, 2003,
by and between ACIN LLC, a Delaware limited liability company, successor by
merger with CSTL LLC, a Delaware limited liability company (hereinafter referred
to as "Lessor"), and ALPHA LAND AND RESERVES, LLC, a Delaware limited liability
company (hereinafter referred to as "Lessee").
WHEREAS, by Coal Mining Lease dated April 9, 2003, effective as of April
1, 2003 (the "Lease"), Lessor did demise, lease and let to Lessee the Leased
Premises (all capitalized terms used herein shall have the meaning given in the
Lease), for the purpose of mining, preparation, loading, removal, transportation
and shipping of coal, as more fully set forth in the Lease; and
WHEREAS, Lessor and Lessee desire to amend the Lease as hereinafter set
forth.
WITNESSETH:
That for and in consideration of the terms, conditions and stipulations
embodied within the Lease, as amended hereby, to be performed and observed by
Lessor and Lessee, the sufficiency of which is hereby acknowledged, Lessor and
Lessee do hereby agree with the following, applicable to the Border Mine only,
XXXX XX #00-00000:
Beginning December 15, 2003, continuing only through March 14, 2004, the
tonnage royalty will be suspended at the Border Mine, provided, however, if
prior to March 14, 2004, one of the following two conditions is achieved, then
the tonnage royalty of [***] percent ([***]%) will immediately resume:
1. If and when the total aggregate clean production after
December 15, 2003, reaches 69,000 tons; the royalty rate on
all clean produced tons in excess of 69,000 tons shall revert
to [***] percent ([***]%) immediately.
2. If and when the aggregate suspended royalties for coal
produced after December 15, 2003, reaches [***] Dollars
($[***]), the tonnage royalty rate of [***] percent ([***]%)
shall immediately resume on all other produced tons.
All other terms and conditions of the Lease shall remain in full force and
effect, without modification or amendment, including specifically the obligation
to provide monthly tonnage and royalty reports.
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Amendment to be
executed as of the day and year first above written.
ACIN LLC
By NRP (Operating) LLC, Its Sole Operating
Manager
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx
Its President & COO
ALPHA LAND AND RESERVES, LLC
By: /s/ Xxxxxx X. Xxxxxx
Its: President and Manager
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
STATE OF West Virginia
COUNTY OF Xxxxxx, XX:
The foregoing instrument was acknowledged before me this 16th day of
December, 2003, by Xxxx Xxxxxx, President & COO of NRP (Operating) LLC, a
Delaware limited liability company and the sole operating manager of ACIN
LLC, on behalf of ACIN LLC, a Delaware limited liability company.
My commission expires: November 1, 2008
[NOTARY SEAL] /s/ Paddy Xxx Xxx
-----------------
Notary
STATE OF Virginia
COUNTY OF Washington, SS:
The foregoing instrument was acknowledged before me this 6th day of January,
2004 by Xxxxxx X. Xxxxxx, as President and Manager of ALPHA LAND AND RESERVES,
LLC, on behalf of ALPHA LAND AND RESERVES, LLC, a Delaware limited liability
company.
My commission expires: November 30, 2005
Given under my hand and notarial seal this 6th day of January 2005.
/s/ Xxxxxxx Xxxxxx Xxxxx
------------------------
Notary Public
My Commission expires November 30, 2005
[SEAL]
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
THIRD AMENDMENT TO COAL MINING LEASE
THIS THIRD AMENDMENT TO COAL MINING LEASE (this "Amendment") made and
entered into this 1st day of October, 2004, effective as of October 1, 2004, by
and between ACIN LLC, a Delaware limited liability company, successor by merger
with CSTL LLC, a Delaware limited liability company (hereinafter referred to as
"Lessor"), and ALPHA LAND AND RESERVES, LLC, a Delaware limited liability
company (hereinafter referred to as "Lessee").
WHEREAS, by Coal Mining Lease dated April 9, 2003, effective as of April
1, 2003 (the "Lease"), Lessor did demise, lease and let to Lessee the Leased
Premises (all capitalized terms used herein shall have the meaning given in the
Lease), for the purpose of mining, preparation, loading, removal, transportation
and shipping of coal, as more fully set forth in the Lease; and
WHEREAS, said Coal Mining Lease was amended by First Amendment to Coal
Mining Lease dated September 30, 2003, and
WHEREAS, said Coal Mining Lease was further amended by Second Amendment to
Coal Mining Lease dated December 15, 2003; and
WHEREAS, Lessor and Lessee desire to further amend the Lease as
hereinafter set forth.
WITNESSETH:
That for and in consideration of the terms, conditions and stipulations
embodied within the Lease, as amended, to be performed and observed by Lessor
and Lessee, the sufficiency of which is hereby acknowledged, Lessor and Lessee
do hereby agree with the following:
As of October 1, 2004, 559+ acres of Jawbone Seam, as described by
Exhibit A, attached hereto, is added to the Coal Mining Lease dated April 9,
2003, effective as of April 1, 2003. All other terms and conditions of the Coal
Mining Lease shall remain in full force and effect, without modification or
amendment.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Amendment to be
executed as of the day and year first above written.
ACIN LLC
By NRP (Operating) LLC, Its Sole Operating
Manager
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx
Its President & COO
ALPHA LAND AND RESERVES, LLC
By: /s/ Xxxxxxxx X. Xxxxx
Its: Vice President
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
STATE OF West Virginia
COUNTY OF Xxxxxx, XX:
The foregoing instrument was acknowledged before me this 24th day of
September by Xxxx Xxxxxx, President & COO of NRP (Operating) LLC, a Delaware
limited liability company and the sole operating manager of ACIN LLC, on behalf
of ACIN LLC, a Delaware limited liability company.
My commission expires: November 1, 2008
[SEAL] /s/ Paddy Xxx Xxx
-----------------
Notary
STATE OF Virginia
COUNTY OF Roanoke, SS:
The foregoing instrument was acknowledged before me this 7th day of
October, 2004 by Xxxxxxxx X. Xxxxx, as Vice President of ALPHA LAND AND
RESERVES, LLC, on behalf of ALPHA LAND AND RESERVES, LLC, a Delaware limited
liability company.
My commission expires: February 28, 2005
Given under my hand and notarial seal this 7th day of October, 2004
/s/ Xxxx X. Xxxxxx
------------------
Notary Public
My Commission expires February 28, 2005
[SEAL]
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
NATURAL RESOURCE PARTNERS L.P.
0000 XXXXX XXXXXX - P. 0. XXX 0000
XXXXXXXXXX, XX 00000-0000
(000) 000-0000 - FAX (000) 000-0000
March 8, 2004
Xx. Xxxxxxxx X. Xxxxx
Vice President
ALPHA LAND AND RESERVES, LLC
Xxxx Xxxxxx Xxx 000
Xxxxxx, XX 00000
Re: Second Amendment to Coal Mining Lease
Lease dated April 9, 2003
Second Amendment Date: December 15, 2003
Dear Xx. Xxxxx:
The Second Amendment to Coal Mining Lease dated December 15, 2003, is hereby
extended through April 30, 2004, subject to the limitations set forth in Items 1
and 2 of the Second Amendment to Coal Mining Lease.
All other terms and conditions of the Lease between ACIN and Alpha, as
previously amended, remain in full force and effect, without modification or
amendment.
If Alpha is in agreement, please indicate by executing in the space provided
below and return one counterpart for our records to my attention.
Sincerely,
NRP (Operating) LLC
On Behalf of ACIN LLC
Its Sole Operating Manager
/s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
Vice President & Regional Manager
JHM/g
ACCEPTED AND AGREED:
--------------------
ALPHA LAND AND RESERVES, LLC
By: /s/ Xxxxxxxx X. Xxxxx
Its: Vice President
The symbol [***] is used to indicate that a portion of the exhibit has been
omitted and filed separately with the commission. Confidential treatment has
been requested with respect to the omitted portion.
