EXHIBIT 10.2
SECOND AMENDED AGREEMENT
This SECOND AMENDED AGREEMENT ("Agreement") is effective this 2 day of May,
2011, between LIBERTY COAL ENERGY CORP., a Nevada corporation ("Liberty") and
ROCKING HARD INVESTMENTS, LLC, a Utah limited liability company ("RHI"), herein
after called "The Parties." RECITALS
WHEREAS, RHI on February 13, 2010 sold to ESL Teachers, Inc. its rights in
certain State of Wyoming Coal leases located in Sheridan County, state of
Wyoming and in particular, State of Wyoming Coal Mining Lease 0-40536 on 92.47
acres, (Xxxx 0-0 Xxxxxxx 00 X00X X00X) and State of Wyoming Coal Mining Lease
0-40537 on 1200 acres; (X0/0 Xxxxxxx 00 X00X X00X; N1/2:SW:N1/2 XX Xxxxxxx 00
X00X X00X; and X0/0 Xxxxxxx 00 X0X X00X) (the "Leases");
WHEREAS, ESL Teachers, Inc. as of March 2, 2010 changed its name to Liberty
Coal Energy Corp, thus Liberty continues with all contractual rights and
obligations previously maintained by ESL Teachers, Inc., and
WHEREAS, Liberty and RHI hereby acknowledge that Liberty assumed all rights
and obligations of ESL Teachers, Inc. under that certain Letter of Agreement
entered into by ESL Teachers, Inc. and RHI on February 13, 2010.
WHEREAS, Liberty and RHI agree to a Second Amended agreement that combines
and replaces the Amended Agreement of May 2010 and the Royalty agreement of May,
2010
NOW THEREFORE, for $10.00 and other good and valuable consideration and the
mutual covenants of the parties hereto, the parties agree as follows:
ARTICLE I SECOND AMENDED AGREEMENT
SECTION 1.01 PURPOSE: This Agreement is being entered into in order to recognize
Liberty succeeding to the contractual rights and obligations of ESL Teachers,
Inc. to allow for the Assignment of the Leases to be filed and registered in the
name of Liberty with the Wyoming Office of State Lands and Investments and to
combine the terms of the amended agreement of March 2010 and the royalty
agreement executed the same day.
SECTION 1.02. RHI has filed the Assignment of the Leases naming Liberty as the
Assignee with the Wyoming Office of Lands and Investments and such were
presented to the Wyoming Board of Lands and Investments and Liberty has obtained
a Certificate of Authority to do business in the State of Wyoming.
ARTICLE II COAL LEASE ASSIGNMENT
SECTION 2.01. RHI hereby states and represents that it has assigned its right,
title and ownership in its State of Wyoming Coal Leases to Liberty, subject to
the terms and conditions set forth herein.
SECTION 2.02. RHI has performed its obligations under the February 13, 2010
agreement by assigning the Leases and obtaining conditional approval from the
State of Wyoming.
SECTION 2.03. Liberty is credited with the payments made to date by ESL
Teachers, Inc. under the February 13, 2010 agreement and has obtained a
certificate to do business in the State of Wyoming.
ARTICLE III. CONFIDENTIALITY, INDEPENDENT CONTRACTOR
SECTION 3.01. CONFIDENTIALITY The parties hereto agree to the confidentiality of
the terms and conditions of this agreement and further agree to not discuss this
matter with anyone, except where necessary such as in response to an official
government request or in reporting to government agencies when necessary.
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SECTION 3.02. INDEPENDENT ENTITIES It is understood and agreed by the parties
hereto that this Agreement does not create a fiduciary relationship between
them, and each serves as independent entities and that nothing in this Agreement
is intended to create a joint venture or partnership between the parties.
ARTICLE IV. TERMS AND CONDITIONS
SECTION 4.01. Liberty agrees to comply with the terms and conditions set forth
in the March 2, 2006 State of Wyoming Coal Mining Lease(s). Copies are attached
hereto as Exhibit A and by this reference are hereby incorporated into and made
a part of this Agreement.
SECTION 4.02. The Leases have overriding royalties of $0.04 per short ton.
SECTION 4.03. Ongoing obligations for Liberty:
a. Payment to RHI of Twenty-five Thousand Dollars USD ($25,000.00) on or
before February 13, 2011.
b. Liberty agrees to provide to RHI all mining reports, seismic tests,
exploration expenditures, exploration reports, and all mining plans
developed on a semi-annual basis within thirty days of the anniversary
of the signature of this Agreement.
c. Liberty commits and agrees to spend a minimum of Five Hundred Thousand
Dollars USD ($500,000.00) or more on exploring and developing the
Leases within thirty six (36) months after the date of this Agreement.
d. Liberty commits and agrees to complete a feasibility study on the
Lease properties before a date forty eight (48) months from the date
of this Agreement.
e. Payment to RHI in the amount of Twenty-five Thousand Dollars USD
($25,000.00) on or before February 13, 2012.
f. The parties have agreed to Coal royalties on the property, which calls
for production and minimum royalties as follows;
i. Production royalty: ($1.00) per ton of coal sold.
ii. A minimum royalty shall be paid annually beginning on February
13, 2013. The minimum royalty shall be in the amount of $35,000
in 2013, $45,000 in 2014, $55,000 in 2015. Minimum royalties
shall remain at $55,000 annually until production royalties
become due or Liberty surrenders the property to Synfuel
Technology Inc.
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iii. Maximum royalties to be paid is five million dollars
($5,000,000.00). The maximum royalties must be made within
fifteen (15) years of this Agreement.
iv. Additional conditional royalties shall apply as follows;
MINERAL, OIL & GAS ROYALTIES
In the event Liberty discovers other marketable minerals in mining for
coal, it shall further pay a royalty to RHI for the marketing or utilization of
such additional minerals a royalty amount that the parties in good faith agree
upon. As guidance in this determination the amount of royalty should be somewhat
commensurate with the $1.00 per ton paid for coal under this Agreement as a
percentage of the coal market price per ton. In other words if the royalty
payment hereunder for coal is 8% of the market price for a ton of coal, then the
royalty for additional mineral(s) marketed should be about 8% of the per ton
market price.
Liberty shall exercise due diligence to promptly pay or cause to be paid
royalties when due hereunder. Liberty covenants and agrees to use reasonable
diligence to produce, utilize, or market the minerals on the Land.
Liberty shall upon the written request of RHI provide RHI with its books
and records relating in any way to its operations conducted in the mining of
minerals on the Land as well as copies of its tax returns during the term of
this Agreement and for the year following termination of this Agreement.
In the event Liberty decides to produce from the Land under the assigned
Lease any oil and/or gas, the parties hereto agree to enter into good faith
negotiations as to the royalty payment to be paid RHI for such oil and/or gas
production.
v. Other Payments
Liberty Coal is responsible for making the annual lease payments to the State of
Wyoming. Liberty shall notify RHI no later than February 2 of each year if it
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does not intend to make the Wyoming Lease payments. RHI can make the lease
payments in the event that Liberty fails to make the lease payments.
vi. Work commitment
Liberty agrees to pursue the property's development consistently, including a
drill and sampling program in 2011, initiating environmental baseline monitoring
in 2012. Depending on results of initial drilling and testing in 2011, Liberty
may also conduct bulk sampling for coal testing, ground stability testing, and
other engineering as appropriate for feasibility determination. Mine permit
application shall begin at the point (in Liberty's sole opinion) when
sufficiently positive economics have been established.
SECTION 4.04. DEFAULT Should Liberty (or Assignee) fail to complete the
conditions and obligations set forth in subparagraphs 4.03 (a) through (f)
above, RHI has the right to terminate this Agreement and shall be entitled to
reassignment of the Leases from Liberty or assignee to RHI.
Either party noticed per article 5.06 that it is in default on any term of this
agreement shall have 30 days from the date of the notice to remedy the default.
SECTION 4.05 FORCE MAJEURE Neither party shall be liable in damages or have the
right to terminate this Agreement for any delay or default in performing
hereunder if such delay or default is caused by conditions beyond its control
including, but not limited to Acts of God, Government restrictions (including
the denial or cancellation of any export or other necessary license), wars,
insurrections and/or any other cause beyond the reasonable control of the party
whose performance is affected. Minimum royalties are not affected by this Force
Majeure clause.
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ARTICLE V. GENERAL PROVISIONS
SECTION 5.01. ENTIRE AGREEMENT OF THE PARTIES This Agreement supersedes any and
all other prior agreements, either oral or written, between the parties hereto.
This Agreement contains all of the covenants and agreements between the parties.
Each party to this Agreement acknowledges that no representations, inducements,
promises, or agreements, except the March 12, 2010 Assignment of Leases and the
Royalty Agreement, orally or otherwise, have been made by any party, or anyone
acting on behalf of any party not already embodied herein or in the Royalty
Agreement or in the March 12, 2010 Assignment of Leases, and that no other
agreement, statement, or promise not contained in this Agreement, shall be valid
or binding. Any modification of this Agreement will be effective only if in
writing signed by the party to be charged. Notwithstanding the foregoing the
State of Wyoming Coal Mining Leases are binding upon Liberty.
SECTION 5.02. COOPERATION The parties hereto agree to fully cooperate with one
another and agree to do whatever is needed to complete this agreement, including
Liberty obtaining a Certificate of Authority from the Wyoming Secretary of
State.
SECTION 5.03. PARTIAL INVALIDITY If any provision in this Agreement is held by a
court of competent jurisdiction to be invalid, void, or unenforceable, the
remaining provisions will nevertheless continue in full force without being
impaired or invalidated in any way.
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SECTION 5.04. ATTORNEY'S FEES if any action at law or in equity, including an
action for declaratory relief, if brought to enforce or interpret the provisions
of this Agreement, the prevailing party will be entitled to reasonable
attorney's fees, which may be set by the court in the same action or in a
separate action brought for that purpose, in addition to any other relief to
which that party may be entitled.
SECTION 5.05. GOVERNING LAW This Agreement will be governed by and construed in
accordance with the laws of the State of Utah wherever practicable and where
required under and pursuant to the mining laws of the State of Wyoming. The
parties agree that venue for any action hereunder is Salt Lake City, Utah.
SECTION 5.06. WRITTEN NOTICE - PAYMENT All written notices, reports and payments
permitted or required to be delivered by the provisions of this Agreement will
be deemed so delivered:
(1) at the time delivered by hand;
(2) one (1) business day after transmission by facsimile, telecopy or
other electronic means;
(3) one (1) business day after being placed in the hands of a
commercial courier service for next business day delivery; or
(4) three (3) business days after placement in the United States or
Mexico Mail by Registered or Certified Mail, Return Receipt
Requested, postage prepaid; and must be addressed to the parties
as follows:
Addresses:
If to: Liberty Coal Energy Corp.
X/X Xx Xxxxxx
00 00xx Xxxxxx Xxxxx 0000
Xxxxxx, XX 00000
If to: Rocking Hard Investments, LLC or Synfuel Technologies
x/x Xxxx Xxxxxxx, Xxx.
0000 Xxxx 0000 Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
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A change by any party with respect to the address for delivery of all such
notices and reports must be delivered in writing to the other party within ten
(10) business days of any such change in address. Any required payment or report
not actually received by RHI during regular business hours on the date due (or
postmarked by postal authorities at least two (2) days prior) will be deemed
delinquent.
SECTION 5.07 ASSIGNMENT Either party shall have the right of assignment of its
rights under this agreement to another party, as part of a re-organization or
sale of assets or other good reason as it in its sole authority deems
appropriate. Such assignment shall not be valid without the agreement in writing
by the other party, Such written permission shall not be unreasonably withheld.
SECTION 5.08. EXECUTION OF AGREEMENT IN COUNTERPARTS This Agreement may be
executed in any number of counterparts, which taken together shall be deemed to
constitute one original. Facsimile signatures to this Agreement shall have the
same force and effect as original signatures.
IN WITNESS WHEREOF, the parties hereto have signed, sealed and delivered this
Agreement effective as of the day and year first above written.
LIBERTY COAL ENERGY CORP. ROCKING HARD INVESTMENTS, LLC
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxx Xxxxxxx
---------------------------- ---------------------------------
Xxxxx Xxxxxx, President Xxxx Xxxxxxx, Manager
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