Exhibit 10.1
Xxxx seam lease
Lease Agreement
This agreement is made and entered into this the date hereinbelow signed by
and between Xxxx Xxxxx and Xxxxxx Xxxxx, her husband; X.X. Xxxxx, Xx.,
single, Xxxxxxxx Xxx Urban; Xxxxxx Xxxxxx, single; Xxxxxxxx Xxxxx, and Xxxxxxx
Xxxxx, her husband; c/o Xxxxxxxx Xxxxx, widow; Xxxxx X. Xxxxxxx and
_____________ Xxxxxxx, his wife; Xxxxxx Xxxxxxx and ___________ Xxxxxxx, his
wife; Xxxxxxx Xxxxxx and _______________ Xxxxxx, her husband; Xxxxxxx Xxxxxxx
and _____________ Xxxxxxx, her husband; Xxxxx X. Xxxxxxxxxx and _____________
Xxxxxxxxxx, his wife; Xxxx X. Xxxxxxxxxx and ______________ Xxxxxxxxxx, his
wife; Xxxxxx X. Xxxxxxx and ______________ Xxxxxxx, her husband; Xxxx Fair,
single; Xxxxxx Xxxxx and _______________ Xxxxx, his wife; Xxxxxxx X. Xxxxxx
and __________ Xxxxxx, his wife; Xxxxx Xxxxxx, Xx. and _____________ Xxxxxx,
his wife; Xxxxxxx Xxxxxx, single; Xxx Xxxxxx, widow; Xxxx Xxxxxx, single;
Xxxxx Xxxxxx, single; Xxxx Xxxxxxxx and Xxxx X. Xxxxxxxx, her husband; Xxxxx
Xxxxx and ________________ Xxxxx, her husband, and Xxxx Xxxxxx and
____________ Xxxxxxx her husband; Xxxxxx X. Xxxxx and ________________ Xxxxx,
his wife; Xxxxx Xxxxxxx and _________________ Xxxxxxx, his wife, Xxxx X.
Xxxxxxx and _________________ Xxxxxxx, his wife; Xxxx Xxxxxxx and
__________________ Xxxxxxx, her husband; Xxxx Xxxx Xxxxxxx and
__________________ Xxxxxxx, her husband; Xxxx Xxxxxxxxxx and
_________________ Xxxxxxxxxx, his wife; Xxxxx Xxxxxxx and _____________
Xxxxxxx, her husband; Xxxx X. Xxxxxxx and ________________ Xxxxxxx, his wife;
and Xx. Xxxxx X. Xxxxx and _________________ Xxxxx, his wife; Ladonnna Xxxx;
Xxxxx Minnney and _______________ Xxxxxx, her husbann; Xxxxxxx Xxxx and
__________________ Xxxx, his wife; Xxxxx Large and ______________ Large, her
husband; Xxxxxx X. Xxxxxx, Trustee; Xxxxx X. Xxxxxxx and _________________
Xxxxxxxx, her husband; Xxxxxxxxx Xxxxx and _______________ Xxxxx, her husband;
Xxxxxxx X. Xxxxxxx and ___________________ Xxxxxxx, his wife; Xxxxxx.
Xxxxxxxx and ______________ Xxxxxxxx, his wife; Young Family Trust, Xxxxxxx
Xxxxx, Trustee; Xxxxx X. Xxxxxx and __________________ Xxxxxx, his wife;
Xxxxxx X Xxxxxx and ___________________ Xxxxxx, his wife; Xxxxx Xxxxxxx and
_______________ Xxxxxxx, her husband; Xxxx Xxxxxx and _____________________
Xxxxxx, her husband; Xxxxxxx Xxxxxx and ______________ Xxxxxx, her husband;
Xxxxxxx X. Xxxxx and _______________ Xxxxx, his wife; Xxxxx Xxxxx and
________________ Xxxxx, her husband, hereinafter referred to as LESSOR and
Eastern Consolidated Energy, Inc., whose address is 0000 Xxxxx'x Xxxxxx,
Xxxxxxxxxxx, XX. Xxxxx County, Kentucky, hereinafter referred to as LESSEE.
CONDITIONS PRECEDENT
LESSEE does hereby covant and agree that it will acquire all necessary bonds
and maintain a liability insurance policy sufficient to cover any and all
damages which may arise as a result of an act or non act which may arise as a
result of this agreement. LESSEE further promises and agrees that it enters
in and upon the properties at it's own risks and does covenant and agree to
hold LESSORS herein harmless for any and all damages which may arise as a
result of an act or non act which may arise as a result of this agreement.
TERMS AND CONDITIONS
WITNESSETH: That for and in consideration of the sum of the payment of the
Minimum Annual Royalties and Tonnage Royalties hereinafter provided and the
observance and performance by Lessee of all of the provisions of this Lease,
said Lessor hereby demises, leases and lets unto Lessee all of the minable and
merchantable coal which can be mined from the Xxxx seam and other seams which
may are above drainage, by the deep mining method or other methods necessary
and convenient to mine the same, together with the sole and exclusive right of
mining, excavating, removing, shipping and marketing all of said coal which
can be mined by such methods in, on and underlying that certain tract or
parcel of land situate in Xxxxxx County, Kentucky, shown shaded and outlined
in red color (Xxxx Xxxxxxx Heirs) on a topographic map segment, Marked Exhibit
A, attached hereto and made a part hereof, hereinafter the "Leased Premises."
LESSOR does further hereby grant, demise, and lease unto Lessee for and during
the term hereinbelow specified, the exclusive right and privilege to exercise
and use, pertaining to the Leased Premises, any and all rights, easements, and
privileges which are or may become necessary, convenient, or incidental to
Lessee for and in the exploration, development, mining, excavation, removal,
processing, marketing, and shipping of the herein leased coal and coals from
all other properties. The rights, easements, and privileges granted, demised,
and leased hereunder include but are not limited to the right of Lessee to the
free and uninterrupted use and possession of, and rights-of-way into, upon,
over, across, and through, the Leased Premises for the construction,
operation, repair, maintenance, and reclamation of the mining operation,
roads, railroads, tramways, haulways, exploration sites, work and service
areas, pollution control structures, telephone, water, electrical and other
utility lines, devices and structures, coal tipples, coal preparation plants,
coal processing and storage areas, and all other machinery, devices,
improvements, structures and appurtenances which, at such points, and in such
manners, by Lessee, in its sole discretion, from time to time may be deemed
necessary, convenient, or incidental in or for its exploration, development,
mining, removal, processing, marketing, and/or shipping said Leased Coal and/
or other coal.
The foregoing rights granted to Lessee are granted subject to the provisions
of this lease and only to the extent of Lessor's power to grant the same and
are limited to such as Lessor possesses and owns, and has the lawful right to
grant; and, where Lessor owns the minerals and appurtenant rights, are limited
to such as Lessor owns under the deeds of instruments under which it owns
title to such minerals and appurtenant rights.
Lessee shall fully investigate and familiarize himself with the deeds under
which Lessor owns said minerals and rights.
Said deeds and rights are recorded in the following deed books _____ and
pages____, records of the Xxxxxx County Clerk.
EXCEPTING and RESERVING, however, to the Lessor all coal other than that
herein leased and the entire ownership control of the land described herein
and the coal, clay, stone, sand, water, oil and gas, and all other minerals
and mineral products therein and thereon for all purposes other than those for
which this lease is made, including without limiting the foregoing, the
following:
1. The right of searching for, mining, and removing by deep mining or other
appropriate methods all other coal, from any and all seams of coal or portions
thereof, the right of mining which is not herein leased;
2. Full and free rights of ingress and egress as may be necessary or
convenient in the proper development of said land or other lands or in the
proper exercise of the rights hereby reserved so long as Lessor or their heirs
or assigns do not unreasonably interfere with Lessee; and
3. The right to use jointly and in common with the Lessee any and all roads
or roadways constructed by or on behalf of the Lessee on the demised premises.
4. The right of searching for oil, gas, and all other minerals and products
and removing the same when found; providing however that the rights of
searching for the removal of oil, gas and all other minerals shall in no way
unreasonably interfere with the coal mining nor removal rights of Lessee.
Any and all of the rights herein excepted and reserved by Lessor shall inure
to the benefit of and may be exercised and enjoyed by Lessor and its
successors and assigns or its other Lessees or agents in connection with all
lands now or hereafter owned by Lessor provided, however, that the properties,
rights and privileges thus excepted and reserved shall always be used and
exercised subject to the provisions of Item # thirty-one hereof and so as to
avoid any actual and material interference with the operations of the Lessee
hereunder.
TO HAVE AND TO HOLD unto Lessee the Leased Premises for and during initial
terms as setforth hereinbelow:
SEAMS ABOVE DRAINAGE
The initial terms shall be and is three (3) years from the date of execution
by LESSEE and if active mining of the seams above drainage has been commenced
and is being diligently prosecuted during such initial term, thereafter, for
so long as Lessee is mining and producing coal through or on the leased
premises, or this lease is terminated by Lessee, together with the right to
mine, excavate and remove the Lessee's own account the minable and
merchantable coal in the seams of coal herein leased, in and underlying the
above described parcel of land, which can be mined and removed by deep mining
method, or other methods herein agreed to, subject only to the exceptions,
reservations, terms, conditions, covenants and agreements expressly provided
herein. In the event the coal leased hereunder is exhausted or if mining has
not been commenced and is not being diligently prosecuted or the minimum
royalty remain unpaid for thirty (30) days after giving of written notice by
Lessor to Lessee prior to the end of three (3) years, then this lease shall
end, terminate and become void at such time.
XXXX SEAM
The initial term shall be and is one and one half years (eighteen [18] months)
after execution by LESSEE and if active mining has been commenced and is being
diligently prosecuted during such initial term, thereafter, for so long as
Lessee is mining and producing coal through or on the leased premises, or this
lease is terminated by Lessee, together with the right to mine, excavate and
remove the Lessee's own account the minable and merchantable coal in the seams
of coal herein leased, in and underlying the above described parcel of land,
which can be mined and removed by deep mining method, or other methods herein
agreed to, subject only to the exceptions, reservations, terms, conditions,
covenants and agreements expressly provided herein. In the event the coal
leased hereunder is exhausted or if mining has not been commenced and is not
being diligently prosecuted or the minimum royalty remain unpaid for thirty
(30) days after giving of written notice by Lessor to Lessee prior to the end
of three (1) year, then this lease shall end, terminate and become void at
such time.
This Lease is subject to the following terms, conditions, covenants and
agreements which Lessee covenants with Lessor faithfully to observe and
perform.
Item # 1
MINING PLAN
(a) Lessee shall provide to Lessor a general Mine Plan to which mine
development must conform within (90) days after acquisition of a mining
permit. Lessee covenants and agrees to project and plan development of the
Leased Premises in accordance with the General Mine Plan as to so equip the
mine with modern mining machinery and haulways and works so that all minable
and merchantable coal, as the same is hereinafter defined, will be reached and
mined in all parts of the demised premises. Said projections or plans shall
show the details of the operation and methods of mining. Lessor shall review
and comment on said mining plans and projections. Should the mining
projections or plan be unsatisfactory for whatever stated reason, Lessee will
negotiate with Lessor to resolve the disagreement. Should the Lessee proceed
to mine without a permit approved by the Regulatory Authority, Lessee will
indemnify Lessor for any loss which may result. Any projection or plan, once
approved, shall be adhered to by Lessee and shall not be departed from
thereafter without concurrence of Lessor. Projections and plans shall be
prepared by the Lessee and submitted to the Lessor at least once every twelve
(12) months, along with copies of the applications, if any, for permits.
(b) Lessee shall, as soon as practicable after the execution and delivery of
this Lease, enter upon the Leased Premises and begin diligently in an
energetic, approved, skillful and workmanlike manner to recover the greatest
possible amount of minable and merchantable coal from the Leased Premises
which may be mined with modern machinery and equipment and consistent with
good mining practices, having due regard to the development of all of the
Leased Premises and the future development of the coal property and so as to
avoid damage, or limit access to all seams of coal in the tracts of land
herein described. Lessee shall do all acts in mining so as to commit no waste
of said minerals. It is the purpose and spirit of this lease to secure the
prompt development and continuous operation of mining and removing the leased
coal and to secure as full, complete and speedy operation as can be done
practicable and economically.
(c) The payment or acceptance of Annual Minimum Royalty or Tonnage Royalty
in, Item Eight or Item Ten of this Lease shall not excuse Lessee from the
diligent mining obligations required in this, Item One.
(d) Lessee shall take all necessary action to obtain all permits required by
the applicable laws of the State of Kentucky and the United States of America
before beginning the mining operations hereunder.
(e) Lessee shall conduct its mining operations in accordance with a mining
plan in compliance with the applicable laws of the State of Kentucky, or any
political subdivision thereof, and of the United States of America now in
effect or as may hereafter be enacted, and make and file all maps required and
furnish copies to Lessor at their request.
(f) If any minable or merchantable coal be lost or made unmineable by reason
of any improper, negligent, or careless mining methods or shipping or any
other cause which is contrary to the provisions and requirements of this
lease, then Lessee shall pay to Lessor, for all coal so lost or made
unmineable, a royalty equal to the average royalty paid for coal mined, under
this Lease, during the prior three-year period or the period of time this
Lease has been in effect, if less than three (3) years, per ton of two
thousand (2,000) pounds for each ton coal so lost or not mined. If no such
royalty has been paid, then Lessee shall pay to Lessor royalty equal to the
most recent royalty paid for coal mined on the closest other properties leased
by Lessor.
Item # 2
MINABLE AND MERCHANTABLE COAL
DEFINITION: The term "minable and merchantable coal", where ever used in this
Lease, means coal which, when reached in the prosecuting of Lessee's
operations, could be mined at a reasonable profit, by a prudent miner in the
prevailing coal market, by the use of such modern mining methods and such
modern mining and cleaning machinery and equipment as are reasonably adapted
to practical, efficient and economical mining under the conditions found at
the time in question. But, said definition is not intended to exempt, nor
shall it be construed as exempting Lessee from mining coal which by reason of
local conditions or thickness of seam or character of coal, cannot be mined by
a prudent miner, at a reasonable profit when the general condition of the seam
of coal, outside of or beyond such local conditions, shall be normal and it
shall only apply when the general conditions of the property, or a particular
portion of section thereof, shall warrant such application, provided always
that the condition of coal adjacent to and beyond the local situation shall be
taken into consideration. In determining whether coal could be mined at a
reasonable profit, full consideration shall be given to the profits or losses
of Lessee on coal theretofore mined and such condition will prevail in
determining whether coal is minable and merchantable.
Item # 3
SEAM PROTECTION
Lessee shall include in the mining plan, provision for pillars of coal and
other supports of :(1) protection of any entry leading into the seams leased
for deep mining operations;
(2) the reasonable protection and development of seams of coal other than
those hereby leased.
Item # 4
PILLARS AND BARRIERS
Lessee agrees to observe and perform all conditions, covenants and limitations
with respect to the mining of coal contained in any of the instruments of
record under which Lessor holds title, and to save Lessor harmless from the
breach of any such conditions, covenants or limitations.
Lessee shall have the right to leave such pillars or barriers as may be
required by law, by State or Federal regulations, or by any condition,
covenant or limitation contained in any instrument under which Lessor holds
title or to which it is a party for the protection of existing oil or gas
xxxxx, gas lines, power lines or surface improvements, but the right to
recover from the owners of existing oil or gas xxxxx, or from others, for coal
left in such pillars or barriers shall remain the property of Lessor.
Item # 4
OIL AND GAS LEASES
It is understood and agreed between the parties hereto that Lessor has
previously leased the oil and gas under the major portion of the tracts of
land hereinabove described, as well as the above drainage coals.
Should Lessee deem it necessary or convenient to secure any additional rights
or privileges of any kind or nature not owned by Lessor and not herein
demised, then and in that event, it may obtain same at its sole expense and
without cost or obligation on the part of Lessor.
Item # 5
MINE PLAN ADHERENCE
Lessee agrees to make entries into and to work and mine the coal hereby leased
in accordance with general projections or plans of mining and descriptions
thereof which shall, in advance of development, be submitted by Lessee to
Lessor.
Item # 6
SURVEYING AND MAPPING
Lessee shall provide the following surveying services for the Leased Premises:
1. Provide a mining boundary control and any required flagging based on a
Standard Coordinate System;
2. Prepare and furnish Lessee with mining progress maps as reasonably
required to scales of 1" = 100', 1" = 400' or 1" = 2,000';
3. Advance vertical and horizontal controls and check surveys as required;
and
4. Provide stop distances if applicable around surface reservations,
exceptions and boundaries.
All of the above work will be performed in accordance with laws and
regulations governing such surveys.
Item # 7
MAPS AND INSPECTIONS
Lessee agrees to furnish to Lessor such information as may be reasonably
requested by the Lessor from time to time concerning, but not limited to, the
leasehold boundaries, railroad tracks and rights-of-way, improvements, mine
workings, elevations, coal analyses, thickness of the veins or seams of coal
as they are mined and Lessee shall furnish maps of properties owned by others
adjacent to the herein Leased Premises, if available to Lessee.
Lessee shall give unto Lessor and its duly authorized agents the right to
enter into the mines of Lessee, both in properties owned by others and
controlled by Lessee to the extent it has a right to do so to inspect and
examine said mines and to use freely the means of access thereto without
hindrance or molestation, but failure of Lessor to so inspect or examine said
mines or failure to notify Lessee of any default does not excuse any failure
of Lessee to comply with this Lease.
Item # 8
ROYALTY PAYMENTS
(a) Lessee agrees to pay to each LESSOR, at his or her address as set forth
in the introduction to this Lease, or at such other place as such LESSOR may
form time to time designate, on or before the 25th day of each calendar month,
his or her proportionate share (as set forth on Exhibit B attached) of the
following amounts, to be paid, as royalty on each and every net ton of two
thousand (2000) pounds of coal mined and sold from the Leased Premises, during
the previous month to-wit:
(a) [1] For all seams above drainage Lessee shall pay the greater of SIX PER
CENT (6%) of the gross Realization, f. o. b. the mine or ONE DOLLAR AND EIGHTY
FIVE ONE HUNDREDTHS DOLLARS ($1.85) for each and every ton sold.
(a)[2] For the Xxxx seam Lessee shall pay the greater of SIX PER CENT (6%) of
the gross Realization, f. o. b. the mine or ONE DOLLAR AND FIFTY ONE
HUNDREDTHS DOLLARS ($1.50) for each and every ton sold.
LESSEE agrees to furnish to LESSOR, on or before the 25th day of each calendar
month, an accounting, as provided in Item Eleven hereinbelow, showing the
number of tons of coal mined and sold and the gross selling price thereof from
the Leased Premises during the preceding calendar month.
(b) The gross selling price of such coal shall be calculated on the basis of
each calendar month and shall be the actual gross realization to the Lessee
for each ton sold.
(c) "Gross realization" of coal shall, for all purposes under this Lease, be
the amount received, during an arms length transaction, without selling cost,
by the Lessee, herein, from the "Ultimate Consumer", less transportation fees.
"Ultimate Consumer is defined as a person, firm, corporation or limited
liability company in which Lessee or any of its officers, managers or
directors do not have an equity interest.
Lessee shall secure and preserve all billing of coal sold and furnish one copy
of each billing to Lessee at the time royalties herein provided for are paid.
Item # 9
WEIGHTS
(a) Lessee agrees to keep a true and faithful account of all coal mined and
sold by it from the Leased Premises and the gross realization and to render to
Lessor on or before the 25th day of each month a statement showing the number
of tons of coal mined and sold from the Leased Premises and the gross
realization during the preceding calendar month. Tonnage statements shall be
based upon weights furnished by railway companies as to coal shipped by
railroad and for any coal used or sold from the Leased Premises, not shipped
by railroad, mine scale weights shall be used if the coal is weighed at the
mines, if mine scale weights are not used, and the coal is transported by
truck to a barge, then the weights as provided by the barge company.
(b) Volumetric measurements shall be made by Lessor at its convenience to
determine the actual tonnage of coal mined. Tonnage variance shall be
reviewed with the Lessee if the reported tonnage deviates from such volumetric
measure in excess of five (5 %) percent. If Lessor is dissatisfied with said
review, Lessor or their agents shall have the right to inspect said mine
during normal working hours and if necessary to enter into arbitration under
the terms of arbitration of this agreement.
If the coal is washed prior to shipment, then volumetric measurement shall be
adjusted by the percentage of rejects.
Item # 10
MINIMUM ROYALTIES
For all purposes of this Lease, a lease year shall be the period of twelve
(12) consecutive months after the date of this Lease and each succeeding
periods of twelve (12) consecutive months thereafter.
Lessee agrees to pay to Lessor a minimum royalty of THIRTY SIX THOUSAND
DOLLARS ($36,000.00) per year, payable in monthly installments of THREE
THOUSAND DOLLARS ($3,000.00). The first monthly installment payment shall
begin March 25, 2002.
If Lessee shall not mine or produce from the Leased Premises in any lease year
as much coal as will, at the tonnage royalty payable during such year, produce
a sum equal to the annual minimum royalty and renewal payment, then and in
that event Lessee shall have the right and privilege, in any of the succeeding
lease years, of mining free of tonnage royalty such amount of coal over and
above the amount required to yield the annual minimum royalty payment for such
year or years as will, at the tonnage royalty rate set forth in, Item Eight
hereof, be equal to such "deficiency"; provided, however, no coal shall be
mined in any year free of tonnage royalty or on account of the "deficiency" in
any preceding year until the Lessee shall have mined during the then current
year an amount of coal, which, at the applicable tonnage royalty rate, shall
be equal to the annual minimum royalty for said current year. No payments, by
way of tonnage royalty in excess of the annual minimum royalty in any one year
shall be credited against any "deficiency" in any subsequent year.
Item # 11
ACCOUNTING
Lessee agrees to keep accurate and correct books of account and records
showing all coal mined and all coal processed, marketed and shipped from the
premises, together with the correct weights thereof, to which books and
records Lessor, or its duly authorized agents, shall at all reasonable times,
have access for the purpose of examination and for verification, and Lessor,
for like purposes, is hereby authorized by Lessee to demand and require, of
any railroad or other carrier transporting the product of said premises, an
inspection of the books and records of said carrier showing the detailed
weight and quantity of all such products shipped by Lessee and all pertinent
information relating thereto. Said carrier, and its agents, are hereby
expressly authorized and requested by Lessee to show to Lessor, or its duly
authorized agent, all such records when requested and to furnish all such
information upon request.
Item # 12
FORCE MAJEURE
The term "force majeure" as used herein, shall mean maters beyond the
reasonable control of Lessee, including market conditions. Lessee shall
notify Lessor in writing within ten days when a period to be claimed under
Force Majeure begins.
In the event Lessee is unable, wholly or in part, as a result of force
majeure, to carry out its obligations under this Lease, such obligations,
shall be suspended during the continuance of any inability so caused, and the
term of this Lease shall be extended for a period of such inability. Such
cause shall be remedied with all reasonable dispatch, provided that in no
event will Lessee be required against its will to settle any strike or lockout
or to adjust any labor dispute. Force Majeure shall not defeat the obligation
to pay minimum royalties.
Item # 13
DEFAULT OF PAYMENTS
All payments required to be made by Lessee shall be considered as rent
reserved by Lessor upon contract and all remedies now or hereafter given by
the laws of the State of Kentucky for the collection of rent are reserved by
Lessor in respect of the sums so payable, and a lien is hereby reserved and
imposed upon all improvements, building, structures, equipment, machinery and
other personal property of Lessee for use in connection with Lessee's
operations on the demised premises.
If default be made by the Lessee in the payment of the annual minimum
royalties and/or tonnage royalties or in the performance of any other terms,
conditions or agreements herein required to be kept and performed by the
Lessee, and such default is continued for a period of thirty days after
written notification, Lessor may, at its option, terminate this lease and
re-enter upon and take possession of the Leased Premises. Any such action by
Lessor shall in no manner impair the right to annual minimum royalties and
tonnage royalties due or accrued up to the time of such terminating.
Lessor also reserves the right to pursue any and all remedies available under
the laws of the State of Kentucky for violation of any covenant, term,
condition or agreement hereof and all such remedies shall be deemed cumulative
and not exclusive.
Item # 14
ASSIGNMENT OF LEASE
Lessee shall not assign or amend this Lease or sublet the premises or any part
thereof without obtaining the prior written consent of 51% of Lessors herein,
which consent shall not be unreasonably withheld. In the event of any
permitted assignment or sublease, Lessee shall remain primarily liable to
Lessor for the performance of all obligations and duties hereunder and shall
provide Lessor with a satisfactory assumption agreement signed by the assignee
or sublessee.
Neither this Lease, the estate hereby created, nor the rights of Lessee
created hereunder shall be subject to sale, disposition or possession thereof,
in whole or in part, under the judgment or decree of any court, or by or
though judicial process of law or equity, except for the purpose of enforcing,
at the instance of Lessor, its rights hereunder, and the Lessee hereby
dedicates its plant, tipple, mining equipment, machinery, structures and
improvements now or hereafter located upon the Leased Premises, together with
all rights, privileges and easements hereunder, as a mining unit devoted to
the obligation to mine the coal of Lessor to the extent of the obligation of
the Lessee to the Lessor. If (1) Lessee or its assignee shall be adjudged a
bankrupt or insolvent, (2) any execution, attachment, or other legal process
shall issue against Lessee or its assignee whereby the demised premises or any
property of Lessee shall be taken or attempted to be taken, (3) a receiver or
trustee of the property of Lessee or its assignee or any part thereof shall be
appointed, or (4) this Lease shall, by operations of law devolve upon or
attach to any person or persons other than Lessee, or its assignee, then and
in either of said events this Lease and all rights of the Lessee and its
assignee hereunder shall, at the option of Lessor, forthwith cease, terminate
and be void.
In the event a SUB-LESSEE should acquire the rights to this lease, he agrees
to be bound by the mine plan and shall diligently prosecute the mining of coal
from the Leased Premises. Under no circumstances shall Lessee or SUB-LESSEE
simply hold the Leased Premises as "reserves".
Upon failure to diligently prosecute mining for a period greater than twelve
(12) months, without approval of fifty one percent (51%) of Lessors, Lessor
shall have the right to terminate and void this agreement by giving notice to
Lessee at it last known address.
Item # 15
NON WAIVER OF RIGHTS
(a) Failure of either the Lessor or Lessee to exercise any of their respective
rights hereunder upon the nonperformance by the other party of any condition,
covenant or provision herein contained shall not be construed as a waiver
thereof, nor shall the defective performance or waiver of nonperformance of
any such condition, covenant or provision upon the part of the other party be
construed as a waiver of the rights of the other party as to any subsequent
performance or nonperformance hereof.
(b) 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 either party or offered in any judicial proceeding or otherwise, unless the
same is in writing, duly executed by Lessor and Lessee.
Item # 16
TITLE WARRANTY
Lessor convents that the Lessee, paying the minimum annual royalties and
tonnage royalties and complying with the terms, conditions, covenants and
agreements hereof, shall have quiet and peaceful possession and enjoyment of
the leased property. Lessor warrants its title to the coal herein leased, to
Lessee, subject only to the came conditions of warranty under which Lessor
received title.
Item # 17
WRITTEN NOTICES
The giving of any notices to, or the making of any demand on Lessor, shall be
sufficient if in writing, addressed to Lessor and mailed by registered or
certified mail, return receipt requested to 75% of the owners at their last
known address and likewise the giving of any notice to or the making of any
demand on Lessee, shall be sufficient if in writing addressed to Eastern
Consolidated Energy, Inc. at 1000 Xxxxx'x Branch, Xxxxxxxxxxx, XX 00000 by
registered or certified mail, return receipt and the mailing of such notice
and not the receipt thereof shall constitute the giving of such notice. In
case of change of address of the office of either party hereto, the one so
changing its address shall give notice thereof to the other and designate the
address at which it desires any notice hereunder to be sent, and in the
absence of any such notice of change of address executed in accordance with
this Item, notice given to the addresses above respectively stated shall be
deemed sufficient.
Item # 18
TRANSFER OF OBLIGATIONS
All the terms, covenants, conditions and agreements to be performed and
observed by the respective parties hereto shall be binding upon the parties
and their and each of their successors, heirs and assigns whether so expressed
or not, and shall insure to the benefit of their respective successors, heirs
and assigns.
Item # 19
REMOVAL OF EQUIPMENT
Upon termination of this lease by expiration of its term or for any other
reason or cause other than default of Lessee and if Lessee has fully paid all
sums required to be paid hereunder, Lessee shall have ninety (90) days from
the date of such termination to remove from the Leased Premises any personal
property, machinery, equipment and other property belonging to it, and any
property which is directed to be removed by Lessor. Any such property not so
removed within ninety (90) days shall become the property of Lessor at its
election.
Item # 20
LESSOR INDEMNIFICATION
Lessee agrees to indemnify Lessor from and against any and all liabilities,
claims, debts, demands, expenses and causes of action relating to injuries to,
or death of, persons and damage to, or destruction of property, real, personal
and mixed, asserted, claimed or alleged by:
1. any person, firm, corporation or other business organization,
2. any officer, employee, xxxxxxx, servant or agent of Lessee,
3. any contractor or subcontractor of Lessee, or any officer, xxxxxxx,
servant or agent of any such contractor or subcontractor,
4. any contractor or subcontractor of Lessor or by any officer, employee,
xxxxxxx, servant or agent of any such contractor or subcontractor, and
5. any employee, agent or servant of Lessor, arising from Lessee's operation
and activities under this Lease, including the use of any part of the Premises
in connection with Lessee's mining and removal of coal and the exercise of its
rights hereunder, to the extent the same results from, is caused by, or is
alleged to have resulted from or have been caused by, directly or otherwise,
of:
(a) Lessee, its employees, workmen, servants, or agents; and
(b) Lessee's contractors and subcontractors and their respective employee's
workmen, servants or agents. Lessee shall acquire and maintain comprehensive
public and automobile liability insurance policies.
Item # 21
PREVIOUS MINING
It is agreed between the parties hereto that mining operations have previously
been prosecuted in, on and over the tract of land hereinabove described, and
that Lessor has not heretofore made and does not now make any representations
or warranties concerning the quantity or quality of the coal on the premises
or the conditions of any entries, working places, pillars, barriers or
openings therein, or as to the condition of the surface, structures or works
therein or thereon, and that Lessee takes the Leased Premises "AS IS".
Item # 22
SALE OF LESSEE
Should ownership of fifty-one (51) percent or change of control in, the LESSEE
from the status as of the date of this Lease be transferred to another party
by voluntary act, then a notice ten (10) days prior to closing of said
transfer shall be given to Lessor.
Item # 23
ARBITRATION
Any and all disputes and disagreement as to any Item in this agreement shall
be first arbitrated pursuant to the Uniform Arbitration Act as adopted by the
Commonwealth of Kentucky.
Both parties agree that the situs of any action, whether arbitration or
judicial, shall be Xxxxxx County Kentucky.
Item # 24
EMINENT DOMAIN TAKING
As part of the consideration for this Lease it is agreed that should any part
of the Leased premises be transferred to, taken, affected by, needed or in any
manner acquired by any governmental entity or other person authorized by law
to exercise the powers of Eminent Domain, then and in that event, Lessor
reserves unto itself and there shall be excluded from this Lease that part of
the Leased Premises transferred to such authority. Lessee agrees on request
from Lessor to release any such part of the Leased Premises. Lessor and
Lessee agree to a prorate share of the proceeds as follows:
(a) Lessor shall be paid pursuant to, Item Eight for the tonnage lost by the
act of Eminent Domain.
(b) Lessee shall be paid the average net profit per ton, said average to be
computed over the previous six (6) months of normal and usual production.
(c) Any moneys then remaining shall be evenly distributed to Lessor and
Lessee. Any moneys paid for any properties not leased herein shall be and
remain the money of Lessor.
Item # 25
PROPERTY LINE BARRIERS
Lessor consents to the mining of all coal herein leased to the adjacent
boundary line of adverse mineral, provided such consent is secured from the
adjacent adverse mineral owner, and the appropriate government authority
provided by State law.
Item # 26
LEASE EXECUTION
This Lease may be executed in several counterparts and each such instrument
shall be deemed to be an original document if executed by one or more Lessor
and by Lessee.
Item # 27
RECLAMATION
Upon termination of its use thereof, Lessee shall promptly close all drift
mouths to satisfaction of the regulatory authority and shall comply with all
applicable laws and regulations pertaining to reclamation of the property
disturbed and the closing of mines. Upon the termination of, or expiration
of, its right to mine hereunder, Lessee shall leave the premises in a
condition satisfactory to the regulatory authority.
Item # 28
WHEELAGE
Lessee shall have the right and is hereby expressly granted the right and
privilege to transport into, over, through or under the leased premises, any
coal mined from other lands, paying for such right and privilege, a wheelage
in an amount equal to FIVE ONE HUNDREDTHS DOLLARS (00.05 ) for each net ton
(2,000 pounds) of such coal so transported such payments to be made at the
times and in the manner provided for in, Item Eight hereinabove.
Item # 29
XXXXXXX'X COMPENSATION
Nothing in this Lease shall be construed as making Lessor in any respect the
employer of Lessee or of any workmen engaged in any work in, on or about the
Premises, and it is specifically stipulated and agreed that Lessee, in all of
its operation in and on the premises, is and shall be an independent
contractor within the meaning of the commonwealth of Kentucky Workmen's
Compensation Law and exclusively liable for the payment of workmen's
compensation to all the workmen engaged in, on or about the Premises, and that
it will provide compensation for all such employees in accordance with the
Workmen's Compensation Laws of the Commonwealth, and that before beginning any
work or undertaking any operations under this Lease, and thereafter, from time
to time during the term, it will submit to Lessor for its examination and
approval a policy or policies of insurance (or certification for the same)
affording (or showing ) complete coverage of all persons engaged in any work
on the premises, such policy or policies to provide full protection to Lessor
and all persons engaged in any work on the Premises.
Item # 30
LIENS AND ENCUMBRANCES
Except in a circumstance where Lessor has consented in advance, Lessee
convenants that it will not permit any lien, encumbrance or charge against
property of Lessor as may result from its mining operations or otherwise to
remain undischarged after the same shall have been asserted. In the event any
such lien, encumbrance or charge shall remain unsatisfied for thirty (30) days
after due notice by Lessor, Lessor may pay and satisfy same and hold Lessee
liable for all moneys expended by Lessor, and may, at its option, terminate
this Lease forthwith. Provided, however, if Lessee in good faith disputes the
validity or correctness of such lien, it may refrain from paying the same or
causing the same to be discharged of record, providing it shall proceed with
due diligence to conduct any necessary or proper proceeding or litigation for
the purpose of determining the correctness or validity thereof and so long as
the Lessee in good faith maintains such litigation, it shall not be deemed in
default in respect to its obligations under this paragraph.
Item # 31
USE OF ROADS
Lessor shall have the right to use Lessee's haulage and access roads on or
leading to the Leased Premises only upon such terms as may be agreed upon
between the parties by agreement made before such use is undertaken by Lessor,
their successors or assigns.
Item # 32
ORAL AGREEMENTS
It is agreed that both parties or their agents may have made oral statements
about the contents of this agreement. Such statements do not constitute
warranties, shall not be relied upon by either party, and are not part of this
lease agreement. The entire contract is embodied in this writing. This
writing constitutes the final expression of the parties agreement, and it is a
complete and exclusive statement of the terms of that agreement.
Item # 33
TAXES, ASSESSMENTS AND FEES
Lessee covenants and agrees to pay all property, franchise, excise, severance,
black-lung taxes and other governmental charges that may be levied or assessed
against the property, rights, and privileges hereby demised, leased, and let
or against Lessee or Lessor, as owner thereof, and of all improvements and
betterment's erected by the Lessee and all the coal mined and produced
hereunder, shall be paid by Lessee or if paid by Lessor, Lessee agrees
promptly to repay the same to Lessor whereupon receipt of a statement
therefor. Lessee shall also pay all taxes and assessments, other than taxes
assessed against Lessor based on the royalty received by it hereunder, that
may be levied or assessed by the United States of America, the State of
Kentucky, or any county, municipality or taxing district, or authority upon
the production or output of coal produced form the Leased Premises by Lessee,
or based thereupon. Lessor shall pay all taxes levied or assessed against it
by the United States of America, State of Kentucky or other taxing power
vested with the authority to levy the same, on or based upon any income
received hereunder by it, or on any coal, property or rights reserved
herefrom.
Witness our hand this the _____ day of March 2002.
LESSEE
Eastern Consolidated Energy, Inc.
by __________________________________
its ________________________________
COMMONWEALTH OF KENTUCKY
COUNTY OF_______ ______________
Subscribed and sworn to before me this the _______ day of _____________, 2002
by ________________________________________, as _________________________ of
Eastern Colsolidated Energy, Inc.
My commission expires: _________________________________
___________________________________
NOTARY PUBLIC
LESSORS:
_/s/ Xxxxx Xxxxx Xxxxxx
_/s/ Xxxxxx X. Xxxxxx, Trustee
_/s/ Xxxxx X Xxxxxxxx
_/s/ Xxxxxxx Xxxxxx
_/s/ Xxxxxx Xxxxxx
_/s/ Xxxxx Xxxxxx
_/s/ Xxxxx Xxxxxxx
_/s/ Xxxxxx Xxxxxxx
_/s/ Xxxx Xxxx Xxxxxxx
_/s/ Xxxxxxx X Xxxxxxx
_/s/ Xxxx X Xxxxxxx
_/s/ Xxxxx Xxxxxxx
_/s/ Xxxxxx X. Xxxxxxxx
_/s/ Xxx Xxxxxx
_/s/ Xxxxx Xxxxxxx
_/s/ Xxxxxxx Xxxxxx
_/s/ Xxxxxxx X. Xxxxxx
_/s/ Xxxxx X Xxxxxx, Xx.
_/s/ Xxxx Fair
_/s/ Young Family Trust
_/s/ Xxxxx X. Xxxxxx
_/s/ Xxxxxx X. Xxxxxx
_/s/ Xxxxxx Xxxx
_/s/ XxXxxxx Xxxx
_/s/ Xxxxxx Xxxxxxx
_/s/ Xxxx Xxxx Xxxxxxx
_/s/ Xxxx Xxxxxx
_/s/ Xxxxx Xxxxxx
_/s/ Xxxxxxx Xxxxxx
_/s/ Xxxxxxx X Xxxxx
_/s/ Xxxxxxx Xxxxx
_/s/ X.X. Xxxxx, Xx.
_/s/ Xxxx Xxxxxxx
_/s/ Xxxxxxxx Xxx Urban
_/s/ Xxxxx Xxxxx
_/s/ Xxxx X. Xxxx
_/s/ Xxxxxx X. Xxxxxx
_/s/ Xxxxxx x. Xxxxx
_/s/ Xxxx Xxxxxxxxxx
_/s/ Xxxxx X. Xxxxxxxxxx
_/s/ Xxxxx Xxxxxxx
_/s/ Xxxx Xxxxx
_/s/ Xxxxx Xxxxx
_/s/ Xxxxxx Xxxxx
_/s/ Xxxx Xxxxxxxx
_/s/ Xxxxx Xxxxxx
_/s/ Xxxx Xxxxxx
(All signatures notarized)
