AMENDED OVERRIDING ROYALTY AGREEMENT
Exhibit 10.37
AMENDED OVERRIDING ROYALTY AGREEMENT
This Amended Overriding Royalty Agreement (this “Agreement”) is made and entered into
as of the 3rd day of December, 2008, by and
among Western LAND Company, LLC
(“Western Land”), a Kentucky limited liability company, Western Diamond, LLC
(“Western Diamond”), a Nevada limited liability company, Ceralvo Holdings, LLC
(“Ceralvo”), a Delaware limited liability company, Xxxxxxxxx Mining, Inc. (“Xxxxxxxxx
Mining”), a Delaware corporation, Xxxxxxxxx Coal Company, Inc., a Delaware corporation
(“Xxxxxxxxx Coal”), Xxxxxxxxx Land Company, LLC (“Xxxxxxxxx Land”), a Delaware limited
liability company (together, with each of the foregoing and their respective successors and
assigns, the “Xxxxxxxxx Parties”), and Xx. Xxxxx X. Xxxx (“Xxxx”), 0000 Xxxxx Xxxx,
Xxxxxxxxxxxx, Xxxxxxxx 00000 (collectively, the “Parties).
Whereas, on November 22, 2006, Xxxxxxxxx Mining f/k/a Honeywood Mining, Inc., entered
into an Overriding Royalty Agreement with Xxxx, pursuant to which Xxxx was granted a royalty
interest on certain real property pursuant to the terms and conditions stated therein; and
Whereas, on November 22, 2006, Xxxxxxxxx Coal entered into an Overriding Royalty
Agreement with Xxxx, pursuant to which Xxxx was granted a royalty interest on certain real property
pursuant to the terms and conditions stated therein; and
Whereas, the Parties desire to fully amend and restate the terms of each of the
foregoing Overriding Royalty Agreements, and Ceralvo, Western Diamond and Western Land desire to
join in this Agreement upon such terms and conditions as set forth herein;
Now, Therefore, in accordance with the foregoing Recitals and in exchange for good
and valuable consideration, the receipt and sufficiency of which all of the parties to this
Agreement hereby acknowledge, the parties hereby covenant and agree as follows:
1. Western Diamond Grant of Overriding Royalty. Western Diamond, together with its
successors and assigns, hereby grants to Xxxx and agrees to pay to Xxxx an overriding royalty (the
“Western Diamond Royalty”) in the amount of Five Cents ($0.05) of all coal hereafter mined or
extracted and subsequently sold from all of the coal reserves and real property described in, and
conveyed, demised or otherwise granted in or under, the following deeds and instruments:
(i) The Corporation Special Warranty Deed from Central States Coal Reserves of Kentucky, LLC
and Beaver Dam Coal Company to Western Diamond, LLC, dated September 19, 2006, of record in Deed Book 363, page 369, in the Office of the Ohio County Clerk;
(ii) The Partial Assignment of Coal Mining Lease from Central States Coal Reserves of
Kentucky, LLC to Western Diamond, LLC dated September 19, 2006, of record in Deed Book 363, page
428, in the Office of the Ohio County Clerk;
(iii) The Corporation Special Warranty Deed from Central States Coal Reserves of Kentucky, LLC
and Beaver Dam Coal Company to Western Diamond, LLC, dated September 19, 2006, of record in Deed
Book 363, page 414, in the Office of the Ohio County Clerk;
(iv) The Corporation Special Warranty Deed from Beaver Dam Coal Company to Western Diamond,
LLC, dated September 19, 2006, of record in Deed Book 363, page 393, in the Office of the Ohio
County Clerk;
(v) The Corporation Special Warranty Deed from Beaver Dam Coal Company to Western Diamond,
LLC, dated September 19, 2006, of record in Deed Book 363, page 403, in the Office of the Ohio
County Clerk;
(vi) The Corporation Special Warranty Deed from Central States Coal Reserves of Kentucky, LLC
to Western Diamond, LLC, dated May 31, 2007, of record in Deed Book 528, page 284, in the Office of
the Muhlenberg County Clerk, and the Deed of Confirmation between Central States Coal Reserves of
Kentucky, LLC, Western Diamond, LLC and Xxxxxxxxx Coal Reserves, Inc., dated September 30, 2007, of
record in Deed Book 531, page 205, in the Office of the Muhlenberg County Clerk;
(vii) The Corporation Special Warranty Deed from Central States Coal Reserves of Kentucky, LLC
and Beaver Dam Coal Company to Western Diamond, LLC, dated May 31, 2007, of record in Deed Book
368, page 17, in the Office of the Ohio County Clerk, and the Deed of Correction between Central
States Coal Reserves of Kentucky, LLC, Beaver Dam Coal Company, LLC and Western Diamond, LLC, of
record in Deed Book 369, page 759, in the Office of the Ohio County Clerk;
(viii) The Partial Assignment and Assumption of Mineral Leasehold Estate from Central States
Coal Reserves of Kentucky, LLC to Western Diamond, LLC, dated May 31, 2007, of record in Deed Book
528, page 320, in the Office of the Muhlenberg County Clerk; and
(ix) The Partial Assignment and Assumption of Mineral Leasehold Estate from Central States
Coal Reserves of Kentucky, LLC to Western Diamond, LLC, dated May 31, 2007, of record in Deed Book
528, page 330, in the Office of the Muhlenberg County Clerk.
2. Western Land Grant of Overriding Royalty. Western Land, together with its
successors and assigns, hereby grants to Xxxx and agrees to pay to Xxxx an overriding royalty (the
“Western Land Royalty”) in the amount of Five Cents ($0.05) per ton, of all coal hereafter mined or
extracted and subsequently sold from all of the coal reserves and real property described in, and
conveyed, demised or otherwise granted in or under, the following deeds and instruments:
(i) The Corporation Special Warranty Deed from Central States Coal Reserves of Kentucky, LLC
to Western Land Company, LLC, dated December 12, 2006, of record in Deed Book 524, page 505, in the
Office of the Muhlenberg County Clerk;
(ii) The Corporation Special Warranty Deed from Central States Coal Reserves of Kentucky, LLC
and Beaver Dam Coal Company to Western Land Company, LLC, dated December 12, 2006, of record in
Deed Book 365, page 36, in the Office of the Ohio County Clerk;
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(iii) The Partial Assignment and Assumption of Mineral Leasehold Estate from Central States
Coal Reserves of Kentucky, LLC to Western Land Company, LLC, dated November 20, 2006, of record in
Deed Book 524, page 523, in the Office of the Muhlenberg County Clerk, as amended and restated in
Deed Book 527, page 186, in the Office of the Muhlenberg County Clerk;
(iv) The Partial Assignment and Assumption of Surface and Mineral Leasehold Estate from
Central States Coal Reserves of Kentucky, LLC to Western Land
Company, LLC, dated November 20,
2006, of record in Deed Book 365, page 57, in the Office of the Muhlenberg County Clerk;
(v) The Corporation Special Warranty Deed from Central States Coal Reserves of Kentucky, LLC,
Beaver Dam Coal Company, Ohio County Coal Company, LLC and Grand Eagle Mining, Inc. to Western Land
Company, LLC, dated March 30, 2007, of record in Deed Book 367, page 1, in the Office of the Ohio
County Clerk;
(vi) The Corporation Special Warranty Deed from Central States Coal Reserves of Kentucky, LLC
to Western Land Company, LLC, dated March 30, 2007, of record in Deed Book 527, page 118, in the
Office of the Muhlenberg County Clerk, as corrected by Deed of Correction dated September 30, 2007,
of record in Deed Book 531, page 213, in the Office of the Muhlenberg County Clerk; and
(vii) The Partial Assignment and Assumption of Surface and Mineral Leasehold Estate from
Central States Coal Reserves of Kentucky, LLC to Western Land Company, LLC, dated March 30, 2007,
of record in Deed Book 527, page 161, in the Office of the Muhlenberg County Clerk.
3. Xxxxxxx Xxxxx of Overriding Royalty. Ceralvo, together with its
successors and assigns, hereby grants to Xxxx and agrees to pay to Xxxx an overriding royalty (the
“Ceralvo Royalty”) in the amount of Five Cents ($0.05) per ton, of all coal hereafter mined or
extracted and subsequently sold from all of the coal reserves and real property described in, and
conveyed, demised or otherwise granted in or under, the following deeds and instruments:
(i) The Corporation Special Warranty Deed from Cyprus Creek Land Resources, LLC and Cyprus
Creek Land Company to Ceralvo Holdings, LLC, dated March 31, 2008, of record in Deed Book 373, page
262, in the Office of the Ohio County Clerk;
(ii) The Memorandum of Assignment and Assumption of Mineral Leasehold Estate from Cyprus Creek
Land Resources, LLC to Ceralvo Holdings, LLC, dated March 31, 2008, of record in Deed Book 373,
page 199, in the Office of the Ohio County Clerk; and
(iii) The Memorandum of Assignment and Assumption of Coal Lease Agreement from Cyprus Creek
Land Resources, LLC to Ceralvo Holdings, LLC, dated March 31, 2008, of record in Deed Book 373,
page 210, in the Office of the Ohio County Clerk.
4. Xxxxxxxxx Coal Grant of Overriding Royalty. Xxxxxxxxx Coal, together with
its successors and assigns, hereby grants to Xxxx and agrees to pay to Xxxx an overriding
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royalty
(the “Xxxxxxxxx Coal Royalty”) (together with the Western Diamond Royalty, the Western Land
Royalty, and the Ceralvo Royalty, the “Overriding Royalty”) in the amount equal to Five Cents
($0.05) per ton, of all coal hereafter mined or extracted and subsequently sold from all of the
coal reserves and real property described in, and conveyed, demised or otherwise granted in or
under, the following deeds and instruments:
(i) The Deed from Xxxxxx Xxxx Xxxxx, Xxxx Xxxx Xxxxx and Xxxxxx Xxxxx to Xxxxxxxxx Coal
Company, Inc., dated March 19, 2008, of record in Deed Book 373, page 514, in the Office of the
Ohio County Clerk; and
(ii) The unrecorded Coal Mining Lease between Xxxxxx X. Xxx, Xxxxxxxxx Xxx, Xxxxxx Xxxxxxx Xxx
and Xxxx Xxxxx Xxx, lessors, and Xxxxxxxxx Coal Company, Inc., lessee, dated March 7, 2008.
5. Payment. Payment of the Overriding Royalty shall be paid to Xxxx on or
before the 25th day of each calendar month on all coal mined and produced from the subject
properties which was sold during the preceding calendar month. All payments shall be paid by check
payable to Xxxx. Each payment of the Overriding Royalty hereunder shall be accompanied by a
statement from the Xxxxxxxxx Parties showing the number of tons of coal mined and sold during the
preceding calendar month (showing separately coal produced by the strip, surface, auger or open pit
method of mining and coal produced by any other method of mining) and the computation of the
Overriding Royalty payable on such coal so mined and sold during such calendar month. All payments
due hereunder shall be mailed to Xxxx at the address listed herein or as otherwise directed by Xxxx
from time to time.
6. Records. The Xxxxxxxxx Parties shall keep records of truck scale weights,
or river barge dead weight surveys, or railroad car weights, whichever is applicable, together with
accurate surveys and progress maps used in conjunction with accepted and recognized engineering
methods which shall be taken as the basis for payment of the Overriding Royalty.
7. Term. The term of the Royalty shall commence as of November 22, 2006 and
shall continue to the later of: (i) November 22, 2026 or (ii) until such time as all of the
mineable and saleable coal from the subject properties has been mined (the “Term”).
8. Indemnification. The Xxxxxxxxx Parties shall, at their own cost and
expense, indemnify and hold, Xxxx and his assigns harmless of, from and against, any and all claims
damages, demands, expenses, fines, liabilities and taxes (of any character or nature whatsoever,
regardless of by whom imposed), and losses of every conceivable kind, character and nature
whatsoever (including, but not limited to, claims for losses or damages to any property or injury
to or death of any person) asserted by or on behalf of any person arising out of, resulting from or
in any way connected with the mining of the coal on the subject properties or from this Agreement.
The Xxxxxxxxx Parties also covenant and agree at their expense, to pay, and to indemnify and save
Xxxx and his assigns harmless of, from and against, all costs, reasonable attorneys’ fees, expenses
and liabilities incurred in any action or proceeding brought by reason of any such claim or demand.
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9. Obligations to Run With Land. The Parties agree that the Overriding Royalty shall
constitute an independent and enforceable obligation that shall run with the land and shall be
binding on the Xxxxxxxxx Parties, their respective assigns and successors, and any subsequent owner
of the subject properties unless otherwise agreed to by Xxxx. The Parties further agree that Xxxx
shall not encumber this Agreement or the Overriding Royalty conveyed herein without written
permission from all of the Parties. Furthermore, Xxxxxxxxx Land hereby guarantees to Xxxxx the
full, prompt and proper payment of the Overriding Royalty, this guaranty being one of payment and
not of collection. This guaranty shall not be in any way impaired or affected by the bankruptcy or
other releaser of any of the other Xxxxxxxxx Parties or of any other party liable for the payment
in full or in part of the Overriding Royalty.
10. Notices. All notices and other communications with respect to this
Agreement shall be in writing and shall be deemed effectively given when delivered personally or
seventy-two (72) hours after mailing by certified mail, postage prepaid, to the following
addresses of the parties:
If to the Xxxxxxxxx Parties:
Xxxxxx X. Xxxxxx
0000 Xxxxxxx Xxxxxxxxx, 00xx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
0000 Xxxxxxx Xxxxxxxxx, 00xx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
With Required Copy To:
Xxxxx X. Xxxxxx
Xxxxxx + Xxxxx, PLLC
000 Xxxx Xxxx Xxxxxx, Xxx. 000
Xxxxxxxxx, Xxxxxxxx 00000
Xxxxxx + Xxxxx, PLLC
000 Xxxx Xxxx Xxxxxx, Xxx. 000
Xxxxxxxxx, Xxxxxxxx 00000
If to Xxxx:
Xxxxx X. Xxxx
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
Each party may change its address by giving written notice of such change to the other
party.
11. Miscellaneous Provisions.
11.1. Effectiveness. This Agreement shall become effective upon its
execution and delivery by each Party.
11.2. Complete Understanding. This Agreement represents the complete
understanding between the Parties hereto with respect to the subject matter hereof, and supersedes
all prior negotiations, representations, guarantees, warranties, promises, statements, or
agreements, either written or oral, between the Parties hereto as to the same.
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11.3. Amendment. This Agreement may be amended only by an instrument
executed and delivered by each Party.
11.4. Waiver. No Party shall be deemed to have waived any right which it
holds hereunder unless the waiver is made expressly and in writing (and, without limiting the
generality of the foregoing, no delay or omission by any party in exercising any such right shall
be deemed a waiver of its future exercise). No waiver shall be deemed a waiver as to any other
instance or any other right.
11.5. Recording. The parties acknowledge and agree to record a memorandum of
this Agreement in a form that shall provide notice of the obligations created hereunder.
11.6. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Kentucky without regard to its conflict of law
rules.
11.7. Assignment. This Agreement shall be binding upon, and shall inure to
the benefit of, the Parties hereto and their respective executors, administrators, heirs,
successors, and assigns, and shall be freely assignable by the Parties, in whole or in part.
11.8.
Severability. No determination by any court, governmental body, or
otherwise that any provision of this Agreement or any amendment hereof is invalid or unenforceable
in any instance shall affect the validity or enforceability of (a) any other provision thereof, or
(b) that provision in any circumstance not controlled by the determination. Each such provision
shall be valid and enforceable to the fullest extent allowed by, and shall be construed wherever
possible as being consistent with, applicable law.
11.9. Further Assurances. The Parties shall cooperate with each other and
shall execute and deliver, or cause to be delivered, all other instruments and shall take all other
actions, as either Party hereto may reasonably request from time to time in order to effectuate the
provisions hereof.
11.10. Counterparts; Facsimile. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same Agreement. This Agreement may be executed and delivered via facsimile, with a copy
sent to each Party.
11.11. Amendment and Restatement of Prior Overriding Royalty Agreements.
This Agreement shall fully restate, amend and replace, in their entirety, the Overriding Royalty
Agreement dated November 22, 2006, by and between Xxxxxxxxx Mining and Xxxx, and the
Overriding Royalty Agreement dated November 22, 2006, by and between Xxxxxxxxx Coal and
Xxxx.
In Witness Whereof, the parties have executed this Agreement as of the date set forth
above.
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| Xxxxxxxxx Coal Company, Inc. |
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| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Xxxxxx X. Xxxxxx, President | ||||
| Xxxxxxxxx Mining, Inc. |
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| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Xxxxxx X. Xxxxxx, President | ||||
| Western Land Company, LLC |
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| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Xxxxxx X. Xxxxxx, Manager | ||||
| Western Diamond, LLC |
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| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Xxxxxx X. Xxxxxx, Manager | ||||
| Ceralvo Holdings, LLC |
||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Xxxxxx X. Xxxxxx, Manager | ||||
| Xxxxxxxxx Land Company, LLC |
||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Xxxxxx X. Xxxxxx, President | ||||
| /s/ Xx. Xxxxx X. Xxxx | ||||
| Xx. Xxxxx X. Xxxx | ||||
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