Exhibit 10.9
AGREEMENT OF LEASE
AGREEMENT OF LEASE made this 8th day of February, 1983, by and between
XXXXX LAND COMPANY LIMITED PARTNERSHIP, a West Virginia limited partnership
("Lessor"), and XXXXXX X. XXXXXXXX, XX., ("Lessee").
WHEREAS, Lessor owns all of the coal underlying and in the property
described in Schedule A and proposes to lease same or that portion of same as
hereinafter described:
NOW, THEREFORE, THIS AGREEMENT WITNESSETH:
1. For and in consideration of the rents and royalties reserved and
to be paid to Lessor by Lessee, and on the terms, conditions, covenants and
agreements set forth herein, Lessor does hereby demise and lease to Lessee for
the purposes hereinafter set forth the land and property mentioned and generally
described in Schedule A attached hereto (including the map attached as a part of
Schedule A). The land generally described in Schedule A is referred to as
"Leased Premises" and the coal therein as "Leased Coal".
SURFACE RIGHTS
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2. With respect to that portion of the Leased Premises where Lessor
owns the surface and the minerals (other than oil and gas), Lessor grants to
Lessee, for the purpose of mining, removing, gathering, storing, preparing for
market, transporting and shipping coal from the Leased premises and any other
lands whatsoever, such mining rights, auxiliary privileges and easements as may
be necessary and convenient to the Lessee. Said grant of easements shall be
non-exclusive and shared with Lessor's
other Lessees whether existing or created hereafter.
Without limiting the generality of this grant of rights incidental and
auxiliary to mining said coal, it is understood that the grant herein of said
coal is made together with the right to mine only the deep mining and punch
mining methods, and, where Lessor has the necessary surface rights, by strip
mining, all the coal without liability for depriving the surface or any strata
of the Leased Premises of lateral or subjacent support; the right to haul
through, over and under the Leased Premises coal produced from the Leased
Premises and from any other lands whatsoever as provided hereinafter and to
store refuse from any coal in the workings and passageways in the Leased
Premises; the right to use so much of the surface of the Leased Premises (where
Lessor owns the surface) and all roadways, power lines, etc., presently located
thereon as Lessee may desire for the creation, maintenance and operation of
mining structures, buildings, cleaning and preparation plants with appurtenant
facilities including, but not limited to tipples, railroad sidings, loading
facilities, shops and offices, and power lines, tracks, tramways and equipment,
and for drainage, ventilation, haulage, refuse dumps and other purposes in
connection with the mining and removal of the Leased Coal and of coal produced
from lands other than the Leased Premises. And the right to use, in connection
with mining operations of the
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Lessee on, in or under the Leased Premises, sand, rock, water and other
substances found on, in or under the Leased Premises the removal of which will
facilitate orderly mining and carrying away of the Leased Coal, all insofar as
the Lessor has the right to release without liability for injury or damage that
may result to springs, xxxxx or watercourses in, on or under the Leased
Premises. Lessee covenants that he will at all times during the term of this
lease keep all buildings, tipples, structures, machinery and equipment used in
his operations as well as his workings underground in good order and repair and
will from time to time make such replacements, renewals and additions as may be
reasonably necessary to enable Lessee at all times to perform his obligations
hereunder according to improvements made from time to time in the art of coal
mining and coal preparation.
With respect to that portion of the Leased Premises where Lessor does
not at the date of this Lease own the surface, or owns the surface subject to
existing easements, public or private, Lessor grants to Lessee the same mining
rights, privileges and easements as Lessor possesses or has the right to utilize
and that this leasehold is subject to all out conveyances of record that may
hereintofore have been made by the Lessor or by its predecessors in title; to
any and all easements of record or apparent on the ground; to such property
rights. if any, as may have been acquired by other parties by adverse
possession; to the rights of parties in possession; to any existing oil and gas
lease or leases made by the Lessor it being understood that in
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no instance does the Lessor intend or purport to grant to Lessee any right not
possessed by Lessor.
There is specifically excluded by Lessor the right of Lessee to mine
by what is commonly known as the auger method without the written consent of
Lessor, however, the thin seam mining method or any method similar to the thin
seam mining method is not to be considered auger mining.
EXCEPTING AND RESERVING, NEVERTHELESS, to the Lessor, its successors
and assigns, all rights not specifically granted herein including, but not
limited to:
(a) all oil and gas within or underlying the demised premises,
together with the right to drill and bore for and sink shafts for the
purpose of testing and exploring for and removing oil and gas, and the
right to market and remove oil and gas when found and to lay pipe lines and
erect and install such other structures, machinery or appliances on demised
premises as may be necessary for the removal of oil and gas.
(b) the non-exclusive use of existing roads and the right to construct
and maintain other roads.
(c) all the dwellings and trailer lots which are situate on the
demised premises.
(d) Lessee shall not cut or remove any timber growing on the Leased
Premises except with the written consent of Lessor. All timber which shall
be cut or removed shall be cut in lengths designated by Lessor. Title to
all timber, including that cut with permission of Lessor, is reserved to
Lessor.
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(e) the surface of said land not required by Lessee for its
operations, subject, however, to the Lessee's rights given hereunder.
The reserved rights shall be exercised in such a way as not to interfere
unreasonably with the operations, rights and privileges of the Lessee herein
granted.
EXCHANGE OF LANDS
-----------------
3. This Lease is made subject to the right of the Lessor with the
approval of Lessee to make exchanges of small parts or portions of any of the
Leased Premises or of all or any of the veins or seams of coal hereby leased
with the owners of adjoining property or the owners of any seam adjoining the
exterior boundary lines of the Leased Premises for the purpose of consolidating
some of the holdings. If any such exchanges are made, coal acquired by the
Lessor in such exchange shall automatically be included in and become a part of
this Lease and the coal embraced herein exchanged by the Lessor shall
automatically be released and excluded from this Lease. Lessor hereby grants to
the Lessee the right to penetrate any and all seams to the boundary lines of
adjoining properties in which the Lessee has the right to mine coal, but not to
remove coal of adjoining property owners not under lease by Lessee.
TERM
----
4. The initial term of this Lease shall expire February 8, 1988,
except that Lessee shall have the right to terminate this Lease as of the last
day of the sixth calendar
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month after notice of such termination in writing to the Lessor not less than 30
days prior to such date. Such termination by the Lessee shall relieve Lessee of
the requirements for making any payments which fall due following the
termination, other than tonnage royalty payments for coal mined prior to the
termination date and any other payments then due. Lessee shall have options to
renew or extend this Lease, on the same terms and conditions, except as to term
and royalties for three (3) successive five (5) year periods after February 8,
1988 and for additional five (5) year terms commencing with February 8, 2003 as
provided for in paragraph 6 herein, provided Lessee has fully performed his
covenants hereunder, and gives Lessor written notice of his intent to renew not
less than one hundred twenty (120) days before the expiration of each, preceding
term.
IN CONSIDERATION WHEREOF, the Lessee does hereby covenant, promise and
agree to and with the Lessor as follows:
TONNAGE ROYALTIES
-----------------
5. The Lessee shall pay to the Lessor during each year of the initial
term and each year of any renewal term exercised by Lessee under this Lease as
tonnage royalty for each and every ton of two thousand (2,000) pounds of coal
mined and removed from the Leased Premises and for coal used on the premises,
except such coal as is used by the Lessee in the processing and preparation of
coal for market, the following percentages of the gross sale price, as such term
is hereinafter defined, for each net ton mined and removed from the Leased
Premises during the Lease Year:
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(a) Eleven and three fourths Percent (11 3/4%) of the first one
hundred thousand (100,000) tons mined each Lease Year.
Ten and three fourths Percent (10 3/4%} of the second one hundred
thousand (100,000) tons mined each Lease Year.
Nine and three fourths Percent (9 3/4%) of the third one hundred
thousand (100,000) tons mined each Lease Year.
Eight and three fourths Percent (8 3/4%) of the fourth one hundred
thousand (100,000) tons mined each Lease Year.
Seven and three fourths Percent (7 3/4%) of the fifth one hundred
thousand (100,000) tons mined each Lease Year.
Six and three fourths Percent (6 3/4%) of the sixth one hundred
thousand (100,000) tons mined each Lease Year.
Five and three fourths Percent (5 3/4%) of all coal mined in any
Lease Year in excess of six hundred thousand (600,000) tons.
(b) As used herein "gross sale price" shall mean the bona fide sales
price receivable by Lessee for the coal without deduction for selling
expenses or commissions less "Allowable Transportation Cost." The term
Allowable Transportation Cost shall mean either:
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(i) the actual transportation costs incurred by Lessee for
transportation of the coal outside of the Leased Premises, if such
transportation is done by unaffiliated third parties or
(ii) if Lessee transports the coal off the Leased Premises, the
sum which an unaffiliated third party would charge for transportation
outside of the Leased Premises.
(c) if any coal is sold but not at arm's length the royalty shall be
computed at its fair market value as determined by Lessor's Engineer.
The tonnage royalty shall be paid on the 25th day of each month covering
production of the preceding month. In addition to the foregoing tonnage
royalties and in the event Lessee shall acquire the right to use the coal
processing facility presently located on the Leased Premises or shall erect a
coal processing facility, Lessee shall pay to Lessor a royalty of 1/2 of 1% of
the gross sales price for each ton of foreign coal (coal not mined on the Leased
Premises) processed through the Bethlehem Steel Corporation coal processing
facility or any other coal processing facility erected on the Leased Premises,
such payment to be made con-
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currently with tonnage royalty payments heretofore specified. Lessee shall not
be required to process coal through said facility or to make such 1/2 of 1%
royalty payment if Lessee, for any reason, does not process coal through said
facility. Lessee shall have the right to move coal from other lands onto or
across the Leased Premises provided, however, that Lessor shall receive a
wheelage fee for such coal equal to 1/2 of 1% of the gross sale price of said
coal. If foreign coal is processed through Bethlehem's or any other coal
processing facility on the Leased Premises then the payment to Lessor shall be a
total of 1% of the gross sale price being 1/2% of 1% for wheelage and 1/2% of 1%
for processing foreign coal. It is understood that either through the process
now or heretofore employed in the obtaining of coal mined or by other cleaning
plant or plants later erected thereon, there has already accumulated and will be
produced in the future, certain slate, red dog, refuse and like by-products of
mining and that some commercial salvage or use may be made or obtained from
said accumulations, present and future, and Lessee is granted the right to sell
or dispose of such products. It is agreed that the Lessee shall pay to Lessor a
sum equal to 10% of the gross selling price for all such product from all
sources F.O.B. the mine. Anything contained in the preceding sentence to the
contrary notwithstanding, any coal produced from all sources by using refuse and
like by-products from the Leased Premises shall be paid for in the same manner
and at the same royalty
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rate as coal mined and produced and shipped from the Leased Premises .
MINIMUM ROYALTIES
-----------------
6. The Lessee shall pay to Lessor in respect to each 12-month period (the
"Lease Year"} a minimum annual royalty payable in full on the dates specified
and in the amounts set forth as follows:
Lease Year Royalty Amount Date Payable
---------- -------------- ------------
No. 1 $150,000 February 8, 1983
No. 1 $ 50,000 August 8, 1983
No. 2 $ 75,000 February 8, 1984
No. 2 $ 75,000 May 8, 1984
No. 2 $ 75,000 August 8, 1984
No. 2 $ 75,000 November 8, 1984
No. 3 $100,000 February 8, 1985
No. 3 $100,000 May 8, 1985
No. 3 $100,000 August 8, 1985
No. 3 $100,000 November 8, 1985
No. 4 $125,000 February 8, 1986
No. 4 $125,000 May 8, 1986
No. 4 $125,000 August 8, 1986
No. 4 $125,000 November 8, 1986
No. 5 $l50,000 February 8, 1987
No. 5 $150,000 May 8, 1987
No. 5 $150,000 August 8, 1987
No. 5 $150,000 November 8, 1987
The minimum annual royalty for the first Lease Year shall be due and
payable in two (2} installments, the first of which shall be delivered upon the
execution of this lease in the amount of $150,000 and the second in the amount
of $50,000 shall become due and payable on the 8th day of August, 1983 (the
"Second Payment Date"). Failure to make this payment or any other payment
required to be made by Lessee under the provisions of this lease shall
constitute grounds for forfeiture of this lease and subject to the provisions of
paragraph 17.
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On the Lease Year beginning February 8, 1984 and for each Lease Year
thereafter during the initial five (5) year term the minimum annual royalty
shall be paid in equal quarterly installments, in advance, on the 8th day of
February, May, August and November of each year in the amounts set forth
hereinabove.
In the event Lessee shall exercise his right to renew or extend this
lease at the expiration of the initial term or at expiration of a renewal term,
the Lessee shall pay to Lessor for each and every year during each Lease Year of
the first three (3) renewal terms a minimum annual royalty of Seven Hundred
Thousand Dollars ($700,000). Said minimum annual royalty shall be payable in
advance in equal quarterly payments of One Hundred Seventy-Five Thousand Dollars
($175,000) on the 8th day of each February, May, August and November of each
Lease Year commencing February 8, 1988.
Commencing with February 8, 2003, if this lease is then in existence,
Lessee shall have the option to renew or extend this lease for successive terms
of five (5) years each upon the same terms and conditions except the minimum
annual royalty for each and every year during each Lease Year of any renewal
term shall be the sum of One Million Fifty Thousand Dollars ($1,050,000.00)
payable in advance in equal quarterly payments of Two Hundred Sixty-Two Thousand
Five Hundred Dollars ($262,500) on the 8th day of February, May, August and
November of each Lease Year, but after February 8, 2003 this lease shall
terminate when all of the
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mineable and merchantable coal in the seams in the demised premises shall have
been mined and removed therefrom, and when Lessee shall no longer have need of
the demised premises or any part thereof for the mining or transporting or
processing or handling of coal from other lands or leaseholds. "Mineable and
merchantable coal" as used herein means coal which can be mined and marketed at
a reasonable profit to Lessee at the time such coal is reached in the course of
Lessee's mining operations by the use of practical and efficient machinery,
facilities, methods and management.
Such minimum annual royalty may be used as a credit against any
amounts to be paid as tonnage royalties in respect of coal mined during the
Lease Year. Tonnage royalties shall not include any payments made by Lessee for
wheelage or processing costs provided for in paragraph 5. If the Lessee in any
Lease Year shall fail to mine sufficient coal to equal the minimum royalty at
the then current rate of tonnage royalty, Lessee shall have the right during
succeeding Lease Years of mining free from tonnage royalty such an amount of
coal as at the current tonnage royalty will reimburse Lessee for the deficiency
without interest. Lessee shall not be entitled to any credit on the minimum
annual royalty for any succeeding year for tonnage royalties paid in any year in
excess of the minimum annual royalty therefor and no coal shall be mined free of
tonnage royalties in any Lease Year until a sufficient quantity of coal shall
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have been mined in such Lease Year to amount at the then current tonnage royalty
rate to the minimum royalty for the Lease Year.
If in any Lease Year the Lessee is prevented for any period of thirty
(30) consecutive days from operating its mines by reason of any strike, at the
mine or elsewhere, or by riot, fire, explosion, flood, invasion, act of God or
the public enemy, unavoidable accident, legally enforceable closure orders,
railcar or truck shortage or other causes beyond its control, the obligation on
the part of the Lessee to pay minimum annual royalty shall be suspended for that
portion of said Lease Year except for the first 30 days during which such
conditions shall exist, and not to exceed six (6) months in any one Lease Year,
and payment of minimum annual royalty shall be prorated accordingly. Low prices
of coal or the absence of a market therefor shall not be an excuse for the
nonpayment of the minimum annual rental.
It is agreed that in the event Lessor enters into a lease agreement
with Xxxxxxxx Mining Company ("Xxxxxxxx") on a tract of land which is
continguous with the Lease Premises and further, in the event, Lessee does not
terminate this Lease during the first six (6) months of the initial term, then
all royalty payments made by Xxxxxxxx pursuant to said lease agreement shall be
credited against any minimum annual royalty which may be due by Lessee to Lessor
in any Lease Year and for which Lessee has failed to mine sufficient coal to
equal the minimum annual royalty for said Lease Year.
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In the event the lease, if any, with Xxxxxxxx is terminated at any
time while this lease is in effect, then the acreage leased to Xxxxxxxx shall
automatically be transferred and become a part of the Leased Premises and
subject to all of the terms and provisions of this Lease except that Lessee's
obligation to pay taxes as provided in paragraph 8 shall be increased from
ninety percent (90%) to one hundred percent (100%) per annum.
WEIGHTS
-------
7. As to the coal mined on the premises and transported and shipped
by railroad cars, which is not commingled with coal mined from other premises,
the quantity of coal upon which the Lessee shall pay royalty shall be determined
by railroad weights; and, as to the coal mined from the premises and transported
by other means of transportation, and as to coal sold locally, and coal used on
the premises (except that used in processing and preparing coal for market) the
quantity of coal upon which the Lessee shall pay royalty shall be determined by
standardized weight scales to be provided by the Lessee, and according to the
scale books and accounts of the Lessee, or according to any further rule or
regulation which may be prescribed by the Lessor and accepted by the Lessee for
the correct ascertainment and report of the quantity of such coal.
As to coal mined from the Leased Premises and which shall be
commingled at the tipple or loaded with coal from other premises, payment of
royalty shall be based on railroad weights, but shall be prorated according to
the computed tonnage shown to
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have been mined by various mining techniques from the Leased Premises and other
premises, respectively, during said period or periods, such proration to be
based on mine car weights or on weightometers, if belt conveyors are used,
and/or by engineers' measurements and computations which shall be made according
to usual, customary, modern and accurate methods, or by any other scientifically
reliable and accurate appliance or method if belt conveyers are not used. Any
method used shall be subject to the approval of Lessor.
In the event that a variance in weights of coal shall occur between
Lessee and the purchaser of the coal sold by Lessee, then the purchaser's weight
shall control if Lessee is ultimately paid on the basis of the purchaser's
weights.
TAXES
-----
8. Commencing with the taxes for the year 1983 (i.e., those levied as
of July 1, 1982) the Lessee shall pay ninety percent (90%) of all taxes, levies,
assessments and other charges imposed by the United States, the State of West
Virginia or any political subdivision thereof, or by any municipal corporation
upon the entire estate of the Lessor in the lands included within the Leased
Premises (except the oil and gas estate hereinafter mentioned) as well as upon
the leasehold estate hereby created, and upon coal mined and produced therefrom
so that the Lessor shall be entirely relieved from such charges. The Lessee
shall
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also pay all taxes, levies, assessments and other charges, imposed by the United
States, the State of West Virginia, or any political subdivision thereof, or by
any municipal corporation, upon the Lessee, and upon all real estate, plant,
equipment and improvements of the Lessee and upon the mining or severance of the
coal by Lessee in the Leased Premises. If any payment on account of any or all
of the above shall be made in the first instance by the Lessor, the same shall
be repaid by the Lessee to the Lessor upon statement and demand. It is not
intended that the Lessee shall pay nor be required to pay any presently existing
or subsequently incurred Business and Occupation Tax or corporation income tax
or Federal income tax assessed against Lessor, and it is not intended that
Lessee shall pay any taxes attributable to the oil and gas estate.
If Lessee elects to terminate this Lease after the first six (6)
months of the initial term or provided for in paragraph 4 hereof, the Lessee
shall be relieved of liability for the taxes due for the second half of 1983.
Taxes for the year 1983 shall be pro-rated with Lessee paying eleven
twelfths (11/12) of ninety percent (9O%) of said taxes.
RECORDS OF COAL MINED
---------------------
9. Lessee shall keep accurate records of all coal mined and removed
from the Leased Premises and such records shall be subject at all reasonable
times to the inspection of Lessor. Lessee shall keep said records in such
manner as to segregate the
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tonnage of coal mined and removed from the Leased Premises separate and distinct
from the tonnage of coal mined and removed from other portions of Lessee's
mining operations. Lessee shall only be obligated to keep the records required
in this paragraph for a period of four (4) years at which time Lessee may
transfer any records that it desires to dispose of by delivering said records to
Lessor.
Lessee shall furnish to Lessor on or before the 25th day of each
calendar month during the term of this Agreement of Lease, a report showing the
quantity of coal mined and removed from the Leased Premises during the preceding
calendar month together with a separate report showing the quantity of coal used
in the processing and preparation of coal for market. Such monthly reports
shall, if required by Lessor, be accompanied by the railway company's
certificate of weights, or the returns of the shipping department or sales agent
of Lessee as to weights. Lessee hereby grants to Lessor, its engineer or agent,
the right to obtain from any railroad on which coal mined hereunder shall be
shipped, or from any barge line, or any person who weighs coal which Lessee may
ship, manifests and other information as to the quantity of coal mined hereunder
and shipped over such railroad or by river, at such time or times as Lessor may
desire such information; and this provision shall constitute full authority to
such railroad, barge line or person to give such information to Lessor, its
engineer or agent.
OPERATION
---------
10. Lessee further covenants that he will conduct any mining
operation on the Leased Premises in a skillful, efficient
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and workmanlike manner, and in conformity with the present and future laws of
the State of West Virginia, the United States, and the valid regulations of the
various agencies of both now in force or which may hereafter be adopted; employ
machinery and methods that are modern, adequate and efficient; and develop the
property on a sound and accepted engineering plan and according to an approved
system of mining and with due regard to the future value of the Leased Premises
as coal property. Before commencement of operations in any seam Lessee shall
submit to Lessor a plan of operation in the seam showing in reasonable detail
the method and system under which operations will be conducted in that seam.
Lessor shall within thirty (30) days after the plan of mining has been submitted
to it either approve or disapprove the plan and if no objections are made within
said thirty (30) days, the plan shall be considered approved. If the Lessor
shall object to the plan submitted by the Lessee, the engineers for the parties
shall attempt to agree upon a satisfactory method and system of mining and if
they fail to agree within thirty (30) days after the objections by Lessor, the
question of a proper plan shall be submitted to arbitration, as provided herein,
but the Lessee shall have the right to commence mining under his plan of
operation and shall be liable to Lessor for any damages which may be found by
the arbitrators to have been suffered by Lessor by reason of an improper plan of
mining. After a plan has been settled by agreement or arbitration, the Lessee
shall not materially depart therefrom without a modification established as the
original plan was established
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and so long as Lessee shall mine according to such plan he shall not be liable
for any injury to the surface or other strata owned by Lessor or for leaving
unmined any coal which the plan shows will be left. It is recognized by the
parties that the covenant contained in the preceding sentence and anything
herein contained shall not impose any obligation on the part of the Lessee to
proceed with diligence to operate any vein or seam of coal.
SURVEYS AND MAP
---------------
11. The Lessee shall have a survey of the mine workings made by a
competent registered mining engineer as the work progresses, and shall keep an
accurate and complete map of the Leased Premises and mine workings on an
appropriate scale which shall be in conformity in all respects with the
requirements of the mining laws of the State of West Virginia, and shall show
all property lines, surface improvements and such natural topography as may
require protection against liability for damages to persons or property. Such
map shall at all times be accessible to the Lessor, its agents or
representatives for inspection; and a true, complete and correct copy of the
same, in duplicate, shall be furnished to the Lessor, without demand, within
thirty (30) days after the first day of January and July of each year.
The Lessee shall also keep, for each seam, an accurate and complete
map of the Leased Premises and mine workings on a scale of four hundred (400)
feet to the inch, or other appropriate
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scales showing in addition to the above-mentioned information, the projection of
the mine development and a true, complete and correct copy of the same shall be
furnished to the Lessor, without demand, within thirty (30) days after the first
day of January and July of each year. The aforesaid maps or copies thereof,
together with the surveys, notebooks and calculations, as well as all
engineering records and data, relative to the Leased Premises and mine workings,
shall be delivered to and become the property of Lessor at the termination of
this Lease or any renewal or extension thereof for any cause whatsoever.
INSPECTION
----------
12. Lessor, its agents, engineers or other person in its behalf, with
their assistants, shall have the right to enter at all reasonable times the said
mines or works of the Lessee, in order to inspect, examine, select samples of
coal, survey or measure the seam or any part thereof, for the purpose of
ascertaining the condition of the mines, the methods practiced, as well as the
amount of coal removed, or for any other lawful purpose. Lessor shall give
Lessee due notice of its intent to make inspections, and opportunity to have
Lessee's agent or engineer accompany the representative of Lessor. Lessor alone
shall be responsible for any injury to any agents, engineers or other persons in
its behalf who may enter said mines or works of Lessee, unless such injury is
caused by the negligence of Lessee.
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INDEMNITY
---------
13. Lessee specifically agrees that all of his operations on the
demised premises and the transportation of coal over the same will be so
conducted and carried on that Lessor will not be subject to liability for
damages because of pollution or discoloration of the streams on or near the
demised premises or because of interference with the present beds of such
streams or their natural flow; and further agrees that he will protect,
indemnify and save Lessor harmless from any and all damages and expenses of
litigation in respect thereto.
Lessee shall pay and be solely responsible for any reclamation fee
which may be required to be paid with respect to his coal under (S) 402 of the
Surface Mining Control and Reclamation Act of 1977, any tax which may be
imposed with respect to his coal for black lung benefits under (S) 2 of the
Black Lung Benefits Reform Act of 1977, and all hourly base payments and tonnage
base royalty payments relating to his coal or his employees required to be made
to the UMW Health and Retirement Funds as provided under the National Bituminous
Coal Wage Agreement of 1978 or similar funds provided for under subsequent labor
agreements. Lessee shall furnish to Lessor satisfactory evidence that all such
payments have been timely and properly made and will carry any insurance or
bonds which are necessary to protect Lessor hereunder.
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ASSIGNMENTS
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14. Lessee shall not mortgage, assign, convey, Lease, sublet or
transfer the Leased Premises, or any part thereof, or any of his estate therein
or rights hereunder, to any person or persons whomsoever or any corporation
whatsoever, without the consent in writing of Lessor first had an obtained, nor
shall the benefit of this lease or the rights or estate created thereby, pass by
operation of law without such written consent, which written consent shall not
be unreasonably withheld; but in case of assignment, subletting or transfer with
the written consent of Lessor, the transferee shall assume in writing all the
obligations of Lessee herein in a form satisfactory to Lessor.
Lessor hereby gives its consent to any assignment of this lease to any
company which Lessee owns Fifty-One Percent (51%) or more of its outstanding and
issued capital stock or to Hansford Coal Company or to which substantially all
of the assets of Lessee shall have been conveyed, provided, nevertheless, that
Lessee, and such company, shall in each such case remain liable for and assume
the obligations of Lessee hereunder. It is expressly provided, however, that
Lessee shall have the right to contract with third parties for the mining and
removal of coal from the demised premises, but in such event Lessee shall remain
responsible for compliance with all terms and conditions of this lease.
INSOLVENCY, BANKRUPTCY, ETC.
----------------------------
15. Lessee shall not permit this Lease or the estate hereby created,
or any interest therein, to be sold under any execution or other legal
proceeding or process whatsoever. The
-22-
assignment or transfer of this Lease, or of the estate and rights created, or
any of them, under judicial process or under judgment or decree or adjudication
of Lessee as a bankrupt, or the discharge of Lessee by any court as an insolvent
debtor, without the written consent of Lessor, may, at the option of Lessor, be
considered and held as an absolute forfeiture of this Lease, and thereupon all
the rights of Lessee hereunder shall at once cease and determine, and Lessor, in
addition to all its other rights and remedies, may at its option, at once resume
possession of the premises, either by legal process or by summary proceedings
without legal process.
INSURANCE
---------
16. Lessee agrees to become and remain a subscriber to the Workmen's
Compensation Fund of the State of West Virginia and to conform to all rules and
regulations relating thereto; to indemnify and save Lessor harmless against all
claims for damages to persons (including death) or to property, arising out of
any act or omission by or on behalf of Lessee occurring on the leased premises
and continuously and at Lessee's expense to carry public liability insurance in
the amount of not less than One Million Dollars ($1,000,000.00) for personal
injury or death for one and not less than Two Million Five Hundred Thousand
Dollars ($2,500,000.00) for personal injury or death of two or more persons
involved in each occurrence, and property damage insurance in the amount of not
less than Five Hundred Thousand Dollars ($500,000.00), with both Lessor and
Lessee named as insureds therein, but without restriction on the Lessor
-23-
as claimant thereunder for any damage done to its property. Copies of all
insurance policies in this lease required shall be furnished to Lessor promptly
upon receipt thereof by Lessee.
DEFAULT PROVISIONS
------------------
17. If (i) Lessee shall fail or default in the payment of any sums
required to be paid by him hereunder, when and as the same shall become due and
payable and any such default shall continue for a period of fifteen (15) days
after written demand by Lessor for such payment; or (ii) default shall be made
by Lessee in the performance of any other covenant or condition herein contained
to be performed by him and any such default shall continue for a period of sixty
(60) days after written demand by Lessor for the performance thereof (or, if any
default shall not be curable within 60 days, then Lessee shall have commenced to
cure such default as promptly as possible); or (iii) Lessee shall file a
petition in bankruptcy, or make an assignment for the benefit of his creditors,
or consent to the appointment of a receiver of himself or of the whole or any
substantial part of his property, or shall be adjudicated a bankrupt, or an
order, judgment or decree shall not be vacated or set aside or stayed within
sixty (60) days from the date of such appointment, or any such stay shall be set
aside, then Lessor, at its option, may avail itself of all or any of the
following remedies:
(a) declare a forfeiture of all the right, title and interest of
Lessee to all the property forming the subject matter of this Lease;
(b) re-enter and take Possession of the Leased
-24-
Premises forming the subject matter of this Lease, including all
improvements and personal property theretofore placed by Lessee in or upon
the Leased Premises, to complete exclusion of Lessee. Neither any such re-
entry, taking possession, nor termination of the sublease shall in any wise
impair the right of Lessor rents royalties or other payments accrued to the
time of the termination of the lease, or limit any of the remedies for the
recovery thereof which Lessor otherwise would have had;
(c) obtain in any court judgment in favor of Lessor and against Lessee
for the amount of all indebtedness of Lessee to Lessor, including, but not
limited to, all unpaid payments provided for in this Lease regardless of
whether the same be matured or unmatured payments;
(d) the parties acknowledge that they are familiar with the laws of
the State of West Virginia relating to forfeiture of a lease as set forth
by the West Virginia Supreme Court of Appeals and the parties agree that
failure of Lessee to make any payment required under this Lease or any
violation of the covenants and conditions contained in this Lease by Lessee
shall be ground: for forfeiture of the Lease if Lessee shall fail to cure
said default within the time periods specified in this paragraph 17
notwithstanding that Lessor may have an adequate remedy at law for monetary
damages for certain defaults specified herein.
-25-
REMEDIES
--------
18. All rents, royalties and other payments hereinbefore provided to
be paid to Lessor by Lessee shall be deemed, treated and considered as rent
reserved under the contract for the demised premises and Lessor shall have for
the collection thereof all rights and remedies which landlords may have for the
collection of rent reserved upon contract under the present or any future laws
of the State of West Virginia.
All of the remedies granted to Lessor herein shall be deemed to be
cumulative and the exercise of any remedy shall not be considered as an election
by Lessor of remedies or as a waiver of any other remedy specified in this
article. Moreover, the specification of remedies in this article 18 shall not
be deemed to exclude Lessor from any other legal or equitable remedy or remedies
which it may have under the laws of the State of West Virginia. Failure on the
part of Lessor to enforce any of the rights herein granted to it on default for
any period or periods shall not operate as an estoppel or as a waiver against
Lessor, or prevent it at any subsequent time from electing to exercise all or
any of such rights for any subsequent default. In case any provision hereof
shall be unenforceable or enforceable only to a limited extent, the inclusion
herein of such provision shall not affect the validity of any other provision
hereof, and any such provision which is enforceable only to a limited extent may
be enforced to such extent with the same effect as if such provision had
expressly provided in the alternative for the enforcement thereof to the extent
to which such provision may be enforceable.
-26-
REMOVAL OF LESSEE'S PROPERTY
----------------------------
19. No property placed on the premises by Lessee shall be removed by
him during the existence of the Lease, except in the ordinary course of
business. At the termination of the lease, and provided Lessee is not in default
as to, or in violation of, any requirement of the lease, Lessee may remove
within the following twelve (12) months any of the property of whatsoever kind
or character, theretofore placed on the Leased Premises by Lessee. If Lessee
elects to remove part of his property then he shall be obligated to remove the
part of said property removed in its entirety from the Leased Premises.
Otherwise than as stated in the immediately preceding sentence all property
placed on the Leased Premises by Lessee shall remain thereon at the termination
of the lease, and shall be and become the property of the Lessor.
ARBITRATION
-----------
20. Lessor and Lessee mutually covenant and agree that in case of any
disagreement or dispute between the parties hereto as to any of the covenants
and agreements or conditions of this Lease, or as to the performance or non-
performance thereof, all such disagreements and disputes, including any
obligation to pay rent or royalty, shall be submitted to arbitration pursuant to
the provisions of Section 1 of Article 10 of Chapter 55 of the West Virginia
code, it being specifically hereby agreed that a judgment may be entered in any
court of competent jurisdiction on any arbitration award, and that the
arbitration proceeding shall be
-27-
the exclusive remedy. Any such arbitration shall be conducted as follows: one
arbitrator shall be chosen by Lessor and one by Lessee within ten (10) days
after notice in writing from either party to the other, and the two so chosen
shall select a third arbitrator within five (5) days after their selection. In
the case of the failure of either party to select an arbitrator within said
period of ten (10) days such arbitrator may be selected by the chief judge of
the District Court of the United States for the Southern District of West
Virginia upon the application of the party not so failing. In case the two so
chosen are unable to agree upon a third arbitrator within five (5) days after
their own selection, the third arbitrator shall be appointed by said chief judge
upon the application of either or both of the parties. The award of the
arbitrators shall be made in writing within thirty (30) days from the final
submission of the controversy to the arbitrators, and one copy thereof shall be
furnished to each of the parties hereto. Such award, if concurred in by all or a
majority of said arbitrators, shall be final and conclusive on the parties as to
the controversy submitted to arbitration. The arbitrators shall determine the
costs of the arbitration, including reasonable compensation to the arbitrators,
and by whom such costs shall be paid. Such costs may be assessed against either
the Lessor or the Lessee, or against both. Pending an award by the arbitrators
as to any disagreement or dispute submitted to arbitration, no action shall be
taken by either Lessor
-28-
or Lessee as to the matter is disagreement or dispute which will in any way tend
to interfere with compliance with the arbitration award; but except as may have
been hereinbefore specifically provided to the contrary, this provision shall
not restrict Lessee's right to continue mining during the pendency of the
arbitration proceedings.
NOTICES
-------
21. All requests, statements, notices and demands to Lessor under
this Lease shall be deemed to be sufficiently given and served for all purposes
if sent by certified mail to it at P. O. Xxx 000, Xxxxxxxxxx, Xxxx Xxxxxxxx,
00000, or at such other address as Lessor from time to time by written notice to
Lessee may prescribe.
All requests, statements, notices and demands to Lessee under this
Lease shall be deemed to be sufficiently given and served for all purposes if
sent by certified mail to Lessee at X.X. Xxx 000, Xxxxxxxx, XX 00000, or at such
other address as Lessee from time to time by written notice to Lessor may
prescribe.
SUCCESSORS AND ASSIGNS
----------------------
22. This Lease shall be binding upon and inure to the benefit of the
parties hereto and, subject to the provisions contained in Article 14 hereof,
upon and to their respective successors and assigns.
HEADINGS
--------
23. The headings to the various sections hereof are not intended as
part of the text hereof, as an indication of the
-29-
contents of any section, or as an indication that the subject matter indicated
by the heading will not also be part of another section. They are only inserted
for the sake of convenience.
IN WITNESS WHEREOF, Lessor has caused this Lease to be signed in its
limited partnership name by its Managing General Partner and Lessee has caused
this Lease to be signed all as of the day and year first above written.
LESSOR:
XXXXX LAND COMPANY LIMITED
PARTNERSHIP
By /s/ X. X. Xxxxxxx III
------------------------
Managing General Partner
LESSEE:
By /s/ Xxxxxx X. Xxxxxxxx, Xx.
Xxxxxx X. Xxxxxxxx, Xx.
-00-
XXXXX XX XXXX XXXXXXXX,
XXXXXX XX XXXXXXX, to-wit:
The foregoing instrument was acknowledged before me this 10th day of
February, 1983, by Xxx X. Xxxxxxx, III, Managing General Partner of Xxxxx Land
Company Limited Partnership, on behalf of the limited partnership.
/s/ Xxxxxxx Xxxx Xxxxx
-------------------------
Notary Public
My commission expires June 6, 1988.
-----------------------
STATE OF WEST VIRGINIA,
COUNTY OF KANAWHA, to-wit:
The foregoing instrument was acknowledged before me this 10th day of
February, 1983, by Xxxxxx X. Xxxxxxxx, Xx.
/s/ Xxxxxxx Xxxx Xxxxx
-------------------------
Notary Public
My commission expires June 6, 1988.
-----------------------
XXXXXX X. XXXXXXXX, XX.
P. 0. XXX 000
XXXXXXXX, XXXX XXXXXXXX 00000
TELEPHONE; (000) 000-0000
--------------------------------------------------------------------------------
October 7, 1987
Mr. Xxx Xxxxxxx
Xxxxx Limited Land Company Limited Partnership
X.0. Xxx 000
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000
Dear Xxx:
In compliance with the terms of our Agreement of February 8, 1983,
I wish to inform you of my desire to renew and/or extend the
Agreement for an additional five (5) year term commencing with
February 8, 1988.
Best regards,
/s/ Xxxxxx
LWH,Jr/nls
AMENDMENT OF AGREEMENT OF LEASE
-------------------------------
THIS AMENDMENT TO AGREEMENT OF LEASE entered into this 9th day of March,
1989, by and between XXXXX LAND COMPANY LIMITED PARTNERSHIP, a West Virginia
limited partnership, hereinafter referred to as "Lessor", and XXXXXX X.
XXXXXXXX, XX., hereinafter referred to as "Lessee";
W I T N E S S E T H:
-------------------
WHEREAS, Xxxxx Land Company Limited Partnership and Xxxxxx X.Xxxxxxxx, Xx.
entered into a certain Agreement of Lease on the 8th day of February, 1983,
whereby Xxxxx Land Company leased certain real estate and the rights to mine
coal therefrom to Xxxxxx X. Xxxxxxxx, Xx., a copy of which Agreement of Lease is
attached hereto as Exhibit "A" and hereby incorporated by reference; and
WHEREAS, Xxxxx Land Company Limited Partnership and Xxxxxx X. Xxxxxxxx, Xx.
are desirous of amending said Agreement of Lease to provide for a separate
tonnage royalty for all coal sold by Xxxxxx X. Xxxxxxxx, Xx. for an "actual sale
price", as defined herein, of less than Thirty Dollars ($30.00) per ton and to
provide for the renewal thereof;
NOW, THEREFORE, in consideration of the above, the parties hereto hereby
amend said Agreement of Lease as follows:
1. The last sentence of the Section 4 is hereby amended to read as
follows:
"Lessee shall have options to renew or extend this Lease, on the same
terms and conditions, except as to term and royalties, for four (4)
successive five (5) year periods after February 8, 1988 and for
additional five (5) year terms commencing on February 8, 2008 as
provided for in the Section 6 herein, provided Lessee has fully
performed his covenants hereunder, and gives Lessor written notice of
his intent to renew not less than one hundred and twenty (120) days
before the expiration of each preceding term."
2. Section 5, Paragraph 1 is hereby amended by striking "gross sales
price, as such term is hereafter defined" as it appears on page 6 of the
Agreement of Lease and inserting "gross sale price or actual sale price, as the
case may be, as such terms are hereinafter defined."
3. Section 5, Subparagraph (a) is hereby amended by inserting the
following after the subparagraph heading (a) and before the first word thereof:
"The following percentages are based upon the gross sale price of tons of coal
as such term is hereafter defined:"
4. Section 5, subparagraph (b) is hereby amended by inserting the
following before the first sentence thereof:
"As used herein, 'actual sales price' shall mean the bona fide sale
price receivable by Lessee for the coal without deduction for selling expenses,
commissions, transportation costs
-2-
and any other costs and expenses."
5. Section 5 is hereby amended by inserting the following after
Subparagraph (c) thereof as an additional Subparagraph (d):
"(d) In the event the actual sale price for the above-described coal
is less than Thirty Dollars ($30.00) per ton, Lessee shall pay to Lessor an
alternative tonnage royalty in lieu of the tonnage royalties set forth in
Subparagraph (a) hereinabove in the amount of six percent (6%) of the actual
sale price, as such term is defined hereinabove, for each net ton of such coal.
Any additional royalties set forth hereinafter in Section 5 for wheelage,
processing fees or other royalties and fees shall be determined by reference to
the gross sales price of such coal and not be referenced to the actual sales
price thereof.
6. The fourth paragraph of Section 6 (also being the second paragraph on
page 11) is hereby amended to read as follows:
"In the event Lessee shall exercise his right to renew or extend this
Lease at the expiration of the initial term or after the expiration of
a renewal term, the Lessee shall pay to Lessor for each and every year
during each Lease Year of the first three renewal terms a minimum
annual royalty of Seven Hundred Thousand Dollars ($700,000.00), said
minimum annual royalty being paid in advance in equal quarterly
payments of One Hundred and Seventy-Five Thousand
-3-
Dollars ($175,000.00) on the 8th day of each February, May, August and
November of each Lease Year thereof, and the Lessee shall pay to
Lessor for each and every year during each Lease Year of the fourth
renewal term a minimum annual royalty of One Million Fifty Thousand
Dollars ($1,050,000.00), which minimum annual royalties shall be
payable in advance in equal quarterly payments of Two Hundred Sixty-
Two Thousand and Five Hundred Dollars ($262,500.00) on the eighth day
of each February, May, August and November of each Lease Year thereof.
7. The fifth paragraph of Section 6 (also identified as the third
paragraph on page 11) is hereby amended to change the date "February 8, 2003"
wherever appearing therein to "February 8, 2008".
8. The parties hereto acknowledge that Lessee has renewed the Agreement
of Lease until February 8, 1993 and Lessee hereby agrees to renew said Agreement
of Lease for an additional five (5) year term commencing February 8, 1993, and
hereby notifies Lessor of such intent pursuant to Section 5 of the Agreement of
Lease.
9. In the event that said Agreement of Lease and this Amendment of
Agreement of Lease between the parties hereto shall be assigned, conveyed,
leased, sublet or otherwise transferred, Lessor and Lessee agree that this
Amendment of Agreement of Lease
-4-
to the extent it may provide for royalties to be reduced to six percent (6%)
shall be null and void with respect to any such transferee but that in all other
respects the Agreement of Lease and this Amendment of Agreement of Lease shall
remain in full force and effect.
10. The parties hereto expressly understand and agree that the royalties
set forth in the above amendments to Sections 5 and 6 of the Agreement of Lease
regarding tonnage royalties and minimum annual royalties shall be credited in
the manner set forth in Section 6, Subparagraph 7 (also being the second
paragraph on page 12) of the Agreement of Lease.
11. The parties hereto covenant and agree that the entire understanding
between the parties hereto shall be represented by that certain Agreement of
Lease dated the 8th day of February, 1983, as amended by this Amendment of
Agreement of Lease, which Amendment shall be effective as of the 1st day of
July, 1988, and which Agreement of Lease shall remain in full force and effect
except to the extent said Agreement of Lease is amended hereby. In the event
that the terms and conditions of this Amendment of Agreement of Lease are held
to be in conflict with the terms and conditions of the Agreement of Lease, the
terms and conditions of the Agreement of Lease shall control.
IN WITNESS WHEREOF, the Lessor has caused its names to be signed hereto by
its Senior Managing General Partner, and the Lessee has executed this instrument
and affixed its hand and seal
-5-
thereto, all in duplicate, on this the ______ day of ________, 1989.
XXXXX LAND COMPANY LIMITED PARTNERSHIP
By: /s/ X.X. Xxxxxxx, III
-------------------------------------
Its Senior Managing
General Partner
/s/ Xxxxxx X. Xxxxxxxx, Xx.
-------------------------------------
XXXXXX X. XXXXXXXX, XX.
STATE OF WEST VIRGINIA,
COUNTY OF KANAWHA, to-wit:
The foregoing instrument was acknowledged before me this 9th day of March,
1989, by X.X. Xxxxxxx, III, Senior Managing General Partner of Xxxxx Land
Company Limited Partnership.
My commission expires 10-23-94.
[NOTARY PUBLIC SEAL APPEARS HERE]
/s/ Xxxxxxx Xxxxx
----------------------------------------
Notary Public
STATE OF WEST VIRGINIA,
COUNTY OF KANAWHA, to-wit:
The foregoing instrument was acknowledged before me this ___ day of ______,
1988, by Xxxxxx X. Xxxxxxxx, Xx..
My commission expires ________________________.
----------------------------------------
Notary Public
-6-
SECOND AMENDMENT OF LEASE
This Second Amendment of Lease, is made and entered into this 1st day of
April 1992 by and between XXXXX LAND COMPANY LIMITED PARTNERSHIP, a West
Virginia limited partnership, hereinafter referred to as "Lessor" and ARK LAND
COMPANY, hereinafter referred to as "Lessee":
WITNESSETH
The following recitals are herein agreed:
1. Lessor and Lessee, entered into a certain Agreement of Lease, dated
December 20, 1989, hereinafter the "Lease" or the "Ark Lease", wherein Lessor
leased certain property and the right to mine coal therefrom to Lessee.
2. The initial term of the Lease expires on December 31, 1992 subject to
Lessee's rights to renew.
3. Lessor and Xxxxxx X. Xxxxxxxx, Xx., entered into an Agreement of Lease
on the 8th day of February, 1983, wherein Lessor leased certain other property
and right to mine coal therefrom to Xxxxxx X. Xxxxxxxx, Xx., (hereinafter
referred to as the "Xxxxxxxx Lease").
4. On July 30, 1989, Lessee acquired the Xxxxxxxx Lease, as amended, by
assignment from said Xxxxxx X. Xxxxxxxx, Xx., with the consent of Lessor.
5. On the 1st day of September, 1989, the Lessee herein subleased a
portion of the Xxxxxxxx Lease, as amended, to Red Warrior Coal Company ("Red
Warrior") conditioned upon the consent of Lessor, which was obtained on December
11, 1989.
6. On the 19th day of September, 1990, the Lessee herein subleased a
portion of the Xxxxxxxx Lease, as amended, to Catenary Coal Company
("Catenary"), conditioned upon the consent of Lessor, which was obtained on
February 6, 1991.
7. The Ark Lease presently provides in Section 4.2 that Guaranteed
Minimum Royalty ("GMR") paid by Ark may be used, subject to certain limitations
described therein, as a credit against amounts paid by Ark as production
royalties for coal mined from the property leased in the Ark Lease or the
Xxxxxxxx Lease. Ark desires to amend the Xxxxxxxx Lease in certain respects
related to such cross-recoupment.
8. The amendment of the Xxxxxxxx Lease is of benefit to Ark.
9. Therefore, the parties desire to modify and amend the Xxxxxxxx Lease.
10. The Lessor, in exchange for such renewal of the Ark Lease by Ark
contemporaneously herewith, is willing to modify and amend the Xxxxxxxx Lease.
NOW THEREFORE, based on the foregoing recitals the mutual covenants and
conditions herein contained the parties agree that the Xxxxxxxx Lease be and is
amended as follows:
1. In the event Ark does not hereafter renew the Ark Lease for a term
commencing after December 31, 1998, to the extent there is any GMR (as defined
in the Ark Lease) which has not been recouped by December 31, 1998, then in such
event, Ark, after December 31, 1998, may recoup against production royalty due
under the Xxxxxxxx Lease such previously un-recouped GMR from the Ark Lease.
Such right of recoupment shall be subject to the following restrictions:
a. Such right of recoupment against production royalties on the
Xxxxxxxx Lease shall exist only after minimum royalties have been paid under the
Xxxxxxxx Lease. Such right of recoupment shall not be applicable against
royalties due for wheelage, processing or for other reasons.
b. The aforesaid right of recoupment applies only in the event Ark
does not hereafter renew the Ark Lease for a term commencing after December 31,
1998. If Ark renews the Ark Lease beyond December 31, 1998, then upon
expiration of such subsequent term, Ark shall have no right to use such
unrecouped GMR, unless Xxxxx subsequently agrees to the same by written
Amendment to the Xxxxxxxx Lease.
c. Such right of recoupment shall be and remain subject to the five-
year period of recoupment as described in Section 4.2 of the Ark Lease.
d. The amendment herein set forth is restricted to Ark and its
permitted Sublessees, and in the event this Lease if further assigned, subleased
or transferred in any way, whether by operation of law or by Sublessee of Ark,
this provision shall be void unless specifically agreed to by Lessor at the time
of such transfer.
IN WITNESS WHEREOF, The Lessor has caused its name to be signed hereto by
its Managing General Partner and Ark has executed this instrument by a corporate
officer, thereunto duly authorized, all in duplicate, the day and year first
above written.
LESSOR:
XXXXX LAND COMPANY LIMITED PARTNERSHIP
By: /s/ X. X. Xxxxxxx, III
-------------------------------------
X.X. Xxxxxxx, III
Its Managing General Partner
LESSEE:
ARK LAND COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-------------------------------------
Its: Vice President
STATE OF WEST VIRGINIA,
COUNTY OF KANAWHA, To-Wit:
The foregoing instrument was acknowledged before me this 2nd day of April,
1992, by X. X. Xxxxxxx, III, Managing General Partner of XXXXX LAND COMPANY
LIMITED PARTNERSHIP.
/s/ Xxxxxxx Xxxxx
----------------------------------------
NOTARY PUBLIC
My Commission Expires: 10-23-94
[NOTARY PUBLIC SEAL APPEARS HERE]
STATE OF MISSOURI,
COUNTY OF ST. XXXXXXX, To-Wit:
The foregoing instrument was acknowledged before me this 1st day of April,
1992, by Xxxxxxx X. Xxxxxxxxxx, as Vice President of ARK LAND COMPANY.
/s/ Xxxxxxx X. Xxxxxxxxxx
----------------------------------------
NOTARY PUBLIC
My Commission Expires: 3/4/95
AMENDMENT OF LEASE
This Amendment of Lease, is made and entered into this 31 day of
October, 1992, by and between XXXXX LAND COMPANY LIMITED PARTNERSHIP, a West
Virginia limited partnership ("Lessor"), and ARK LAND COMPANY, a Delaware
corporation ("Lessee" or "Ark"):
WITNESSETH
The following recitals are herein agreed:
1. Lessor and Xxxxxx X. Xxxxxxxx, Xx., entered into an Agreement of
Lease dated February 8, 1983 (the "Xxxxxxxx Lease"), wherein Lessor leased
certain property and the right to mine coal therefrom to Xxxxxx X. Xxxxxxxx, Xx.
2. On July 30, 1989, Ark acquired the Xxxxxxxx Lease, as amended, by
assignment from Xxxxxx X. Xxxxxxxx, Xx., with the consent of Lessor.
3. Lessor and Ark entered into a certain Agreement of Lease, dated
December 20, 1989 (the "Ark Lease"), wherein Lessor leased certain other
property and the right to mine coal therefrom to Ark.
4. On September 1, 1989 Ark subleased a portion of the Xxxxxxxx
Lease, as amended, to Red Warrior Coal Company ("Red Warrior") conditioned upon
the consent of Lessor, which was obtained on December 11, 1989.
5. On September 19, 1990 Ark subleased a portion of the Xxxxxxxx
Lease, as amended, to Catenary Coal Company ("Catenary"), conditioned upon the
consent of Lessor, which was obtained on February 6, 1991.
6. The Ark Lease was amended to extend the term by that certain First
Amendment to Lease, dated March 1, 1992.
7. The Xxxxxxxx Lease was amended by that certain Second Amendment to
Lease dated March 1, 1992.
8. The Xxxxxxxx Lease and Ark Lease, as both have been amended, are
sometimes referred to collectively as the "Leases."
9. Ark is considering constructing and operating a dragline upon
either or both of the Leases.
10. Ark, or its parent or affiliates, is considering purchasing a
contract (or contracts) from a coal producer to baseload the proposed dragline
operation.
11. To enhance the economic feasibility of mining the property leased
by Ark under both the Leases, the parties have agreed to modify the production
royalty obligations of Ark, subject to the terms and conditions contained
herein.
NOW THEREFORE, based on the foregoing recitals, and the mutual
covenants and conditions contained in the Ark Lease and the Xxxxxxxx Lease, the
parties agree as follows:
Section 1. Beginning on the execution of this Amendment, Ark will
receive the following reduction in production royalties payable pursuant to
Section 5 of the Xxxxxxxx Lease, as amended, and pursuant to Section 5 of the
Ark Lease, as amended.
For all tons mined under the Leases, after calculation of the
production royalty required under the Ark Lease or the Xxxxxxxx Lease, as both
have been amended both previously and herein, Ark will receive a reduction in
the production royalty in the amount of $.20 per ton. This reduction shall
continue until such reductions total Five Million Dollars ($5,000,000) or is
sooner terminated as herein provided.
Lessor will have the right to recoup all of, or a portion of, the
$5,000,000 royalty concession in the following described manner; provided
- 2 -
however that Ark shall not be required to refund any amounts in excess of the
royalty reductions actually taken. The parties agree that Thirty Million
(30,000,000) tons of coal (the "Excess Amount") are likely to be recoverable by
the dragline method in excess of conventional mining methods (which are
estimated to recover Ten Million (10,000,000) tons) for a total of Forty Million
(40,000,000) tons. If, by the dragline operation, Ark mines the Excess Amount,
then Ark shall not be required to refund any of the $5,000,000 royalty
concession to Lessor. If Ark does not mine the entire Excess Amount, then in
accordance with the terms below, Lessor shall receive a refund in the proportion
that the amount that Ark has not mined bears to such Excess Amount. An example
of the above calculation is attached as Exhibit 1. The tonnages stated in this
Section 1 are not to be construed as stipulations or representations as to the
actual recoverable tonnage and are for the sole and limited purpose of
determining whether Lessor is entitled to a refund as stated above and to
establish a method or formula to determine the extent of such refund.
If Ark places a dragline operation on the Xxxxxxxx Lease or Ark Lease,
but closes its dragline operation without mining the Excess Amount, Ark shall
then either (i) open another mine or mines on the property leased under either
of the Leases, or (ii) refund the proportionate amount of the unrecovered
$5,000,000 as described above. Ark shall have 90 days after closing (i.e.
permanently ceasing to operate) the dragline to determine whether it desires to
open a new mine or mines. If Ark does not give notice of such intention during
the said 90 days, and Ark does not open such mine within one year after closing
the dragline, then Ark shall forthwith refund the remaining proportionate
amount.
- 3 -
If Ark opens such additional mine or mines after closing the dragline
operation, then for coal mined from such new mines, in addition to production
royalty, Ark shall pay to Lessor an additional royalty of $.25 per ton until
such time as the proportionate amount of $5,000,000 which must be refunded as
described above, has in fact been refunded to Lessor. If after opening such mine
or mines, mining terminates without Lessor having recovered the proportionate
part of the $5,000,000 due it, then upon cessation of all mining, Ark shall
forthwith pay the balance in a lump sum.
Notwithstanding any of the foregoing provisions if: (i) Ark takes any
of said $.20 per ton reductions after execution hereof and on or before February
28, 1993, the Board of Directors of Ark's sublessee and of Arch Mineral
Corporation have failed to approve the construction of a dragline on either of
the Leases; or (ii) if such approval for the construction is obtained but Ark
does not place an operating dragline on the Lessor's property within three (3)
years from the Effective Date (such date three (3) years after the Effective
Date being hereinafter referred to as the Termination Date), then upon the first
to occur of such events, Ark shall fully and immediately refund in lump sum the
total of the $.20 per ton reductions previously and actually taken by Ark.
Section 2. The Leases contain certain rights for Ark to extend the
respective lease terms of each Lease. Upon the approval of the Board of
Directors of Ark's Sublessee and the Board of Directors of Arch Mineral
Corporation for the construction of a dragline on either of the Leases, which
approval must be obtained, if at all, on or before February 28, 1993, Ark will
forthwith in writing extend the Xxxxxxxx Lease for twenty (20) additional lease
years from the date of the Board approval obtained pursuant to this
- 4 -
Section 2 or until the exhaustion of all mineable and merchantable surface
mineable coal leased by the Xxxxxxxx Lease, whichever is shorter. (Ark will have
the right, but not the obligation to extend the Ark Lease as provided in the Ark
Lease.) Ark will have the right to obtain further extensions as provided for in
the Xxxxxxxx Lease after such extended term expires. Any and all such extended
terms shall expire upon exhaustion of all mineable and merchantable coal leased
by the Xxxxxxxx Lease.
Section 3. (a) In the event Ark, its parent or affiliates, on or
before February 28, 1993, acquires from a non-affiliated coal producing third
party a contract to supply coal to a domestic utility (excluding metallurgical
or export sales), or enters into a new contract to supply such coal which amends
or replaces an existing contract supplied by a non-affiliated coal producing
third party and Ark, its parent or affiliates, have paid good and valuable
consideration to such non-affiliated coal producing third party (collectively
the "Purchased Contract"), Ark will have an additional royalty adjustment as
described below subject to the following conditions: (i) the Purchased Contract
described above is acquired by Ark, its parent or affiliates after the date of
the execution of this Amendment, and (ii) within 90 days of acquiring such
Purchased Contract, Ark specifically identifies such Purchased Contract for the
purpose of taking such deduction. As used herein, "specifically identifies"
shall mean written notice stating that Ark elects to treat the contract as a
Purchased Contract; identifies the parties thereto, and the term and tonnages to
be supplied thereunder. If not prohibited by such Purchased Contract, Ark will
provide Lessor a true copy thereof.
If the above conditions are met, then for coal mined from either of
the Leases and sold pursuant to any such Purchased Contract, Ark will pay
- 5 -
to Lessor, in lieu of the Production Royalty provided in the applicable Lease,
Production Royalty based on a Base Gross Selling Price defined as Twenty-Five
Dollars ($25.00) subject to the deductions contained in the applicable Lease,
and subject to premium and penalty adjustments paid or incurred under the
Purchased Contract. Each quarter the Base Gross Selling Price shall be adjusted
upward or downward in the same percentage that the price paid pursuant to such
Purchased Contract has been adjusted during the immediately preceding adjustment
period under the Purchased Contract. After Five (5) years from the
identification of such Purchased Contract in accordance with the preceding
paragraph, the then existing Base Gross Selling Price shall increase by One
Dollar ($1.00) and shall be adjusted quarterly as set forth above. After Seven
(7) additional years, the then existing Base Gross Selling Price shall increase
by another One Dollar ($1.00) and shall be adjusted quarterly as set forth
above.
(b) Ark, its parent or affiliates, may acquire other Purchased
Contracts in like manner as in 3(a) within two (2) years of the Effective Date,
provided however that the Base Gross Selling Price shall be and remain, during
the term of such other Purchased Contract, Twenty Seven Dollars ($27.00) subject
to the deductions contained in the applicable Lease, and subject to premium and
penalty adjustments in such other Purchased Contract. Beginning with the
Effective Date, each quarter the Base Gross Selling Price shall be adjusted
upward or downward in the same manner (on a dollar for dollar basis) that the
price paid pursuant to the first Purchased Contract acquired by Ark, its parent
or affiliates has been adjusted during the immediately preceding adjustment
period under such first purchased Contract. Upon acquisition of such other
Purchased Contract the Base Gross Selling price
- 6 -
thereunder shall be $27.00 plus the adjustments incurred in the Base Gross
Selling Price from the Effective Date under the first Purchased Contract
acquired pursuant to Section 3(a). After so establishing the Base Gross Selling
price under such other Purchased Contract it shall thereafter be adjusted
quarterly in accordance with the changes in price pursuant to the terms of such
other Purchased Contract, provided that such other Purchased Contract shall not
be adjusted by One Dollar ($1.00) after Five (5) years and the subsequent Seven
(7) years respectively as contained in Section 3(a).
(c) If Ark pays the Production Royalty reduced as set forth in this
Section 3, and if the current Cincinnati Gas & Electric contract is displaced by
such Purchased Contract, then notwithstanding the foregoing, through December
1995, the first 350,000 tons per year mined from the Leases shall be deemed sold
to Cincinnati Gas & Electric, and such tons shall bear the production royalty
contained in the applicable Lease prior to this Amendment, provided however that
Ark shall be entitled to the deduction of $.20 per ton in accordance with
Section 1 above.
(d) If Ark, its parent or affiliates, acquire or seek to acquire
another Purchased Contract or Contracts after two (2) years from the Effective
Date then the parties shall negotiate in good faith for a royalty reduction
consistent with the purpose of this Section 3.
Section 4. If after three (3) years from the Effective Date, Ark has
not constructed a dragline on Lessor's property, and Ark has taken royalty
adjustments as described in Section 3 for Purchased Contracts, then Ark shall
immediately refund the difference between the production royalty payable under
the Leases and the Production Royalty paid pursuant to the terms of Section 3
herein.
- 7 -
Section 5. If after three (3) years from the identification of such
Purchased Contract, the coal mined from the Leases does not supply all of the
tonnages actually shipped under such Purchased Contract, and if coal is shipped
under the Purchased Contract from a source other than the Leases, then Ark will
pay production royalty calculated pursuant to Section 3 hereof (on all tons
actually mined from the Leases only to the extent that tons mined by Ark or its
lessees supply the Purchased Contract from a source other than the Leases),
based upon the average weighted actual gross selling price received by Ark
(subject to deductions allowable under the applicable Lease and herein) of coal
mined and sold from the Leases. It is understood that this Section 5 does not
apply to all tons mined from the Leases, but only to the difference between
those tons which are actually shipped under the Purchased Contract and those
tons which are shipped on the Purchased Contract from the Leases. This
obligation shall continue during the term of the Xxxxxxxx Lease or such
Purchased Contract, whichever is shorter.
Section 6. Nothing contained in this Amendment shall require Ark to
place a dragline upon the properties leased by the Leases.
Section 7. This Amendment shall expire unless on or before February
28, 1993, the Board of Directors of Ark's sublessee and its parent, Arch Mineral
Corporation, shall have approved the expenditure of capital for the construction
of a dragline on the property leased by the Xxxxxxxx Lease or Ark Lease. Ark
shall immediately notify Lessor in writing of such Board of Director approval
and deliver the Lease extension described in Section 2 hereof.
Section 8. This Amendment is conditioned upon and shall not be
effective until this Amendment is approved by both the General Partners of
- 8 -
Lessor and the Board of Directors of Ark. Notwithstanding the
foregoing, the terms contained in Section 1 hereof are effective immediately,
Ark and Lessor will use their best efforts to obtain such approvals on or before
February 28, 1993 and within ten (10) days respectively. Upon such approval,
each party shall immediately provide the other party with a certificate signed
by an officer or general partner of such entity reflecting such requisite
approval. The date on which both parties have both received such Board and
Partnership approvals shall be the "Effective Date."
Section 9. This Amendment is binding upon each of the parties, their
respective permitted successors and assigns.
Section 10. Except as amended hereby, all other terms of the Leases,
as amended, remain in effect.
XXXXX LAND COMPANY LIMITED PARTNERSHIP
By: /s/ X. X. Xxxxxxx, III
-----------------------------------
Its: Managing General Partner
----------------------------------
ARK LAND COMPANY
By: /s/ Xxxxxx X. XxXxxxx
-----------------------------------
Its: President
----------------------------------
id:003101
- 9 -
EXHIBIT 1
EXAMPLE 1
---------
Assuming, for example, that Ark mines 22,000,000 tons of coal by the dragline
method, then:
1. Ark has mined 12,000,000 tons in excess of the amount mineable by
conventional mining methods determined by subtracting the conventional
method amounts (10,000,000) from the amount actually mined.
22,000,000 - 10,000,000 = 12,000,000
2. Subtract the 12,000,000 tons in excess of the amount mineable by
conventional methods from 30,000,000 tons (Excess Amount).
30,000,000 - 12,000,000 = 18,000,000
3. If Ark does not open a new mine (which would increase the 22,000,000
tons actually recovered) then the proportion of excess coal not mined
(in excess of conventional methods) bears to the Excess Amount of
30,000,000 is determined.
18,000,000 = .60
----------
30,000,000
4. Multiply the proportion determined in 3 above by $5,000,000 to
determine the amount which Ark is required to refund.
.60 x $5,000,000 = $3,000,000
EXAMPLE 2
---------
Assuming, for example, that Ark mines 50,000,000 tons, it will owe no refund to
Lessor because it mined the entire Excess Amount.
EXAMPLE 3
---------
Assuming, for example, that Ark mines 5,000,000 tons, it will owe $1,000,000
because it failed to mine any of the Excess Amount and took the reduction of
$.20 per ton
AMENDMENT OF LEASE
This Amendment of Lease, is made and entered into this 5th day of
December, 1992, by and between XXXXX LAND COMPANY LIMITED PARTNERSHIP, a West
Virginia limited partnership ("Lessor"), and ARK LAND COMPANY, a Delaware
corporation ("Lessee" or "Ark"):
WITNESSETH
The following recitals are herein agreed:
1. Lessor and Xxxxxx X. Xxxxxxxx, Xx., entered into an Agreement of
Lease dated February 8, 1983 (the "Xxxxxxxx Lease"), wherein Lessor leased
certain property and the right to mine coal therefrom to Xxxxxx X. Xxxxxxxx, Xx.
2. On July 30, 1989, Ark acquired the Xxxxxxxx Lease, as amended, by
assignment from Xxxxxx X. Xxxxxxxx, Xx., with the consent of Lessor.
3. Lessor and Ark entered into a certain Agreement of Lease, dated
December 20, 1989 (the "Ark Lease"), wherein Lessor leased certain other
property and the right to mine coal therefrom to Ark.
4. On September 1, 1989 Ark subleased a portion of the Xxxxxxxx
Lease, as amended, to Red Warrior Coal Company ("Red Warrior") conditioned upon
the consent of Lessor, which was obtained on December 11, 1989.
5. On September 19, 1990 Ark subleased a portion of the Xxxxxxxx
Lease, as amended, to Catenary Coal Company ("Catenary"), conditioned upon the
consent of Lessor, which was obtained on February 6, 1991.
6. The Ark Lease was amended to extend the term by that certain First
Amendment to Lease, dated March 1, 1992.
7. The Xxxxxxxx Lease was amended by that certain Second Amendment to
Lease dated March 1, 1992.
8. The Xxxxxxxx Lease and Ark Lease, as both have been amended, are
sometimes referred to collectively as the "Leases."
9. Ark is considering constructing and operating a dragline upon
either or both of the Leases.
10. Ark, or its parent or affiliates, is considering purchasing a
contract (or contracts) from a coal producer to baseload the proposed dragline
operation.
11. To enhance the economic feasibility of mining the property leased
by Ark under both the Leases, the parties have agreed to modify the production
royalty obligations of Ark, subject to the terms and conditions contained
herein.
NOW THEREFORE, based on the foregoing recitals, and the mutual
covenants and conditions contained in the Ark Lease and the Xxxxxxxx Lease, the
parties agree as follows:
Section 1. Beginning on the execution of this Amendment, Ark will
receive the following reduction in production royalties payable pursuant to
Section 5 of the Xxxxxxxx Lease, as amended, and pursuant to Section 5 of the
Ark Lease, as amended.
For all tons mined under the Leases, after calculation of the
production royalty required under the Ark Lease or the Xxxxxxxx Lease, as both
have been amended both previously and herein, Ark will receive a reduction in
the production royalty in the amount of $.20 per ton. This reduction shall
continue until such reductions total Five Million Dollars ($5,000,000) or is
sooner terminated as herein provided.
Lessor will have the right to recoup all of, or a portion of, the
$5,000,000 royalty concession in the following described manner; provided
however that Ark shall not be required to refund any amounts in excess of the
royalty reductions actually taken. The parties agree that Thirty Million
(30,000,000) tons of coal (the "Excess Amount") are likely to be recoverable
-2-
by the dragline method in excess of conventional mining methods (which are
estimated to recover Ten Million (10,000,000) tons) for a total of Forty Million
(40,000,000) tons. If, by the dragline operation, Ark mines the Excess Amount,
then Ark shall not be required to refund any of the $5,000,000 royalty
concession to Lessor. If Ark does not mine the entire Excess Amount, then in
accordance with the terms below, Lessor shall receive a refund in the proportion
that the amount that Ark has not mined bears to such Excess Amount. An example
of the above calculation is attached as Exhibit 1. The tonnages stated in this
Section 1 are not to be construed as stipulations or representations as to the
actual recoverable tonnage and are for the sole and limited purpose of
determining whether Lessor is entitled to a refund as stated above and to
establish a method or formula to determine the extent of such refund.
If Ark places a dragline operation on the Xxxxxxxx Lease or Ark
Lease, but closes its dragline operation without mining the Excess Amount, Ark
shall then either (i) open another mine or mines on the property leased under
either of the Leases, or (ii) refund the proportionate amount of the unrecovered
$5,000,000 as described above. Ark shall have 90 days after closing (i.e.
permanently ceasing to operate) the dragline to determine whether it desires to
open a new mine or mines. If Ark does not give notice of such intention during
the said 90 days, and Ark does not open such mine within one year after closing
the dragline, then Ark shall forthwith refund the remaining proportionate
amount.
If Ark opens such additional mine or mines after closing the
dragline operation, then for coal mined from such new mines, in addition to
production royalty, Ark shall pay to Lessor an additional royalty of $.25 per
ton until such time as the proportionate amount of $5,000,000 which must be
-3-
refunded as described above, has in fact been refunded to Lessor. If after
opening such mine or mines, mining terminates without Lessor having recovered
the proportionate part of the $5,000,000 due it, then upon cessation of all
mining, Ark shall forthwith pay the balance in a lump sum.
Notwithstanding any of the foregoing provisions if: (i) Ark takes
any of said $.20 per ton reductions after execution hereof and on or before
February 28, 1993, the Board of Directors of Ark's sublessee and of Arch Mineral
Corporation have failed to approve the construction of a dragline on either of
the Leases; or (ii) if such approval for the construction is obtained but Ark
does not place an operating dragline on the Lessor's property within three (3)
years from the Effective Date (such date three (3) years after the Effective
Date being hereinafter referred to as the Termination Date), then upon the first
to occur of such events, Ark shall fully and immediately refund in lump sum the
total of the $.20 per ton reductions previously and actually taken by Ark.
Section 2. The Leases contain certain rights for Ark to extend the
respective lease terms of each Lease. Upon the approval of the Board of
Directors of Ark's Sublessee and the Board of Directors of Arch Mineral
Corporation for the construction of a dragline on either of the Leases, which
approval must be obtained, if at all, on or before February 28, 1993, Ark will
forthwith in writing extend the Xxxxxxxx Lease for twenty (20) additional lease
years from the date of the Board approval obtained pursuant to this Section 2 or
until the exhaustion of all mineable and merchantable surface mineable coal
leased by the Xxxxxxxx Lease, whichever is shorter. (Ark will have the right,
but not the obligation to extend the Ark Lease as
-4-
provided in the Ark Lease.) Ark will have the right to obtain further extensions
as provided for in the Xxxxxxxx Lease after such extended term expires. Any and
all such extended terms shall expire upon exhaustion of all mineable and
merchantable coal leased by the Xxxxxxxx Lease.
Section 3. (a) In the event Ark, its parent or affiliates, on or
before February 28, 1993, acquires from a non-affiliated coal producing third
party a contract to supply coal to a domestic utility (excluding metallurgical
or export sales), or enters into a new contract to supply such coal which amends
or replaces an existing contract supplied by a non-affiliated coal producing
third party and Ark, its parent or affiliates, have paid good and valuable
consideration to such non-affiliated coal producing third party (collectively
the "Purchased Contract"), Ark will have an additional royalty adjustment as
described below subject to the following conditions: (i) the Purchased Contract
described above is acquired by Ark, its parent or affiliates after the date of
the execution of this Amendment, and (ii) within 90 days of acquiring such
Purchased Contract, Ark specifically identifies such Purchased Contract for the
purpose of taking such deduction. As used herein, "specifically identifies"
shall mean written notice stating that Ark elects to treat the contract as a
Purchased Contract; identifies the parties thereto, and the term and tonnages to
be supplied thereunder. If not prohibited by such Purchased Contract, Ark will
provide Lessor a true copy thereof.
If the above conditions are met, then for coal mined from either of
the Leases and sold pursuant to any such Purchased Contract, Ark will pay to
Lessor, in lieu of the Production Royalty provided in the applicable Lease,
Production Royalty based on a Base Gross Selling Price defined as Twenty-Five
Dollars ($25.00) subject to the deductions contained in the applicable Lease,
and subject to premium and penalty adjustments paid or incurred under the
-5-
Purchased Contract. Each quarter the Base Gross Selling Price shall be adjusted
upward or downward in the same percentage that the price paid pursuant to such
Purchased Contract has been adjusted during the immediately preceding adjustment
period under the Purchased Contract. After Five (5) years from the
identification of such Purchased Contract in accordance with the preceding
paragraph, the then existing Base Gross Selling Price shall increase by One
Dollar ($1.00) and shall be adjusted quarterly as set forth above. After Seven
(7) additional years, the then existing Base Gross Selling Price shall increase
by another One Dollar ($1.00) and shall be adjusted quarterly as set forth
above.
(b) Ark, its parent or affiliates, may acquire other Purchased
Contracts in like manner as in 3(a) within two (2) years of the Effective Date,
provided however that the Base Gross Selling Price shall be and remain, during
the term of such other Purchased Contract, Twenty Seven Dollars ($27.00) subject
to the deductions contained in the applicable Lease, and subject to premium and
penalty adjustments in such other Purchased Contract. Beginning with the
Effective Date, each quarter the Base Gross Selling Price shall be adjusted
upward or downward in the same manner (on a dollar for dollar basis) that the
price paid pursuant to the first Purchased Contract acquired by Ark, its parent
or affiliates has been adjusted during the immediately preceding adjustment
period under such first purchased Contract. Upon acquisition of such other
Purchased Contract the Base Gross Selling price thereunder shall be $27.00 plus
the adjustments incurred in the Base Gross Selling Price from the Effective Date
under the first Purchased Contract acquired pursuant to Section 3(a). After so
establishing the Base Gross Selling price under such other Purchased Contract it
shall thereafter be adjusted quarterly in accordance with the changes in price
pursuant to the
-6-
terms of such other Purchased Contract, provided that such other Purchased
Contract shall not be adjusted by One Dollar ($1.00) after Five (5) years and
the subsequent Seven (7) years respectively as contained in Section 3(a).
(c) If Ark pays the Production Royalty reduced as set forth in
this Section 3, and if the current Cincinnati Gas & Electric contract is
displaced by such Purchased Contract, then notwithstanding the foregoing,
through December 1995, the first 350,000 tons per year mined from the Leases
shall be deemed sold to Cincinnati Gas & Electric, and such tons shall bear the
production royalty contained in the applicable Lease prior to this Amendment,
provided however that Ark shall be entitled to the deduction of $.20 per ton in
accordance with Section 1 above.
(d) If Ark, its parent or affiliates, acquire or seek to acquire
another Purchased Contract or Contracts after two (2) years from the Effective
Date then the parties shall negotiate in good faith for a royalty reduction
consistent with the purpose of this Section 3.
Section 4. If after three (3) years from the Effective Date, Ark has
not constructed a dragline on Lessor's property, and Ark has taken royalty
adjustments as described in Section 3 for Purchased Contracts, then Ark shall
immediately refund the difference between the production royalty payable under
the Leases and the Production Royalty paid pursuant to the terms of Section 3
herein.
Section 5. If after three (3) years from the identification of such
Purchased Contract, the coal mined from the Leases does not supply all of the
tonnages actually shipped under such Purchased Contract, and if coal is shipped
under the Purchased Contract from a source other than the Leases, then
-7-
Ark will pay, on a number of tons actually mined and sold from the Leases
equivalent to the number of tons supplied under the Purchased Contract by Ark or
its Lessees from sources other than the Leases, subject to deductions allowable
under the applicable Lease and herein, production royalty calculated pursuant
to Section 3 hereof, or production royalty based upon the average gross selling
price of all tons of coal mined and sold from the dragline mine on either of the
Leases for that month pursuant to sales on the spot market, whichever is
greater. "Sales on the spot market" shall mean sales made under purchase orders
or agreements of less than one year of duration.
Section 6. Nothing contained in this Amendment shall require Ark to
place a dragline upon the properties leased by the Leases.
Section 7. Ark and its lesses shall have the right, without further
rent, royalty or charge, to enter on and upon the surface of the premises
covered by the Ark Lease and/or the Xxxxxxxx Lease after the expiration or
termination of such leases for the limited purpose of conducting, in a timely
manner and in accordance with applicable law, all reclamation and related work
necessary to secure final reclamation bond release until such time as final bond
release is obtained. Notwithstanding the foregoing, after the expiration or
termination of such Leases, Ark shall give reasonable notice to lessor prior to
any entry upon the premises, shall not interfere with any then existing lessee
and shall continue to be bound by Sections 10 (to the extent applicable), 13 and
16 of the Xxxxxxxx Lease and Sections 9 (to the extent applicable), 12 and 15
of the Ark Lease despite the expiration or termination of said Leases in other
respects.
Section 8. This Amendment shall expire unless on or before February
28, 1993, the Board of Directors of Ark's sublessee and its parent,
-8-
Arch Mineral Corporation, shall have approved the expenditure of capital for the
construction of a dragline on the property leased by the Xxxxxxxx Lease or Ark
Lease. Ark shall immediately notify Lessor in writing of such Board of Director
approval and deliver the Lease extension described in Section 2 hereof.
Section 9. This Amendment is conditioned upon and shall not be
effective until this Amendment is approved by both the General Partners of
Lessor and the Board of Directors of Ark. Notwithstanding the foregoing, the
terms contained in Section 1 hereof are effective immediately, Ark and Lessor
will use their best efforts to obtain such approvals on or before February 28,
1993 and within ten (10) days respectively. Upon such approval, each party shall
immediately provide the other party with a certificate signed by an officer or
general partner of such entity reflecting such requisite approval. The date on
which both parties have both received such Board and Partnership approvals shall
be the "Effective Date."
Section 10. This Amendment is binding upon each of the parties, their
respective permitted successors and assigns.
Section 11. Except as amended hereby, all other terms of the Leases,
as amended, remain in effect.
XXXXX LAND COMPANY LIMITED PARTNERSHIP
By: /s/ X. X. Xxxxxxx, III
Its: Managing General Partner
ARK LAND COMPANY
By: [SIGNATURE APPEARS HERE]
Its: President
-9-
EXHIBIT 1
EXAMPLE 1
---------
Assuming, for example, that Ark mines 22,000,000 tons of coal by the dragline
method, then:
1. Ark has mined 12,000,000 tons in excess of the amount mineable by
conventional mining methods determined by subtracting the conventional
method amounts (10,000,000) from the amount actually mined.
22,000,000 - 10,000,000 = 12,000,000
2. Subtract the 12,000,000 tons in excess of the amount mineable by
conventional methods from 30,000,000 tons (Excess Amount).
30,000,000 - 12,000,000 = 18,000,000
3. If Ark does not open a new mine (which would increase the 22,000,000
tons actually recovered) then the proportion of excess coal not mined
(in excess of conventional methods) bears to the Excess Amount of
30,000,000 is determined.
18,000,000 = .60
------------------
30,000,000
4. Multiply the proportion determined in 3 above by $5,000,000 to
determine the amount which Ark is required to refund.
.60 x $5,000,000 = $3,000,000
EXAMPLE 2
---------
Assuming, for example, that Ark mines 50,000,000 tons, it will owe no refund to
Lessor because it mined the entire Excess Amount.
EXAMPLE 3
---------
Assuming, for example, that Ark mines 5,000,000 tons, it will owe $1,000,000
because it failed to mine any of the Excess Amount and took the reduction of
$.20 per ton
LEASE EXTENSION
THIS LEASE EXTENSION ("Agreement") is made and entered into this 16
day of February, 1993 between XXXXX LAND COMPANY LIMITED PARTNERSHIP ("Xxxxx") a
West Virginia limited partnership, and ARK LAND COMPANY ("Ark"), a Delaware
corporation.
******RECITALS******
Xxxxx and Xxxxxx X. Xxxxxxxx, Xx. entered into an Agreement of Lease
dated February 8, 1983, as amended (the "Lease"), wherein Xxxxx leased certain
property and the right to mine coal therefrom to Xxxxxx X. Xxxxxxxx, Xx.
On July 30, 1989, Ark acquired the Lease by assignment from Xxxxxx X.
Xxxxxxxx, Xx. with the consent of Xxxxx.
Xxxxx and Ark desire to extend the term of the Lease as provided
herein. ******
NOW, THEREFORE, the parties agree as follows:
1. The term of the Lease shall be extended for a term of twenty (20)
additional lease years from the date of approval of the dragline capital
expenditure by the Board of Directors of Ark's Sublessee and the Board of
Directors of Arch Mineral Corporation or until exhaustion of all mineable and
merchantable surface mineable coal from the property covered by the Lease,
whichever is shorter. Ark will have the right to obtain further extensions as
provided for in the Xxxxxxxx Lease after such extended term expires. Any and
all such extended terms shall expire upon exhaustion of all mineable and
merchantable coal leased by the Xxxxxxxx Lease.
2
2. All terms of the Lease, as amended, shall remain in effect.
The parties have caused this Aqreement to be executed the day and
year set forth above.
XXXXX LAND COMPANY LIMITED
PARTNERSHIP
By: /s/ X. X. Xxxxxxx, III
------------------------------------
Title: Managing General Partner
---------------------------------
ARK LAND COMPANY
By: [SIGNATURE APPEARS HERE]
------------------------------------
Title: Vice President
---------------------------------
STATE OF WEST VIRGINIA )
) SS.
COUNTY OF KANAWHA )
I, the undersigned, a Notary Public, in and for said State and County
aforesaid, do hereby certify that X. X. Xxxxxxx, III, personally known to me to
------------------
be the same person whose name is as Managing General Partner of XXXXX LAND
------------------------
COMPANY LIMITED PARTNERSHIP, a West Virginia limited partnership, subscribed to
the foregoing instrument, appeared before me this day in person and acknowledged
that he, being thereunto duly authorized, signed, sealed with the seal of said
corporation and delivered the said instrument as the free and voluntary act of
said corporation and as his own free and voluntary act, for the uses and
purposes therein set forth.
Given under my hand and notarial seal this 16th day of February,
1993.
/s/ Xxxxxxx Xxxxx
---------------------------------------
Notary Public
My Commission Expires: 10-23-94 [SEAL OF NOTARY PUBLIC
APPEARS HERE]
3
STATE OF ILLINOIS )
) SS.
COUNTY OF ST. CLAIR )
I, the undersigned, a Notary Public, in and for said State and County
aforesaid, do hereby certify that Xxxxxxx X. Xxxxxxxxxx, personally known to me
---------------------
to be the same person whose name is as Vice President of ARK LAND COMPANY, a
--------------
Delaware corporation, subscribed to the foregoing instrument, appeared before me
this day in person and acknowledged that he, being thereunto duly authorized,
signed, sealed with the seal of said corporation and delivered the said
instrument as the free and voluntary act of said corporation and as his own free
and voluntary act, for the uses and purposes therein set forth.
Given under my hand and notarial seal this 15th day of February,
1993.
/s/ Xxxxxx Xxxxxxx
---------------------------------------
Notary Public
My Commission Expires: [SEAL OF NOTARY PUBLIC
APPEARS HERE]
THIS DOCUMENT PREPARED BY:
/s/ Xxxxxx Xxxxxx Singer
--------------------------------
Xxxxxx Xxxxxx Singer, Counsel
Ark Land Company
X.X. Xxx 0000
Xxxxxxxx Xxxxxxx, XX 00000
(000) 000-0000
4
MODIFICATION OF AMENDMENT OF LEASES
-----------------------------------
THIS MODIFICATION OF AMENDMENT OF LEASES (the "Amendment"), is made and
entered into this the 4th day of August, 1994, by and between XXXXX LAND COMPANY
LIMITED PARTNERSHIP, a West Virginia limited partnership ("Lessor") and ARK LAND
COMPANY, a Delaware corporation ("Lessee" or "Ark").
W I T N E S S E T H:
WHEREAS, Lessor and Xxxxxx X. Xxxxxxxx, Xx. entered into an Agreement of
Lease dated February 8, 1983 (the "Xxxxxxxx Lease"), wherein Lessor leased
certain property and the right to mine coal therefrom to Xxxxxx X. Xxxxxxxx,
Xx.; and
WHEREAS, on July 30, 1989, Ark acquired the Xxxxxxxx Lease, as amended,
by assignment from Xxxxxx X. Xxxxxxxx, Xx., with the consent of Lessor; and
WHEREAS, Lessor and Ark entered into a certain Agreement of Lease, dated
December 20, 1989 (the "Ark Lease"), wherein Lessor leased certain other
property and the right to mine coal therefrom to Ark; and
WHEREAS, The Xxxxxxxx Lease and Ark Lease, as both have been variously
amended from time to time, are sometimes referred to collectively as the
"Leases" and the property leased under the Xxxxxxxx Lease and the Ark Lease is
sometimes referred to as the "Premises"; and
WHEREAS, Ark subleased the Premises to Catenary Coal Company
("Catenary"), with the consent of Lessor; and
WHEREAS, Catenary is considering constructing and operating a coal
preparation facility on the premises (the "Preparation Plant"); and
WHEREAS, To enhance the economic feasibility of constructing and
operating the Preparation Plant, the parties have agreed to modify the
production royalty obligation of Ark,
subject to the terms and conditions contained herein.
NOW, THEREFORE, based on the foregoing recitals, and the mutual
covenants and conditions contained in the Ark Lease and the Xxxxxxxx Lease, the
parties agree as follows:
SECTION 1
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1.1 A new Lease Year under the Xxxxxxxx Lease shall begin effective
January 1, 1995.Each Lease Year thereafter shall commence on January 1 and
terminate on December 31 of each calendar year.
1.2 The minimum annual royalty payable under the Xxxxxxxx Lease shall
be prorated to account for the shortened Lease Year as follows: On November 8,
1994, Ark shall pay to Lessor the sum of One Hundred One Thousand Nine Hundred
Twenty-Three Dollars and Eight Cents ($101,923.08) as minimum annual royalty for
the remainder of the current Lease Year. Commencing January 1 1995, Ark shall
pay to Lessor the sum of Seven Hundred Thousand Dollars ($700,000.00), payable
in advance, in equal quarterly payments of One Hundred Seventy-Five Thousand
Dollars ($175,000.00) on the first day of January, April, July and October of
each Lease Year. Commencing January 1, 2008, Ark shall pay to Lessor the sum of
One Million Fifty Thousand Dollars ($1,050,000.00), payable in advance, in equal
quarterly payments of Two Hundred Sixty-Two Thousand Five Hundred Dollars
($262,500.00) on the First day of January, April, July and October of each Lease
Year.
SECTION 2
---------
2.1 Ark shall be entitled to a royalty deduction as follows:
2.1.1 Commencing January 1,1995, and continuing thereafter through
December 31, 1995, Ark shall be entitled to deduct $.50 per ton for all tons of
coal mined and removed
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under the Leases, or either of them, and processed through the Preparation Plant
after calculation of the production royalty required under the Ark Lease or the
Xxxxxxxx Lease, as both have been amended previously and herein amended.
2.1.2 For the purposes of this Agreement, "Preparation Plant" as
referred to herein shall mean a modern and efficient coal processing facility
designed, constructed or expanded so as to permit the eventual capacity to wash
coal mined and removed from both surface and underground operations as
contemplated by this Agreement.
2.1.3 Commencing January 1,1996, and continuing thereafter through
December 31, 1999, Ark shall be entitled to deduct $.40 per ton for all tons of
coal mined and removed under the Leases, or either of them, and processed
through the Preparation Plant after calculation of the production royalty
required under the Ark Lease or the Xxxxxxxx Lease, as both have been amended
previously and herein amended.
2.1.4 Commencing January 1, 2000, and continuing thereafter through
December 31, 2002, Ark shall be entitled to deduct $.30 per ton for all tons of
coal mined and removed under the Leases, or either of them, and processed
through the Preparation Plant after calculation of the production royalty
required under the Ark Lease or the Xxxxxxxx Lease, as both have been amended
previously and herein amended.
2.1.5 Commencing January 1, 2003, and continuing thereafter through
December 31, 2004, Ark shall be entitled to deduct $.20 per ton for all tons of
coal mined and removed under the Leases, or either of them, and processed
through the Preparation Plant after calculation of the production royalty
required under the Ark Lease or the Xxxxxxxx Lease, as both have been amended
previously and herein amended.
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2.1.6 Commencing January 1, 2005, and continuing thereafter through
December 31, 2005, Ark shall be entitled to deduct $.10 per ton for all tons of
coal mined and removed under the Leases, or either of them, and processed
through the Preparation Plant after calculation of the production royalty
required under the Ark Lease or the Xxxxxxxx Lease, as both have been amended
previously and herein amended.
2.2 Notwithstanding anything herein to the contrary, if during any
Lease Year the total royalty reduction taken under Section 2.1 shall equal the
sum of Six Hundred Thousand Dollars ($600,000.00), then all further royalty
reductions pursuant to Section 2.1 shall xxxxx for the remainder of the Lease
Year, provided, however, that the royalty reduction provided for in Section 2.1
shall recommence in the next succeeding Lease Year.
2.3 Notwithstanding anything herein to the contrary, if the total
royalty reductions taken under Section 2.1 shall equal the sum of Three Million
Dollars ($3,000,000.00), then all further royalty reductions pursuant to Section
2.1 shall immediately cease and terminate.
2.4 Notwithstanding anything herein to the contrary, if on or before
December 31, 2000, Ark shall not have in operation a deep mine on either the
Xxxxxxxx Lease or the Ark Lease (the "Additional Mines"), then all further
royalty reductions pursuant to Section 2.1 shall immediately cease and
terminate.
SECTION 3
---------
3.1 Commencing January 1, 2001, and continuing through December 31,
2001, and for each calendar year thereafter, Ark shall mine and remove no less
than Three Hundred Sixty Thousand (360,000) clean tons of coal from the
Additional Mines, or either or them. This requirement shall hereinafter be
referred to as the "Minimum Tonnage Requirement."
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3.2 If Ark fails to mine and remove the Minimum Tonnage Requirement in
any lease year as set forth in Section 3.1, then Ark shall not, in any
succeeding Lease Year, be entitled to take the royalty reduction provided for in
Section 2.1 and Section 2.1 shall become null and void and to have no effect in
any subsequent Lease Year regardless of the amount of coal mined and removed
from either of the Leased Properties.
3.3 The Minimum Tonnage Requirement provided for in this Section 3
shall not be deemed to be cumulative.
SECTION 4
---------
4.1 Effective on the date on which coal is first processed through the
Processing Plant, Ark shall pay to Lessor the sum of five and three-quarters
percent (5.75%) of the gross sales price, as defined by the Leases, as amended,
for all Rash Coal, as hereinafter defined, mined, not cleaned, and sold pursuant
to the terms of the Leases.
4.2 For purposes of calculating the royalty due Lessor under this
Section 4, the term "Rash Coal" shall mean any coal mined and sold pursuant to
the terms of the Leases having an average gross selling price per ton of less
than Fifteen Dollars ($15.00), as defined pursuant to the terms of the Leases.
4.3 All royalty deductions and adjustments provided for in the Leases,
as previously amended and as amended herein, shall apply to royalties payable on
Rash Coal.
4.4 All coal sold pursuant to Sections 4.1 and 4.2 will not be included
as part of the tonnage requirement schedules provided for in Section 5 of the
Xxxxxxxx Lease.
SECTION 5
---------
This Amendment shall be binding upon each of the parties and their
respective permitted
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successors and assigns.
SECTION 6
---------
Except as amended hereby, all other terms of the Leases, as amended,
remain in effect.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
the day and year set forth above.
XXXXX LAND COMPANY LIMITED PARTNERSHIP
By: [SIGNATURE ILLEGIBLE]
-------------------------------
Its: Managing General Partner
ARK LAND COMPANY
By: [SIGNATURE ILLEGIBLE]
-------------------------------
Its: Exec. Vice President
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LETTER AGREEMENT
----------------
This binding Letter Agreement effective the 1st day of October, 1995, by
and between XXXXX LAND COMPANY LIMITED PARTNERSHIP ("Xxxxx") and ARK LAND
COMPANY ("Ark").
WHEREAS, Xxxxx leases to Ark coal properties in Xxxxx and Kanawha County,
West Virginia through lease documents commonly known by the parties as Xxxxx I
(Xxxxxxxx Lease); and
WHEREAS, the parties are currently involved in binding arbitration to
resolve several issues in dispute and desire to settle these issues amicably
outside the current litigation. These issues relating to arbitration are
described in various documents exchanged by the parties since September, 1994;
and
WHEREAS, the purpose of this Letter Agreement is to establish and bind the
parties to a settlement of the arbitration issues and all leases, amendments and
agreements heretofore entered into by the parties shall remain in full force and
effect, except as herein specifically modified.
THEREFORE, in consideration of the above recitals and the mutual promises
and covenants contained herein and other good and valuable consideration, the
sufficiency of which is hereby acknowledged, Ark and Xxxxx agree as follows:
1. Ark shall keep and not be required to repay the disputed
$933,243.65.
2. Ark shall continue to receive credit for the Dragline Deduction
and Preparation Plant Deduction as a direct deduction from production royalty
under the Xxxxx I and Xxxxx II Leases. The parties agree that the deductions for
the dragline and
preparation plant shall be applied in a manner identical to that set forth in
the September 25, 1995 Ark Royalty Report.
3. Effective October 1, 1995 Ark shall not be entitled to include
transloading fees as Allowable Transportation Cost for coal which is trucked,
transloaded and sold F.O.B. barge. As to any other coal trucked, transloaded,
and sold F.O.B., any other destinations Ark shall be entitled to deduct
transloading as an allowable transportation cost if such transloading is
incurred after the loading of the coal on the initial barge. Xxxxx will not be
required to pay any alleged past due amount to Ark associated with and for any
claimed transloading expenses.
4. Ark shall be entitled to deduct all Allowable Transportation Cost
outside the leased premises, except as specifically set forth herein.
5. Ark shall, upon execution of this document, deliver to Xxxxx
$200,000.00 as payment for all disputed past royalty amounts claimed by Xxxxx in
the arbitration.
6. Effective October 1,1995 the Xxxxx I Lease shall be deemed to be
amended to create three (3) different categories of royalty calculations based
on the "gross sales price" as defined therein, which are as follows:
X. Xxxxx sales price equal to or less than $15/per ton (rash
coal).
Fixed royalty rate of 5.75%.
"Allowable Transportation Cost" as defined in the Xxxxx 1
Lease agreement may be deducted before calculating the
royalty.
The $15/ton coal (rash coal) shall not be included in the
amount of tonnage used for the graduated tonnage rate
designated in the Xxxxx I Lease.
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X. Xxxxx sales price greater than $15/ton but equal to or less
than $30/ton.
Fixed rate royalty of 6%.
No deductions except the Dragline Deduction and Preparation
Plant Deduction where applicable.
Coal sold for a gross sales price greater than $15.00 but
equal to or less than $30.00 per ton shall not be included in
the amount of tonnage used for the graduated tonnage rate
designated in the Xxxxx I Lease.
X. Xxxxx Sales price greater than $30/ton.
Included in graduated royalty rates described in Xxxxx I
Lease.
Allowable Transportation Cost as defined in the Xxxxx I Lease
may be deducted before calculating the royalty.
The parties also agree that for the purposes of this Section gross sales price
shall be determined on a monthly weighted average by customer by order.
7. The parties agree that effective October 1,1995 production
royalties under the Xxxxx I and Xxxxx II Leases shall be paid and deductions
taken on "sold" tons. The parties also agree that royalty adjustments due to
increases or decreases in gross sales price as a result of quality premiums or
penalties shall be made at the royalty rate in effect at the time the coal was
sold. Ark agrees to make a good faith estimate of any premium/penalty for the
month coal is sold and pay royalties at the rate then in effect on the gross
sales price adjusted for the estimated premium or penalty.
8. The allocation of transportation expenses between in-lease and
outside of lease is inherently one of a factual nature. Therefore, the parties
hereto agree that the allocation of said expenses and the corresponding amount
per ton to be added back to
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gross sales before the royalty calculation will be calculated on a yearly basis
based upon the actual transportation contract entered by Ark's sublessee for
transportation of the coal from the lease. This determination will be made prior
to the first royalty report of each year. Ark agrees to provide sufficient
information and documentation to enable Xxxxx to verify such rate. However, the
parties hereto agree that the amount to be added back to gross sales per ton in-
lease transportation for the remainder of 1995 will be $0.80 per ton and shall
remain at such rate until such time as the transportation contract is amended.
9. The parties agree that for the purposes of the quarterly
adjustments of the Base Gross Selling price under the AEP/Cardinal Contract
identified pursuant to the December 5,1992 Amendment of Leases any changes in
price under the AEP/Cardinal Contract shall be determined on an F.O.B. Barge
basis regardless of the actual point of delivery.
10. This Letter Agreement shall be effective as of October 1, 1995
and all payments and calculations made with respect to coal sold after said date
shall incorporate the provisions of this Agreement. Except as provided herein,
the parties agree that all amounts due to Xxxxx and/or Ark on the disputed
arbitrable issues have been fully paid through October 1,1995 and that all
issues raised pursuant to the Xxxxxxx & Xxxxxxx Audit dated August 31,1994 shall
be deemed to be resolved. The parties also hereby agree that as of the date
hereof the Xxxxx I Lease is in full force and effect and there exist
4
under the lease no known default, or known event, which with the passage of time
or giving of notice, or both, may constitute a default, and all notices of
default heretofore given are withdrawn.
ARK LAND COMPANY
By: [SIGNATURE ILLEGIBLE]
----------------------
Title: President
XXXXX LAND COMPANY LIMITED
PARTNERSHIP
By: [SIGNATURE ILLEGIBLE]
----------------------
Title: Managing Senior Partner
[NOTARY SEAL APPEARS HERE]
STATE OF MISSOURI ,
-----------
COUNTY OF ST. LOUIS , to wit:
----------
The foregoing instrument was acknowledged before me this 1st day of
---
October, 1995, on behalf of ARK LAND COMPANY, by Xxxxx Xxxxx, its President.
------- ----------- ---------
My commission expires 9-1-96.
------
[SIGNATURE ILLEGIBLE]
---------------------
Notary Public
0
XXXXX XX XXXX XXXXXXXX,
XXXXXX XX XXXXXXX, to wit:
The foregoing instrument was acknowledged before me this 27th day of
----
October, 1995, on behalf of XXXXX LAND COMPANY LIMITED PARTNERSHIP, by
-------
X.X. Xxxxxxx III, its Managing General Partner.
---------------- ------------------------
My commission expires 10-23-04.
---------
/s/ Xxxxxxx Xxxxx
------------------------
Notary Public
[NOTARY SEAL APPEARS HERE]
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AGREEMENT
---------
THIS AGREEMENT made this 27th day of November, 1996 by and between ARK
---- --------
LAND COMPANY, a Delaware corporation. and XXXXX LAND COMPANY LIMITED
PARTNERSHIP, a West Virginia limited partnership.
WHEREAS, Ark is the Lessee on certain tracts of land owned by Xxxxx
pursuant to a Lease dated February 8. 1983, known as the Xxxxxxxx or Xxxxx I
Lease. and a Lease dated December 20. 1989 known as the Xxxxx II or Ark Lease:
WHEREAS, Ark is desirous of obtaining certain concessions pertaining to
the above-mentioned leases; and
WHEREAS, Xxxxx is willing to grant said concessions if Xxxxx is also
granted certain concessions as to said Leases: and
WHEREAS, the parties wish to memorialize their agreement and the various
concessions:
NOW, THEREFORE, WITNESSETH, the following Agreement:
1. The parties agree to enter into an amendment of the Xxxxx II Lease
which is attached hereto as Exhibit AA and incorporated herein by this reference
and agree to abide by the terms and conditions contained therein.
2. Xxxxx agrees to allow Ark (and its lessee) and American Electric
Power to relocate the 138 KV power line presently located on Xxxxx'x property to
a the new location and according to the terms of that certain Memorandum of
Understanding attached hereto as Exhibit BB and incorporated herein by this
reference and the attached map. Xxxxx will have no obligation as to any cost or
expense of this relocation, and Ark agrees to indemnify Xxxxx for
any such cost or expense of said relocation.
3. Xxxxx will allow Ark (or its lessee Catenary Coal) to dispose of used
tires on Xxxxx'x property according to the terms of that certain Consent and
Indemnification Agreement attached hereto as Exhibit CC which includes the
attendant attorney's opinion. surface owner s consent and regulatory consent
letter.
4. The above-mentioned Leases and any other agreements between the
parties other than as amended above shall remain in full force and effect.
5. The individuals executing this Agreement verify that they have full
corporate authority in the case of Ark, and full partnership authority in the
case of Xxxxx, to execute and enter into this Agreement.
6. The parties agree to execute the attached agreements which constitute
exhibits to this Agreement simultaneous with its execution of this Agreement.
IN WITNESS WHEREOF. Xxxxx has caused this Agreement to be signed in
its partnership name by its Managing General Partner and Ark has caused this
Agreement to be signed by a duly authorized person, all of the day and year
first above written.
XXXXX LAND COMPANY LIMITED
PARTNERSHIP, a West Virginia
limited partnership
By: /s/ X. X. Xxxxxxx, III
--------------------------
Its: Managing General Partner
2
ARK LAND COMPANY, a Delaware
corporation
By: [SIGNATURE APPEARS HERE]
-------------------------
Its: President
------------------
STATE OF WEST VIRGINIA,
COUNTY OF KANAWHA, to-wit:
The foregoing instrument was acknowledged before me this 13th day of
December 1996, by X. X. Xxxxxxx, III, Managing General Partner of Xxxxx Land
Company Limited Partnership, a limited partnership.
My commission expires April 8, 2002.
/s/ Xxxx Xxx Xxxxxxx
---------------------
NOTARY PUBLIC
-------------------------
[OFFICIAL SEAL OF NOTARY
PUBLIC APPEARS HERE]
-------------------------
STATE OF MISSOURI,
COUNTY OF ST. LOUIS, to-wit:
The foregoing instrument was acknowledged before me this 27th day of November,
1996, by Xxxxxx X. XxXxxxx, President of Ark Land Company, a Delaware
corporation.
My commission expires 5/14/2000
/s/ Xxxxxx Xxxxxxx
--------------------
NOTARY PUBLIC
------------------------
[OFFICIAL SEAL OF NOTARY
PUBLIC APPEARS HERE]
------------------------
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EXHIBIT AA
LEASE AMENDMENT
---------------
THIS LEASE AMENDMENT, made and entered into this ____ day of ______, 1996,
by and between XXXXX LAND COMPANY LIMITED PARTNERSHIP, a West Virginia limited
partnership ("Lessor") and ARK LAND COMPANY, a Delaware corporation ("Lessee" or
"Ark").
WHEREAS, Lessor and Ark entered into an Agreement of Lease dated December
20, 1989 (known as the Xxxxx II Lease and/or the Ark Lease), wherein Lessor
leased certain property and the right to mine coal therefrom to Ark; and
WHEREAS, the Xxxxx II Lease has been amended on previous occasions of which
the lease and its amendments are collectively referred to as the "Lease"; and
WHEREAS, the Lessor and Ark desire to once again amend the Xxxxx II Lease;
and
WHEREAS, the parties wish to memorialize said amendment subject to the
terms and conditions contained herein.
NOW, THEREFORE, based on the foregoing recitals and mutual covenants and
the conditions contained in the Xxxxx II Lease and this Amendment, the parties
agree as follows:
l. Effective January 1, 1997, Paragraph 4.1 of the Xxxxx II Lease shall
be amended to and the minimum royalty shall be amended as follows:
4.1 Lessee agrees to pay the Lessor as a guaranteed minimum
royalty (GMR) the sum of One Million Twenty Thousand Dollars
($1,020,000.00) for each and every lease year during the term
of this Lease. As used herein, a lease year shall mean from
January 1st to December 31st of each year. The GMR for each
and every lease year shall be due and payable in equal monthly
installments of Eighty-Five Thousand Dollars ($85,000.00)
payable on the 25th day of each month during the term of this
Lease.
2. Effective upon the date of this Amendment, Ark hereby releases to
Lessor, and Lessor hereby accepts from Ark, all of the coal in all seams below
the Coalburg Seam of coal in Tract One (1) of the Xxxxx II Lease. Tract One (1)
of the Xxxxx II Lease is more particularly shown on the map attached hereto as
Exhibit A. The result of this release is that the Xxxxx II Lease will have no
applicability or effect as to the above-mentioned coal.
3. All other terms and conditions of the Xxxxx II Lease and its
amendments shall remain in full force and effect.
4. This Amendment is binding upon each of the parties, their respective
successors and assigns.
5. The individuals executing this Agreement verify that they have full
corporate authority in the case of Ark, and full partnership authority in the
case of Xxxxx, to execute and enter into this Amendment.
LESSOR:
XXXXX LAND COMPANY LIMITED
PARTNERSHIP, a West Virginia
limited partnership
By:_________________________
Its:_____________________
LESSEE:
ARK LAND COMPANY, a West Virginia
corporation
By:_____________________________
Its:_________________________
STATE OF WEST VIRGINIA,
COUNTY OF KANAWHA, to-wit:
The foregoing instrument was acknowledged before me this _____ day of
______, 1996, by X. X. Xxxxxxx, III, Managing General Partner of Xxxxx Land
Company Limited Partnership, a limited partnership.
My commission expires __________________.
________________________
NOTARY PUBLIC
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STATE OF _________________,
COUNTY OF_________________, to-wit:
The foregoing instrument was acknowledged before me this ____ day of _________,
1996, by _______________, _________________, of Ark Land Company, a West
Virginia corporation.
My commission expires ___________________.
______________________
NOTARY PUBLIC
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EXHIBIT BB
MEMORANDUM OF UNDERSTANDING
THIS AGREEMENT, made this ___ day of __________, 1996, between XXXXX LAND
COMPANY LIMITED PARTNERSHIP, ARK LAND COMPANY, CATENARY COAL COMPANY AND
APPALACHIAN POWER COMPANY (hereinafter called "Appalachian"), will serve as
the agreement whereby the parties hereto have agreed to the terms by which
Appalachian will relocate a section of its Baileysville-Kanawha electric
transmission line in order to accommodate mining plans of Catenary Coal Company.
Whereas, Xxxxx Land Company and its lessees, through Agreement dated
January 19, 1953, of record in the Xxxxx County, West Virginia Clerk's office in
Deed Book 76 at page 53 and in the Kanawha County, West Virginia Clerk's office
in Deed Book 1038 at page 357 and through Agreement dated December 1, 1953, of
record in the Xxxxx County, West Virginia Clerk's Office in Contract Book 26, at
page 1, granted Appalachian Electric Power Company (predecessor in title to
Appalachian Power Company) an easement to construct, erect, operate and maintain
a line or lines for the purpose of transmitting electric or other power in, on,
along, over, through or across their lands; and,
Whereas, Catenary Coal Company, sublessee of Xxxxx Land Company, has
requested that Appalachian relocate a portion of its Baileysville-Kanawha
electric transmission line covered by the above two referenced Agreements to
accommodate the mining of coal; and,
Whereas, Catenary Coal Company has agreed the total cost of said relocation
shall be borne by Catenary Coal Company; and,
Whereas, Appalachian has agreed to relocate its said facilities to
accommodate said mining of coal as shown on Exhibit "A" attached hereto:
It is agreed between the parties hereto that:
l. Appalachian will relocate its Baileysville-Kanawha electric transmission
line as shown on Exhibit "A" no later than ________ to accommodate the mining of
Catenary Coal Company, and Xxxxx Land Company agrees to the new location on its
lands as shown on Exhibit "A".
2. Subsequent to the completion of the physical relocation of said
electric transmission line, the parties hereto agree that the existing two
Agreements cited above will be amended in so far as the centerline of the
easement is concerned but otherwise the terms and conditions of said two
Agreements shall remain in full force and effect. Appalachian shall prepare a
supplemental right of way Agreement to accomplish the amendment which shall be
executed by the parties hereto and recorded in the Clerk's Offices.
3. The total cost of said relocation shall be borne by Catenary Coal
Company.
IN TESTIMONY WHEREOF, the parties hereto have executed this Memorandum of
Understanding as of the day and year first above written
XXXXX LAND COMPANY LIMITED PARTNERSHIP
By:___________________________
Its:__________________________
ARK LAND COMPANY
By:___________________________
Its:__________________________
CATENARY COAL COMPANY
By:___________________________
Its:__________________________
APPALACHIAN POWER COMPANY
By:___________________________
Vice-President
EXHIBIT A
Memorandum of Understanding
[MAP APPEARS HERE]
EXHIBIT CC
Consent and Indemnification Agreement
THIS CONSENT AND INDEMNIFICATION AGREEMENT (the "Agreement") is made and
effective this the 31st day of July, 1996, by and between Arch Mineral
Corporation, a Delaware corporation ("Arch"), Ark Land Company, a Delaware
Corporation ("Ark") and Catenary Coal Company, a Delaware corporation
("Catenary") and Xxxxx Land Company Limited Partnership, a West Virginia Limited
Partnership ("Xxxxx").
WHEREAS, Xxxxx has leased certain coal and mining rights located in Kanawha
County, West Virginia to Ark, and, with the consent of Xxxxx, Ark has subleased
such coal and mining rights to Catenary; and
WHEREAS, such coal and mining rights are hereinafter referred to as the
"Premises"; and
WHEREAS, Ark is a wholly owned subsidiaries of Arch; and
WHEREAS, Catenary is a wholly owned subsidiary of Catenary Coal Holdings,
Inc., and Catenary Coal Holdings, Inc. is a wholly owned subsidiary of Arch; and
WHEREAS, Catenary desires to dispose of waste tires used in conjunction
with its mining operations on the Premises; and
WHEREAS, Xxxxx has agreed to consent to such disposal on the express
condition that Arch and Ark indemnify and save Xxxxx harmless from and against
any and all liabilities, losses, claims, damages or demands which arise out of
or are attributable to the disposal by Catenary of waste tires on the Premises.
NOW, THEREFORE, for and in consideration of the mutual covenants and
conditions set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. Upon execution of this Agreement, Xxxxx shall execute the Surface
Owner's Consent, in the form of Exhibit 1, attached hereto and made a part
hereof.
2. Arch, Ark and Catenary shall indemnify and hold harmless Xxxxx from
and against any losses or damages (a) arising out of or attributable to
Catenary's failure to dispose of waste tires in full and strict compliance with
all statutes, rules, regulations and
requirements of any federal, state or local governmental authority or agency
governing the disposal of waste tires on the Premises, including, but not
limited to, that certain Memorandum of Understanding dated November 10, 1994, by
and between the Office of Waste Management of the West Virginia Division of
Environmental Protection, and the Office of Mining and Reclamation of the West
Virginia Division of Environmental Protection and (b) arising out of or related
to any future remedial actions with respect to the existence of any such waste
tires placed on or under the Premises by Catenary and required to be taken by
any federal, state or local governmental authority or agency pursuant to any
future statutes, rules, and regulations governing the disposal of waste tires on
the Premises, regardless of whether Catenary shall have complied with all
statutes, rules, and regulations of any federal, state or local governmental
authority or agency governing the disposal of waste tires on the Premises now
existing or existing at the time of any such disposal.
4. Upon execution of this Agreement, Arch shall deliver to Xxxxx the
Opinion of Xxxxxx X. Xxxxx, Esq., in the form of Exhibit 2, attached hereto and
made a part hereof.
5. This Agreement and the exhibits attached hereto constitute the entire
agreement and understanding of the parties in respect to the transaction
contemplated hereby. All prior agreements, arrangements and understandings of
the parties relating to the subject matter hereof are hereby superseded, and
this Agreement shall not be modified, supplemented or changed in whole or in
part other than by an agreement in writing signed by all parties hereto or their
respective successors or assigns.
6. This Agreement shall be binding and shall inure to the benefit of the
parties hereto, their successors and assigns.
7. This Agreement may be executed in one or more counterparts, each of
which shall be deemed a original and all of which together shall constitute one
agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
first above written.
Arch Mineral Corporation
By:___________________________
Its:__________________________
Ark Land Company
By:___________________________
Its:__________________________
Catenary Coal Company
By:___________________________
Its:__________________________
Xxxxx Land Company Limited Partnership
By:___________________________
Its:__________________________
Exhibit 1
Surface Owner's Consent
Xxxxx Land Company Limited Partnership, a West Virginia Limited Partnership
hereby certifies that Catenary Coal Company shall be allowed to place waste
tires, as defined by that certain Memorandum of Understanding dated
November 10, 1994, by and between the Office of Waste Management of the West
Virginia Division of Environmental Protection, and the Office of Mining and
Reclamation of the West Virginia Division of Environmental Protection, on that
certain property owned by Xxxxx Land Company and encompassed by West Virginia
Surface Mining Permit No.3024-90 and 3004-95.
Xxxxx Land Company Limited Partnership
By: _________________________
Its: _________________________
STATE OF ________________ )
) SS.
COUNTY OF _______________ )
Sworn to and subscribed before me this ___ day of July, 1996 by
____________________________ as ___________________________ of Xxxxx Land
Company Limited Partnership, a West Virginia limited partnership, on behalf of
said limited partnership.
_________________________________
Notary Public
My Commission Expires:
Exhibit 2
July 31, 1996
Xxxxx Land Company Limited Partnership
X.X. Xxx 000
Xxxxxxxxxx, XX 00000
Gentlemen:
I have acted as counsel to Arch Mineral Corporation, a Delaware
corporation ("Arch"), Ark Land Company, a Delaware Corporation, and Catenary
Coal Company ("Catenary"), a Delaware corporation, in connection with the
Consent and Indemnification Agreement, dated July 31, 1996 (the "Agreement"), by
and between Arch, Catenary and Xxxxx Land Company Limited Partnership ("Xxxxx").
This opinion is being delivered pursuant to Section 4 of the Agreement.
Unless otherwise defined herein, capitalized terms used herein are defined as
set forth in the Agreement.
I have participated in the preparation of, and have reviewed executed
copies of the Agreement, have reviewed the Exhibits attached thereto, and have
familiarized myself with Catenary's plan for disposal of waste tires on the
Premises. As to questions of fact material to the opinions expressed herein, I
have, when relevant facts were not independently established by me examined and
relied upon the representations of the officers or other representatives of
Arch, Catenary, Ark Land Company, or of public officials. Having regard for the
foregoing considerations and such other considerations as I deem relevant, I am
of the opinion that, upon Xxxxx'x consent to Catenary's disposal of waste tires
on the Premises and after all necessary revisions to Catenary's permit,
Catenary's plan for disposal of waste tires on the Premises conforms to all
requirements of any federal, state or local governmental authority or agency
governing the disposal of waste tires on the Premises, including but not limited
to, that certain Memorandum of Understanding dated November 10, 1994, by and
between the Office of Waste Management of the West Virginia Division of
Environmental Protection, and the Office of Mining and Reclamation of the West
Virginia Division of Environmental Protection.
The opinions set forth herein are rendered only to you and are solely for
your benefit in connection with the Agreement. The opinions set forth herein may
not be relied upon by you for any other purpose or relied upon by any other
person for any purpose without our prior written consent.
Xxxxx Land Company Limited Partnership
July 31, 1996
Page 2
This opinion letter is governed by, and shall be interpreted in accordance
with, the legal Opinion Accord (the "Accord") of the ABA Section of Business Law
(1991). As a consequence, it is subject to a number of qualifications,
exceptions, definitions, limitations on coverage and other limitations, all as
more particularly described in the Accord, and this Opinion Letter should be
read in conjunction therewith.
Very truly yours,
Xxxxxx X. Xxxxx
Consent and Indemnification Agreement
THIS CONSENT AND INDEMNIFICATION AGREEMENT (the "Agreement") is made and
effective this the 31st day of July, 1996, by and between Arch Mineral
Corporation, a Delaware corporation ("Arch"), Ark Land Company a Delaware
Corporation ("Ark") and Catenary Coal Company, a Delaware corporation
("Catenary") and Xxxxx Land Company Limited Partnership, a West Virginia Limited
Partnership ("Xxxxx").
WHEREAS, Xxxxx has leased certain coal and mining rights located in Kanawha
County, West Virginia to Ark, and, with the consent of Xxxxx Ark has subleased
such coal and mining rights to Catenary; and
WHEREAS, such coal and mining rights are hereinafter referred to as the
"Premises"; and
WHEREAS, Ark is a wholly owned subsidiaries of Arch; and
WHEREAS, Catenary is a wholly owned subsidiary of Catenary Coal Holdings,
Inc., and Catenary Coal Holdings Inc. is a wholly owned subsidiary of Arch; and
WHEREAS, Catenary desires to dispose of waste tires used in conjunction
with its mining operations on the Premises, and
WHEREAS, Xxxxx has agreed to consent to such disposal on the express
condition that Arch and Ark indemnify and save Xxxxx harmless from and against
any and all liabilities, losses, claims, damages or demands which arise out of
or are attributable to the disposal by Catenary of waste tires on the Premises.
NOW, THEREFORE, for and in consideration of the mutual covenants and
conditions set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. Upon execution of this Agreement, Xxxxx shall execute the Surface
Owner's Consent, in the form of Exhibit 1, attached hereto and made a part
hereof.
2. Arch, Ark and Catenary shall indemnify and hold harmless Xxxxx from
and against any losses or damages (a) arising out of or attributable to
Catenary's failure to dispose of waste tires in full and strict compliance with
all statutes, rules, regulations and
requirements of any federal, state or local governmental authority or agency
governing the disposal of waste tires on the Premises, including, but not
limited to, that certain Memorandum of Understanding dated November 10,1994, by
and between the Office of Waste Management of the West Virginia Division of
Environmental Protection, and the Office of Mining and Reclamation of the West
Virginia Division of Environmental Protection and (b) arising out of or related
to any future remedial actions with respect to the existence of any such waste
tires placed on or under the Premises by Catenary and required to be taken by
any federal, state or local governmental authority or agency pursuant to any
future statutes, rules, and regulations governing the disposal of waste tires on
the Premises, regardless of whether Catenary shall have complied with all
statutes, rules, and regulations of any federal, state or local governmental
authority or agency governing the disposal of waste tires on the Premises now
existing or existing at the time of any such disposal.
4. Upon execution of this Agreement, Arch shall deliver to Xxxxx the
Opinion of Xxxxxx X. Xxxxx, Esq., in the form of Exhibit 2, attached hereto and
made a part hereof.
5. This Agreement and the exhibits attached hereto constitute the entire
agreement and understanding of the parties in respect to the transaction
contemplated hereby. All prior agreements, arrangements and understandings of
the parties relating to the subject matter hereof are hereby superseded, and
this Agreement shall not be modified, supplemented or changed in whole or in
part other than by an agreement in writing signed by all parties hereto or their
respective successors or assigns.
6. This Agreement shall be binding and shall inure to the benefit of the
parties hereto, their successors and assigns.
7. This Agreement may be executed in one or more counterparts, each
of which shall be deemed a original and all of which together shall constitute
one agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
first above written.
Arch Mineral Corporation
By: [SIGNATURE ILLEGIBLE]
--------------------------
Its: Vice President
Ark Land Company
By: [SIGNATURE ILLEGIBLE]
--------------------------
Its: President
Catenary Coal Company
By: [SIGNATURE ILLEGIBLE]
--------------------------
Its: Vice President
Xxxxx Land Company Limited Partnership
By: X. X. Xxxxxxx, III
--------------------------
Its: Managing General Partner
Exhibit 1
Surface Owner's Consent
Xxxxx Land Company Limited Partnership, a West Virginia Limited Partnership
hereby certifies that Catenary Coal Company shall be allowed to place waste
tires, as defined by that certain Memorandum of Understanding dated November
10, 1994, by and between the Office of Waste Management of the West Virginia
Division of Environmental Protection, and the Office of Mining and Reclamation
of the West Virginia Division of Environmental Protection, on that certain
property owned by Xxxxx Land Company and encompassed by West Virginia Surface
Mining Permit No.3024-90 and 3004-95.
Xxxxx Land Company Limited Partnership
By: __________________________
Its: __________________________
STATE OF West Virginia )
) SS.
COUNTY OF ___________________ )
Sworn to and subscribed before me this ___ day of July, 1996 by
___________________________ as __________________________ of Xxxxx Land
Company Limited Partnership, a West Virginia limited partnership, on behalf of
said limited partnership.
___________________________________
Notary Public
My Commission Expires:
Exhibit 2
July 31, 1996
Xxxxx Land Company Limited Partnership
X.X. Xxx 000
Xxxxxxxxxx, XX 00000
Gentlemen:
I have acted as counsel to Arch Mineral Corporation, a Delaware
corporation ("Arch"), Ark Land Company, a Delaware Corporation, and Catenary
Coal Company ("Catenary"), a Delaware corporation, in connection with the
Consent and Indemnification Agreement, dated July 31,1996 (the "Agreement"), by
and between Arch, Catenary and Xxxxx Land Company Limited Partnership ("Xxxxx").
This opinion is being delivered pursuant to Section 4 of the
Agreement. Unless otherwise defined herein, capitalized terms used herein are
defined as set forth in the Agreement.
I have participated in the preparation of, and have reviewed executed
copies of the Agreement, have reviewed the Exhibits attached thereto, and have
familiarized myself with Catenary's plan for disposal of waste tires on the
Premises. As to questions of fact material to the opinions expressed herein, I
have, when relevant facts were not independently established by me examined and
relied upon the representations of the officers or other representatives of
Arch, Catenary. Ark Land Company, or of public officials. Having regard for the
foregoing considerations and such other considerations as I deem relevant, I am
of the opinion that, upon Xxxxx'x consent to Catenary's disposal of waste tires
on the Premises and after all necessary revisions to Catenary's permit,
Catenary's plan for disposal of waste tires on the Premises conforms to all
requirements of any federal, state or local governmental authority or agency
governing the disposal of waste tires on the Premises, including, but not
limited to, that certain Memorandum of Understanding dated November 10, 1994, by
and between the Office of Waste Management of the West Virginia Division of
Environmental Protection, and the Office of Mining and Reclamation of the West
Virginia Division of Environmental Protection.
The opinions set forth herein are rendered only to you and are solely
for your benefit in connection with the Agreement. The opinions set forth herein
may not be relied upon by you for any other purpose or relied upon by any other
person for any purpose without our prior written consent.
Xxxxx Land Company Limited Partnership
July 31, 1996
Page 2
This opinion letter is governed by, and shall be interpreted in accordance
with, the legal opinion Accord (the "Accord") of the ABA Section of Business Law
(1991). As a consequence, it is subject to a number of qualifications,
exceptions, definitions, limitations on coverage and other limitations, all as
more particularly described in the Accord, and this Opinion Letter should be
read in conjunction therewith.
Very truly yours,
Xxxxxx X. Xxxxx
