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Coal Mining Lease

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Title:

Coal Mining Lease

Entities:

Peabody Energy Corp.; Penn Virginia Resource LP Corp.; Penn Virginia Resource Partners L.P.

Date:

2003

Size:

51KB total

Price:

$36

ID:

#184329

► Leasing ► Miscellany ► Mining ► Coal Mining Lease Agreements
► Energy ► Coal
► Real Estate

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COAL MINING LEASE

(FEDERAL #2 RESERVES)

Between

SUNCREST RESOURCES LLC

And

STERLING SMOKELESS COAL COMPANY

Dated December 19, 2002

COAL MINING LEASE

INDEX


ARTICLE 1

TERM OF LEASE

Section 1.1	Term	2

ARTICLE 2

MINING OPERATIONS

Section 2.1	Mining Operations	3

ARTICLE 3

ROYALTIES

Section 3.1	Minimum Rental Payments	3

Section 3.2	Production Royalty Payments	4

ARTICLE 4

DEFAULT

Section 4.1	Events of Default	6

Section 4.2	Remedies	8

Section 4.3	Arbitration	10

ARTICLE 5

INDEMNIFICATION

Section 5.1	Indemnification of Lessor	11

ARTICLE 6

TAXES AND INSURANCE

Section 6.1	Payment of Taxes	11

Section 6.2	Insurance	12


ARTICLE 7

INSPECTION AND MINE PLANS

Section 7.1	Lessors Right to Inspect	14

Section 7.2	Mine Plans	14

ARTICLE 8

LOST COAL QUANTITY

Section 8.1	Agreement to Acquire Adverse Interests	15

Section 8.2	Determination of Lost Coal Quantity	16

Section 8.3	Mandatory Sale of Lost Coal Quantities for Failure to Acquire Adverse Interests	17

Section 8.4	Federal No. 2 Order	17

Section 8.5	Determination of Lost Coal Quantity	17

Section 8.6	Mandatory Sale of Lost Coal Quantities for Adverse Chloride Event	19

ARTICLE 9

GENERAL

Section 9.1	Remedies Cumulative	20

Section 9.2	Notices	20

Section 9.3	Binding Effect of Lease	21

Section 9.4	Entire Agreement	21

Section 9.5	Governing Law and Section Headings	21

Section 9.6	Memorandum of Lease	21

Section 9.7	Relationship Between the Parties	21

Section 9.8	Separability of Provisions	22

Section 9.9	Force Majeure	22

Section 9.10	Reconveyance	23

COAL MINING LEASE

THIS COAL MINING LEASE (Lease) is made and entered into as of the 19th day of December, 2002, by and between Suncrest Resources LLC, a Delaware limited liability company, having its principal offices at 2550 East Stone Drive, Suite 200, Kingsport, TN 37660 (the Lessor), and Sterling Smokeless Coal Company, a West Virginia corporation, having its principal offices at 202 Laidley Tower, Charleston, WV 25324 (the Lessee).

WITNESSETH:

WHEREAS, Lessor owns the fee interest in the Pittsburgh seam of coal in certain tracts of land in Monongalia County, West Virginia (the Fee Interests); and

WHEREAS, Lessee has agreed to obtain (i) all subsidence rights with respect to certain tracts of land in Monongalia County, West Virginia (the Subsidence Rights), and (ii) certain adverse Pittsburgh seam of coal interests in four tracts in Monongalia County, West Virginia (the Adverse Pittsburgh Interests and, together with the Subsidence Rights, the Adverse Interests);

WHEREAS, the Fee Interests and the Adverse Interests are collectively referred to herein as the Coal Reserves, which are fully described in Exhibit A attached hereto and made a part hereof; and

WHEREAS, Lessee desires to lease the Coal Reserves from Lessor for the purpose of mining such coal reserves by any underground mining method;

NOW, THEREFORE, in consideration of the premises and of the mutual covenants hereinafter contained, the parties hereto agree as follows:

Subject to the terms hereof, Lessor does hereby lease unto Lessee the Coal Reserves for the purpose of mining the coal by any underground mining method. Lessor also grants to Lessee all such mining rights held by Lessor with respect to the Coal Reserves.

NOTWITHSTANDING ANY PROVISION IN THIS LEASE OR ANY AGREEMENT REFERRED TO HEREIN OR ATTACHED HERETO, LESSOR MAKES NO WARRANTY, EXPRESS OR IMPLIED, WHETHER OF MERCHANTABILITY, QUALITY, QUANTITY, RECOVERABILITY, TITLE OR OTHERWISE AS TO THE COAL RESERVES OR LESSORS INTERESTS THEREIN OR MINING RIGHTS OWNED BY LESSOR, OR AS TO THE CONDITION OF THE COAL RESERVES AND LESSEE SHALL RELY UPON ITS OWN EXAMINATION THEREOF THROUGH ENGINEERS AND OTHER REPRESENTATIVES SELECTED AND EMPLOYED SOLELY BY LESSEE.

Lessees rights hereunder are subject, however, to all rights existing as of the date hereof, including, but not limited to, coalbed methane rights, oil and natural gas lease rights, public roads, public drainage ditches, easements for power lines, pipelines, railroads and rights-of-way, telephone lines, buried cables and all other easements.

TO HAVE AND TO HOLD the same unto the Lessee, its successors and assigns, for and during the term herein set forth and upon the following terms and conditions:

ARTICLE 1

TERM OF LEASE

Section 1.1 Term. The term of this Lease shall commence on the date hereof and terminate on the earlier of (a) the date on which all of the mineable and merchantable coal shall have been removed from the Coal Reserves or (b) the Purchase Date (as defined in Section 9.1(a) of the Purchase and Sale Agreement dated the date hereof (the Purchase Agreement) among Eastern Associated Coal Corp. (EACC), Penn Virginia Resource Partners, L.P., Peabody Energy Corporation (Peabody) and Peabody Natural Resources Company. For purposes of this Lease, the term mineable coal shall mean coal which can be mined by the use of modern, practical and efficient machinery, facilities and methods. The term merchantable coal shall mean coal that is generally mineable at a profit to Lessee.

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