EXHIBIT 10.4
Portions of this exhibit
indicated by “******” have been omitted pursuant to a
request for
confidential treatment under Rule
24b-2 of the Securities Exchange Act of 1934, as
amended, and the omitted material
has been separately filed with the Securities and
Exchange
Commission.
AMENDED AND RESTATED EQUIPMENT
LEASE AGREEMENT
(Existing Truck Unloading
Facility)
THIS AMENDED AND RESTATED
EQUIPMENT LEASE AGREEMENT (“Agreement”) is made on the
22 nd day of June, 2005 effective as of
the 1st day of January, 2007 (the “Effective Date”), by
and between Virginia Electric and Power Company, a Virginia public
service corporation with its principal office located in Richmond,
Virginia, trading in the Commonwealth of Virginia as
“Virginia Power” and in the State of North Carolina as
“North Carolina Power” (hereinafter referred to as
“Virginia Power”), and Mettiki Coal, LLC, a Delaware
limited liability company which has its principal office located in
Tulsa, Oklahoma and which is the successor entity to Mettiki Coal
Corporation (hereinafter referred to as “Mettiki”).
Virginia Power and Mettiki sometimes are referred to hereinafter
individually as a “party” and collectively as the
“parties.”
RECITALS
WHEREAS , pursuant to the terms of that certain Lease
Agreement effective January 15, 1996 (the “Existing Premises
Lease Agreement”), Mettiki is the lessee of certain real
estate (the “Premises”) owned by Virginia Power and
located at Virginia Power’s Mt. Storm Power Station (the
“Station”) located in Mt. Storm, West Virginia;
and
WHEREAS , Virginia Power and Mettiki are parties to that
certain Equipment Lease Agreement, effective as of January 15, 1996
(the “Existing Equipment Lease”), pursuant to which
Mettiki leases to Virginia Power that certain truck unloading
facility located on the Premises (the “Existing Truck
Unloading Facility”); and
WHEREAS , the term of the Existing Equipment Lease is
coterminous with the Existing Premises Lease Agreement;
and
WHEREAS , subject to the terms and conditions of the
Existing Premises Lease Agreement, the term of the Existing
Premises Lease Agreement will expire at 11:59 p.m. on December 31,
2006 (the “Existing Premises Lease Expiration Time”);
and
WHEREAS , Alliance Coal, LLC, a Delaware limited
liability company and the parent entity of Mettiki (“Alliance
Coal”), and Virginia Power have entered into that certain
Agreement for the Supply of Coal dated of even date (the
“Coal Supply Agreement”); and
WHEREAS , pursuant to the Coal Supply Agreement, the
parties hereto have entered into that certain Amended and Restated
Lease Agreement dated of even date (the “Amended and Restated
Premises Lease Agreement”) pursuant to which the initial term
of the Existing Premises Lease Agreement will be extended on, and
subject to, the terms and conditions of the Amended and Restated
Premises Lease Agreement; and
WHEREAS , subject to and the conditions set forth
herein, Virginia Power and Mettiki also desire to extend the
initial term of the Existing Equipment Lease after the Existing
Premises Lease Expiration Time; and
NOW, THEREFORE, in consideration of
the above Recitals, which are incorporated herein, and for and in
consideration of the mutual covenants and agreements set forth
below, the parties agree as follows:
a. During the term of this
Agreement, the Existing Truck Unloading Facility shall remain the
property of the Mettiki subject to any valid lien of Virginia
Power. Upon expiration or termination of this Agreement, the
Existing Truck Unloading Facility shall become the property of
Virginia Power in accordance with the terms of the Coal Supply
Agreement and the Amended and Restated Premises Lease
Agreement.
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2.
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Lease and
Operation of Existing Truck Unloading Facility
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a. Subject to the terms and
conditions hereof, Mettiki will rent and lease to Virginia Power,
and Virginia Power will rent and lease from Mettiki, the Existing
Truck Unloading Facility during the term hereof. Unless otherwise
agreed to by the parties, the Existing Truck Unloading Facility
shall be used and operated only for the purpose of unloading coal
to be delivered to the Station pursuant to the Coal Supply
Agreement, and no other purpose.
b. Virginia Power shall lease the
Existing Truck Unloading Facility on an “as is” basis
and Mettiki shall not be obligated to make any alterations or
improvements thereto prior to or after commencement of this
Agreement.
c. Virginia Power’s right to
use and operate the Existing Truck Unloading Facility as permitted
herein may only be exercised by (i) Virginia Power and its
employees, and (ii) Virginia Power agents, contractors, and
subcontractors who have been approved in writing by Mettiki, such
approval not to be unreasonably withheld, delayed or
conditioned.
d. This Agreement shall in no way
assign, encumber, lease, sublease or set over either party’s
estate, interests or rights under the Existing Premises Lease
Agreement or the Amended and Restated Premises Lease Agreement, as
appropriate.
e. Mettiki shall operate the
Existing Truck Unloading Facility as contemplated by the parties in
the Coal Supply Agreement and the Ancillary Services Agreement
attached as Attachment 1 to the Coal Supply Agreement.
f. Virginia Power shall be
responsible for all direct costs and expenses to repair damage to
the Existing Truck Unloading Facility caused by the negligence or
intentional acts or omission(s) of Virginia Power and its
affiliates and their respective employees, agents,
contractor’s or subcontractors.
-2-
The term of this Agreement shall be
coterminous with the term of the Amended and Restated Premises
Lease Agreement.
Notwithstanding any other provision
of this Agreement to the contrary, this Agreement shall
automatically terminate upon the expiration, cancellation, or
termination of the Coal Supply Agreement or the Amended and
Restated Premises Lease Agreement.
Virginia Power agrees to pay to
Mettiki a fixed rental fee of $****** per month (the “Fixed
Monthly Fee”) for the lease to Virginia Power of the Existing
Truck Unloading Facility through ******. The Fixed Monthly Fee
shall be payable on the first day of each month during the term
hereof commencing on the Effective Date. The invoicing and payment
of the Fixed Monthly Fee will be effected in accordance with
Article 6 of the Coal Supply Agreement. After ******, and
continuing through the remaining term hereof, the Fixed Monthly Fee
shall be zero.
Any default under this Agreement
will constitute a default under the Coal Supply
Agreement.
Except as otherwise provided herein,
if Mettiki materially fails to comply with any of the provisions of
this Agreement, and shall fail within thirty (30) days after
written notice from Virginia Power to correct such noncompliance,
Virginia Power may terminate this Agreement by giving written
notice of termination to Mettiki. Such termination shall be
effective as specified in the termination notice but not earlier
than one (1) business day following Mettiki’s receipt of such
notice. If Virginia Power terminates this Agreement for
Mettiki’s default pursuant to this paragraph, Alliance Coal
shall be deemed to be in material breach of the Coal Supply
Agreement as of the date of such termination of this Agreement and
Virginia Power may with respect to the Coal Supply Agreement
exercise all remedies available to it at law, in equity or under
the Coal Supply Agreement, including Virginia Power’s
operation of the Existing Truck Unloading Facility as provided in
the Coal Supply Agreement. Termination pursuant to the provisions
of this paragraph shall not constitute a waiver of any other right
or remedy Virginia Power may have under this Agreement.
Except as otherwise provided herein,
if Virginia Power materially fails to comply with any of the
provisions of this Agreement, and shall fail within thirty (30)
days after written notice from