EXHIBIT 10.3
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 LEASE
AGREEMENT
THIS AMENDED AND RESTATED LEASE
AGREEMENT (“Agreement”) is made on the
22 nd day of June, 2005, effective as of
the 1 st 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 “LANDLORD”), 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 “TENANT”). LANDLORD and TENANT sometimes are
referred to hereinafter individually as a “party” and
collectively as the “parties.”
RECITALS
WHEREAS , LANDLORD is the sole owner of the real estate
on which the Mt. Storm Power Station (“Station”) in
Grant County, West Virginia, is located; and
WHEREAS , LANDLORD and TENANT are parties to that
certain Lease Agreement effective as of January 15, 1996, as
amended (the “Existing Lease Agreement”), pursuant to
which TENANT leases from LANDLORD a certain parcel of real estate
on the Station property for the purpose of operating, using,
maintaining, renewing, replacing and repairing that certain truck
unloading facility which is located on the Station property and
owned on the date hereof by TENANT; and
WHEREAS , subject to the terms and conditions of the
Existing Lease Agreement, the term of the Existing Lease Agreement
will expire at 11:59 p.m. on December 31, 2006 (the “Existing
Lease Expiration Time”); and
WHEREAS , Alliance Coal, LLC, a Delaware limited
liability company and the parent entity of TENANT (“Alliance
Coal”), and LANDLORD have entered into that certain Agreement
for the Supply of Coal dated of even date herewith (the “Coal
Supply Agreement”); and
WHEREAS , subject to the terms and conditions of this
Agreement, after the Existing Lease Expiration Time, TENANT desires
to continue to lease from LANDLORD the parcel of real estate on the
Station property which is subject to the Existing Lease Agreement
for the purpose of continuing to operate, use, maintain, renew,
replace and repair the Existing Truck Unloading Facility as
provided in the Coal Supply Agreement; and
WHEREAS , LANDLORD is willing to extend the term of the
Existing Lease Agreement on and subject to the terms and conditions
of this Agreement.
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, intending to be legally bound, agree as
follows:
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a.
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Subject to the
terms and conditions hereinafter set forth, LANDLORD will rent and
lease to TENANT, and TENANT will rent and lease from LANDLORD, the
Premises (as defined in the Existing Lease Agreement) during the
term hereof.
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b.
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TENANT leases
the Premises “as is” and LANDLORD shall not be
obligated to make any alterations or improvements thereto prior to
or after commencement of this Lease, except as otherwise required
during the term of this Agreement by applicable law or
regulation.
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c.
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Unless required
by the terms and conditions of the Coal Supply Agreement or any of
the Attachments thereto, nothing in this Agreement shall be
interpreted as granting TENANT access to any part of the Station
other than the Premises and access thereto as described
above.
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d.
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Nothing herein
shall require the TENANT to perform or bear the cost or expense of
remediation of any environmental condition or issue existing on or
prior to January 5, 1996, including, without limitation, any such
condition or issue referred to, described or indicated in, the
******. In no event will TENANT have any liability or obligation to
LANDLORD or any other party with respect to any such environmental
condition or issue.
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The parties acknowledge and agree
that, subject to the terms and conditions of this Agreement, the
term of the Existing Lease Agreement shall automatically be
extended pursuant to the terms hereof for an additional term of
seven (7) years after the Existing Lease Expiration Time. The
extended term shall commence at one minute past midnight on the
Effective Date and end at one minute before midnight on the
1 st day of January, 2013 unless
otherwise extended at the mutual agreement of the parties or
terminated sooner in accordance with the provisions of this
Agreement.
This Agreement shall automatically
terminate upon the earlier of (i) the cancellation or termination
of the Existing Lease Agreement prior to the Existing Lease
Termination Time, (ii) the expiration, cancellation, or termination
of the Coal Supply Agreement, or (ii) the transfer to LANDLORD of
title to the Existing Truck Unloading Facility in accordance with
the terms of the Coal Supply Agreement.
2
The rental fee for the term of this
Agreement shall be One Dollar ($1.00), receipt of which LANDLORD
hereby acknowledges.
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a.
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TENANT shall be
entitled to use the Premises only for the purposes of operating,
using, maintaining, renewing, replacing and repairing the Existing
Truck Unloading Facility in connection with the supply of coal to
the Station pursuant to the Coal Supply Agreement, and for no other
use unless written permission is first obtained from LANDLORD for
such other use. TENANT may not use the Premises to provide goods or
services to parties other than LANDLORD, unless otherwise
authorized in writing by the LANDLORD. During the term of this
Agreement, TENANT shall have access to the Premises along a roadway
owned, used and controlled by LANDLORD.
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b. During the term of this
Agreement, the Existing Truck Unloading Facility shall remain the
sole and exclusive property of the TENANT and/or an affiliate of
TENANT. Upon expiration or termination of this Agreement, the
Existing Truck Unloading Facility shall become the property of the
LANDLORD in accordance with paragraph 8.
c. TENANT shall have the right to
place on the Premises such non-permanent machines, tools or other
equipment and items as it shall consider necessary or desirable for
the purpose for which this Agreement is made (collectively,
“Equipment”). Such Equipment shall at all times remain
the sole and exclusive personal property of TENANT and may be
removed by TENANT at any time, whether at the termination of this
Agreement, or prior thereto. TENANT shall be responsible for
property taxes on the Equipment. Any machines, tools, equipment or
other items which TENANT permanently affixes to the Existing Truck
Unloading Facility or the Premises during the term of this
Agreement shall be deemed to be a part of the Existing Truck
Unloading Facility.
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d.
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(i) TENANT
shall not, at any time, use, or store, or permit the use or storage
of, on the Premises, any material designated as hazardous or toxic
(either in its original form or as waste upon disposal) unless
reasonably required by TENANT or TENANT’s subcontractor(s)
for the operation and maintenance of the Existing Truck Unloading
Facility and such use or storage is in compliance with applicable
laws, rules, regulations or ordinances. TENANT agrees not to commit
or permit any waste or nuisance on or about the Premises nor do or
permit any act that poses a threat of environmental harm or damage
which constitutes a violation of applicable environmental laws.
Without limitation of the foregoing, TENANT shall not dispose of
any hazardous or toxic material or petroleum product in, or cause
or permit release of any such material or product into, land,
water, storm drains or sewers on or near the Premises.
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(ii) LANDLORD shall provide TENANT
written notice of violation of the provisions of paragraph 5.d.(i).
If TENANT, in accordance with the applicable laws, fails to
initiate correction of such violation and does not identify a cure
reasonably acceptable to LANDLORD within thirty (30) days of
receipt of LANDLORD’s written notice, TENANT will be in
material default under this Agreement. In the event TENANT fails to
comply with paragraph 5.d.(i) above, and fails or refuses to cure
such noncompliance within thirty (30) days after the date of
TENANT’S receipt of written notice of such noncompliance from
LANDLORD, the LANDLORD may immediately take remedial action to
prevent further noncompliance and contain and clean up releases of
such materials or products, and TENANT shall indemnify LANDLORD for
any reasonable costs and expenses incurred by LANDLORD. LANDLORD
may deduct such costs and expenses from amounts due TENANT under
the Coal Supply Agreement. Any such action by LANDLORD shall not
constitute a waiver of other rights available to LANDLORD under
this Agreement, including but not limited to termination rights.
Nothing in this paragraph 5.d. shall relieve TENANT of any of its
obligations or liabilities under this Agreement or the Coal Supply
Agreement.
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e.
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TENANT shall
not place underground or aboveground storage tanks, other than
those required for the operation of the Existing Truck Unloading
Facility, on the Premises without LANDLORD’s prior written
consent.
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