This Royalty Agreement involves
Title: AMENDMENT NO. 1 TO ROYALTY ASSIGNMENT AND AGREEMENT
Industry: Coal Sector: Energy
AMENDMENT NO. 1 TO ROYALTY ASSIGNMENT AND AGREEMENT
This Amendment No. 1 to Royalty Assignment and Agreement dated February 11, 2011 (the “ Amendment ”) amends that certain that certain Royalty Assignment and Agreement dated October 9, 2009 (the “ Royalty Agreement ”) by and between Hidden Splendor Resources, Inc. (“ Grantor ”) and Denly Utah Coal, LLC, a Texas limited liability company (“ Denly ” or “ Grantee ”). Unless otherwise specifically defined herein, the terms used in this Amendment have the same meanings given such terms in the Royalty Agreement.
WHEREAS, Grantor is a wholly owned subsidiary of America West Resources, Inc. (the “ Parent ”) and America West Services, Inc., a Nevada corporation, is also a wholly owned subsidiary of the Parent;
WHEREAS, Grantor has granted to the Grantee certain royalty interests with respect to the Subject Lands (as defined in the Royalty Agreement) pursuant to the Royalty Agreement;
WHEREAS, on the date hereof, the Parent, Denly, John Thomas Bridge and Opportunity Fund, L.P., a Delaware limited partnership, and John Thomas Bridge and Opportunity Fund, L.P. II, a Delaware limited partnership have entered into that certain Loan Agreement and associated documents relating to certain financing transactions (the “ Financing Transactions ”); and
WHEREAS, in connection with the Financing Transactions, the parties desire to enter into this Amendment for the purposes of (a) adjusting the production periods applicable to the royalty interests granted to Grantee and (b) addressing certain related matters, all on the terms and conditions set forth in this Amendment.
NOW THEREFORE, in consideration of the mutual covenants contained in this Amendment and for other good and valuable consideration, the parties hereto agree as follows:
WAIVER AND RELEASE
Waiver and Release of Grantees . The Grantor hereby acknowledge and agree that Grantee has performed all of its obligations under the Royalty Agreement as of the effective date of this Amendment, and the Grantor hereby releases, acquits and discharges Grantee from any and all claims and causes of actions of every kind and character arising out of, or in connection with, the Royalty Agreement or any of the transactions described in the same to the extent the same have arisen or accrued prior to the execution of this Amendment.
Royalty . Section 1 of the Royalty Agreement is hereby amended and restated in its entirety to hereafter read as follows:
Royalty . In consideration of the Financing Renewal, the Financing Transactions and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Grantor hereby assigns, grants and conveys to Grantees an overriding royalty interest on all coal mined, removed and sold from the Subject Lands, in the production periods and in the amounts as followings, on the terms and subject to the conditions herein specified:
January 1, 2020 through December 31, 2021 )
Royalty per ton of coal (2,000 pounds)
Grantor warrants and represents that its conveyance of the above-described overriding royalty interest does not violate the terms of any lease agreement covering the Subject Lands; subject to the Code of Federal Regulations.”
Payment . Section 2 of the Royalty Agreement is hereby amended and restated in its entirety to hereafter read as follows:
Payment . Royalty payments shall be paid not later than fifteen (15) days after the end of each calendar month that includes any portion of the production period covered by this Agreement with respect to all coal from the Subject Lands that is sold during that portion of such calendar month that is included in the production period, beginning with coal sold on or after January 1, 2020 (whether or not such coal was mined before or after January 1, 2020). Payment shall be calculated based on the number of tons sold.”
REPRESENTATIONS AND WARRANTIES
In order to induce the Grantee to enter into this Amendment, the Gra