Exhibit 10.33

COAL LEASE AGREEMENT

Between

TYGART RESOURCES, INC.

and

PITTSBURGH-LIGONIER, INC., LESSORS

and

ROCKING CHAIR ENERGY COMPANY, LLC, LESSEE

January 20, 2006

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LEASE AGREEMENT

This Agreement of Lease dated the 20th day of January, 2006, by and between
TYGART RESOURCES, INC., a West Virginia corporation, PITTSBURGH-LIGONIER, INC.,
a West Virginia corporation, (together “LESSOR”), and ROCKING CHAIR ENERGY
COMPANY, LLC, an Alabama limited liability company, (“LESSEE”).

WITNESSETH:

WHEREAS, Lessor desires to lease to Lessee, and Lessee desires to lease from
Lessor, certain of Lessor’s interests in the real properties within the area of
Pleasant District, Barbour County, West Virginia outlined in blue on Exhibit A
(the “Leased Premises”) and listed in Exhibit B, both exhibits attached hereto
and made a part hereof.

NOW, THEREFORE, in consideration of the mutual covenants and conditions herein
contained and intending to be legally bound hereby, the parties hereto (together
the “Parties” and each a “Party”) hereby agree as follows:

ARTICLE ONE

DEMISE

Section 1.01 Demise. Subject to the covenants, conditions and reservations set
forth herein, Lessor hereby demises, rents, leases and lets unto Lessee, and
Lessee hereby takes and hires from Lessor for the Term specified in Article Two,
the sole and exclusive right and privilege to mine and take away, by any lawful
mining method, all of the coal in all of the seam below the Lower Kittanning
seam now owned by the Lessor in all of the tracts or parcels of coal within the
Leased Premises as described or listed in Exhibit B attached hereto (the
“Clarion Seam”).

Section 1.02 Access and Mining Rights. Lessor hereby grants to Lessee for and
during the Term all access rights, mining rights, waivers and immunities owned
or otherwise enjoyed by Lessor with respect to the Leased Premises, including
without limitation, right (i) to drill, mine, dig, ventilate, drain and remove
all of the demised coal therefrom, and (ii) to haul demised coal, mine personnel
supplies, material and equipment over, under or through the Leased Premises and
to use the Leased Premises for any proper purpose.

Section 1.03 Additional Coal Interests. Lessor hereby covenants and agrees that
if Lessor has an interest in or title to any coal which is situate within the
Leased Premises and which is not otherwise herein identified as being part of
the Leased Premises, that Lessor’s interest in or title to such coal shall be
deemed to be included in the Leased Premises, subject to this Lease with the
same terms and conditions as if such additional interest had been identified as
part of the Leased Premises as of the date first above written.

Section 1.04 Exercise of Rights Reserved by Lessor. All remaining rights of
Lessor with respect to the Leased Premises, including without limitation oil and
gas rights, shall be exercised in such a way as not to interfere with the rights
of Lessee hereunder and the location of oil and gas wells and related facilities
shall be subject to the prior written approval of the Lessee.

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*CONFIDENTIAL MATERIAL HAS BEEN

OMITTED AND FILED SEPARATELY WITH

THE SECURITIES AND EXCHANGE

COMMISSION. BRACKETS AND UNDERSCORES

DENOTE SUCH OMISSIONS.

 

ARTICLE TWO

TERM

Section 2.01 Term. The initial term of this Lease shall commence on February 15,
2006 and, unless extended or earlier terminated as provided in Article Nine,
shall expire at 12:00 noon eastern time on the last day of the twentieth Lease
Year (defined in Section 3.02).

Section 2.02 Extension. Upon the expiration of the initial term hereof and each
effective extension of the initial term hereof (“Term”), this Lease shall be
extended for five additional terms of ten (10) years each unless Lessee shall
have given Lessor written notice of Lessee’s intention to terminate this Lease
as provided in Section 9.01 hereof. Each such extension of the Term hereof shall
be on all of the terms and conditions contained herein. The Term hereof shall
expire, unless extended as provided in this Section 2.02 or earlier terminated
as elsewhere expressly provided herein, at 12:00 noon eastern time on the last
day of such term.

Section 2.03 Limitation on Term. If Lessee has not commenced mining coal in the
Clarion Seam within eighteen (18) months from February 15, 2006, this Lease
shall terminate at the option of Lessor unless Lessee pays Lessor the sum of
[_*_] Dollars ($[_*_]) as an advance on royalty, in which case the Lease will
remain in full force and effect until August 15, 2007.

ARTICLE THREE

ROYALTIES

Section 3.01 Royalties. In consideration of the demise of the Leased Premises
contained in Article One, Lessee shall pay coal royalties to Lessor on the
following terms and conditions:

 

  (a) Beginning February 15, 2006, Lessee shall pay the sum of [_*_] Dollars
($[_*_]) per month on or before the 15th day of each month for six (6) months,
[_*_] Dollars ($[_*_]) per month for the next six (6) months, and [_*_] Dollars
($[_*_]) per month for the next six (6) months, all payments of which are to be
an advance on royalty (“Royalty”).

 

  (b) Any sums payable pursuant to Section 2.03 and Section 3.0 1(a) above shall
be considered as an advance on Royalty.

 

  (c) Any advance on Royalty shall be applied as a credit against amounts due
Lessor under Production Royalty payments required pursuant to Section 3.01(d) as
limited pursuant to Section 3.01(f).

 

  (d) Lessee agrees to pay Lessor a production royalty (the “Production
Royalty”) equal to the greater of $[_*_]for each ton or [_*_]% of Gross
Realization per month in accordance with Section 3.03.

 

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*CONFIDENTIAL MATERIAL HAS BEEN

OMITTED AND FILED SEPARATELY WITH

THE SECURITIES AND EXCHANGE

COMMISSION. BRACKETS AND UNDERSCORES

DENOTE SUCH OMISSIONS.

 

  (e) Beginning thirty (30) months after February 15, 2006, Lessee agrees to pay
Lessor at least [_*_] Dollars ($[_*_]) per year (“Minimum Royalty”) as long as
coal subject to this Lease is being mined or is reasonably capable of being
mined according to reasonable mining plans; provided that said Minimum Royalty
shall not be required after Lessor has received [_*_] dollars ($[_*_]) of
Royalties from this Lease Agreement. If Production Royalty during any such Lease
Year is less than said $[_*_], Lessee shall pay the difference by the 10th day
following the end of said Lease Year. Any sums payable pursuant to Section 2.03,
Section 3.01(a), and Section 3.01(e) shall be considered as an advance on
Royalty. If the only coal mined is from other leases and Lessor has received
$[_*_] of Royalties under this Lease Agreement, only wheelage pursuant to
Article Four shall be paid by Lessee to Lessor.

 

  (f) Anything to the contrary contained in this Lease Agreement
notwithstanding, if Lessee has not commenced mining coal within thirty
(30) months after February 15, 2006, Lessee shall commence making monthly
payments of Minimum Royalty in the amount of [_*_] Dollars ($[_*_]), the first
payment of which will be due on the first day of the month following the
thirtieth month after February 15, 2006 or September 1, 2008. Said monthly
Minimum Royalty shall continue until such time as coal production produces
enough Production Royalty to satisfy said Minimum Royalty contained in this
paragraph. If coal production begins greater than thirty (30) months after
February 15, 2006, Lessee shall be entitled to recoup any monies paid as advance
on royalties plus Minimum Royalties previously paid but only after Lessor has
received a monthly payment of $[_*_] from Production Royalty. For example: If
Lessee mines coal sufficient pay Production Royalty of $[_*_] for coal produced
in the 36th month (payment for which is due on or before the 15th day of the
month after Gross Realization as hereinafter defined), it shall have paid $[_*_]
in advance royalty and $[_*_] as Minimum Royalty, a total of $[_*_]; Lessee
shall receive a credit of $[_*_] ($[_*_] less $[_*_]) and shall pay only $[_*_]
to Lessor that month; and the remaining credit available will be reduced to
$[_*_] ($[_*_] less $[_*_]). Failure to pay a minimum of $[_*_] as provided in
this paragraph, shall be a breach of this Lease Agreement, and Lessor shall be
entitled to cancel this Lease ten (10) days after giving written notice to
Lessee unless Lessee within such ten (10) days causes said monthly Minimum
Royalty to be wire transferred into the account designated by Lessor in the
notice of cancellation given to the Lessee.

Section 3.02 Definitions. The following terms whenever capitalized herein are
defined as specified below:

Month means a calendar month.

 

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Mineable Coal means coal within the Leased Premises which Lessee in its sole
discretion considers to be mineable and merchantable. Coal in the Clarion Seam
less than sixty inches (60”) is considered not mineable or merchantable unless
in fact mined by Lessee.

Lease Year means (i) in the case of the first Lease Year, the period beginning
on February 15, 2006 and ending February 15, 2007, and (ii) in the case of
succeeding Lease years, the succeeding periods of twelve (12) months each.

Production means coal from the Leased Premises which during the Month in
question (i) is shipped from the Leased Premises, (ii) title to which has passed
from Lessee, or (iii) is consumed or processed on the Leased Premises by Lessee
or others by means other than cleaning or washing. Tons of Production shall be
measured by the weight of the coal in the form of condition (i.e., clean or raw)
actually shipped, transferred or consumed. Production shall be deemed to occur
at the earliest of the times set forth above.

Gross Realization means with respect to any Month, the sum of:

The aggregate consideration actually received by Lessee for all Production
during the Month which is not sold or transferred to or consumed by Related
Entity (defined in paragraph (c) below):

Plus, with respect to any Production during the Month sold or transferred to or
consumed by a Related Entity, the greater of (i) the product of the Average
Gross Realization (defined in paragraph (a) below) for such Month multiplied by
the actual number of such Tons of such Production, and (ii) the aggregate
consideration received by Lessee for Production not sold, transferred to or
consumed by a Related Entity.

 

  (a) “Average Gross Realization” means with respect to any month:

 

  (1) The aggregate consideration actually received for all Production during
the Month sold or transferred to or consumed by persons other than Related
Entities, divided by the actual number of Tons of such Production; or,

 

  (2) If during a Month more than half of all Production is sold or transferred
to or consumed by Related Entities, the greater of (i) the Average Gross
Realization determined under paragraph (a) (1) above or (ii) the amount of the
highest Average Gross Realization in any of the twelve preceding Months.

 

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  (b) If Production is commingled with coal mined from outside the Leased
Premises or coal tracts within the Leased Premises not owned by Lessor, and
sold, transferred or consumed in a manner which does not differentiate between
the consideration for Production and the consideration for coal not covered by
this Lease, then the consideration for Production shall be deemed the greater of
(i) that share of the total consideration received for Production and coal not
included in this Lease which results from allocating the total consideration on
the basis of the relative weights of Production and coal not included in this
Lease, and (ii) if the Production so commingled, is sold, transferred or
consumed by a Related Entity, the amount of consideration which Lessee would be
deemed to have received therefore under paragraph (a) above. If Production is
commingled with coal not included in this Lease, then the consideration for
Production shall be determined by clauses (i) and (ii) of this paragraph.

 

  (c) The term “Related Entity” shall mean the Lessee and any person which
(i) by means of a legal or equitable ownership of any interest, directly or
indirectly controls, or is controlled by, or is under common control with
Lessee, (ii) makes, commits for or guarantees any loan, extension of credit or
other provision of capital (other than consideration received by Lessee for any
option to purchase or commitment to sell coal mined from the Leased Premises) to
Lessee, or to any (iii) by means of legal or equitable ownership or any
interest, directly or indirectly controls, or is controlled by, or is under
common control with any person or entity which is a Related Entity under clause
(ii) of this paragraph, (iv) received, takes title to or consumes Production in
a less than arms-length transaction, or (v) subleases all or a portion of the
Leased Premises.

 

  (d) The consideration received by Lessee with respect to Production shall mean
all monetary and non-monetary value received by or becoming owing to Lessee,
persons acting on behalf of Lessee, persons designated by Lessee and all Related
Parties and shall include the allocable amount of any consideration previously
so received for any option to purchase or commitment to sell coal which is
applicable to or satisfied in whole or in part by Production during the Month in
question.

 

  (e) Gross Realization with respect to Production from a portion of the Leased
Premises in which Lessor has less than a whole interest shall be equal to (i)
the Gross Realization with respect to such Production multiplied by (ii)
Lessor’s undivided interest in such portion.

 

  (f) Gross Realization shall not be reduced by the amount of any severance,
sales, income or other taxes or governmental impositions or by any royalties to
which Lessee or the Leased Premises are subject. Gross Realization shall not
include transportation costs from the washer or central shipping point to the
customer.

 

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Section 3.03 Production Royalty. Lessee shall pay to Lessor the Production
Royalty on or before the 15th day of each Month following receipt of Gross
Realization, an amount equal to the greater of the amounts described in
Section 3.01(d). Said payments shall be made by wire transfer pursuant to
instructions provided to Lessee by Lessor.

Section 3.04 Monthly Reports and Certification. On or before the 15th day of
each Month, commencing with the first Month in which Production occurs, Lessee
shall furnish Lessor with a written report stating:

 

  (a) The aggregate quantity in tons of Production during the previous Month,
stating separately any quantities of Production which were (i) sold or
transferred to or consumed by Related Entities, (ii) commingled with coal mined
from coal tracts not included in this Lease.

 

  (b) The Average Gross Realization for the previous Month, specifying in
reasonable detail the Lessee’s computation.

 

  (c) The Gross Realization for the previous Month, specifying in reasonable
detail Lessee’s computation, including, without limitation, (i) the nature of
any non-monetary consideration included in the Gross Realization, the value or
values assigned by Lessee to such non-monetary consideration and the method by
which Lessee determined such value or values, (ii) the total amount of any
consideration therefore received by Lessee for any option to purchase or
commitment to sell Production which is applicable to or satisfied in whole or in
part by any sale, transfer or consumption of Production occurring during such
Month, the amount of such consideration allocated to such sale, transfer, or
consumption during such Month and the manner by which Lessee made such
allocation; (iii) the amount allocated by Lessee as consideration for Production
sold, transferred, or consumed by any Related Entity during the Month and the
method by which Lessee determined the amount of such consideration; and (iv) the
amount determined by Lessee to be the consideration for any Production which was
commingled with coal mined from coal tracts not included in this Lease and the
manner in which Lessee determined such amount.

 

  (d) The amount of Production Royalty payable with respect to such Month.

Section 3.05 Additional Information. If during any Month any coal mined from the
Leased Premises was sold or transferred to a Related Entity, then in addition to
the information Lessee is required to furnish Lessor in respect of such Month as
provided in Section 3.4, and at the same time as Lessee furnishes such
information, Lessee shall also furnish to Lessor evidence reasonably
satisfactory to Lessor which established the price Production could have been
sold during such Month in a commercially reasonable manner by Lessee.

Section 3.06 Determination of Tonnage. The number of Tons of Production during
each Month shall be determined as follows:

 

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*CONFIDENTIAL MATERIAL HAS BEEN

OMITTED AND FILED SEPARATELY WITH

THE SECURITIES AND EXCHANGE

COMMISSION. BRACKETS AND UNDERSCORES

DENOTE SUCH OMISSIONS.

 

  (a) The weight of the coal shipped by rail shall be determined by weighing
each entire shipment on railroad approved scales. Whenever Lessee has
established an average car weight with respect to (i) a particular class of
railroad car and (ii) coal of a particular size and type by actual weighings on
approved scales of not less than 500 cars of the class loaded exclusively with
such coal of similar size and type, Lessee may after approval of Lessor in lieu
of actual weighings use the average car weight so established to determine the
weight of any such coal of such size and type shipped in cars of such class.
Such average car weights shall be similarly reestablished upon the written
request of either Party to the other, but not more than once every 90 days.

 

  (b) The weight of any coal not shipped by rail and the weight of any coal
shipped by rail, which is not determined in Section 3.06(a), shall be determined
in accordance with such accurate and mutually agreeable alternative method of
weighing, as Lessor and Lessee shall adopt in writing.

Section 3.07 Lessee’s Continuing Obligation to Pay Correct Production Royalties.
Neither Lessor’s failure to object to any statement in reports furnished by
Lessee of the amount of any Production Royalty nor Lessor’s acceptance of the
amount tendered by Lessee as payment of any Production Royalty shall be deemed
agreement by Lessor to accept or require any amount of such Production Royalty
less than the amount thereof due under the provisions of this Article.

Section 3.08 Security for Payment of Production Royalties. Prior to Lessee’s
removal of coal from the Clarion Seam for which Production Royalties shall
become due or against which advance on Royalties shall be credited, Lessee shall
secure a letter of credit in the amount of [_*_] dollars ($[_*_]) in favor of
Lessor in order to secure the payment of Production Royalties due under this
Lease Agreement. Said letter of credit shall be continually renewed until such
time as coal is no longer being mined from the Clarion Seam; thereafter, the
letter of credit will be reduced to [_*_] dollars ($[_*_]) to secure the payment
of any wheelage required under this Lease Agreement.

ARTICLE FOUR

WHEELAGE

Lessee shall have the right to haul, transport and load coal produced by it from
the Leased Premises, together with the necessary men, material and equipment on,
over, under and through the Leased Premises. If any coal is mined and removed
from coal tracts located beyond or outside the confines of the Leased Premises,
Lessee shall pay to Lessor a wheelage or haulage charge of [_*_] cents ($[_*_])
per ton for such coal hauled, transported or loaded on, over or through the
Leased Premises, payable at the same time as the payment date for Production
Royalties described in section 3.03.

 

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Upon termination of this Lease for any reason other than default by Lessee,
Lessee may elect to continue such rights only as to underground haulageways then
in existence, from year to year, provided Lessee continues to pay such wheelage
charge.

ARTICLE FIVE

TAXES

Section 5.01 Taxes. Lessee shall pay when due and payable all taxes,
assessments, rates excises levies, or licenses, permits or other fees, or other
governmental charges, general or special, ordinary or extraordinary, foreseen or
unforeseen, of any kind or nature whatsoever (each a “Tax”, collectively
“Taxes”) (i) assessed, levied, imposed upon or becoming due and payable out of
or in respect of the Leased Premises during the Term or (ii) assessed, levied,
imposed upon or becoming due and payable out of or in respect of Lessee’s
improvements in or on the Leased Premises, any Production or operations in or on
the Leased Premises, or any other use or occupancy of the Leased Premises during
the Term for which Lessor is, or but for this Lease would be liable or for which
the Leased Premises may be subject to lien. If Lessee fails to make timely
payment of any Taxes within twenty (20) days after either Lessor, or the
government authority imposing or charged with collecting the same, has given
Lessee written notice that the same is due and payable, specifying the amount
thereof, Lessor may in its sole discretion, subject to Section 11.02, pay the
same and Lessee shall reimburse Lessor the amount thereof on demand with
interest as provided in section 13.03. No such payment by Lessor shall be deemed
to waive Lessee’s default in failing to make timely payment thereof, and such
default shall be deemed to continue until Lessee has fully reimbursed Lessor
with interest. Lessor may from time to time elect to pay directly the taxes on
one or more or all separately assessed coal tracts in the Leased Premises and to
be reimbursed by Lessee. Nothing herein shall impose on Lessee any obligation to
pay, or reimburse Lessor’s payments of, any taxes in the nature of a franchise,
income or capital gains tax levied or imposed against Lessor or Lessor’s
interest in Royalties.

Section 5.02 Proration. Upon commencement and termination of this Lease by
expiration of the term or otherwise, Taxes shall be prorated to the date of
commencement or termination, and within ninety (90) days after such commencement
to termination, Lessor or Lessee, as the case may be, shall pay to the other the
amount owing to the other as the result of such proration. The foregoing shall
not be deemed in any way to limit or impair Lessor’s right to recover damages
from Lessee in the event of the termination of this Lease under Sections 9.03 or
9.04 including, without limitation, damages measured in whole or part by
reference to amounts of Taxes payable after such termination.

Section 5.03 Mined-Out Tracts. Promptly after all of the mineable and
merchantable coal in any tract in this Lease which is separately assessed for
the purpose of imposing or levying property taxes is mined-out, Lessee shall
take whatever steps are necessary to cause the value of such coal tract to be
removed from the tax records of the governmental agencies responsible for such
assessments.

 

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ARTICLE SIX

MINING OPERATIONS, RECORDS AND INSPECTIONS

Section 6.01 No Obligation to Mine. Lessee shall have no obligation to undertake
and continue mining operations on the Leased Premises.

Section 6.02 Proper Mining Practices.

 

  (a) Lessee shall mine the Leased Premises in a workmanlike manner by any
method of modern bituminous coal mining then generally accepted in the industry.
Lessee shall endeavor in good faith to comply with all applicable federal and
state laws and municipal ordinances now or hereafter enacted or adopted and with
the lawful requirements of all federal, state and municipal authorities with
respect to the condition of the Leased Premises, Lessee’s use and occupation
thereof and any operation incidental thereto, including, without limitation, any
such laws or requirements relating to mine safety or to the reclamation,
restoration, repair or closure of mined areas or to other environmental
protection or conservation measures. Lessee shall not be deemed in default of
any provision of this Lease for any action other than failure to pay royalties
if and to the extent such action is lawfully required of Lessee in order to
comply with any such state or federal law or municipal ordinance or with
requirements of any such federal, state or municipal authority.

Section 6.03 Records. Lessee shall prepare and keep for not less than three
(3) years (or such longer limit as may be required by law) complete and accurate
records of the mining, processing, use, shipment, and sale or other consumption
of such coal. Lessee shall also retain for such period all other records used in
determining the amount of Gross Realization and Production during the Term,
including, without limitation, copies of all invoices, shipping bills and
records, tax bills, statements, agreements, correspondence, memoranda, mining
and engineering logs, journals and maps relating directly to the quantity of
Production and the consideration received therefore. These provisions shall not
entitle Lessor to inspect any coal sales agreements except those between Lessee
and Related Entities relating to the Leased Premises, nor shall Lessor be
entitled to inspect Lessee’s internal records regarding production and method of
mining except to the extent necessary to determine the quantity of Production
and the consideration received therefor. Lessor, by any of its duly authorized
managers, officers, employees, agents and counsel, shall have the right at all
reasonable times upon reasonable notice to Lessee to have access to any and all
such records, documents and materials, to inspect or audit the same and to copy
therefrom, by hand or by any mechanical, electronic, photographic, electrostatic
or other process, and to use for such copying any facility or equipment Lessee
may have, paying Lessee the actual cost of any such use. Lessee shall cooperate
with Lessor’s authorized officers, employees, agents and counsel in such
inspections or audits. Any data maintained by Lessee in electronic form shall be
made available to Lessor as “hard copy”. Lessor shall not conduct more than one
general inspection in any Lease Year unless it has reasonable factual basis to
believe proper Production Royalty has not been paid. Once a general inspection
or audit has been conducted for a particular year and any adjustments resulting
from such general inspection or audit have been made, that year shall not be
subject to further general inspection or audit.

 

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Section 6.04 Inspection of Premises. Lessor by its duly authorized officers,
employees, agents, and counsel shall have the right at all reasonable times on
reasonable notice to inspect any and all portions of the Leased Premises and any
of Lessee’s operations hereunder. Any such officers, employees, agents or
counsel shall upon arriving at the site of Lessee’s operations on the Leased
Premises promptly report their presence to Lessee’s mine office at the Leased
Premises and shall comply with all applicable safety rules and regulations. All
such visits shall be at the sole risk and expense of Lessor.

Section 6.05 Maps. Lessee shall at all times after Lessee commences Production
from the Leased Premises maintain maps with respect to Lessee’s coal mining
operations within the Leased Premises to the extent and in a manner consistent
with the customary practice of prudent coal operators. Lessee shall furnish to
Lessor a copy of such maps in the form of a true scaled print or tracing
thereof, certified by an officer of Lessee, Superintendent, registered Surveyor
or Mining Engineer as current, complete and accurate, within thirty (30) days
thereafter and as of (i) the first day of the seventh (7th) Month during the
Lease Year. Lessee shall also furnish to Lessor a copy of such map, so
certified, within 30 days after receiving from Lessor any written request
therefore, which Lessor may from time to time make.

Section 6.06 Mining Plans and Production Projections. At least sixty (60) days
before Lessee first commences Production and semiannually thereafter, Lessee
shall furnish to Lessor a copy of Lessee’s plans for mining the Leased Premises
during the coming year, certified as complete and accurate by an officer of
Lessee or Superintendent. Lessee shall conduct any mining operations within the
Leased Premises generally according to the last mining plan submitted to Lessor
but not objected to.

Section 6.07 Objection to Mining Plan. Within thirty (30) days after Lessor
receives any new or revised mining plan from Lessee, Lessor may by notice to
Lessee object that implementation of such mining plan will (i) materially reduce
the economic value of the Leased Premises for reasons other than depletion of
the coal by mining, (ii) unreasonably render Mineable coal unmineable or
(iii) subject any Party-Lessor to criminal liability or to injunctive civil
remedies which would restrict the business activities of any Party-Lessor or its
immediate, intermediate or ultimate parents. Lessee shall attempt to resolve
their disagreement, but if they unable to resolve after twenty (20) days, within
another twenty (20) days thereafter either may invoke Arbitration (defined in
Article Twelve).

Section 6.08 Confidentiality. Lessor shall treat all information received from
Lessee under this Lease as confidential and shall not disclose the same to third
parties except as may be required by law or to enforce Lessor’s rights
hereunder. As used in this section “third parties” shall not include (i) any
parent, subsidiary or affiliate corporation of Lessor, (ii) any partner in any
Lessor or director of any such corporation, or any officer or agent of any of
them, (iii) any prospective purchaser or sublessee of the Leased Premises or
assignee of this Lease or of the capital stock of any Lessor which is a
corporation or their respective parents or (iv) any mortgagee or other person or
entity from whom Lessor is seeking a loan, extension of credit, or other
provision of capital, or any agent of any of them. Such information may be
disclosed to

 

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such enumerated parties upon the condition that each of such enumerated parties
agree in writing that such information will be treated as confidential and will
not be disclosed to any third party except as hereinabove provided.

Section 6.09 Control of Mining. Although Lessor may require and enforce
compliance with Section 6.02 and object to mining plans pursuant to
Section 6.07, Lessor shall have no right to control or direct mining operations
on the Leased Premises by Lessee or Lessee’s employees and contractor.

ARTICLE SEVEN

INDEMNITY AND ASSURANCE

Section 7.01 Indemnification of Lessor. Lessee hereby agrees to indemnify, hold
harmless and defend Lessor from and against any and all loss, cost or liability
(including reasonable attorneys’ fees and investigation costs) arising during or
after the Term out of the possession and use of the Leased Premises by Lessee
and those on the Leased Premises by Lessee’s permission, including without
limitation any (i) claims for death of or injury to persons or destruction of or
damage to property, (ii) any penalties, fines and prosecutions, (iii) suits for
abatement of any public or private nuisance (iv) cost of any restoration,
repair, closure or reclamation of any area, as well as any costs or expenses
related to any such claims, penalties fines, prosecutions, suits or impositions
which are asserted during or after the Term, and (v) costs associated with any
breach of this Agreement by Lessee or its agents, servants or employees.

Section 7.02 Assurance of Performance. It is the intention of Lessor and Lessee
expressed in Section 6.02 and Section 7.01 that Lessee and not Lessor bear the
costs associated with Lessee’s mining operations on the Leased Premises,
including costs of closure and environmental compliance costs arising after the
end of the Term. In order to carry this mutual intention into effect, Lessor may
at its option at any time after the end of the Term convey to Lessee by
quitclaim deed one or more or all of the coal tracts in the Leased Premises
within which Lessee has conducted mining operations, together with whatever
unmined coal tracts within the Leased Premises may be required under applicable
regulations to constitute a mine barrier between the mined portion so conveyed
and surrounding properties owned by third parties, including the portion of the
Leased Premises retained by Lessor. Lessor may not so convey less than all of
any contiguous mined-out portion of the Leased Premises. Lessee agrees to accept
such conveyance and hereby irrevocably appoints Tygart Resources, Inc., its
successors and assigns as Lessee’s attorney-in-fact with power of substitution
in the Leased Premises for the sole purpose of executing such instruments and
performing such acts as may be necessary to perfect of record the foregoing
conveyance from Lessor to Lessee.

 

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ARTICLE EIGHT

INTERNATIONAL COAL GROUP, INC. HAS REQUESTED THAT THE PORTIONS OF THIS DOCUMENT
DENOTED BY BOXES AND ASTERISKS BE ACCORDED CONFIDENTIAL TREATMENT PURSUANT TO
RULE 24B-2 PROMULGATED UNDER THE SECURITIES ACT OF 1934.

LESSOR’S REPRESENTATIONS, WARRANTIES AND COVENANTS

Section 8.01 Lessor’s Warranties of Title. Lessor represents, warrants and
covenants as follows:

 

  (a) Neither Lessor nor anyone claiming by, through or under Lessor has by its
acts or omission caused any title defect to the Leased Premises or caused any
security interests, liens, claims, encumbrances, charges or burdens against the
Leased Premises.

 

  (b) The Leased Premises include a minimum of [_*_] acres of mineable coal of
the seam sometimes referred to as the Clarion seam, the next mineable seam below
the Lower Kittanning coal seam; Lessor has the sole and exclusive right to lease
or let to Lessee the Clarion Seam of coal for the conduct of mining operations
as contemplated by this Lease. For purposes of this Section 8.01(b) and
Section 8.03, Lessor shall not be deemed to have the sole and exclusive right to
lease or let to Lessee the coal of any of the seams below the Lower Kittanning
seam underlying any particular tract or parcel of land, or portion thereof,
unless Lessor has the sole and exclusive right to lease or let to Lessee the
coal of all such seams.

 

  (c) Lessee shall have the quiet enjoyment of the Leased Premises during the
Term. No other warranty of title is expressed or implied.

Section 8.02 Title Defects. If the Lessee determines that a title defect, which
is a breach of the express warranty in Section 8.0 1(a) (“Defect”), exists as to
any part of the Leased Premises, it may notify Lessor as to the existence and
nature of such Defect. Any notice of Defect involving a tract under lease as of
the date of commencement of this Lease shall be given within the first three
(3) Lease Years. Upon expiration of the notice period, the Lessee’s rights to
claim a Defect shall be extinguished.

If it is determined by the parties or by Arbitration that the Lessee does not
have the sole and exclusive leasehold interest in any Mineable Coal within the
Leased Premises as a result of a Defect, Lessee may demand that Lessor cure the
Defect, and Lessor at its expense shall cure the Defect if Lessor can do so at
reasonable expense. If Lessor cannot cure the Defect at reasonable expense, in
lieu of curing the Defect, Lessor shall indemnify Lessee against any claim,
loss, expense (including attorney’s fees and costs) or liability resulting from
the Defect. Lessor shall be responsible for the defense of any claim made
against Lessee as a result of the Defect.

Section 8.03 Remedy for Shortage. If at any time during the first three
(3) Lease Years, Lessor shall have breached its representations and warranties
set forth in Section 8.0 1(b), Lessee may demand that Lessor cure such breach,
and Lessor shall at its expense cure such breach if Lessor can do so at
reasonable expense. If Lessor cannot cure such breach at reasonable expense
within a reasonable period of time and such breach shall have resulted in
Lessee’s not having the sole and exclusive interest in the Mineable Coal within
the Leased Premises, Lessor shall, in lieu

 

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of curing such breach, replace such acreage with other coal equal in tonnage
owned by Lessor adjacent to the Leased Premises and acceptable to Lessee. Lessor
shall be responsible for the defense of any claim made against lessee as a
result of such breach. Exhibit B is a tabulation of the tracts of coal, which
Lessor owns within the Leased Premises; Exhibit B is included as a convenience
to Lessee but it shall not expand the representations and warranties of
Section 8.0 1(b) or the remedy provided in this section.

Section 8.04 Exclusive Remedies. The remedies provided in Section 8.02 and 8.03
shall be Lessee’s exclusive remedies for any Defect or other breach of
representations and warranties in this Article.

ARTICLE NINE

TERMINATION AND DEFAULT

Section 9.01 Termination by Lessee. After September 1, 2008, Lessee may give
written notice to Lessor that Lessee desires to terminate this Lease. Upon such
notice this Lease will terminate (“Lessee Termination”) on the last day of the
then current Lease year (“Termination Date”).

Section 9.02 Effect of Lease Termination. After Lessee gives notice of an
intended Lessee Termination and until the Termination Date, Lessee shall:

 

  (a) Operate its mine and facilities on and associated with the Leased Premises
(the “Mine”) in a reasonable manner so as not to diminish the value of the
Leased Premises.

 

  (b) Maintain the Mine in operating condition, free of accumulations of water,
gas, rubble and other hazards to mining;

 

  (c) Conduct any mining operations within the Leased Premises strictly
according to the last uncontested mining plan provided to Lessor;

 

  (d) Make available to Lessor and any prospective purchaser or sublessee of the
Leased Premises or assignee of the Lessor’s interest in the Lease (i) access to
Lessee’s employees or contractors operating the Mine to answer questions,
(ii) access to the Mine and (iii) all information in the possession of Lessee
its contractors relating to the operation, geology, mining costs or title to the
Mine; and

 

  (e) Make all payments due before the Termination Date without abatement,
proration or excuse. Termination shall not entitle Lessee to a refund of any
advance minimum royalty.

Section 9.03 Default. If Lessee:

 

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  (a) defaults in the payment of any Royalties payable by Lessee hereunder and
continues in such default for ten (10) or more days after notice from Lessor;

 

  (b) defaults in the performance or observance of any other obligation or
condition hereunder, the effect of which default is to subject any Lessor to
criminal liability or to injunctive civil remedies which would restrict the
business activities of the Lessor or its immediate, intermediate or ultimate
parents and Lessee does not within twenty (20) days after notice from Lessor
proceed diligently to cure the default;

 

  (c) defaults in the performance or observance of any other obligation or
condition hereunder, and within ninety (90) days after Lessor has obtained final
declaratory or injunctive judicial relief against Lessee relating to such
default does not proceed diligently to comply with the terms of such judicial
relief;

then Lessor shall then and thereafter have the right, without further notice or
demand except as expressly required hereby:

 

  (1) To terminate this Lease by giving Lessee notice of such Termination, which
shall be effective immediately or, at such later date as may be specified in
such notice;

 

  (2) Whether or not the foregoing right of termination is or has been
exercised, to recover from Lessee at any time or from time to time all unpaid
Royalties reserved to Lessor hereunder as well as damages for such default and
any other default by Lessee in its obligations hereunder;

 

  (3) Without terminating this Lease or releasing Lessee from any of its
obligations hereunder, to re-enter and take possession of the Leased Premises by
any lawful means and, from time to time thereafter, as Lessor may elect, to
occupy or re-let the whole or any part thereof for the amount of Lessee for such
term (which may be less or greater than the remaining portion of the Term) and
upon such other terms and conditions (which may include reduced royalties, or no
royalties) as Lessor may in its sole discretion determine; provided, however,
that Lessor shall continue to have the right at any time to terminate this Lease
as provided in Section 9.03(a) and lessee shall continue to have the right to
terminate this Lease as provided in Section 9.01;

 

  (4) To have such continued default enjoined and to obtain the specific
performance by lessee of any or all of its obligations hereunder; and

 

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  (5) To invoke any other right or remedy available to Lessor at law or in
equity.

Notwithstanding the foregoing, during the period no Mining Operations are being
conducted hereunder, Lessor shall have the right to give notice of termination
of this Lease pursuant to this Section 9.03 only for failure by Lessee to pay
Royalties as provided in Section 3.01, taxes as provided in Article Five,
Minimum Royalties as provided in Section 3.01(e), and wheelage as provided in
Article Four.

Section 9.04 Bankruptcy; Insolvency. If any one or more of the following events
occur:

 

  (a) Lessee is adjudicated bankrupt, insolvent, or unable to pay’ its debts as
they fall due;

 

  (b) Lessee seeks by way of petition, answer or otherwise, any organization,
liquidation, dissolution, arrangement, composition, readjustment or similar
relief under any state or federal bankruptcy, insolvency or debtor relief laws
now or hereafter existing;

 

  (c) Lessee seeks or consents to the appointment of any trustee, receiver,
conservator or liquidator of itself, or the issuance of any order, judgment or
decree providing for any such appointment;

 

  (d) Lessee makes or suffers any general assignment of its assets for the
benefit of creditors: or

 

  (e) Lessee fails, within ten (10) days after the filing of any petition
seeking the adjudication of Lessee as a bankrupt or as insolvent or as unable to
pay its debts as they fall due, or seeking any reorganization, arrangement,
composition, readjustment, liquidation or dissolution of Lease or seeking the
appointment of any trustee, receiver, conservator or liquidator of Lessee or
Guarantor, to file an answer opposing the same or failure by Lessee as the case
may be, within thirty (30) days after filing of any such petition to have the
same denied or dismissed;

Lessor shall then and thereafter have the right, without further notice or
demand except as expressly required herein, to terminate this lease by giving
Lessee written notice of such termination, which shall be effective immediately
or at such later date as may be specified in such notice. Lessor shall have the
further right, whether or not such right of termination is exercised, to recover
from Lessee then and from time to time thereafter, any and all Royalties payable
by Lessee hereunder as well as damages from any default by Lessee in its
obligations hereunder.

 

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Section 9.05 Other Defaults. If Lessee shall default in the performance of any
covenant or condition of this Lease and such default is not then such that
Lessor may invoke the remedies provided in Section 9.03, then Lessor may at its
election from time to time:

 

  (a) Obtain from any court of competent jurisdiction an appropriate declaratory
judgment or mandatory or prohibitory injunction;

 

  (b) Obtain from any court of competent jurisdiction appropriate money damages;

 

  (c) Demand and obtain from lessee a specific agreement to indemnify and hold
it harmless against any harm arising out of such default, which indemnity shall
be an amplification and not a limitation on the indemnity contained in
Section 7.01; and/or

 

  (d) Obtain any other legal, equitable or administrative remedy available to
Lessor except termination of this Lease or ejectment of Lessee from the Leased
premises.

Section 9.06 Non-waiver of Right of Termination. Upon written notice by Lessor
of termination under either Sections 9.03 and 9.04, Lessee shall have no further
right to prevent such termination or to restore this Lease in any other way, by
payment of any Royalties by cure of any other default or by any other remedial
action. Any failure or forbearance of Lessor to pursue any remedy for any
default on the part of Lessee hereunder shall not constitute a waiver of, or
work as an estoppel against, the right of Lessor to terminate this Lease by
reason of any continuing or subsequent default by Lessee. Acceptance by Lessor
of partial payment of any Royalties, payment of which is in default or
acceptance by Lessor of payment of any Royalties, while payment of any other
Royalties or performance of any other obligation is in default shall not
constitute a waiver by Lessor of such default nor preclude Lessor from
terminating this Lease or exercising any other right hereunder, by reason of
such default.

Section 9.07 Re-entry upon Termination. Upon any termination of this lease, all
estate, right and interests of Lessee hereunder shall terminate and Lessor shall
have the immediate right, without notice thereof or demand therefore, to enter
upon and take exclusive possession of the Leased Premises. No termination of
this Lease or repossession of the Leased Premises under this Section or any
other provision hereof shall deprive Lessor of the right to recover from Lessee
the unpaid amount of all Royalties reserved to Lessor hereunder or to recover
from Lessee damages for any default by Lessee in its obligations hereunder.

Section 9.08 Documentation of Termination. At any time after the termination of
this Lease, by expiration of the Term or otherwise, Lessee shall upon the
request of Lessor from time to time (i) execute, acknowledge and deliver to
Lessor a release in recordable form, terminating and releasing to Lessor all of
Lessee’s right, title and interest hereunder in the Leased Premises and such
other instruments as Lessor may reasonably request to evidence such termination
and release, and (ii) either deliver to Lessor a release in recordable form
executed and acknowledged by each other person claiming by, through or under
Lessee who has an interest, beneficially or of record, in the leasehold interest
created by this Lease (e.g., secured

 

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parties, assignees, sublessees and royalty owners), terminating and releasing to
Lessor all such person’s right, title and interest in the Leased Premises,
together with such other instruments executed and acknowledge by each such
person as Lessor may reasonably request to evidence such termination and release
or deliver to Lessor an agreement indemnifying Lessor and holding it harmless
against claims by any such person claiming by, through or under Lessee. All such
instruments shall be in such form and substance as Lessor may reasonably
request.

Section 9.09 Termination for Force Majeure. No event (whether or not beyond
control of Lessor or Lessee), including, without limitation, earthquake, flood,
storm and other acts of God, fire, explosion, destruction of or injury to
Lessee’s plant or other casualty, war, civil commotion, embargo, riot, general
or particular strike, unavailability of materials, lack of railroad cars or
other transportation, change in economic conditions, or change in federal or
state laws or regulations or municipal ordinances or condemnation of the Leased
Premises by power of eminent domain, shall cause or be grounds for any
termination of this Lease or default thereunder. The foregoing does not restrict
or qualify Lessee’s right to affect a Lease Termination.

ARTICLE TEN

ASSIGNMENTS AND TRANSFERS

Section 10.01 Assignment. Subject to Lessor’s consent which may be given in
Lessor’s sole discretion, this Lease may be assignable to any person who
executes and delivers to Lessor a written undertaking to be bound by and perform
all of the terms, conditions and covenants of this Lease. If such assignment
shall be to any other company, which in the reasonable judgment of Lessor shall
be no less capable then Lessee of discharging all of the terms, conditions and
covenants of the Lease, such assignment would relieve Lessee of any further
obligations thereunder.

Section 10.02 Transfers by Lessor. Lessor may transfer all or any part of its
interest in the Leased Premises or in this Lease. If any transferee is a person
who is not already a Party-Lessor, Lessor shall give notice of such transfer to
Lessee. No such transfer shall relieve any Party-Lessor of its obligations under
this Lease.

Section 10.03 Security. This Lease shall not be given as security for the
performance of any obligation of Lessee without Lessor’s expressed written
consent; provided, however, subject to Lessor’s review and approval of security
documents, Lessor agrees that Lessee’s interest in this Lease Agreement may be
pledged to secure financing for the construction of infrastructure providing
access to the Clarion Seam and related expenses thereto. In no event shall the
security documents subordinate or limit any of Lessor’s rights hereunder.

ARTICLE ELEVEN

CONTESTS

Section 11.01 Lessee’s Right to Contest. After written notice to Lessor, Lessee
may at its sole cost contest by appropriate legal proceedings conducted in good
faith and with due diligence (all such proceedings together with appeals
therefrom being hereinafter referred to as “Contests”) the amount, validity and
application, in whole or in part, of any rule, regulation, order or other
determination referred to in Section 5.01 provided that:

 

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  (a) Lessee gives Lessor prior written notice before commencing any such
Contest;

 

  (b) The Contest shall operate to suspend the collection of such Tax or the
enforcement of such ruling, regulation, order or other determination which is
the subject of such Contest;

 

  (c) Lessor shall not be subject to civil or criminal liability because the Tax
in question is not paid or the rule, regulation, or other determination is not
complied with;

 

  (d) Lessee shall have furnished such security, if any, as may be required in
the proceeding;

 

  (e) No notice of termination has been given to Lessee under Section 9.03 or
9.04 and Lessee is in compliance with all of the terms and conditions hereof and
has fulfilled all of Lessee’s obligations hereunder;

 

  (f) Neither Lessor’s interest in this Lease nor Lessor’s reversionary estate
in the Leased Premises shall be in danger of being forfeited or lost.

Section 11.02 Relief from Obligations. If and so long as all the conditions of
Section 11.01 are met, then, during the period that Lessee carries forward any
such Contest in good faith and with due diligence, Lessee shall be relieved from
its obligations herein to pay the Tax or comply with ruling, regulation, order
or other determination with respect to which such Contest is conducted.

ARTICLE TWELVE

ARBITRATION

Section 12.01 Scope of Arbitration. In addition to those disputes expressly
required to be resolved by arbitration elsewhere in this Lease, the following
disputes shall be subject to arbitration as provide in this Article
(“Arbitration”);

 

  (a) Disputes as to the quantity of Production or amount of Gross Realization.

 

  (b) Disputes as to the amount of Mineable Coal within any portion of the
Leased Premises.

 

  (c) Disputes as to the existence of and the amount of Mineable Coal rendered
unmineable by any alleged Defect.

 

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  (d) Disputes as to the amount of coal lost which is to be included in
Production.

 

  (e) Disputes as to the validity of any objection of Lessor to any mining plan
submitted by Lessee or the general conformity of Lessee’s operations to the last
mining plan to which Lessor has not objected.

No other dispute arising under or with respect to this Lease shall be resolved
by Arbitration unless the Parties shall subsequently agree in writing that such
dispute shall be resolved by Arbitration under this Article.

Section 12.02 Arbitration. Any dispute required to be resolved by Arbitration
under Section 12.01 shall, upon the written demand of either Part to the other
therefore, be submitted to arbitration by three arbitrators, one selected by
Lessor, one by Lessee, and a third selected by such first two arbitrators. If
either Party fails to select an arbitrator within fifteen (15) days after the
other has given such written demand, naming its arbitrator therein, or if the
arbitrators, selected as provided herein, shall fail to select a third
arbitrator within twenty (20) days after the appointment of the second of them,
then in the first instance the Party having named its arbitrator and in the
second instance either or both of the Parties may apply to a Judge of the United
States District Court for the Northern District of West Virginia (“Court”), and
said Judge shall appoint such arbitrator for the other Party or such third
arbitrator, as the case may be, after notice and opportunity to be heard has
been given to the other party. No person shall be eligible for appointment as
the third arbitrator who is an officer, employee or shareholder of, or is
otherwise interested in either of the Parties or in the matter to be arbitrated.

Section 12.03 Decision and Binding Effect. The determination of two or more of
the arbitrators on any disputes submitted to them shall be final and binding
upon the Parties and may be enforced by either party in any court of competent
jurisdiction. Arbitration proceedings hereunder shall, except as specifically
provided otherwise herein, comply with the provisions of the commercial rules of
the American Arbitration Association.

Section 12.04 Costs. In any arbitration, Lessor and Lessee shall pay the
expenses of its own arbitrator, witnesses and attorneys, and all other costs
thereof shall be divided equally between them, unless the arbitrators shall
otherwise direct.

Section 12.05 Discovery. In the course of any Arbitration, the arbitrators may
enter orders allowing either Party such discovery of the other Party as would be
allowed in a trial of the same issues by the Court, and they may enforce such
orders with similar sanctions.

Section 12.06 Expert Arbitrators. If any Arbitration involves a Defect, which is
a title defect, the third arbitrator shall be an experienced West Virginia title
attorney. In all other matters the third arbitrator shall be an attorney or
registered engineer experienced in the subject matter of the Arbitration. Unless
all parties consent, no person shall be selected as the third arbitrator who has
performed substantive professional services for any party within the previous
five (5) years.

Section 12.07 Suspension Period for Cure. In the event that whether a default in
Lessee’s obligations has occurred hereunder depends on the determination of any
dispute

 

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required to be resolved by arbitration under Section 12.01, none of the time
permitted under this Lease for cure of such default shall be deemed to elapse
during the period commencing from that date either Party gives the other written
demand for arbitration under Section 12.02 and ending ten (10) days after the
arbitrators have notified Lessee of their final determination of such dispute.

ARTICLE THIRTEEN

GENERAL PROVISIONS

Section 13.01 Notices. Any notice, consent obligation, report, demand, maps,
mining plan, document or other item(s) to be given hereunder (except payment of
Royalties) shall be deemed given, when given in writing and personally delivered
to the applicable Party or when actually received after being mailed first
class, registered or certified mail, postage prepaid, return receipt requested,
in either case delivered to the address indicated below for such Party or such
other address as such Party may from time to time designate by written notice to
the other:

 

If to Lessor:                               

President

Tygart Resources, Inc.

7 Evelyn Court

frwin, Pennsylvania 15642

If to Lessee:   

Jimmie R. Ryan, Manager

Rocking Chair Energy Company, LLC

P. 0. Box 838

Helena, Alabama 35080

With copy to:   

John F. De Buys, Jr., Esq.

BURR & FORMAN LLP

Wachovia Tower

420 North 20th Street, Suite 3100

Birmingham, Alabama 35203

A return receipt from the United States Postal Service shall be a presumption of
receipt of notice.

Section 13.02 Computation of Time; Reference to Periods.

 

  (a) Days. Whenever this Lease states a period of time in number of days, the
period shall be deemed at 12:00 P.M. eastern time on the last day of such
period.

 

  (b) Weekends and Holidays. When any period of time (other than a Year or a
Month) computed hereunder would end upon a Saturday, Sunday or bank holiday
recognized by the State of Pennsylvania such period shall be construed to end
upon the next day following which is not a Saturday, Sunday or such bank
holiday.

 

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Section 13.03 Interest. Whenever any provision of this Lease shall require
payment of interest on any sum, it shall mean interest payable at prime rate
charged by Pittsburgh National Bank (PNC Bank) to its most creditworthy
customers (the “Prime Rate”) computed from the date such sum is payable
hereunder until the date such sum is actually paid.

Section 13.04 Execution in Counterparts. This Lease may be executed in any
number of counterparts and by each Party on separate counterparts, each of which
when so executed and delivered shall be deemed an original and all of which
shall constitute but one and the same instrument.

Section 13.05 Estoppel Certificates.

 

  (a) Lessee shall, at any time and from time to time during the Term, not later
than fifteen (15) days after receiving written request therefore from Lessor,
execute, acknowledge and deliver to Lessor, or such other recipient as such
notice shall direct, a statement in writing (i) certifying that this Lease is
unmodified and in full force and effect (or, if modified, stating the nature of
such modification and certifying that, as so modified, this Lease is in full
force and effect), (ii) acknowledging that there are not, to Lessee’s knowledge,
any uncured defaults on the party of Lessor hereunder (or if such default is
claimed, specifying the nature of such default), and (iii) stating the date to
which any Royalties are paid in advance. Any such statement may be conclusively
relied upon by any prospective purchaser or encumbrancer of the Leased Premises.
Lessee’s failure to deliver any such statement within said fifteen (15) days
shall be conclusive and binding upon Lessee that (i) this Lease is in full force
and effect, without modification except as may be represented by Lessor,
(ii) there are not, to Lessor’s knowledge, any uncured defaults in Lessor’s
performance, and (iii) no Royalties have been paid in advance, except as
represented to such purchaser or encumbrancer in the written statement required
by this Section 13.05(a) by Lessor.

 

  (b) Lessor shall, at any time and from time and time during the Term, not
later than fifteen (15) days after receiving written requests therefore from
Lessee execute, acknowledge and deliver to Lessee, or such other recipient as
such notice shall direct, a statement in writing (i) certifying that this Lease
is unmodified and in full force and effect (or, if modified, stating the nature
of such modification and certifying that, as so modified, this Lease is in full
force and effect), (ii) acknowledging that there are not, to Lessor’s knowledge,
any uncured defaults on the part of Lessee hereunder (or if such default is
claimed, specifying the nature of such default), and (iii) stating the date to
which any Royalties are paid in advance. Any such statement may be conclusively
relied upon by any prospective assignee or sublessee of Lessee’s interest in
this Lease. Lessor’s failure to deliver any such statement within the said
fifteen (15) days shall be conclusive and binding upon Lessor that (i) this is
in full force and effect, without notification except as may be represented by
Lessor, (ii) there are not to

 

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Lessor’s knowledge any uncured defaults in Lessee’s performance, (iii) no
Royalties have been paid in advance, except as represented to such assignee or
sublessee in the written statement required by this Section 13.05(b).

Section 13.06 Non-waiver of Rights and Defaults. No failure or delay of either
Party in the exercise of any right given to each Party hereunder shall
constitute a waiver thereof unless the time, if any, specified herein for
exercise of such right has expired, nor shall any single or partial exercise of
any such right preclude other or further exercise thereof or of any other right.
The waiver of a Party of any default of the other Party hereunder shall not be
deemed to be a waiver of any such subsequent default, or other default of such
other Party. No waiver, release or extension of time for performance of any
obligation hereunder shall be binding against a Party, or admissible in evidence
against a Party in any action brought to enforce any provision hereof or for
damages by reason of an alleged default of any obligation hereunder, unless such
waiver, release or extension is contained in a writing signed by such Party.

Section 13.07 Headings. Article and Section headings herein are used for
convenience of reference only and shall not affect the construction of any
provision of this Lease. All references herein to “Sections,” “Articles” and
“Exhibits” are to sections and articles of and exhibits to this Lease.

Section 13.08 Definitions; Gender and Number. Terms defined in any party of this
Lease shall have the defined meanings wherever capitalized herein. As used in
this Lease, the terms “herein,” “hereof, and “hereunder” shall refer to this
Lease, the singular shall be deemed to refer to the plural and the plural to the
singular, and pronouns of certain gender shall be deemed to comprehend either or
both of the other genders. As use herein, the Term “person” shall be deemed to
refer to any individual person, combination of persons, partnership, corporation
or other legal entity.

Section 13.09 Broker’s Fees. Each party agrees to defend, indemnify and hold
harmless the other from and against any and all claims, demands, losses, costs
and expenses of any kind whatsoever in connection with any claim for a broker’s
fee or commission, with respect to this Lease or any transaction contemplated
herein, arising out of some act of such Party.

Section 13.10 Binding Effect. This Lease shall bind and inure to the benefit of
the Parties and their respective successors and assigns. Nothing herein
contained shall entitle any person other than the Parties, their successors and
assigns, to any claim, cause of action, remedy or right of any kind.

Section 13.11 Further Instruments. Each Party shall from time to time execute
and deliver such further instruments as the other Party or its counsel may
reasonably request to effectuate the express intent of this Lease.

Section 13.12 Survival of Provisions. Any provision herein, which by its terms
has or may have application after the termination of this Lease, shall be
deemed, to the extent of such application, to survive termination of this Lease.

 

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Section 13.13 Entire Agreement; Modification. This Lease constitutes the entire
agreement between the Parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings and representations of the
Parties with respect to the subject matter hereof. This Lease may not be
modified, amended, supplemented or otherwise changes, except by a writing by
both of the Parties.

Section 13.14 Governing Law. This Lease shall be deemed to be contract and lease
made under the laws of the State of West Virginia and for all purposes shall be
governed by and construed in accordance with such laws.

Section 13.15 Joint and Several Obligations. Each and every obligation of the
Parties-Lessor as Lessor shall be joint and several.

Section 13.16 Agency. For all purposes under this Lease, including amendment
hereof, Tygart Resources, Inc. (“Tygart”) shall except as set forth in section
7.02 hereof, be agent of each Party-Lessor as Lessor. Any notice or payment to
Tygart shall be effective as notice or payment to each Party-Lessor as Lessor.
Any notice, consent or waiver by Tygart shall be effective as notice, consent or
waiver by each Party-Lessor as Lessor. Nevertheless, nothing in this Lease shall
constitute the Parties-Lessor a partnership, joint venture or other association.

Section 13.17 Barriers. Lessor hereby waives the statutory restriction against
mining within five feet of the boundary lines of the Leased Premises. Lessee may
mine to the Lessor’s property line if the written consent of adjoining property
owners and mineral lessees, if any, is first obtained.

Section 13.18 Exploration Data. Lessee shall furnish within a reasonable time to
Lessor copies of all drilling, coring, maps, photographs, coal analyses, coal
reserve calculations, and all other exploration data made in connection with
Lessee’s testing of the Mineable Coal in the Leased Premises during the Term of
this Lease.

Section 13.19 Memorandum of Lease. The parties will prepare and execute a
memorandum of this Lease appropriate for recording as well as supplemental
memoranda reflecting the addition of any properties to the Leased Premises. In
the event of any inconsistency between such memoranda and this Lease shall
govern.

 

23

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IN WITNESS WHEREOF, the Parties have caused this Lease to be executed and
delivered by their respective officers, thereunto duly authorized, as of the
date first above written.

 

LESSOR:   TYGART RESOURCES, INC. By:  

/s/ Thomas E. Blandford

    Thomas E. Blandford, President PITTSBURGH-LIGONIER, INC. By:  

/s/ Benjamin H. Putnam

    Benjamin H. Putnam, Jr., President LESSEE:   ROCKING CHAIR ENERGY COMPANY,
LLC By:  

/s/ Jimmie R. Ryan

    Jimmie R. Ryan, Manager

 

24

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EXHIBIT ‘A’

[Map of Leased Premises Intentionally Omitted]

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*CONFIDENTIAL MATERIAL HAS BEEN

OMITTED AND FILED SEPARATELY WITH

THE SECURITIES AND EXCHANGE

COMMISSION. BRACKETS AND UNDERSCORES

DENOTE SUCH OMISSIONS.

 

EXHIBIT ‘B’

to

LEASE AGREEMENT

dated, January 20, 2006

between

TYGART RESOURCES, INC., and

PITTSBURGH-LIGONIER, INC., LESSORS

and

ROCKING CHAIR ENERGY COMPANY, LLC, LESSEE

Clarion Coal Tracts owned within the Leased Premises, situate in:

Pleasant District, Barbour County, WV

 

NO.

 

TRACT NO.

 

TRACT NAME

 

ACRES owned

[_*_]

 

  

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ASSIGNMENT AND CONSENT AGREEMENT

THIS ASSIGNMENT AND CONSENT AGREEMENT (“Agreement”) is dated the 28th day of
March, 2006, and made effective as of the 1st day of April, 2006 by and between:

TYGART RESOURCES, INC. a West Virginia corporation, and PITTSBURGH-LIGONIER,
INC., a West Virginia corporation (herein together called “Lessor”);

ROCKING CHAIR ENERGY COMPANY, LLC, an Alabama limited liability company (herein
called “Lessee”);

and

WOLF RUN MINING COMPANY, a West Virginia corporation (herein called “Assignee”).

Recitals:

A. By Lease Agreement dated January 20, 2006 (the “Base Lease”), by and between
the Lessor herein, Tygart Resources, Inc. and Pittsburgh-Ligonier, Inc., and the
Lessee herein, Rocking Chair Energy Company, LLC, the Lessor leased to Lessee
the sole and exclusive right and privilege to mine and take away, by any mining
method, the Clarion seam of coal owned by the Lessor in all of the tracts or
parcels of coal within the premises described in Exhibit B that is attached to
and made a part of the Base Lease.

B. Lessee desires to assign all of its rights, titles and interests in, to and
under the Base Lease to the Assignee herein, Wolf Run Mining Company, and
Assignee desires to accept such assignment.

C. Lessor desires to consent to the assignment of the Base Lease by Lessee to
Assignee.

NOW, THEREFORE, WITNESSETH: That for and in consideration of the premises and
the covenants and conditions set forth herein, and other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
Lessor, Lessee and Assignee hereby agree as follows:

1. Lessee hereby ASSIGNS and SETS OVER to Assignee all of Lessee’s rights,
titles and interests in, to and under the Base Lease, free and clear of any and
all liens, claims, demands or encumbrances created or existing by, through or
under Lessee.

2. Assignee hereby accepts such assignment and agrees to assume and be bound by
all terms, covenants and conditions applicable to the Lessee as set forth in the
Base Lease, as modified herein, arising from and after the date of such
assignment.

3. Lessor hereby consents to the assignment of the Base Lease from Lessee to
Assignee; provided, however, that the consent hereby given shall not relieve
Assignee of the obligation to obtain Lessor’s consent for any subsequent
assignment of the Base Lease to the extent such consent is required by the terms
of the Base Lease, as the same may be amended from time-to-time.

4. Lessor and Lessee hereby represent and warrant to Assignee as of the date of
this Agreement as follows:

 

1

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a. That the Base Lease is in full force and effect; and

b. That neither Lessor nor Lessee are in default of their respective obligations
under the Base Lease, nor does any circumstance or situation exist that with the
giving of notice or the passage of time would constitute a default by either
Lessor or Lessee under the Base Lease

5. This Assignment and Consent Agreement may be executed in counterparts, and
all counterparts taken together shall constitute one original.

IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Consent
Agreement to be executed by their duly authorized representatives as of the date
set forth above.

 

TYGART RESOURCES, INC. By:  

/s/ Thomas E. Blandford

Print Name:  

Thomas E. Blandford

Title:  

President

PITTSBURGH-LIGONIER, INC. By:  

/s/ Benjamin H. Putnam, Jr.

 

Print Name:  

Benjamin H. Putnam, Jr.

 

Title:  

President

 

ROCKING CHAIR ENERGY COMPANY, LLC By:  

/s/ Jimmie R. Ryan

 

Print Name:  

Jimmie R. Ryan

 

Title:  

Manager

 

WOLF RUN MINING COMPANY By:  

/s/ Samuel R. Kitts

 

Print Name:  

Samuel R. Kitts

 

Title:  

President

 

[Acknowledgments on following page]

 

2

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STATE OF Florida,

COUNTY OF Pinellas, to-wit:

The foregoing Assignment and Consent Agreement was acknowledged before me this
28 day of March, 2006, by Thomas E. Blandford, the President of TYGART
RESOURCES, INC., a West Virginia corporation, for and on behalf of the
corporation.

My commission expires: 8/11/06.

 

/s/ Gregory Mark Cunxscales

Notary Public

[Notary seal required]

STATE OF Ohio,

COUNTY OF Washington, to-wit:

The foregoing Assignment and Consent Agreement was acknowledged before me this
28 day of March, 2006, by Benjamin H. Putnam, Jr. the President of
PITTSBURGH-LIGONIER, INC., a West Virginia corporation, for and on behalf of the
corporation.

My commission expires: 11-06-07.

 

/s/ Patricia E. Beebe

Notary Public

[Notary seal required]

STATE OF Alabama,

COUNTY OF Jefferson, to-wit:

The foregoing Assignment and Consent Agreement was acknowledged before me this
28 day of March, 2006, by Jimmie R. Ryan, the Manager of ROCKING CHAIR ENERGY
COMPANY, LLC, an Alabama limited liability company, for and on behalf of the
company.

My commission expires: 11-16-08.

 

/s/ Carolyn I. Gables

Notary Public

[Notary seal required]

[Additional acknowledgment on following page]

 

2

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COMMONWEALTH OF KENTUCKY,

COUNTY OF GREENUP, to-wit:

The foregoing Assignment and Consent Agreement was acknowledged before me this
31st day of March, 2006, by /s/ Samuel R. Kitts, the President of WOLF RUN
MINING COMPANY, a West Virginia corporation, for and on behalf of the
corporation.

My commission expires: Sept. 8, 2007-03-01.

 

/s/ Marie Hood

Notary Public

[Notary seal required]

Prepared by:

David G. Hammond (W. Va. Bar No. 4843)

Assistant General Counsel

International Coal Group, Inc.

2000 Ashland Drive

Ashland, Kentucky 41101

 

3

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*CONFIDENTIAL MATERIAL HAS BEEN

OMITTED AND FILED SEPARATELY WITH

THE SECURITIES AND EXCHANGE

COMMISSION. BRACKETS AND UNDERSCORES

DENOTE SUCH OMISSIONS.

 

AMENDMENT NO. 1 TO LEASE AGREEMENT

THIS AMENDMENT NO. 1 TO LEASE AGREEMENT is made effective as of the 1st day of
April, 2006, by and between:

TYGART RESOURCES, INC. a West Virginia corporation, and PITTSBURGH-LIGONIER,
INC., a West Virginia corporation (herein together called “Lessor”);

WOLF RUN MINING COMPANY, a West Virginia corporation (herein called “Lessee”).

Recitals:

A. By Lease Agreement dated January 20, 2006 (the “Base Lease”), by and between
the Lessor herein, Tygart Resources, Inc. and Pittsburgh-Ligonier, Inc., and
Rocking Chair Energy Company, LLC (“Rocking Chair”), the Lessor leased to
Rocking Chair the sole and exclusive right and privilege to mine and take away,
by any mining method, the Clarion seam of coal owned by the Lessor in all of the
tracts or parcels of coal within the premises described in Exhibit B that is
attached to and made a part of the Base Lease.

B. By Assignment and Consent Agreement dated March 28, 2006, effective as of
April 1, 2006, Rocking Chair assigned all of its rights, titles and interests
in, to and under the Base Lease to Wolf Run Mining Company, the Lessee herein,
and the Lessor herein consented to such Assignment.

C. Lessor and Lessee desire to modify and amend several provisions in the Base
Lease.

NOW, THEREFORE, WITNESSETH: That for and in consideration of the premises and
the covenants and conditions set forth herein, and other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
Lessor and Lessee hereby agree as follows:

1. Section 2.03 of the Base Lease is hereby stricken in its entirety.

2. Section 3.01 of the Base Lease is hereby stricken in its entirety and the
following new Section 3.01 is hereby added to the terms of the Base Lease:

Section 3.01 Royalties. In consideration of the demise of the Leased Premises
contained in Article One, Lessee shall pay royalties to Lessor on the following
terms and conditions:

 

  (a) For and during the first eighteen (18) months of the initial term of this
Lease, Lessee shall pay to Lessor a monthly advance royalty as follows:

 

 

(i)

For the six (6) month period beginning on February 15, 2006, Lessee shall pay to
Lessor the sum of [_*_] ($[_*_]) per month in advance on the fifteen (15th) day
of each month during said period;

 

 

(ii)

For the six (6) month period beginning on August 15, 2006, Lessee shall pay to
Lessor the sum of [_*_] Dollars ($[_*_]) per month in advance on the fifteen
(15th) day of each month during said period; and

 

Page 1 of 4

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*CONFIDENTIAL MATERIAL HAS BEEN

OMITTED AND FILED SEPARATELY WITH

THE SECURITIES AND EXCHANGE

COMMISSION. BRACKETS AND UNDERSCORES

DENOTE SUCH OMISSIONS.

 

 

(iii)

For the six (6) month period beginning on February 15, 2007, Lessee shall pay to
Lessor the sum of [_*_] Dollars ($[_*_]) per month in advance on the fifteen
(15th) day of each month during said period.

 

  (b) On August 15, 2007, if Lessee has not yet commenced mining coal pursuant
to this Lease, Lessee shall pay to Lessor the sum of [_*_] Dollars ($[_*_]) as
an advance royalty for the period from August 15, 2007, through August 15, 2008.
The failure by Lessee to pay said sum when due shall constitute a default under
this Lease, and Lessor shall be entitled to cancel this Lease ten (10) days
after giving written notice to Lessee unless Lessee, within such ten (10) day
period, causes said advance royalty to be wire transferred to the account
designated by Lessor in the notice of cancellation given to Lessee.

 

  (c) Lessee agrees to pay to Lessor a production royalty (the “Production
Royalty”) in an amount equal to the greater of [_*_] Dollars ($[_*_]) for each
ton or [_*_] percent ([_*_] %) of “Gross Realization,” as defined in
Section 3.02 below, payable in accordance with the requirements set forth
Section 3.03 below.

 

 

(d)

During any “Lease Year,” as defined in Section 3.02 below, that begins on or
after August 15, 2008, if Lessee is mining coal pursuant to this Lease, Lessee
shall pay to Lessor a Production Royalty of at least [_*_] Dollars ($[_*_]) per
month (the “Minimum Monthly Production Royalty”). If the Production Royalty
actually paid by Lessee to Lessor during any month of any given “Lease Year”
after August 15, 2008, is less than the Minimum Monthly Production Royalty,
Lessee shall pay to Lessor no later than the fifteenth (15th) day following the
end of the applicable month the difference between the Minimum Monthly
Production Royalty and the Production Royalty actually paid.

 

 

(e)

If Lessee has not commenced mining coal pursuant to this Lease by August 15,
2008, or if Lessee has been mining coal pursuant to this Lease but at any time
or from time-to-time discontinues mining coal pursuant to this Lease, Lessee
shall pay to Lessor in advance on the 15th day of each month the sum of [_*_]
Dollars and [_*_] Cents ($[_*_]) as an advance royalty. Lessee shall pay such
advance royalty if at any time beginning on August 15, 2008, or thereafter,
Lessee has not mined any coal pursuant to this Lease during the previous thirty
(30) day period.

 

  (f) At such time as Lessee has paid to Lessor the total sum of [_*_] Dollars
($[_*_]) in advance royalty plus Production Royalty payments, Lessee shall not
thereafter be required to make any additional advance royalty payments under
this Lease, regardless of whether Lessee is mining coal pursuant to this Lease.
For purposes of determining when Lessee has paid the total sum of [_*_] Dollars
($[_*_]) in advance royalty plus Production Royalty payments under this Lease,
all payments made by Lessee to Lessor pursuant to this Section 3.01 shall be
included.

 

Page 2 of 4

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*CONFIDENTIAL MATERIAL HAS BEEN

OMITTED AND FILED SEPARATELY WITH

THE SECURITIES AND EXCHANGE

COMMISSION. BRACKETS AND UNDERSCORES

DENOTE SUCH OMISSIONS.

 

  (g) All advance royalty payments made by Lessee to Lessor hereunder shall be
fully recoupable from Production Royalty payments made by Lessee to Lessor;
provided, however, that beginning on September 15, 2008, such recoupment shall
only be applicable to Production Royalty paid to Lessor in excess of $ [_*_] per
month until such time as the advance royalty plus Production Royalty paid under
this Lease reaches the limit of [_*_] Dollars ($[_*_]) established by
Section 3.01(f) above. Thereafter, any advance royalty which has not been
recouped may be recouped from any subsequent Royalty payments. For purposes of
determining which payments may be recouped by Lessee from Production Royalty
payments, all payments made by Lessee to Lessor pursuant to this Section 3.01,
other than Production Royalty payments made pursuant to Section 3.01(c), shall
be included.

3. In Section 3.02 of the Base Lease, the definition of “Lease Year” is hereby
stricken in its entirety and the following new definition is hereby added to the
terms of the Base Lease:

Lease Year means: (i) in the case of the first Lease Year, the period of
eighteen (18) months beginning on February 15, 2006, and ending on August 15,
2007; and (ii) in the case of succeeding Lease Years, any period of twelve
(12) months during the Term of this Lease beginning on August 15 and ending on
the following August 15.

4. Section 10.01 of the Base Lease is hereby amended by adding the following
additional sentence to the end of the existing language of Section 10.01:

Nothing in this Section 10.01 shall prohibit or limit Lessee’s ability to
assign, sublease or transfer Lessee’s interest in this Lease to any direct or
indirect subsidiary company of International Coal Group, Inc. without Lessor’s
consent; provided, however, that no such assignment, sublease or transfer to any
such subsidiary Company shall be effective until after written notice of same is
provided to Lessor, and provided further that no such assignment, sublease or
transfer to any such Subsidiary Company shall relieve Lessee of its obligations
under this Lease.

5. In Section 13.01 of the Base Lease, the Lessee’s address and the “copy to”
address are hereby stricken and the following new addresses are added:

 

If to Lessee:    Wolf Run Mining Company    Attention: President    2708
Cranberry Square    Morgantown, West Virginia 26505 With copy to:    Until July
1, 2006:    International Coal Group, Inc.    Attention: General Counsel    2000
Ashland Drive    Ashland, Kentucky 41101    After July 1, 2006:

 

Page 3 of 4

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*CONFIDENTIAL MATERIAL HAS BEEN

OMITTED AND FILED SEPARATELY WITH

THE SECURITIES AND EXCHANGE

COMMISSION. BRACKETS AND UNDERSCORES

DENOTE SUCH OMISSIONS.

 

International Coal Group, Inc.

Attention: General Counsel

300 Corporate Centre Drive

Scott Depot, West Virginia 25560

6. Except as modified and amended herein, all terms, covenants and conditions of
the Base Lease shall remain in full force and effect.

7. This Amendment No. 1 to Lease Agreement may be executed in counterparts, and
all counterparts taken together shall constitute one original.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to Lease
Agreement to be executed by their duly authorized representatives as of the date
set forth above.

 

TYGART RESOURCES, INC. By:  

/s/ Thomas E. Blandford

Print Name:   Thomas E. Blandford Title:   President PITTSBURGH-LIGONIER, INC.
By:  

/s/ Bejamin H. Putman, Jr.

 

Print Name:   Bejamin H. Putman, Jr. Title:   President WOLF RUN MINING COMPANY
By:  

/s/ Samuel R. Kitts

 

Print Name:   Samuel R. Kitts Title:   President

 

Page 4 of 4

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CORPORATE GUARANTY

KNOW ALL MEN BY THESE PRESENTS: For a valuable consideration, receipt of which
is hereby acknowledged, the undersigned INTERNATIONAL COAL GROUP, INC., a
Delaware corporation (hereinafter called “Guarantor”), absolutely,
unconditionally and irrevocably guarantees, for the benefit of TYGART RESOURCES,
INC., a West Virginia corporation, and PITTSBURGH-LIGONIER, INC., a West
Virginia corporation (collectively, the “Lessor”), the payment and performance
by WOLF RUN MINING COMPANY, a West Virginia corporation (“Lessee”), of each and
every duty, obligation, covenant, agreement, indemnity, responsibility and
liability of Lessee under and pursuant to the Coal Lease Agreement by and
between Tygart Resources, Inc. and Pittsburgh-Ligonier, Inc. and Rocking Chair
Energy Company, LLC, dated the 20th day of January, 2006, as amended by
Amendment No. 1 to Lease Agreement dated effective the 1st day of April, 2006,
and assigned to Wolf Run Mining Company as Lessee by Assignment and Consent
Agreement dated effective the 1st day of April, 2006, together with all loss,
harm and damage, including, without limitation, reasonable attorney’s fees and
costs of litigation, arising from or directly or indirectly related to: (a) the
failure of the Lessee to fully and completely pay and perform all of the
foregoing promptly; and (b) the enforcement of all of the foregoing as well as
this Guaranty. All of the foregoing are collectively referred to as the
“Obligations”.

The liability of Guarantor hereunder shall not be modified, changed, released,
limited or impaired in any manner whatsoever on account of any or all of the
following: (a) the dissolution or termination of Guarantor, Lessee, Lessor or
any other person or entity; (b) the failure by Lessor to file or enforce a claim
against the estate (either in administration, bankruptcy or other proceeding) of
Lessee or any other person or entity; (c) the recovery from Lessee or any other
person or entity becomes barred by any statute of limitations or is otherwise
prevented; or (d) any impairment, modification, change, release or limitation of
the liability of, or stay of actions or lien enforcement proceedings against
Lessee, its property, or its estate in bankruptcy resulting from the operation
of any present or future provision of the Federal Bankruptcy Code (hereinafter
called the “Bankruptcy Code”) or other similar federal or state statute, or from
the decision of any court.

Guarantor will derive substantial benefit from the agreement of Lessor to the
assignment of the Lease from Rocking Chair Energy Company, LLC to Lessee, and
the execution by Guarantor is a condition to Lessor agreeing to the assignment
of the Lease to Lessee. Guarantor absolutely and unconditionally covenants and
agrees that in the event that Lessee does not or is unable so to pay or perform
the Obligations for any reason, including, without limitation, liquidation,
dissolution, receivership, conservatorship, insolvency, bankruptcy, assignment
for the benefit of creditors, sale of all or substantially all assets,
reorganization, arrangements, composition, or readjustment of, or other similar
proceedings affecting the status, composition, identity, existence, assets or
obligations of Lessee, Guarantor shall pay and perform the Obligations and no
such occurrence shall in any way affect Guarantor’s obligations hereunder.

Should the status of Lessee change, this Guaranty shall continue and also cover
the Obligations of Lessee under the new status according to the terms hereof.

--------------------------------------------------------------------------------

In the event any payment by Lessee to Lessor is held to constitute a preference
under the bankruptcy laws, or if for any other reason Lessor are required to
refund such payment or pay the amount thereof to any other party, such payment
by Lessee to Lessor shall not constitute a release of Guarantor from any
liability hereunder, but Guarantor agrees to pay such amount to Lessor upon
demand and this Guaranty shall continue to be effective or shall be reinstated,
as the case may be, to the extent of any such payment or payments.

The rights of Lessor are cumulative and shall not be exhausted by its exercise
of any of its rights hereunder or otherwise against Guarantor or by any number
of successive actions until and unless all Obligations have been paid and have
been performed.

Lessor shall not be required to take any action against Lessee to enforce the
obligations under the Lease but may proceed directly against Guarantor for
violations of the terms and conditions of the Lease, provided that Lessor shall
first give Guarantor notice in writing of the failure of Lessee to perform under
the Lease, and thereafter Guarantor shall have (i) fourteen (14) days to cure
said default if said default is for the payment of money to Lessor, or
(ii) thirty (30) days to cure any other defaults (“Other Defaults”); provided
further that Guarantor shall not be deemed in default in curing Other Defaults
if within said thirty-day cure period it begins curing said Other Defaults and
proceeds diligently to cure said Other Defaults.

All notices, requests, consents, demands, and other communications required or
permitted hereunder shall be in writing and personally delivered to the
applicable Party or when actually received after being mailed first class,
registered or certified mail, postage prepaid, return receipt requested, in
either case delivered to the address indicated below for such Party or such
other address as such Party may from time to time designate by written notice to
the other:

 

If to Lessor:

   President    Tygart Resources, Inc.    7 Evelyn Court    Irwin, Pennsylvania
15642    President    Pittsburg-Ligonier, Inc.    608 Third Street    Marietta,
Ohio 45750

If to Lessee:

   President    Wolf Run Mining Company    2708 Cranberry Square    Morgantown,
West Virginia 26508

If to Guarantor:

   Until July 1, 2006:    International Coal Group, Inc.    Attention: General
Counsel    2000 Ashland Drive    Ashland, Kentucky 41101

 

2

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   After July 1, 2006:    International Coal Group, Inc.    Attention: General
Counsel    300 Corporate Centre Drive    Scott Depot, West Virginia 25560

This Guaranty shall be deemed to have been made under and shall be governed by
the laws of the State of West Virginia in all respects.

This Guaranty may be executed in any number of counterparts with the same effect
as if all parties hereto had signed the same document. All such counterparts
shall be construed together and shall constitute one instrument, but in making
proof hereof it shall only be necessary to produce one such counterpart.

This Guaranty may only be modified, waived, altered or amended by a written
instrument or instruments executed by the party against which enforcement of
said action is asserted. Any alleged modification, waiver, alteration or
amendment which is not so documented shall not be effective as to any party.

The terms, provisions, covenants and conditions hereof shall be binding upon
Guarantor and the successors and assigns of Guarantor and shall inure to the
benefit of Lessor and all transferees, successors, assignees and/or endorsees. A
determination that any provision of this Guaranty is unenforceable or invalid
shall not affect the enforceability or validity of any other provision and any
determination that the application of any provision of this Guaranty to any
person or circumstance is illegal or unenforceable shall not affect the
enforceability or validity of such provision as it may apply to any other
persons or circumstances.

Guarantor represents and warrants that this Corporate Guaranty (a) has been duly
authorized, approved, executed and delivered, and (b) is valid, legally binding,
and enforceable in accordance with its terms.

EXECUTED as the 1st day of April, 2006.

 

  GUARANTOR:   INTERNATIONAL COAL GROUP, INC.   a Delaware corporation ATTEST:  
 

 

  By:  

/s/ Samuel R. Kitts

  Title:   Senior Vice President

 

3