UNIT
PURCHASE AGREEMENT


 


between


 


JET
FUEL, LLC


 


(the
“Purchaser”),


 


and


 


MIDDLE
WILGAT LLC


 


(the
“Seller”)


 


Dated
as of November 25, 2015


 




    	 



    	 	 	 



    

 


UNIT
PURCHASE AGREEMENT


 


THIS
UNIT PURCHASE AGREEMENT (this “Agreement”),
dated as of November 25, 2015 effective November 30, 2015 (the “Effective Date”), is made by and among JET
FUEL, LLC, a Kentucky limited liability company (the “Purchaser”) and MIDDLE WILGAT LLC, a Delaware limited
liability company (the “Seller”). Certain capitalized terms used in this Agreement are defined in Section
1.1 hereof


 


RECITALS


 


WHEREAS,
the Seller now owns, or shall by the Closing Date own, all of the outstanding membership units in GATLING LLC, a West Virginia
limited liability company (“Gatling”), GATLING OHIO LLC, a Delaware limited liability company (“Gatling
Ohio”) and MEIGS POINT DOCK LLC, a Delaware limited liability company (“Meigs Point Dock”) (together,
the “Company”) (and with all of the outstanding membership units of the Company being the “Units”),
which constitutes all of the issued and outstanding Equity Securities, as defined herein, of the Company; and


 


WHEREAS,
the Purchaser desires to purchase from the Seller, and the Seller desires to sell to the Purchaser, all of the issued and outstanding
Equity Securities of the Company upon the terms and subject to the conditions of this Agreement.


 


AGREEMENT


 


NOW,
THEREFORE, in consideration of the mutual covenants and premises contained in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:


 


ARTICLE
I. 

DEFINITIONS


 


1.1 Defined
Terms.


 


As
used herein, the terms below shall have the following meanings:


 


“Action”
means any action, order, writ, injunction, judgment or decree or any claim, suit, litigation, proceeding, dispute, arbitration,
mediation, inquiry, audit, assessment or investigation, or any similar event, occurrence or proceeding.


 


“Affiliate”
means, with respect to any Person (the “referent Person”), any Person that, directly or indirectly, controls the referent
Person, any Person that the referent Person controls, or any Person or entity that is under common control with the referent Person.
For purposes of the preceding sentence, the term “control” means the power, direct or indirect, to direct or cause
the direction of the management and policies of a Person through voting securities, by contract or otherwise.


 




    	 



    	 	 	 



    

 


“Ancillary
Agreements” means the other agreements attached (or forms of which are attached) as exhibits or schedules to this Agreement,
including without limitation, the Loan Agreements, and any document, certificate or instrument delivered pursuant hereto.


 


“Assets”
means, with respect to the Company, all of the Company’s right, title and interest in and to all properties, assets and
rights of any kind, whether tangible or intangible, real or personal and constituting, or used or useful in connection with, or
related to, the business of the Company owned by the Company or in which the Company has any interest, including without limitation
all of Company’s right, title and interest in (a) all accounts and notes receivable (whether current or noncurrent), refunds,
deposits, prepayments or prepaid expenses (including without limitation any prepaid insurance premiums) of the Company, (b) all
Cash held by the Company, (c) all rights and obligations under the Contracts, (d) all rights and obligations under the Leases,
(e) all owned Facilities, (f) all Leased Property, (g) all Improvements, (h) all Fixtures and Equipment, (i) all Inventory, (j)
all Books and Records, (k) all Proprietary Rights relating to the business of the Company, (l) all Permits, (m) all computers
and software, (n) all Insurance Policies, (o) all available supplies, customer, supplier and distributor lists, telephone and
fax numbers and purchasing records related to the business of the Company, (p) all rights under or pursuant to all warranties,
representations and guarantees made by vendors, contractors or suppliers in connection with the Assets or services furnished to
the Company pertaining to the business of the Company or affecting the Assets, (q) all deposits and prepaid expenses of the Company,
(r) all Equity Securities held by the Company, (s) all claims, causes of action, causes in action, rights of recovery and rights
of set-off of any kind, against any Person, including without limitation any liens, security interests, pledges or other rights
to payment or to enforce payment in connection with products delivered by the Company on or prior to the Closing Date, and (t)
all goodwill.


 


“Asset
Retirement Obligation” means any asset retirement obligation of the Company for the past and future coal mining activities.


 


“Balance
Sheet” means the unaudited balance sheet of the Company, dated the Closing Date, together with the notes thereto, if
any.


 


“Books
and Records” means, with respect to the Company, all books, records, lists, ledgers, financial data, files, reports,
product and design manuals, maps, engineering data, plans, drawings, technical manuals and operating records of every kind pertaining
to the Company, or the Assets, in whatever form, including, without limitation, all (a) corporate books and records of the Company,
(b) disk or tape files, printouts, runs or other computer-based information and the Company’s, interest in all computer
programs required to access, and the equipment containing, all such computer-based information, (c) business and marketing plans,
(d) environmental control records, and (e) sales, customer maintenance, and supplier and production records.


 


“Business
Day” means any day other than a Saturday, a Sunday or a day on which banking institutions in New York City are authorized
by Law or executive order to remain closed.


 




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“Cash”
means, with respect to the Company, cash and cash equivalents (including marketable securities and short term investments and
checks received by the Company prior to the Closing Date).


 


“Cessation
Accrual” means the accounting accrual recorded by the Company for future costs associated with the Company’s cessation
of mining operations.


 


“Closing
Date” means December 20, 2015, or such other date as of which all of the conditions set forth in Articles VII and VIII
shall have been satisfied or duly waived but in no event later than December 31, 2015.


 


“Code”
means the Internal Revenue Code of 1986, as amended.


 


“Confidential
Information” means, as to any Person, all proprietary and confidential manufacturing, financial, marketing, operational,
organizational, know-how, customer, vendor, technical and other data relating to the business of such Person, including, without
limitation, all correspondences, memoranda, notes, summaries, analyses, compilations, forecasts, studies, models, extracts of
and documents and records reflecting, based upon or derived from Confidential Information, regardless of who prepares it, as well
as all copies and other reproductions thereof, whether in writing or stored or maintained in or by electronic, magnetic or other
means, media or devices.


 


“Contract”
means, with respect to the Company, as applicable, any agreement, contract, lease, sublease, note, loan, evidence of indebtedness,
indenture, guarantee, purchase order, letter of credit, franchise agreement, undertaking, covenant not to compete, employment
agreement, license, sublicense, instrument, obligation, commitment, purchase and sales order, quotation and other executory commitment
to which the Company is a party or that relates to the businesses of the Company, or its Assets, whether oral or written, express
or implied, and that pursuant to its terms has not expired, terminated or been fully performed by the parties thereto.


 


“Earnest
Money” shall have the meaning set forth in Section 2.1(c) of this Agreement.


 


“Effective
Date” shall mean November 30, 2015.


 


“Employee
Benefit Plans” means all Benefit Arrangements, Multiemployer Plans, Pension Plans and Welfare Plans.


 


“Encumbrance”
means any claim, lien, judgment, pledge, escrow, option, Liability, charge, easement, restrictive covenant, security interest,
deed of trust, right of first refusal, mortgage, right-of-way, encroachment, building or use restriction, encumbrance or other
right of third parties, whether voluntarily incurred or arising by operation of Law, and includes, without limitation, any agreement
to give any of the foregoing in the future, and any contingent or conditional sales agreement or other title retention agreement
or lease in the nature thereof or the filing of, or agreement to give any financing statement, under the Laws of any jurisdiction.


 



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“Environmental
Claims” means, with respect to the Company’s Facilities, all accusations, allegations, notices of violation, liens,
claims, demands, suits, or causes of action for any damage, including, without limitation, personal injury, property damage (including,
without limitation, any depreciation or diminution of property values), lost use of property or consequential damages arising
directly or indirectly out of Environmental Conditions or Environmental Laws. By way of example only (and not by way of limitation),
Environmental Claims include (a) violations of or obligations under any contract related to Environmental Laws or Environmental
Conditions between the Company and any other person, (b) actual or threatened damages to natural resources, (c) claims for nuisance
or its statutory equivalent, (d) claims for the recovery of response costs, or administrative or judicial orders directing the
performance of investigations, responses or remedial actions under any Environmental Laws, (e) requirements to implement “corrective
action” pursuant to any order or permit issued pursuant to the Resource Conservation and Recovery Act, as amended, or similar
provisions of applicable state Law, (f) claims related to Environmental Laws or Environmental Conditions for restitution, contribution,
or indemnity, (g) fines, penalties or liens of any kind against property related to Environmental Laws or Environmental Conditions,
(h) claims related to Environmental Laws or Environmental Conditions for injunctive relief or other orders or notices of violation
from federal, state or local agencies or courts, and (ix) with regard to any present or former employees, claims relating to exposure
to or injury from Environmental Conditions.


 


“Environmental
Conditions” means, with respect to the Company, the state of the environment, including natural resources (e.g.,
flora and fauna), soil, surface water, ground water, any present or potential drinking water supply, subsurface strata or ambient
air, relating to or arising out of the use, handling, storage, treatment, recycling, generation, transportation, release, spilling,
leaking, pumping, pouring, emptying, discharging, injecting, escaping, leaching, disposal, dumping or threatened release of Hazardous
Substances by the Company, or any of its predecessors or successors in interest, or by their respective Representatives when in
such capacity on behalf of the Company. With respect to Environmental Claims by third parties, Environmental Conditions also include
the exposure of Persons to Hazardous Substances at the work place or the exposure of Persons or property to Hazardous Substances
migrating from or otherwise emanating from or located on property owned or occupied by the Company.


 


“Environmental
Laws” means any and all international, federal, state, local or foreign Laws, statutes, ordinances, regulations, treaties,
policies, guidance, rules, judgments, orders, writs, court decisions or rule of common law, stipulations, injunctions, consent
decrees, Permits, restrictions and licenses, which (a) regulate or relate to the protection or cleanup of the environment; the
use, treatment, storage, transportation, handling, disposal or release of Hazardous Substances, the preservation or protection
of waterways, groundwater, drinking water, air, wildlife, plants or other natural resources; or the health and safety of Persons
or property, including protection of the health and safety of employees; or (b) impose liability or responsibility with respect
to any of the foregoing, including CERCLA, or any other law of similar effect.


 


“Equity
Securities” means (a) Units or other equity securities or interests, (b) subscriptions, calls, warrants, options or
commitments of any kind or character relating to, or entitling any Person to purchase or otherwise acquire, any Units or other
equity securities or interests and (c) securities convertible into or exercisable or exchangeable for Units or other equity securities
or interests.


 




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“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.


 


“ERISA
Affiliate” means, with respect to Company, any entity (whether or not incorporated) that is (or at any relevant time
was) a member of a “controlled group of corporations” with, under “common control” with, a member of an
“affiliated service group” with, or otherwise required to be aggregated with, the Company, as set forth in Section
414(b), (c), (m) or (o) of the Code.


 


“Facilities”
means, with respect to the Company, all mines, offices, coal mining and preparation facilities, warehouses, coal stockpiles and
storage areas, mine infrastructure, beltlines, conveyors, administration buildings and all parcels of real property and related
facilities currently owned, leased or operated by the Company, all as identified or listed on Schedules 3.4(a) and 3.4(b).


 


“Financial
Statements” means the Year End Financial Statements and the Interim Financial Statements.


 


“Fixtures
and Equipment” means, with respect to the Company, all of the furniture, fixtures, furnishings, machinery, mobile equipment,
computer hardware, appliances, vehicles and other personal property currently owned or leased by the Company, wherever located
(including all warranty rights with respect thereto), including any such fixtures and equipment in the possession of any of the
Company’s respective suppliers or other vendors, and all spare parts and supplies related thereto.


 


“GAAP”
means accounting principles generally accepted in the United States of America.


 


“Governmental
Entity” means any nation, federal, state, county municipal, local or foreign government, or other political subdivision
thereof and any entity exercising executive, legislative, judicial, regulatory, taxing or administrative functions of or pertaining
to government.


 


“Hazardous
Substances” means any pollutant, chemical, substance and any toxic, infectious, carcinogenic, reactive, corrosive, ignitable
or flammable chemical, or chemical compound, or hazardous substance, material or waste, whether solid, liquid or gas, that is
subject to regulation, control or remediation under any Environmental Laws, including without limitation, any quantity of asbestos
in any form, urea formaldehyde, PCBs, radon gas, crude oil or any fraction thereof, all forms of natural gas, petroleum products
or by-products or derivatives.


 


“Improvements”
means any buildings, roofs and structural elements thereof and any systems and facilities included therein (including, but not
limited to, building systems, heating, ventilation, air conditioning, plumbing, electrical, mechanical, sewer, waste water, storm
water), parking lots, paving and parking equipment, other structures and improvements, and fixtures located on, under or in any
Facility.


 




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“Initial
Deposit” shall have the meaning set forth in Section 2.1(c) of this Agreement.


 


“Insurance
Policies” means the insurance policies listed in Schedule 3.13.


 


“Intellectual
Property Rights” means all (a) U.S. and foreign patents and patent applications and disclosures relating thereto (and
any patents that issue as a result of those patent applications), and any renewals, reissues, reexaminations, extensions, continuations,
continuations-in-part, divisions and substitutions relating to any of the patents and patent applications, as well as all related
foreign patent and patent applications that are counterparts to such patents and patent applications, (b) U.S. and foreign trademarks,
service marks, trade dress, logos, trade names and corporate names, whether registered or unregistered, and the goodwill associated
therewith, together with any registrations and applications for registration thereof, (c) U.S. and foreign copyrights and rights
under copyrights, whether registered or unregistered, including moral rights, and any registrations and applications for registration
thereof, (d) U.S. and foreign mask work rights and registrations and applications for registration thereof, (e) rights in databases
and data collections (including knowledge databases, customer lists and customer databases) under the laws of the United States
or any other jurisdiction, whether registered or unregistered, and any applications for registration therefor, (f) trade secrets
and other rights in know-how and confidential or proprietary information (including any business plans, designs, technical data,
customer data, traffic data, financial information, pricing and cost information, bills of material, or other similar information),
(g) URL and domain name registrations, (h) inventions (whether or not patentable) and improvements thereto, (i) all claims and
causes of action arising out of or related to infringement or misappropriation of any of the foregoing, and (j) other proprietary
or intellectual property rights now known or hereafter recognized in any jurisdiction.


 


“Interim
Financial Statements” means (a) the balance sheet of the Company as of September 30, 2015, and (b) the related statements
of income, changes in members’ equity and cash flows of the Company for the period from January 1, 2015 to September 30,
2015.


 


“Inventory”
means, with respect to the Company, (a) all mine supplies, parts and other products owned by the Company for use in the Ordinary
Course of Business or otherwise under the control of the Company or carried on the books of the Company for use by the Company
and (b) all office supplies and similar materials of the Company.


 


“Knowledge
of Seller” means, with respect to a particular matter, the actual knowledge of Duane Blankenship and Shawn Ray.


 


“Law”
means any federal, state, local or foreign law, statute, code, ordinance, rule, regulation, order, judgment, writ, stipulation,
award, injunction, decree or arbitration award or finding.


 


“Leases”
means, with respect to the Company, as applicable, all of the leases or subleases for personal or real property to which the Company
is a party or by which the Company is bound.


 




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“Liabilities”
means any liability, loss, indebtedness, obligation, co-obligation, commitment, cost, expense, claim, damage, deficiency, guarantee
or endorsement of or by any Person of any nature (whether direct or indirect, known or unknown, absolute or contingent, liquidated
or unliquidated, due or to become due, accrued or unaccrued, matured or unmatured, or otherwise).


 


“Loan
Agreements” shall mean (a) the Secured Promissory Note by and between Jet Fuel, LLC as Maker and Middle Wilgat LLC as
Holder, in the form attached hereto as Exhibit A; (b) the Security Agreement by and between Jet Fuel, LLC, as Debtor and
Middle Wilgat LLC, as Secured Party, in the form attached hereto as Exhibit B;; and (c) the Guaranty Agreement by Royal
Energy Resources, Inc., as Guarantor, for the benefit of Middle Wilgat LLC, as Lender, in the form attached hereto as Exhibit
C.


 


“Material
Adverse Effect,” “Material Adverse Change” or a similar phrase means, with respect to the Company,
any material adverse effect on or change with respect to (i) the business, operations, Assets (taken as a whole), Liabilities
(taken as a whole), condition (financial or otherwise), results of operations or prospects of the Company, taken as a whole, (ii)
the Company’s relations with its respective customers, suppliers and distributors, or (iii) the right or ability of the
Seller or the Company to consummate any of the transactions contemplated hereby or by the Ancillary Agreements.


 


“Multiemployer
Plan” means, with respect to the Company, any “multiemployer plan,” as defined in Section 4001(a)(3) or
Section 3(37) of ERISA, which (a) the Company, or any ERISA Affiliate maintains, administers, contributes to or is required to
contribute to, or, after September 25, 1980, maintained, administered, contributed to or was required to contribute to, or under
which the Company, or any ERISA Affiliate may incur any Liability and (b) covers any employee or former employee of the Company,
or any ERISA Affiliate (with respect to their relationship with any such entity).


 


“NRP
Agreements” means agreements satisfactory to Purchaser with Natural Resource Partners, L.P. or its affiliates (“NRP”)
for the mining of the coal reserves owned by NRP in the area of the Facilities and the operation of the conveyor systems owned
by NRP that service such coal reserves.


 


“Ordinary
Course of Business” means, with respect to a particular Person, any action taken by, or the conduct of, such Person
that is: consistent with the past practices of such Person in timing, frequency and amount and otherwise taken in the ordinary
course of the normal day-to-day operations of such Person; and similar in nature and magnitude to actions customarily taken by,
or the conduct of, such Person, in the ordinary course of the normal day-to-day operations of other Persons that are in the same
line of business as such Person.


 


“Organizational
Documents” means the certificate of incorporation, articles of incorporation, by-laws, articles of organization, limited
liability company agreement, partnership agreement, formation agreement, operating agreement, joint venture agreement or other
similar organizational document of any Person other than any individual (in each case, as amended to date).


 




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“Pension
Plan” means, with respect to the Company, any “employee pension benefit plan” as defined in Section 3(2)
of ERISA (other than a Multiemployer Plan) that (a) the Company, or any ERISA Affiliate maintains, administers, contributes to
or is required to contribute to, or, within the six years prior to the Closing Date, maintained, administered, contributed to
or was required to contribute to, or under which the Company, or any ERISA Affiliate may incur any Liability (including, without
limitation, any contingent Liability) and (b) covers any employee or former employee of the Company, or any ERISA Affiliate (with
respect to their relationship with any such entity).


 


“Permits”
means, with respect to the Company, all licenses, permits, franchises, approvals, authorizations, consents or orders of, or filings
with, or notifications to, any Governmental Entity, or any other Person, necessary or desirable for the past or current conduct
of, or relating to the operation of the businesses of or the ownership of the Assets of, the Company.


 


“Permitted
Encumbrances” means, with respect to the Company, (a) liens for Taxes (i) not yet due and payable, except for such Taxes
to be prorated as stated in Section 9.6(a) herein, or (ii) being contested in good faith, if a reserve or other appropriate
provision, if any, as shall be required by GAAP shall have been reflected or reserved against on the Company Financial Statements,
and (b) easements, rights-of-way, restrictions and other similar charges or encumbrances imposed on real property, in each case,
which (i) do not interfere with the ordinary conduct of business of the Company, (ii) were not incurred in connection with any
indebtedness, and (iii) do not materially detract from the value of the property upon which such encumbrance exists, in each case,
if a reserve or other appropriate provision, if any, as shall be required by GAAP shall have been reflected or reserved against
on the Company Financial Statements


 


“Person”
means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization,
limited liability company or Governmental Entity or other entity.


 


“Pre-Closing
Expenses” means any accounts payable of the Company incurred prior to the Closing Date or allocable to time periods
prior to the Closing Date, but excluding the Asset Retirement Obligation and the Cessation Accrual.


 


“Proprietary
Rights” means all (a) patents, patent applications, patent disclosures, all related continuation-in-part, divisional,
reissue, reexamination, utility model, certificate of invention and design patents, registrations and applications for registration
thereof, and other industrial property rights acquired or available under the Laws of any jurisdiction, (b) trademarks, trade
names, trade dress, logos, corporate names, service marks, and registrations and applications for registration thereof together
with related goodwill, (c) copyrights and registrations and applications for registration thereof, (d) mask works and registrations
and applications for registration thereof, (e) computer software (including without limitation, source code object code, interpreted
code, Java byte code, firmware, middleware, programs, utilities, languages, subroutines or routines), date, databases, compilations,
documentation, data processing systems, networks and network systems, website and other Internet and webcentric systems and properties,
domain names, content contained on any Internet or intranet site, and descriptions, flowcharts and other work product used to
design, plan, organize, and develop any of the foregoing, (f) trade secrets and confidential business information, whether patentable
or unpatentable and whether or not reduced to practice, know-how, manufacturing and product processes and techniques, research
and development information, copyrightable rights, financial, marketing and business data, pricing and cost information, business
and marketing plans and customer and supplier lists and information, including, without limitation, all membership lists and databases
and related information and profiles (which include all website and other content whether published by the members or otherwise),
and internet domain names, (g) other proprietary rights relating to any of the foregoing (including, without limitation, remedies
against infringements thereof and rights of protection of interest therein under the Laws of all jurisdictions), and (h) copies
and tangible embodiments thereof owned or used by the Company in the business of the Company.


 




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“Purchaser’s
Affiliates” means Jet Holdings, LLC and Royal Energy Resources, Inc.


 


“Representative”
means, with respect to any Person, any officer, director, principal, attorney, employee, agent, consultant, accountant or other
representative of such Person.


 


“Returns”
means, with respect to any Taxpayer, any and all returns, reports, declarations, documents and information statements with respect
to Taxes required to be filed by or on behalf of any Taxpayer with any Governmental Entity or Tax authority or agency, whether
domestic or foreign, including, without limitation, consolidated, combined and unitary returns and all amendments thereto or thereof
and any documents with respect to or accompanying requests for the extension of time in which to file any such returns, reports,
declarations, documents and information statements.


 


“Second
Deposit” shall have the meaning set forth in Section 2.1(c) of this Agreement.


 


“Tax(es)”
means all taxes, estimated taxes, withholding taxes, assessments, levies, imposts, fees and other charges, including, without
limitation, any interest, fines, penalties, additions to tax or additional amounts that have or may become payable in respect
thereof, imposed by any foreign, federal, state or local government or taxing authority, whether computed on a separate, consolidated,
unitary, combined or any other basis, which taxes shall include, without limitation, all income taxes, service, license and net
worth taxes, payroll and employee withholding taxes, unemployment insurance, retirement, social security, sales and use taxes,
value-added taxes, excise taxes, franchise taxes, gross receipts taxes, occupation taxes, real and personal property taxes, stamp
taxes, transfer and recording taxes, workers’ compensation and other obligations of the same or of a similar nature.


 


“Taxpayer”
means (a) the Company and each member of any group of corporations with respect to which the Company files or has filed a consolidated,
combined or unitary Return.


 




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“Welfare
Plan” means, with respect to the Company, any “employee welfare benefit plan” as defined in Section 3(1)
of ERISA, which (a) the Company, or any ERISA Affiliate maintains, administers, contributes to or is required to contribute to,
or under which the Company, or any ERISA Affiliate may incur any Liability and (b) covers any employee or former employee of the
Company, or any ERISA Affiliate (with respect to their relationship with any such entity).


 


“Year
End Financial Statements” means (a) the balance sheets of the Company for each of the fiscal years ended December 31,
2010, 2011, 2012, 2013 and 2014, and (b) the related statements of income, changes in members’ equity and cash flows of
the Company for each of the fiscal years ended December 31, 2010, 2011, 2012, 2013 and 2014.


 


1.2 Construction.


 


(a) Unless
the context of this Agreement otherwise requires, (i) words of any gender include each other gender, (ii) words using the singular
or plural number also include the plural or singular number, respectively, (iii) the terms “hereof,” “herein,”
“hereby” and derivative or similar words refer to this entire Agreement, (iv) the terms “Article” or “Section”
refer to the specified Article or Section of this Agreement, (v) the word “including” means “including, without
limitation,” (vi) the word “or” shall be disjunctive but not exclusive, and (vii) the words “made available”
means that the information referred to has been made available if requested by the party to whom such information is to be made
available.


 


(b) References
to agreements and other documents shall be deemed to include all subsequent amendments and other modifications thereto.


 


(c) References
to statutes shall include all regulations promulgated thereunder and references to statutes or regulations shall be construed
as including all statutory and regulatory provisions consolidating, amending or replacing the statute or regulation.


 


(d) The
language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent, and no
rule of strict construction shall be applied against either party.


 


(e) The
annexes, schedules and exhibits to this Agreement are a material part hereof and shall be treated as if fully incorporated into
the body of the Agreement.


 


(f) Whenever
this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified and shall
be counted from the day immediately following the date from which such number of days are to be counted.


 


(g) All
accounting terms used herein and not expressly defined herein shall have the meanings given to them under GAAP.


 




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ARTICLE
II. 

PURCHASE AND SALE OF THE EQUITY SECURITIES


 


2.1 Purchase
and Sale of the Equity Securities


 


(a) Transfer
of the Equity Securities. Upon the terms and subject to the conditions contained herein, on the Closing Date, the Seller shall
sell, convey, transfer, assign and deliver to the Purchaser, and the Purchaser shall purchase and accept from the Seller, the
Equity Securities of the Company, free and clear of any and all Encumbrances.


 


(b) Purchase
Price for the Equity Securities. Upon the terms and subject to the conditions contained herein, as consideration for the purchase
of the Equity Securities of the Company the Purchaser shall pay an aggregate amount equal to US$20,000,000.00 (Twenty Million
Dollars) (the “Purchase Price”), payable as set forth in Section 2.3(c) below.


 


(c) Earnest
Money Deposit. Prior to the execution of this Agreement, the Purchaser paid the amount of US$250,000 (Two Hundred Fifty Thousand
Dollars) of the Purchase Price into a trust account designated by Seller (the “Initial Deposit”). Upon the
execution of this Agreement, Purchaser has paid the additional amount of US$500,000 (Five Hundred Thousand Dollars) into a trust
account designated by Seller (the “Second Deposit”) (with both the Initial Deposit and the Second Deposit together
totaling Seven Hundred Fifty Thousand Dollars and being collectively referred to herein as the “Earnest Money”).


 


(d) Disposition
of Earnest Money. In the event the transaction contemplated by this Agreement is consummated in accordance with the terms
stated herein, the Earnest Money shall be applied to the Purchase Price to be paid by Purchaser at Closing pursuant to Section
2.3(b). In the event that this Agreement is terminated prior to the occurrence of a Closing hereunder, the Earnest Money shall
be disbursed as follows:


 


 (i) Initial
Deposit. In the event the transactions contemplated herein fail to close for any reason whatsoever other than a failure or
refusal on the part of Seller to close on the purchase and sale contemplated herein in violation of Seller’s obligations
in this Agreement, then the Initial Deposit shall be paid to the Seller. If the transactions contemplated herein are not consummated
as a result of Seller’s failure or refusal to close in violation of Seller’s obligations under this Agreement, then
the Initial Deposit shall be refunded to Purchaser.


 


 (ii) Second
Deposit. In the event the transactions contemplated herein fail to close due to (A) a failure or refusal on the part of Seller
to close on the purchase and sale contemplated herein in violation of Seller’s obligations in this Agreement, or (B) a failure
or refusal on the part of Purchaser to close on the purchase and sale contemplated herein due to Purchaser’s failure to
obtain the NRP Agreements, then the Second Deposit will be returned to Purchaser. In the event the transactions contemplated herein
fail to close for any reason whatsoever other than those reasons set forth in clauses (A) and (B) of the immediately preceding
sentence, then the Second deposit will be paid to Seller.


 


THE
PARTIES HEREBY EXPRESSLY ACKNOLWEDGE THAT THE EXTENT OF DAMAGES TO SELLER CAUSED BY THE FAILURE OF THIS TRANSACTION TO BE CONSUMMATED
WOULD BE EXTREMELY DIFFICULT TO ASCERTAIN AND THAT THE AMOUNT OF THE EARNEST MONEY IS A FAIR AND REASONABLE ESTIMATE OF SUCH DAMAGES
UNDER THE CIRCUMSTANCES AND DOES NOT CONSTITUTE A PENALTY.


 




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(e) Jet
Fuel Payment. Prior to the execution of this Agreement, Jet Fuel paid the total amount of US$1,000,000 (One Million Dollars)
to Seller (the “Jet Fuel Payment”) pursuant to the terms of a letter agreement between Jet Fuel and Seller
for the purchase by Jet Fuel of the Equity Securities of the Company, which purchase and sale was not consummated. The parties
expressly acknowledge that Jet Fuel forfeited its right to the return of the Jet Fuel Payment under the terms of its letter agreement
with Seller and that under no circumstances is the Jet Fuel Payment refundable under the terms of this Agreement. In the event
the transaction contemplated by this Agreement is consummated in accordance with the terms stated herein, the Jet Fuel Payment
shall be applied as a credit to the Purchase Price to be paid by Purchaser at Closing.


 


2.2 Closing.


 


Upon
the terms and conditions set forth herein, and subject to Section 11.1, the closing (the “Closing”)
of the transactions contemplated herein shall occur at 10:00 a.m. local time on the Closing Date at the offices of Bailey &
Glasser, LLP, 209 Capitol Street, Charleston, West Virginia 25301 (or by the exchange of documents and instruments by mail, courier,
facsimile or telecopy and wire transfer to the extent mutually acceptable to the parties hereto) or such other place or time agreed
to by the Seller and the Purchaser.


 


2.3 Deliveries
at Closing.


 


To
effect the sale and purchase of the Equity Securities of the Company referred to in Section 2.1(a) and the delivery of
the Purchase Price referred to in Section 2.1(b), the Seller and the Purchaser shall, on the Closing Date, deliver the
following:


 


(a) Instruments
of Possession. At the Closing, the Seller shall execute and deliver to the Purchaser a third amended and restated operating
agreement for each of Gatling and Gatling Ohio and a second amended and restated operating agreement for Meigs Point Dock reflecting
Purchaser as the sole member and owner of one hundred percent of the Equity Securities in Gatling, Gatling Ohio and Meigs Point
Dock, together with any other documents and instruments, as shall be necessary or appropriate to warrant and vest in the Purchaser
good and marketable right, title and interest in and to all of the Equity Securities of the Company free of any and all Encumbrances.
At the Closing, the Seller shall execute and deliver to Purchaser any other documents as the Purchaser may reasonably request,
including without limitation, any evidence of satisfaction by Purchaser of the conditions set forth in Article VI hereto.


 


(b) Purchase
Price. Upon the terms and subject to the conditions contained herein, at the Closing, the Purchaser shall pay the Purchase
Price at Closing as follows: (i) US$750,000 by application of the Earnest Money Deposit to the Purchase Price; (ii) US$1,000,000
by application of the Jet Fuel Payment to the Purchase Price; (iii) US$12,250,000 (Twelve Million Two Hundred Fifty Thousand Dollars)
by wire transfer or certified bank check of immediately available funds to such account(s) as Seller may direct by wire transfer
or certified bank check of immediately available funds to such account(s) as Seller may direct); and (iv) US$6,000,000 in the
form of a senior secured promissory note, the form of which is attached hereto as Exhibit A and a security agreement, the
form of which is attached hereto as Exhibit B and a Guaranty Agreement to be executed by Royal Energy Resources, Inc. as
Guarantor in favor of Seller, the form of which is attached hereto as Exhibit C (collectively, the “Loan Agreements”).


 




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(c) Promissory
Note Credit. In the event the Purchaser discovers any Pre-Closing Expenses that have not been satisfied by the Seller, the
Purchaser shall notify the Seller of the amount of such expenses no later than three (3) months after the Closing, and provide
Seller all documentation evidencing the Pre-Closing Expenses, and the Seller shall either pay such Pre-Closing Expenses directly
or shall, at Seller’s election, give the Purchaser a deduction to the principal balance due under the Promissory Note in
the amount of such Pre-Closing Expenses (but shall not change any scheduled payments of principal or interest due under the Promissory
Note until such principal balance (minus any deductions given under this Section) and all accrued interest have been paid in full.
Seller shall have no liability to pay or to give Purchaser a credit toward the principal balance due under the Promissory Notes
for any Pre-Closing Expenses with respect to which Purchaser first gives notice to Seller more than three (3) months after the
Closing.


 


(d) Permit
and Bond Transfer Applications. At the Closing, the Purchaser shall deliver copies to Seller of all necessary bond and permit
transfer applications and paperwork, with reasonable assurances that such bonds and permits will be transferred into Purchaser’s
name, fully completed and executed for immediate submission to the West Virginia Division of Environmental Protection and the
Ohio Department of Environmental Protection of the change of ownership of Gatling, Gatling Ohio and Meigs Point Dock and to replace
the existing bonds securing all of the environmental permits held by these entities, such that Seller shall have the right to
receive a refund of all bonds existing immediately prior to Closing.


 


2.4 Other
Closing Matters.


 


Each
of the parties shall take such other actions required hereby to be performed by it prior to or on the Closing Date, including,
without limitation, satisfying the conditions set forth in Articles VII and VIII. Seller and Purchaser shall take
all additional reasonable steps as may be necessary or desirable, to consummate the transactions contemplated by this Agreement,
including, but not limited to, to ensure that the Purchaser is given possession of and good and marketable title to all of the
Assets, free and clear of all Encumbrances, and operational control of the Assets and businesses of the Company as of the Closing
Date.


 


ARTICLE
III. 

REPRESENTATIONS AND WARRANTIES

OF SELLER REGARDING THE COMPANY


 


The
Seller hereby makes, as of the date hereof and as of the Closing Date, the following representations and warranties to the Purchaser,
except as otherwise set forth in a written disclosure schedule (the “Disclosure Schedule”) delivered by the
Seller to the Purchaser prior to the Closing Date, which contains Schedules numbered to correspond to various Sections of this
Article III and which sets forth certain exceptions to the representations and warranties contained in this Article
III and certain other information called for by this Agreement. Unless otherwise specified, each reference in this Agreement
to any numbered Schedule is a reference to that numbered Schedule that is included in the Disclosure Schedule.


 




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3.1 Organization
of the Company.


 


(a) Organization.
The Company is duly organized, validly existing and in good standing as a corporation under the Laws of the state of its formation
and has full corporate power and authority to own, lease and operate its Assets and to conduct its business as it is now conducted.
The Company is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which such
qualification is necessary under applicable Law as a result of the conduct of its business or the ownership of its Assets, except
to the extent that the failure to be so qualified or in good standing has not had and would not reasonably be expected to have
a Material Adverse Effect. Each jurisdiction in which the Company is qualified to do business as a foreign limited liability company
is listed on Schedule 3.1(a). The Company has delivered to the Purchaser true, correct and complete copies of the Organizational
Documents of the Company. The Company is not in default under or in violation of any provision of its Organizational Documents,
and such Organizational Documents will continue in effect without further amendment until the Closing Date.


 


(b) Interests
in Other Entities. The Company does not, directly or indirectly, own or have the right to acquire any equity interest of any
other Person. The Company has not made any investment in or advance of cash or other extension of credit to any Person.


 


3.2 Due
Authorization.


 


The
Company has the requisite corporate or other entity, as applicable, power, capacity and authority, and has taken all action necessary,
to execute and deliver this Agreement and each other Ancillary Agreement to which it is (or will be) a party, to consummate the
transactions contemplated hereby and thereby and to perform all of its obligations contained herein and therein, and no other
proceedings on the part of the Company are necessary to authorize the execution, delivery and performance of this Agreement, each
Ancillary Agreement to which it is (or will be) a party and the consummation of the transactions contemplated hereby and thereby.
This Agreement has been duly executed and delivered by the Company and is a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as the enforceability thereof may be limited by (a) applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws in effect which affect the enforcement of creditors rights generally or
(b) general principles of equity, whether considered in a proceeding at law or in equity. Each Ancillary Agreement to which the
Company is (or will be) a party has been (or will be) duly executed and delivered by the Company, and is (or will be) a valid
and binding obligation of the Company, enforceable against the Company, in accordance with its terms, except as the enforceability
thereof may be limited by (a) applicable bankruptcy, insolvency, moratorium, reorganization or similar laws in effect which affect
the enforcement of creditors rights generally or (b) general principles of equity, whether considered in a proceeding at law or
in equity.


 




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3.3 Capitalization
and Ownership of Equity Securities.


 


(a) Capitalization.
The authorized Units of each of Gatling, Gatling Ohio and Meigs Point Dock consist of 100 limited liability company membership
units, all of which are issued and outstanding and owned, or will be owned by the Closing Date, by Seller. The authorized, issued
and outstanding Equity Securities of the Company, together with the holders of such Equity Securities listed in the Company’s
Books and Records, are set forth on Schedule 3.3(a). The Company has no other Units authorized, issued or outstanding and
no other Equity Securities issued or outstanding. Schedule 3.3(a) sets forth a true and correct structure chart of the
Company showing the ownership of the Company.


 


(b) Due
Authorization and Valid Issuance; No Preemptive Rights, etc. All outstanding Equity Securities of the Company have been duly
authorized and validly issued, are fully paid and nonassessable, were issued and sold in accordance with federal and applicable
state securities Laws and were not issued in violation of any preemptive or other similar rights. There are no (i) outstanding
subscriptions, warrants, options, calls, rights of first offer, rights of first refusal, tag along rights, drag along rights,
subscription rights, conversion rights, exchange rights, or commitments or rights of any character relating to or entitling any
Person to purchase or otherwise acquire any Equity Securities of the Company or requiring the Company to issue or sell any Equity
Securities, (ii) obligations or securities having the right to vote on any matters on which the Seller may vote or convertible
into or exchangeable for shares of any Equity Securities of the Company or any commitments of any character relating to or entitling
any Person to purchase or otherwise acquire any such obligations or securities, (iii) statutory preemptive rights or preemptive
rights granted under the Organizational Documents of the Company, or (iv) stock appreciation rights, phantom stock, profit participation,
or other similar rights with respect to the Company. There are no stockholder agreements, voting trusts, proxies or other agreements,
instruments or understandings with respect to the purchase, sale, transfer or voting of the outstanding shares of Equity Securities
of the Company. There are no Contracts under which the Company is obligated to repurchase, redeem, retire or otherwise acquire
any Equity Securities of the Company. No Equity Securities of the Company are reserved for issuance. On the Closing Date, the
Seller will own of record and beneficially all of the Equity Securities of the Company, free and clear of any and all Encumbrances.
At the Closing, the Purchaser will acquire all of the Equity Securities of the Company free and clear of all Encumbrances.


 


3.4 Real
Property and Personal Property


 


(a) Owned
Real Property. Schedule 3.4(a) hereto sets forth all Facilities owned by the Company. Except as set forth on Schedule
3.4(a), with respect to each Facility owned by the Company, (i) the Company has good and marketable fee simple title to such
Facility, free and clear of any and all Encumbrances other than Permitted Encumbrances, (ii) there are no outstanding options
or rights of first refusal in favor of any other party to purchase any such Facility or any portion thereof or interest therein,
and (iii) to the Knowledge of Seller, Seller has not received any written notice of (A) material violations of real property Laws,
(B) existing, pending or threatened zoning, building code or other moratorium proceedings, or similar matters which could reasonably
be expected to materially and adversely affect the ability to operate the Facilities owned by Company as currently operated.


 




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(b) Leased
Real Property. Schedule 3.4(b) sets forth all Leases pursuant to which Facilities are leased by the Company (as lessee),
true and correct copies of which have been delivered to or made available to the Purchaser. Such Leases constitute all leases,
subleases or other occupancy agreements pursuant to which the Company occupies or uses the Facilities. Purchaser expressly acknowledges
that, pursuant to that Partial Lease Termination Agreement effective January 29, 2014 by and between Appalachian Power Company,
Central Coal Company and Ohio Power Company as Lessors and Gatling LLC as Lessee (“Partial Lease Termination”),
Company surrendered a portion of the lease premises under that Restated and Supplemental Surface Lease and Operation Agreement
dated December 22, 2005 by and among said Lessors and Lessee, as amended (the “Surface Lease”) totaling roughly
2.5 developed acres, as described on Schedule 3.4(b). Purchaser further acknowledges that pursuant to that Building and
Improvement Removal Agreement dated January 29, 2014 between AEP West Virginia Transmission Company, LLC and Gatling LLC (“Removal
Agreement”), Company removed the 7200 square foot modular office building, 1200 square foot storage building and 144
square foot storage shed from the surrendered portion of the Surface Lease premises, and that neither the surrendered portion
of the Surface Lease Premises nor any of the buildings, structures or Improvements formerly situated thereon will be included
among the Assets of the Company at Closing. Except as set forth on Schedule 3.4(b), the Company, has good and valid leasehold
title to, and enjoys peaceful and undisturbed possession of, all leased property described in such Leases (the “Leased
Property”), to which it is a party free and clear of any and all Encumbrances other than any Permitted Encumbrances
which would not permit the termination of any Lease by the lessor thereof. Except as set forth on Schedule 3.4(b), the
Leases are enforceable, the Seller (and to the Knowledge of the Seller, any counterparty) is not in breach of such Leases, and
to the Knowledge of the Seller, no event has occurred that, with notice or lapse of time, would constitute a breach under the
Leases, and to the Knowledge of the Seller, no party to the Leases has repudiated any provision of the Lease. Except as set forth
on Schedule 3.4(b), with respect to each such parcel of Leased Property, (i) there are no pending or, to the Knowledge
of the Seller, threatened Actions (including, without limitation condemnation proceedings or any other matter affecting the current
or currently proposed use, occupancy or value) relating to such Leased Property or any portion thereof, (ii) the Company has not
received written notice of any pending or threatened special assessment relating to such Leased Property and, there is no pending
or threatened special assessment relating thereto, (iii) all payments for Leased Property have been paid and will be paid through
the date of the Closing, and (iv) there is no pending or threatened termination of any of the Leases.


 


(c) Personal
Property.


 


(i) Owned
Personal Property. The Company has good and marketable title to all Fixtures, Equipment, supplies, Inventory and other personal
property, including such items that are offsite, that are owned by it, free and clear of any and all Encumbrances, other than
Permitted Encumbrances. With respect to each item of Fixtures, Equipment, supplies, Inventory and other personal property, including
such items that are offsite, (A) there are no Leases, licenses, options, rights, concessions or other agreements, written or oral,
granting to any party or parties the right of use of any portion of such item, (B) there are no outstanding options or rights
of first refusal in favor of any other party to purchase any such item or any portion thereof or interest therein, and (C) there
are no parties who are in possession of or who are using any such item. Schedule 3.4(c)(i) sets forth all Fixtures and
Equipment owned by Company.


 




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(ii) Leased
Personal Property. The Company has good and valid leasehold title to all Fixtures and Equipment leased by it from third parties,
free and clear of any and all Encumbrances, other than Permitted Encumbrances that would not permit the termination of the Lease
thereof by the lessor. With respect to the Company, Schedule 3.4(c)(ii) sets forth all Leases for Fixtures and Equipment,
true and correct copies of which shall be delivered to or made available to the Purchaser on or before Closing.


 


3.5 Material
Contracts


 


(a) Schedule
3.5 lists each of the following contracts and agreements of Company, including all amendments, addendum and restatements (such
contracts and agreements being “Material Contracts”):


 


(i) all
material management contracts and contracts with independent contractors or consultants (or similar arrangements);


 


(ii) all
leases with respect to the Leased Real Property;


 


(iii) all
material contracts and agreements that limit or purport to limit the ability of Company to compete in any line of business or
with any Person or in any geographic area or during any period of time;


 


(iv) all
coal sales agreements, or purchase orders or commitments to sell or offer to sell coal;


 


(v) all
transportation agreements, services agreements and other agreements relating to the operation of the Facilities;


 


(vi) all
Personal Property leases as lessor or lessee;


 


(vii) all
material contracts and agreements between or among the Company and any Affiliate of the Company or among the Seller (to the extent
relating solely to the Company), and any Affiliate of Seller, and Seller represents and warrants that all contracts and agreements
between the Company and Seller, any Affiliate of the Seller or Affiliate of the Company have been or will be terminated at the
date of Closing without any liability to the Company;


 


 (b) Except
as disclosed on Schedule 3.5, each Material Contract (i) is valid and binding on Company and, to the Knowledge of Seller,
the counterparties thereto, and is in full force and effect and (ii) upon consummation of the transactions contemplated by this
Agreement, except to the extent that any consent set forth in Section 3.7 is not obtained, shall continue in full force and effect
without penalty or other adverse consequence. Except as disclosed in such Schedule 3.5, there have been no amendments or
side or supplemental arrangements to or in respect of any such Material Contract. Seller has made all payments owed under any
Material Contact and is not in default of any one Material Contract. The Company and the Seller has delivered to the Purchaser
true and correct copies of all of the Material Contracts listed on Schedule 3.5.


 




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3.6 No
Conflict or Violation.


 


None
of the execution, delivery and performance of this Agreement or any Ancillary Agreement, compliance with any of the provisions
hereof or thereof or the consummation of the transactions contemplated hereby and thereby, by the Seller or the Company will result
in (a) a violation of or a conflict with any provision of the Organizational Documents of the Company, (b) except as set forth
on Schedule 3.6, a violation of, conflict with, breach of, requirement of consent under, default under (with or without
notice or passage of time), termination of, or acceleration of the performance required by, or the creation of any right of any
party to accelerate, modify, terminate or cancel, any term or provision of, any Contract, indebtedness, Lease, Encumbrance, Permit,
authorization, concession or other agreement to which the Company is a party or by which any of their respective Assets are bound,
(c) a violation by the Company of any applicable Law, (d) an impairment of any material right of the Company under any Contract
to which the Company is a party or by which its Assets are bound or under any Permit relating to the operation of its business
or otherwise, or (e) an imposition of any Encumbrance, restriction or charge on any of the Assets or the businesses of the Company,
except Permitted Encumbrances, or an imposition of any Encumbrance, restriction or charge on any of the Equity Securities of the
Company.


 


3.7 Consents
and Approvals


 


(a) Government
Consents and Approvals. No consent, waiver, agreement, approval, Permit or authorization of, or declaration, filing, notice
or registration to or with, or assignment by, any Governmental Entity is required to be made or obtained by any of the Seller
or the Company in connection with the execution, delivery and performance of this Agreement or any Ancillary Agreement or the
consummation of the transactions contemplated hereby and thereby, other than (a) those consents, waivers, agreements, approvals,
Permits, authorizations, declarations, filings, notices, registrations or assignments, that have been obtained or made, or will
be obtained or made prior to the Closing Date, all of which are set forth on Schedule 3.7(a).


 


(b) Other
Third Party Consents and Approvals. No consent, waiver, agreement, approval or authorization of, or declaration, filing, notice
or registration to or with, or assignment by any Person that is not a Governmental Entity (including any party to any Contract
of the Seller or the Company) is required to be made or obtained by any of the Seller or the Company in connection with the execution,
delivery and performance of this Agreement or any Ancillary Agreement or the consummation of the transactions contemplated hereby
and thereby (including, without limitation, all required third party consents under the Contracts), other than those consents,
waivers, agreements, approvals, authorizations, declarations, filings, notices, registrations or assignments, that have been obtained
or made, or will be obtained or made prior to the Closing Date, all of which are set forth on Schedule 3.7(b).


 




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3.8
Financial Statements.


 


The
Company shall deliver to the Purchaser the Financial Statements. The Financial Statements (i) are true and complete and have been
prepared from, and in accordance with, the Books and Records and (ii) have been prepared in accordance with GAAP, consistently
applied throughout the periods covered thereby and present fairly the financial position, assets and liabilities as of the dates
thereof and the revenues, expenses, results of operations and cash flows of the Company for the periods covered then ended. The
Financial Statements are in accordance with the books and records of the Company, and do not reflect any transactions which are
not bona fide transactions. The Financial Statements make full and adequate disclosure of, and provision for, all obligations
and liabilities of Company as of the date thereof. All of the Company’s revenues that have arisen in connection with the
business and that are reflected on the Financial Statements shall have arisen only from bona fide transactions in the ordinary
course of business.


 


3.9
Litigation.


 


Gatling
Ohio is a party to that civil action styled Gatling Ohio LLC v. Allegheny Energy Service Corporation and Allegheny Energy Supply
Company, LLC, Case No. 13CV006206, in the Court of Common Pleas, Franklin County, Ohio (the “Suit”) to
enforce its rights under a now-expired coal sales agreement pursuant to which the defendants breached their obligation to purchase
coal from Gatling Ohio. Purchaser acknowledges that Company assigned its interests in the Suit to a third party prior to Closing
and that the Suit will not constitute an Asset of Company as of Closing. Seller agrees to indemnify, defend and hold Purchaser
and the Company harmless from and against any claims against Purchaser or Company arising in the Suit. Except as disclosed on
Schedule 3.9, there is no unresolved written allegation or charge, and there is no outstanding Action pending or threatened
(i) against, relating to or affecting (a) the Company, or any of its properties, rights or Assets or its Equity Securities or
(b) that relates to the transactions contemplated by this Agreement or by the Ancillary Agreements.


 


3.10
No Brokers.


 


Except
as set forth on Schedule 3.10, none of the Seller or the Company, nor any of their respective agents, Representatives,
holders of Equity Securities or Affiliates, has employed or made, or will enter into or make, any agreement, contract, arrangement
or understanding with any broker, finder or similar agent or any Person that will result in any Liability of the Company or the
Purchaser or any of their respective Affiliates, for any finder’s fee, brokerage fee or commission or similar payment in
connection with the transactions contemplated hereby and by the Ancillary Agreements nor is there any claim by any Person, or
any basis for a claim by any Person for any such finder’s fee, brokerage fee or commission or similar payment.


 


 3.11 Employees.


 


Company
has no employees as of the date of this Agreement and has not had any employees at any time in the five (5) years preceding the
execution of this Agreement. Company has no Employee Benefit Plans. No material labor dispute exists or, to the Knowledge of the
Seller, is imminent with respect to any of the employees of the Company or its subsidiaries which could reasonably be expected
to result in a Material Adverse Effect. None of the Company’s employees is a member of a union that relates to such employee’s
relationship with the Company, and the Company is not a party to a collective bargaining agreement, and the Company believes that
their relationships with their employees are good. No executive officer, to the Knowledge of the Seller, is, or is now expected
to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement
or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and
the continued employment of each such executive officer does not subject the Company to any liability with respect to any of the
foregoing matters. The Company is in compliance with all U.S. federal, state, local and foreign laws and regulations relating
to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be
in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.


 




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3.12
Tax Matters


 




 Except
as disclosed on Schedule 3.12, to the Knowledge of Seller, (a) Each Taxpayer has timely filed with the appropriate taxing authorities
all Returns (including, without limitation, information reporting and related documents) in respect of Taxes required to be filed
through the date hereof (taking into account any extension of time to file granted or obtained) and will timely file any such
Returns required to be filed on or prior to the Closing Date, (b) all Taxes shown to be payable on such Returns have been paid
or will be timely paid, (c) the Company has not received from any Governmental Authority any written notice of proposed adjustment,
deficiency or underpayment, other than a proposed adjustment, deficiency or adjustment that has been satisfied by payment or settlement,
or withdrawn and (d) there are no Tax liens on Company assets. The Company shall deliver to the Purchaser complete and accurate
copies of federal, state and local income tax Returns of the Company for the years 2007 through and including 2014.


 


3.13
Insurance.


 


With
respect to the Company, Schedule 3.13 sets forth all policies of, or binders for business interruption, fire, property,
casualty, crime, directors and officers, liability, title, worker’s compensation, product liability, errors and omissions
and other forms of insurance (including, without limitation, bond and surety arrangements) to which the Company is a party, a
named insured or otherwise the beneficiary of coverage or which are maintained by the Company, including:


 


(a) the
name, address, and telephone number of the agent;


 


(b) the
name of the insurer, the name of the policyholder, and the name of each covered insured;


 


(c) the
policy number, the effective date, the expiration date and the period of coverage; and


 


(d) a
description of the scope and amount of coverage, any annual premiums as of the date hereof and any pending claims thereunder.


 




    	 	20	 



    	 	 	 



    

 


Seller
represents and warrants that all premiums or other forms of payment for such policies are current and will be current through
the date of Closing and such policies will remain effective through the date of Closing.


 


  3.14 Environmental
Matters.


 


 (a) To
the Knowledge of Seller, except as disclosed on Schedule 3.14, (a) Company is in material compliance with all applicable
Environmental Laws, and (ii) there are no written claims pursuant to any Environmental Law pending or, to the Knowledge of Seller,
threatened, against Company, except to the extent the same would not reasonably be expected to have a Material Adverse Effect.
The Seller has provided the Purchaser with all correspondence, notices, demands, pleadings, orders or documents of any nature
relating to the Company’s compliance with Environmental Laws, alleging a breach of Environmental Laws, or seeking damages,
fines or penalties arising out of or relating to an alleged breach of Environmental Laws.


 


 (b) Purchaser
acknowledges that (a) the representations and warranties contained in this Section 3.14 are the only representations and
warranties being made with respect to compliance with or liability under Environmental Laws or with respect to any environmental,
health or safety matter, including natural resources, related in any way to Company or the Assets and (b) no other representation
or warranty, express or implied, is being made with respect thereto.


 


3.15
As-Is Sale.


 


Except
for any express warranties set forth in this Article III, Company makes no representations or warranties with respect to
compliance with or Liability under any Environmental Laws or with respect to any environmental, health or safety matter and the
Assets are being transferred to and accepted by Purchaser AS-IS, WHERE-IS, WITH ALL FAULTS (other than as expressly set forth
herein), and without any representation or warranty, express or implied with respect to the condition thereof.


 


3.16 No
Other Agreements to Sell the Assets or Units of the Company.


 


Other
than sales of coal in the Ordinary Course of Business, none of the Seller or the Company has an obligation of any kind or nature,
absolute or contingent, to any other Person to (a) sell or effect a sale of all or any of the Assets, (b) sell or effect a sale
of any Equity Security of the Company, (c) effect any merger, consolidation or other reorganization of, or other business combination
involving, the Company, or (d) enter into any Contract or cause the entering into a Contract with respect to any of the foregoing.


 


 3.17 Disclaimer
of Seller. COMPANY, INCLUDING ALL OF COMPANY’S ASSETS, IS BEING SOLD ON AN “AS IS”, “WHERE IS”
BASIS AS OF THE CLOSING AND IN ITS CONDITION AS OF CLOSING WITH “ALL FAULTS” AND, NONE OF THE SELLER, ITS AFFILIATES
OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES OR REPRESENTATIVES MAKE OR HAVE MADE AND PURCHASER ACKNOWLEDGES THAT
IT HAS NOT RELIED ON ANY OTHER STATEMENT, REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, IN RESPECT OF COMPANY
OR ANY OF ITS ASSETS, (EXCEPT THE SPECIFIC AND EXPRESS WARRANTIES OF THE SELLER AS SET FORTH IN ARTICLES III AND IV AND THE DISCLOSURE
SCHEDULES THERETO), WITH RESPECT TO (I) MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, (II) THE OPERATION OF THE FACILITIES
BY THE PURCHASER AFTER THE CLOSING OR (III) THE PROBABLE SUCCESS OR PROFITABILITY OF COMPANY AFTER THE CLOSING AND (B) NONE OF
THE SELLER, ITS AFFILIATES, OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES OR REPRESENTATIVES WILL HAVE OR BE SUBJECT
TO ANY LIABILITY OR INDEMNIFICATION OBLIGATION TO THE PURCHASER OR TO ANY OTHER PERSON RESULTING FROM THE DISTRIBUTION TO THE
PURCHASER, ITS AFFILIATES OR REPRESENTATIVES OF, OR THE PURCHASER’S USE OF, ANY INFORMATION, RELATING TO COMPANY, AND ANY
INFORMATION, DOCUMENTS OR MATERIAL MADE AVAILABLE TO THE PURCHASER, WHETHER ORALLY OR IN WRITING, IN CERTAIN “DATA ROOMS,”
MANAGEMENT PRESENTATIONS, FUNCTIONAL “BREAK OUT” DISCUSSIONS, RESPONSES TO QUESTIONS SUBMITTED ON BEHALF OF THE PURCHASER
OR IN ANY OTHER FORM IN THE COURSE OF ANY INDEPENDENT INVESTIGATION CONDUCTED BY THE PURCHASER OR OTHERWISE IN EXPECTATION OF
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, EXCEPT IN THE EVENT OF AN INTENTIONAL, FRAUDULENT MISREPRESENTATION OF A MATERIAL
FACT BY SELLER. ANY SUCH OTHER REPRESENTATION OR WARRANTY IS HEREBY EXPRESSLY DISCLAIMED INCLUDING, WITHOUT LIMITATION, ANY REPRESENTATIONS
AND WARRANTIES AS TO THE FOLLOWING:


 




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(a) any
dimensions or specifications of any of the Assets or the mineability, washability, volume, location, quantity or quality, access
to or recoverability, of coal or reserves in, on or under the Facilities or the feasibility of any mine plans; or


 


(b) pricing
or value assumptions, or estimates attributable to the Assets, or the ability or potential of the Assets for mining purposes or
the projected income or expenses for the Assets, including any estimate and appraisal of the extent and value of the coal seams,
mining rights and reserves; or


 


(c) the
geological or engineering condition of any of the Assets, including soundness, stability or surface or strata support.


 


WITHOUT
LIMITING THE FOREGOING, AS OF THE CLOSING DATE, THE PURCHASER SHALL HAVE INSPECTED OR WAIVED ITS RIGHT TO INSPECT THE ASSETS FOR
ALL PURPOSES AND SATISFIED ITSELF AS TO THE CONDITION OF THE ASSETS. SUBJECT TO THE EXPRESS REPRESENTATIONS AND WARRANTIES SET
FORTH IN ARTICLE III, THE PURCHASER SHALL ASSUME ALL DEFECTS IN AND ALL RISKS ASSOCIATED WITH THE ASSETS. THE INTENT OF
THIS DISCLAIMER IS NOT TO LIMIT THE LIABILITY OF ANY THIRD PARTY INDEPENDENT CONTRACTOR.


 


3.18 Corrupt
Practices.


 


Neither
the Company, nor to the Knowledge of the Seller, any agent or other person acting on behalf of the Company, has (i) directly or
indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign
or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company
(or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any
material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.


 


3.19 Patents
and Trademarks.


 


Except
as set forth on Schedule 3.19, the Company has, or has rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights
and similar rights necessary or material for use in connection with their respective businesses and which the failure to so have
could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). The Company has not
received a notice (written or otherwise) that any of the Intellectual Property Rights used by the Company violates or infringes
upon the rights of any Person. To the Knowledge of Seller, all such Intellectual Property Rights are enforceable and there is
no existing infringement by another Person of any of the Intellectual Property Rights. The Company has taken reasonable security
measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do
so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.


 


3.20 Material
Changes; Undisclosed Events, Liabilities or Developments.


 


Since
the date of the latest Interim Financial Statements, (i) there has been no event, occurrence or development that has had or that
could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent
or otherwise) other than (A) Pre-Closing Expenses incurred in the ordinary course of business consistent with past practice and
(B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP, (iii) the Company has
not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other
property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock
and (v) the Company has not issued any equity securities to any officer, director or Affiliate. No event, liability or development
has occurred or exists with respect to the Company or their respective business, properties, operations or financial condition
that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made.


 




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ARTICLE
IV. 

ADDITIONAL REPRESENTATIONS AND WARRANTIES

OF THE SELLER


 


The
Seller hereby makes, as of the date hereof and as of the Closing Date, the following representations and warranties to the Purchaser,
except as otherwise set forth on the Disclosure Schedule delivered by the Seller to the Purchaser prior to the Closing Date, which
contains Schedules numbered to correspond to various Sections of this Article IV and which sets forth certain exceptions
to the representations and warranties contained in this Article IV and certain other information called for by this Agreement.
Unless otherwise specified, each reference in this Agreement to any numbered Schedule is a reference to that numbered Schedule
that is included in the Disclosure Schedule.


 


4.1
Organization and Authorization of the Seller.


 


(a) Organization.
The Seller is an entity duly created, formed or organized, validly existing and in good standing under the Laws of the state of
its formation, and has full power and authority as such an entity to own, lease and operate its assets and to conduct its business
as it is now conducted. The Seller is duly qualified to do business as a foreign entity and is in good standing in each jurisdiction
in which such qualification is necessary under the applicable Law as a result of the conduct of its business or the ownership
or leasing of its assets, except to the extent that the failure to be so qualified or in good standing would not adversely affect
the ability of the Seller to carry out its obligations under, and to consummate the transactions contemplated by, this Agreement
and the Ancillary Agreements.


 


(b) Authorization.
The Seller has the requisite corporate or other entity, as applicable, power, capacity and authority, and has taken all corporate
action necessary, to execute and deliver this Agreement and each other Ancillary Agreement to which it is (or will be) a party,
to consummate the transactions contemplated hereby and thereby and to perform all of its obligations contained herein and therein,
and no other corporate proceedings on the part of such Seller are necessary to authorize the execution, delivery and performance
of this Agreement, each Ancillary Agreement to which it is (or will be) a party and the consummation of the transactions contemplated
hereby and thereby. This Agreement has been, and upon their execution each of the Ancillary Agreements to which it is (or will
be) a party shall have been, duly executed and delivered by the Seller and this Agreement is, and upon their execution each of
such Ancillary Agreements shall be, a valid and binding obligation of the Seller, enforceable against the Seller in accordance
with its terms, except as the enforceability thereof may be limited by (i) applicable bankruptcy, insolvency, moratorium, reorganization
or similar laws in effect which affect the enforcement of creditors rights generally or (ii) general principles of equity, whether
considered in a proceeding at law or in equity.


 


4.2
Ownership of Equity Securities.


 


The
Seller has, or by Closing will have, good and marketable title to, and owns of record and beneficially, the outstanding shares
of Equity Securities of the Company set forth next to its name on Schedule 4.2, free and clear of any and all Encumbrances,
voting restrictions, restrictions on transfer, charges or claims, and has full right and power and authority to deliver such Equity
Securities as herein agreed. Schedule 4.2 also sets forth the address, state of residence and federal tax identification
number (or social security number, as applicable) of the Seller as of the date hereof. The Seller is not a party to any contract
or agreement with respect to any Equity Securities of the Company, including, but not limited to, any contract or agreement that
could require the Seller to sell, transfer, or otherwise dispose of any Units, other than this Agreement and the Ancillary Agreements.


 




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4.3
No Conflict or Violation.


 


None
of the execution, delivery and performance of this Agreement or any Ancillary Agreement, compliance with any of the provisions
hereof or thereof or the consummation of the transactions contemplated hereby and thereby, by Seller will result in (a) a violation
of or a conflict with any provision of the Organizational Documents of Seller, (b) a violation of, conflict with, breach of, requirement
of consent under, default under (with or without notice or passage of time), termination of, or acceleration of the performance
required by, or the creation of any right of any party to accelerate, modify, terminate or cancel, any term or provision of, any
contract, indebtedness, lease, encumbrance, permit, authorization, concession or other agreement to which the Seller is a party
or by which any of its Assets are bound, (c) a violation by the Seller of any applicable Law, or (d) an imposition of any Encumbrance,
restriction or charge on any of the Equity Securities of the Company.


 


ARTICLE
V. 

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER


 


The
Purchaser hereby, as of the date hereof and as of the Closing Date, the following representations and warranties to the Seller,
except as otherwise set forth the Disclosure Schedule delivered by the Purchaser to the Seller prior to the Closing Date, which
contains Schedules numbered to correspond to various Sections of this Article V and which sets forth certain exceptions
to the representations and warranties contained in this Article V and certain other information called for by this Agreement.
Unless otherwise specified, each reference in this Agreement to any numbered Schedule is a reference to that numbered Schedule
that is included in the Disclosure Schedule.


 


5.1
Organization.


 


The
Purchaser is duly organized, validly existing and in good standing as a corporation under the laws of the State of its formation.


 


5.2
Authorization.


 


The
Purchaser has the requisite corporate power, capacity and authority, and has taken all corporate action necessary, to execute
and deliver this Agreement and each other Ancillary Agreement to which it is (or will be) a party, to consummate the transactions
contemplated hereby and thereby and to perform all of its obligations contained herein and therein, and no other corporate proceedings
on the part of the Purchaser are necessary to authorize the execution, delivery and performance of this Agreement, each Ancillary
Agreement to which it is (or will be) a party and the consummation of the transactions contemplated hereby and thereby. This Agreement
has been, and upon their execution each of the Ancillary Agreements to which it is (or will be) a party shall have been, duly
executed and delivered by the Purchaser, and this Agreement is, and upon their execution each of such Ancillary Agreements shall
be, a valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, except as
the enforceability thereof may be limited by (a) applicable bankruptcy, insolvency, moratorium, reorganization or similar laws
in effect which affect the enforcement of creditors rights generally or (b) general principles of equity, whether considered in
a proceeding at law or in equity.


 




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5.3
Governmental Consents and Approvals.


 


No
consent, waiver, agreement, approval, permit or authorization of, or declaration, filing, notice or registration to or with, or
assignment by, any Governmental Entity is required to be made or obtained by the Purchaser in connection with the execution, delivery
and performance of this Agreement or any Ancillary Agreement or the consummation of the transactions contemplated hereby and thereby,
other than (a) those consents, waivers, agreements, approvals, Permits, authorizations, declarations, filings, notices, registrations
or assignments, that have been obtained or made, or will be obtained or made prior to the Closing Date, all of which are set forth
on Schedule 5.3, (b) where failure to obtain or make such consent, waiver, agreement, approval, permit, authorization,
declaration, filing, notice, registration or assignment, would not prevent or materially delay the consummation by the Purchaser
of the transactions contemplated by this Agreement and the Ancillary Agreements, and (c) as may be necessary as a result of any
facts or circumstances relating solely to the Seller, the Company or any of their Affiliates.


 


5.4
No Brokers.


 


None
of the Purchaser or any of its officers, directors, employees, holders of Equity Securities or Affiliates, has employed or made,
or will enter into or make, any agreement, contract, arrangement or understanding with any broker, finder or similar agent or
any Person that will result in any Liability of Seller or any of its Affiliates, for any finder’s fee, brokerage fee or
commission or similar payment in connection with the transactions contemplated hereby and by the Ancillary Agreements, nor is
there any claim by any Person, or any basis for a claim by any Person for any such finder’s fee, brokerage fee or commission
or similar payment.


 


5.5
No Conflict or Violation.


 


Assuming
that all consents, approvals, authorizations and other actions described in Section 5.3 have been obtained and all filings
and notifications listed on Schedule 5.3 have been made and any applicable waiting period has expired or been terminated,
none of the execution, delivery and performance of this Agreement or any Ancillary Agreement, compliance with any of the provisions
hereof or thereof or the consummation of the transactions contemplated hereby and thereby, by the Purchaser will result in (a)
a violation of or a conflict with any provision of the Organizational Documents of the Purchaser, (b) a violation of, conflict
with, breach of, requirement of consent under, default under (with or without notice or passage of time), termination of, or acceleration
of the performance required by, or the creation of any right of any party to accelerate, modify, terminate or cancel, any term
or provision of, any contract, indebtedness, lease, encumbrance, permit, authorization, concession or other agreement to which
the Purchaser is a party or by which any of its Assets are bound, or (c) a violation by the Purchaser of any applicable Law, except,
in the case of clause (b), to the extent that such violations, conflicts, breaches, defaults or other matters would not adversely
affect the ability of the Purchaser to carry out its obligations under, and to consummate the transactions contemplated by, this
Agreement and the Ancillary Agreements.


 






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5.6 Sufficient
Funds.


 


The
Purchaser has sufficient funds necessary to pay, in cash, that portion of the Purchase Price due in cash on the Closing Date and
to perform the Purchaser’s other obligations under this Agreement (including all fees and expenses related to the transactions
contemplated by this Agreement and payable by the Purchaser). Upon the consummation of such transactions, (a) the Purchaser will
not be insolvent, (b) the Purchaser will not be left with unreasonably small capital, (c) the Purchaser will not have incurred
debts beyond its ability to pay such debts as they mature and (d) the capital of the Purchaser will not be impaired. Purchaser
acknowledges that its obligations under this Agreement are not contingent or conditioned in any manner on obtaining any financing.


 


5.7
Investment Purpose.


 


The
Purchaser is acquiring the Units solely for the purpose of investment and not with a view to, or for offer or sale in connection
with, any distribution thereof other than in compliance with all applicable Laws, including United States federal securities laws.
The Purchaser agrees that the Units may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed
of without registration under the United States Securities Act and any applicable state securities laws, except pursuant to an
exemption from such registration under the United States Securities Act and such laws. The Purchaser is able to bear the economic
risk of holding the Units for an indefinite period (including total loss of its investment), and (either alone or together with
its advisors) has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the
merits and risk of their investment


 


5.8
Litigation.


 


There
is no unresolved written allegation or charge, and there is no outstanding Action pending or threatened or anticipated (or any
basis therefore) that relates to the transactions contemplated by this Agreement or by the Ancillary Agreements.


 






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5.9 Investigation
by Purchaser.


 


Purchaser
acknowledges that it has conducted its own independent investigation and analysis of the business, operations, assets, liabilities,
results of operations, financial condition and prospects of the Company, which investigation, review and analysis was done by
Purchaser and its Affiliates and/or Representatives. Purchaser acknowledges that it has had a full and fair opportunity to conduct
such review, investigation, physical inspection and testing of the Assets of the Company, including without limitation, the Facilities
and the Leased Real Property, as Purchaser deems necessary or advisable in connection with its acquisition of Company pursuant
to this Agreement, and Purchaser has satisfied itself as to the condition of the Assets. In entering into this Agreement, Purchaser
acknowledges that it has relied solely upon the aforementioned investigation, review and analysis and has not relied on any factual
representations, statements or opinions of Seller or its Representatives (except the specific and express warranties of the Seller
set forth in Articles III and IV and the Disclosure Schedules thereto), including factual representations or opinions stated
by the Seller or its Representatives during the course of the independent investigation, whether given orally or in writing. Purchaser
hereby agrees and acknowledges that (a) other than the express warranties and representations made in Articles III and IV,
none of the Seller, its Affiliates or its Representatives make or have made, and Purchaser has not and will not rely upon, any
representation or warranty, express or implied, with respect to the Company or its Assets as to (i) merchantability or fitness
for any particular use or purpose, (ii) the operation of the Company or its business by Purchaser after Closing, or (iii) the
probable success or profitability of Company or its business after Closing, and (b) except in the event of any intentional, fraudulent
misrepresentation of a material fact by Seller, none of Seller, its Affiliates or its Representatives will be subject to any liability
to Purchaser or to any other Person resulting from the distribution to Purchaser, its Affiliates or Representatives of, or Purchaser’s
use of, any information relating to the Company, its business or the Assets, and any information, documents, or material made
available to Purchaser, whether orally or in writing, in certain “data rooms”, management presentations, functional
“break-out” discussions, responses to questions submitted on behalf of Purchaser or in any other form during the independent
investigation or otherwise in expectation of the transactions contemplated by this Agreement. Purchaser acknowledges that by proceeding
with the Closing on its purchase of the Company, it will forever waive all claims against Seller or its Affiliates related to
the condition of the Assets, including without limitation, all claims based on Environmental Conditions, and shall assume all
defects in and all risks associated with the Assets.


 


5.10 Purchaser’s
Knowledge. 


 


Purchaser
does not know of any fact, matter or occurrence or thing that would, or with the passage of time could, make or render any representation
or warranty of Seller true or incorrect in any respect.


 


ARTICLE
VI. 

COVENANTS OF THE PURCHASER, THE COMPANY AND THE SELLER


 


6.1 General.


 


The
Company and the Purchaser covenant and agree that from the date of this Agreement through the Closing:


 


(b) quired
Actions. The Company shall, and the Seller shall cause the Company to, operate its respective businesses in the Ordinary Course
of Business, and shall not take any action inconsistent therewith, with this Agreement, with the Ancillary Agreements or with
the consummation of the transactions contemplated hereby and thereby. Without limiting the generality of the foregoing, the Company
shall, and the Seller shall cause the Company to:


 


(i) maintain
its corporate existence;


 




    	 	27	 



    	 	 	 



    

 


(ii) preserve
its business organizations and properties intact, normal wear and tear excepted, including its present operations and physical
facilities;


 


(iii) have
in effect and maintain at all times all insurance of the kinds, in the amounts and with the insurers as is presently in effect;


 


(iv) keep
in working condition and good order and repair all of the Assets and other properties of the Company, normal wear and tear excepted;


 


(v) maintain
its Books and Records and accounts in its usual, regular and ordinary manner and post all entries therein promptly in compliance
with accepted practice and all applicable Laws;


 


(vi) pay
and discharge when due all Taxes, assessments and governmental charges imposed upon it or any of its properties, or upon the income
or profit therefrom, and as set forth in Section 9.6;


 


(vii) comply
with all Laws applicable to its Assets and its business consistent with past practice; and


 


(viii) meet
its obligations under all Contracts.


 


(b) Prohibited
Actions. Prior to the Closing, without the prior written consent of the Purchaser, the Company shall not (i) enter into any
business other than the Company’s business as it is presently being conducted, (ii) engage in any practice, or take, or
fail or omit to take, any action or enter into any transaction that would (y) impair or prevent the Company from consummating
the transactions contemplated by this Agreement and by the Ancillary Agreements or (z) cause or result in any of the representations
and warranties set forth in Articles III and IV to be untrue at any time after the date hereof through the Closing Date or (iii)
enter into any Contract to do any of the foregoing.


 


(c) Investigation
by the Purchaser. The Company shall, and shall cause its counsel, accountants and other Representatives to, allow the Purchaser,
its employees, Affiliates, counsel, accountants and other Representatives, during regular business hours upon reasonable notice,
to make such inspection of the Assets, businesses and operations of the Company, and to inspect and make copies of Contracts,
Books and Records and all other documents and information requested by the Purchaser, including, without limitation, historical
financial information concerning the business of the Company, and to meet with the Company’s designated Representatives.
The Company shall furnish to the Purchaser promptly upon request (a) all additional documents and information with respect to
the affairs of the Company relating to their business and (b) access to the Company’s accountants and counsel as the Purchaser,
or its counsel, accountants and other Representatives, may from time to time reasonably request and shall instruct such accountants
and counsel to cooperate with the Purchaser, and to provide such documents and information as the Purchaser and its Representatives
may reasonably request.


 




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6.2
Cooperation; Consents.


 


Each
of the parties hereto covenants and agrees, upon the terms and conditions contained herein, to (a) cooperate with the other parties
hereto and to pursue diligently and in good faith and use efforts to, or cause to be taken, all actions necessary, proper or advisable
to consummate and make effective the transactions contemplated hereby and by the Ancillary Agreements and to put the Purchaser
in possession of all of the Equity Securities and in final control of the Company, and its Assets, and (b) execute any documents,
instruments or conveyances of any kind that may be necessary or reasonably be deemed advisable to carry out any of the transactions
contemplated hereby and by the Ancillary Agreements. Without limiting the generality of the foregoing, each party hereto shall
use commercially reasonable efforts to (a) obtain at the earliest practicable date all consents, approvals, Permits, authorizations,
exemptions and waivers from federal, state, local and foreign governmental and regulatory agencies, authorities and bodies and
other persons or entities required to be obtained by it and necessary or advisable to authorize, approve or permit the performance
by such party of its obligations hereunder and under each other agreement and instrument referred to herein or contemplated hereby,
including, without limitation, all such consents, approvals, authorizations, exemptions and waivers listed on Schedule 3.7,
(b) defend and cooperate with each other in any defending of legal proceedings, whether judicial or administrative and whether
brought derivatively or on behalf of third parties, challenging this Agreement and/or the agreements referred to herein or contemplated
hereby or the consummation of the transactions contemplated hereby or thereby, (c) give all notices to, and make all registrations
and filings with, third parties, including, without limitation, submissions of information requested by governmental authorities,
and (d) fulfill all other conditions to this Agreement. The Seller and the Purchaser agree that, in the event that any consent,
approval or authorization necessary or desirable to preserve for the Company any right or benefit under any Lease, license, Contract,
commitment or other agreement or arrangement to which the Company is a party is not obtained prior to the Closing, the Seller
will, subsequent to the Closing, cooperate with the Purchaser or the Company in attempting to obtain such consent, approval or
authorization as promptly thereafter as practicable. If such consent, approval or authorization cannot be obtained, the Seller
shall use commercially reasonable efforts to provide the Purchaser or the Company, as the case may be, with the rights and benefits
of the affected Lease, license, Contract, commitment or other agreement or arrangement for the term of such Lease, license, Contract
or other agreement or arrangement, and, if the Seller provides such rights and benefits, the Company, shall assume the obligations
and burdens thereunder.


 


6.3
Regulatory Approvals.


 


Each
party will give any notices to, make any filings with, and use commercially reasonable efforts to obtain any consents of Governmental
Authorities, if any, required or reasonably deemed advisable pursuant to any applicable Law in connection with the transactions
contemplated by this Agreement, and to use good faith efforts to agree jointly on a method to overcome any objections by any Governmental
Authority to such transactions.


 


6.4
Notification of Certain Matters.


 


The
Seller and the Company shall give prompt written notice to the Purchaser of (a) any notice or other communication from any person
alleging that the consent of such person is or may be required in connection with the execution, delivery or performance of this
Agreement, any Ancillary Agreement or the transactions contemplated herein and therein and (b) any notice or other communication
from any federal, state, local or foreign governmental or regulatory authority, agency, department, body or instrumentality in
connection with this Agreement, any Ancillary Agreement or the transactions contemplated herein and therein.


 




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6.5
Confidentiality; Publicity.


 


Except
as may be required by Law, stock exchange regulations or as otherwise expressly contemplated herein, no party or their respective
Affiliates and Representatives will disclose to any third party the existence of this Agreement, the subject matter or terms hereof
or any Confidential Information concerning the business or affairs of any other party which it may have acquired from such party
in the course of pursuing the transactions contemplated hereby without the prior written consent of Seller, the Company or Purchaser
as the case may be, which consent shall not be unreasonably withheld; provided, however, any party may disclose
any such Confidential Information as follows: (a) to such party’s Affiliates and its or its Affiliates’ employees,
lenders, counsel, or accountants, the actions for which the applicable party will be responsible; (b) to comply with any applicable
Law or order, provided that prior to making any such disclosure the party making the disclosure notifies the other party of any
Action of which it is aware that may result in disclosure and uses its best efforts to limit or prevent such disclosure; (c) to
the extent that the Confidential Information is or becomes generally available to the public through no fault of the party or
its Affiliates making such disclosure; (d) to the extent that the same information is in the possession of the party making such
disclosure prior to receipt of such Confidential Information; (e) to the extent that the party that received the Confidential
Information independently develops the same information without in any way relying on any Confidential Information; or (f) to
the extent that the same information becomes available to the party making such disclosure on a nonconfidential basis from a source
other than a party or its Affiliates, which source, to the disclosing party’s knowledge, is not prohibited from disclosing
such information by a legal, contractual, or fiduciary obligation to the other party. If the transactions contemplated by this
Agreement are not consummated, each party will return or destroy as much of the Confidential Information concerning the other
party as the parties that have provided such information may reasonably request.


 


6.6 Supplements
to Schedules.


 


From
time to time prior to the Closing Date Seller will promptly amend or supplement the Disclosure Schedules with respect to any matters
required to be set forth therein. To the extent Seller amends or supplements any of the Disclosure Schedules and Purchaser elects
to proceed with the Closing, Purchaser will not have the right to claim any breach of representation or warranty with respect
to any failure to disclose any matter set forth on such amended or supplemental Disclosure Schedule; provided that such Disclosure
Schedules do not contain any untrue statement of a material fact or omit to state any material fact relevant to Purchaser’s
decision to proceed with Closing.


 




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ARTICLE
VII. 

CONDITIONS TO THE SELLER’S OBLIGATIONS


 


The
obligations of the Seller to sell the Equity Securities of the Company to the Purchaser on the Closing Date and to consummate
the transactions contemplated hereby are subject to the satisfaction, on or prior to the Closing Date, of each of the following
conditions, any of which may be waived by the Seller in accordance with Section 11.5:


 


7.1
Representations, Warranties and Covenants.


 


All
representations and warranties of the Purchaser contained in this Agreement shall be true and correct (a) in all respects, if
such representations and warranties are qualified by materiality or similar terms and phrases and (b) in all material respects,
if such representations and warranties are not qualified by materiality or similar terms and phrases at and as of the date hereof
and the Closing Date, as though such representations and warranties were made on the Closing Date (except for representations
and warranties that expressly speak only as of a specific date or time other than the Closing Date, which representations and
warranties shall continue on the Closing Date to have been true and correct as of such specific date or time). The Purchaser shall
have performed all obligations arising under agreements and covenants required hereby to be performed by it prior to or at the
Closing Date.


 


7.2
No Proceedings or Litigation.


 


No
Actions by any Governmental Entity or any Person shall have been instituted or threatened for the purpose of enjoining or preventing,
or that question the validity or legality of, the transactions contemplated hereby and by the Ancillary Agreements and that could
reasonably be expected to damage any Seller materially if the transactions contemplated hereby and thereby are consummated.


 


7.3
Closing Deliveries.


 


The
Seller shall have received, at or prior to the Closing, the following:


 


(a) a
certificate executed by the Secretary or an Assistant Secretary of the Purchaser certifying as of the Closing Date (i) a true
and correct copy of the Organizational Documents of the Purchaser and (ii) a true and correct copy of the resolutions of the board
of directors of the Purchaser authorizing the execution, delivery and performance of this Agreement by the Purchaser and the consummation
of the transactions contemplated hereby;


 


(b) certificates
of the Secretary of State of the state of Purchaser’s organization certifying the good standing of Purchaser;


 


(c) a
certificate executed by an officer of the Purchaser certifying that, as of the Closing Date, the conditions set forth in Section
7.1 have been satisfied;


 


(d) the
Purchase Price payable in immediately available funds at Closing;


 


(e) the
executed Loan Agreements; and


 


(f) Permit
and Bond Transfer Applications. At the Closing, the Purchaser shall deliver copies to Seller of all necessary bond and permit
transfer applications and paperwork, fully completed and executed for immediate submission to the West Virginia Division of Environmental
Protection and the Ohio Department of Environmental Protection of the change of ownership of Gatling, Gatling Ohio and Meigs Point
Dock and to replace the existing bonds securing all of the environmental permits held by these entities, such that Seller shall
have the right to receive a refund promptly after Closing of all bonds existing immediately prior to Closing.


 






    	 	31	 



    	 	 	 



    

 


ARTICLE
VIII. 

CONDITIONS TO THE PURCHASER’S OBLIGATIONS


 


The
obligations of the Purchaser to purchase the Equity Securities of the Company and to consummate the transactions contemplated
hereby are subject to the satisfaction, on or prior to the Closing Date, of each of the following conditions, any of which may
be waived by the Purchaser in accordance with Section 11.5:


 


8.1
Representations, Warranties and Covenants.


 


Each
of the representations and warranties contained in Article III and Article IV shall be true and correct (a) in all
respects, if such representations and warranties are qualified by materiality or similar terms and phrases and (b) in all material
respects, if such representations and warranties are not qualified by materiality or similar terms and phrases at and as of the
date hereof and the Closing Date, as though such representations and warranties were made on the Closing Date (except for representations
and warranties that expressly speak only as of a specific date or time other than the Closing Date, which representations and
warranties shall continue on the Closing Date to have been true and correct as of such specific date or time). The Company and
the Seller shall have performed all obligations under this Agreement that by the terms hereof are to be performed by it on or
before the Closing Date.


 


8.2
Consents.


 


All
consents, waivers, agreements, approvals, Permits or authorizations of, or declarations, filings, notices or registrations to
or with, or assignments by Governmental Entities and other Persons required to consummate the transactions set forth herein or
contemplated hereby or by the Ancillary Agreements or required under any Laws or for the operation of the businesses of the Company
after the Closing as they are now conducted and presently proposed to be conducted, including without limitation those consents
identified on Schedule 3.6 hereof, shall have been made or obtained.


 


8.3
No Proceedings or Litigation.


 


No
Actions by any Governmental Entity or any other Person shall have been instituted or threatened for the purpose of enjoining or
preventing, or that question the validity or legality of, the transactions contemplated hereby or by the Ancillary Agreements
and that could reasonably be expected to damage the Purchaser or have a Material Adverse Effect on the value of the Equity Securities
or the Assets, business or operations of the Company if the transactions contemplated hereby and thereby are consummated, including
any Material Adverse Effect on the right or ability of the Purchaser to own, operate or transfer the Company after the Closing.
There shall not be any Law or order in effect that makes the acquisition of the Equity Securities of the Company contemplated
hereby illegal or otherwise prohibited or that otherwise may have a Material Adverse Effect on the Company.


 




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8.4
Instruments of Possession.


 


The
Seller shall have executed and delivered the instruments of possession pursuant to Section 2.3(a).


 


8.5
Closing Deliveries


 


The
Purchaser shall have received, at or prior to the Closing, the following:


 


(a) a
certificate executed by the Seller certifying that, as of the Closing Date, (i) the conditions set forth in Section 8.1
have been satisfied and (ii) such other certificates of the Seller, the officers of the Company and others to evidence compliance
with the conditions set forth in this Article VIII as may be reasonably requested by the Purchaser;


 


(b) a
certificate executed by the Secretary of the Seller certifying as of the Closing (A) a true and correct copy of the Organizational
Documents and all amendments thereto, of the Company and (B) a true and correct copy of the resolutions of the members or shareholders
of the Seller, and the Board of Directors of the Seller, authorizing the execution, delivery and performance of this Agreement
and each Ancillary Agreement, as applicable;


 


(c) copies
of the Organizational Documents of the Company and all amendments thereto, certified as of a recent date by the Secretary of State
of the state of the Company’s, organization;


 


(d) certificates
of the Secretary of State of the state of the Company’s organization, as applicable, certifying the good standing of the
Company, as applicable;


 


(e) any
consents required to be obtained by the Company, or the Seller;


 


(f) physical
possession of all membership unit records of the Company certified as true and correct and complete by the Secretary of the Company;


 


(g) physical
possession of the minute books and corporate seals of the Company; and


 


(h) physical
possession of (A) all Books and Records, whether in print, digital, audio or some other format, tangible Assets, Permits, policies,
Contracts or other instruments owned by or pertaining to the Company that are in the possession of the Seller and (B) all other
documents and certificates, whether in print, digital, audio or some other format, (x) required to be delivered to the Purchaser
pursuant to the terms of this Agreement and (y) as may be reasonably requested by the Purchaser prior to the Closing Date.


 




    	 	33	 



    	 	 	 



    

 


 8.6 NRP
Agreements.


 


The
Purchaser shall have obtained the NRP Agreements.


 


 8.7 Tax
Matters.


 


The
Seller and the Company shall have provided the Purchaser with an affidavit, stating, under penalty of perjury, the Seller’s
United States taxpayer identification number and that the Seller is not a non-resident alien for United States federal income
tax purposes, pursuant to Section 1445(b)(2) of the Code (or any similar provision of state or other tax law).


 


ARTICLE
IX. 

ACTIONS BY THE SELLER, THE PURCHASER AND THE COMPANY

AFTER THE CLOSING


 


9.1
Books and Records.


 


Each
of the Seller and the Purchaser agree that each will cooperate with and make available to the other party, during normal business
hours, all Books and Records and Representatives retained and remaining in existence after the Closing Date that are necessary
in connection with any tax inquiry, audit, investigation or dispute, any Action or any other matter (a “Matter”)
requiring such Books and Records or Representatives for any reasonable business purpose. All such Books and Records relating to
any such Matter shall be retained by the Seller and the Purchaser until the earlier of (a) seven (7) years or (b) the later of
the expiration of the relevant statute of limitations with respect to any such Matter or until the termination of any Action with
respect to such Matter. The party requesting access to any such Books and Records or Representatives shall bear all of the out-of-pocket
costs and expenses (including, without limitation, attorneys’ fees, but excluding reimbursement for salaries and employee
benefits) reasonably incurred in connection with providing access to such Books and Records and Representatives. In the event
it is determined that any Books and Records of Company are still in Seller’s possession after Closing and Purchaser has
not received the original or a copy thereof, Seller will promptly deliver the original of any such Books and Records (or a copy
thereof, if the original is not available) to Purchaser.


 


9.2
Survival.


 


(a) All
representations and warranties of Seller set forth in Articles III and IV shall survive for a period of six (6)
months after the Closing Date.


 


(b) Notwithstanding
the termination of this Agreement, the covenants and agreements of the parties contained herein that by their terms are to be
performed after the Closing shall survive the Closing in accordance with their respective terms, provided that the covenants contained
in Article IX, in the event no term is specified in such covenant, shall survive the Closing indefinitely.


 




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9.3
Further Assurances.


 


The
Purchaser and the Seller shall use commercially reasonable efforts to take all actions and to do all things necessary, proper
or advisable to consummate and make effective the transactions contemplated by this Agreement and by the Ancillary Agreements
(including, without limitation, satisfying the closing conditions in Articles VII and VIII hereto). Following the
Closing, Seller and Purchaser agree to execute such documents, instruments or conveyances and take such actions as may be requested
by their respective counsel and otherwise cooperate with each other, and their respective Affiliates and Representatives in connection
with any action that may be necessary, proper or advisable to carry out the provisions hereof or transactions contemplated hereby
and by the Ancillary Agreements, including, without limitation, providing any notices required to advise any Governmental Authority
having jurisdiction over any of the Company’s Permits of the change in ownership and control of the Company as of Closing.


 


9.4
Consents Not Obtained by Closing.


 


No
less than 15 days prior to the Closing, the Seller shall provide the Purchaser with all contracts requiring the Company’s
consent, approval, authorization or Permit. The Seller and the Purchaser agree that, in the event that any consent, approval,
authorization or Permit necessary or desirable to preserve for the Company any right or benefit under any Lease, license, Contract,
commitment or other agreement or arrangement to which the Company is a party or counterparty is not obtained prior to the Closing,
the Seller will, subsequent to the Closing, cooperate with the Purchaser and the Company in attempting to obtain such consent,
approval, authorization or Permit as promptly thereafter as practicable. If such consent, approval, authorization or Permit cannot
be obtained, the Seller shall use commercially reasonable efforts to provide the Purchaser or the Company, as the case may be,
with the rights and benefits of the affected Lease, license, Contract, commitment or other agreement or arrangement for the term
of such Lease, license, Contract or other agreement or arrangement, and, if the Seller provides such rights and benefits, the
Company shall assume the obligations and burdens thereunder.


 


9.5
Litigation Support.


 


So
long as any party hereto has disclosed a list of all active Actions against said party and is actively contesting or defending
against any Action in connection with (a) any transaction contemplated under this Agreement or the Ancillary Agreements or (b)
any fact, situation, circumstance, status, condition, activity, practice, plan, occurrence, event, incident, action, failure to
act or transaction involving the Company, the Assets or the business and operations of the Company, each of the other parties
will cooperate with such party and its counsel in the contest or defense, make available its Representatives, and provide such
testimony and access to its Books and Records as shall be reasonably necessary in connection with the contest or defense, all
at the sole cost and expense of the contesting or defending party (unless the contesting or defending party is entitled to indemnification
hereunder). The covenant contained in this Section 9.5 shall not apply if one or more parties to this Agreement have an
adverse Action against another one or more parties to this Agreement, but shall apply equally with respect to any Ancillary Agreement
and shall not be in lieu of or otherwise limit the indemnification obligations of the parties pursuant to Article X hereof.


 




    	 	35	 



    	 	 	 



    

 


9.6 Taxes.


 


(a) Seller
shall timely file with the appropriate taxing authorities all Returns (including, without limitation, information reporting and
related documents) in respect of any federal, state and local Taxes, including, without limitation, income Taxes; withholding
of income Taxes; payroll Taxes (such as FICA, FUTA, State withholding, local withholding and the like); workers’ compensation;
unemployment insurance; Federal Excise Tax; and West Virginia Coal Mining Assessment and Special 2 Cent Per Ton Tax, and any penalties
and interest on such Taxes for Company for the 2014 tax year (taking into account any extension of time to file granted or obtained)
and shall be liable for the payment of all Taxes shown to be payable on such Returns for said 2014 tax year. Seller shall pay
all 2014 real estate Taxes and assessments, any delinquent Taxes and assessments, including penalty and interest, and all other
real estate Taxes for prior tax years which are a lien on the Closing Date; in addition, the Seller shall pay such for the 2015
tax year payable in 2016 to be prorated to the date of closing and computed, if undetermined, on the basis of the last certified
tax rate and valuation. If such assessment is not available for the year in question, Real Estate Taxes shall be pro-rated, at
the request of either party, when the amount thereof can be ascertained and the provisions hereof shall survive the Closing. If
increased Real Estate Taxes are, after Closing, determined to be due for the year in which Closing occurs, then each party shall
be obligated for the payment of its pro-rata share of such additional Real Estate Taxes.


 


(b) Seller
and Purchaser shall cooperate with one another to file with the appropriate tax authorities all Returns (including, without limitation,
information reporting and related documents) in respect of any federal, state and local Taxes, including, without limitation,
income Taxes; withholding of income Taxes; payroll Taxes (such as FICA, FUTA, State withholding, local withholding and the like);
workers’ compensation; unemployment insurance; Federal Excise Tax; and West Virginia Coal Mining Assessment and Special
2 Cent Per Ton Tax for Company for the 2015 tax year (taking into account any extension of time to file granted or obtained),
with Seller being liable for the payment of all Taxes shown to be payable on such Returns for the Company for all periods of the
2015 tax year prior to Closing, and with Purchaser to be liable for the payment of all Taxes shown to be payable on such Returns
for the Company for all periods of the 2015 tax year on and after Closing.


 


(c) Seller
is to pay or remain liable for any federal, state and local taxes, including, without limitation, income Tax; withholding of income
Taxes; payroll Taxes (such as FICA, FUTA, State withholding, local withholding and the like); workers’ compensation; unemployment
insurance; Federal Excise Tax; West Virginia Coal Mining Assessment and Special 2 Cent Per Ton Tax, and any penalties and interest
on any such Taxes that are the obligation of GATLING LLC, GATLING OHIO LLC, and MEIGS POINT DOCK LLC before transfer of ownership
to Purchaser, including amounts that are assessed and/or claimed owed with respect to such periods prior to Closing at any time
after Closing.


 


(d) Except
as otherwise provided in Section 9.6(a), 9.6(b) and 9.6(c), Seller shall have no liability for the payment of any Taxes
of Company of any kind whatsoever on and after Closing.


 




    	 	36	 



    	 	 	 



    

 


9.7 Replacement
of Permit Bonds.


 


Immediately
on and after Closing, Purchaser will submit all necessary paperwork and take all other necessary action to obtain cash bonds to
replace all existing bonds securing all of the environmental permits held by Gatling LLC, Gatling Ohio LLC and Meigs Point Dock
LLC, and Seller shall have the right to receive a refund or return of the existing bonds. Purchaser acknowledges that the existing
bonds total approximately $3.6 million.


 


9.8 Valuation
and Reserve Reports.


 


Seller,
on behalf of itself and its Affiliates, hereby consents to the Company’s retention of any firms retained at any time to
perform valuations or reserve reports of any of the Company’s owned or leased assets, and waives any conflict of interest
that may exist by virtue of the Company’s continued retention of such firms. To the extent not already owned by the Company,
the Seller, on behalf of itself and its Affiliates, hereby grants the Company a perpetual, royalty-free license to use any data
developed or created to develop any valuations of reserve reports of the Company’s owned or leased assets, including any
survey data, measurements, core samples, assay test results, etc.


 


ARTICLE
X. 

INDEMNIFICATION


 


10.1
Indemnification 


 


(a) Indemnification
by Purchaser. If the Closing shall occur, the Purchaser shall indemnify, save and hold the Seller, each of the Seller’s
respective Affiliates, and each of their respective directors, officers, employees, successors, transferees and assignees, and
Representatives (each, a “Seller Party”), harmless from and against any and all claims, suits, actions, judgments,
expenses, fees (including attorney’s fees and court costs) or damages of any kind whatsoever (“Damages”)
claimed against or incurred by the Company on and after Closing (each, a “Seller Claim”) so long as such Seller
Claim does not relate to Seller’s gross negligence, fraud or other bad acts. In no event shall Purchaser be required to
indemnify any Seller Party under this provision for any Damages for which Seller is required to indemnify Purchaser pursuant to
any other provision of this Agreement.


 


(b) Indemnification
by Seller. If the Closing shall occur, in the event Seller breaches any of its representations and warranties contained in
this Agreement, and provided that Purchaser makes a written claim for indemnification against Seller within the survival period
set forth in Section 9.2(a) for the representations and warranties, then Seller will indemnify Purchaser from and against
any damages actually incurred by Purchaser as a result of such breach; provided, however, that Seller’s aggregate liability
to indemnify Purchaser for any such damages shall in no event exceed one hundred thousand dollars ($100,000).


 




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(c) Defense
of Claims.


 


(i) If
a claim for any Damages (a “Claim”) is to be made by a person entitled to indemnification hereunder (an “Indemnified
Party”), the person claiming such indemnification shall give written notice (a “Claim Notice”) to the person
from whom indemnification is sought (the “Indemnifying Party”) (A) as soon as practicable after the Indemnified
Party becomes aware of any fact, condition or event which may give rise to Damages for which indemnification may be sought under
this Section 10.1 and (B) in the case of the assertion of a claim (whether pursuant to a lawsuit or other legal action
or otherwise) or the commencement of any Action by a third party (together, a “Third-Party Claim”), upon receipt
of written notice of the Third-Party Claim.


 


(ii) In
the case of a Third-Party Claim, if the Indemnifying Party shall acknowledge in writing to the Indemnified Party that the Indemnifying
Party shall be obligated to indemnify the Indemnified Party under the terms of its indemnity hereunder in connection with such
Third-Party Claim, then the Indemnifying Party shall be entitled and, if it so elects, shall be obligated at its own cost, risk
and expense, to participate in or take control of the defense and investigation of such Third-Party Claim (unless (x) the Indemnifying
Party is also a party to such Third-Party Claim and the Indemnified Party determines in good faith, upon the advice of outside
counsel, that a conflict of interest exists between the Indemnified Party and the Indemnifying Party with respect to such Third-Party
Claim or (y) the Indemnifying Party fails to provide reasonable assurance to the Indemnified Party of its financial capacity to
defend such Third Party-Claim and provide indemnification with respect to such Third-Party Claim) and to pursue the defense thereof
in good faith by appropriate actions or proceedings promptly taken or instituted and diligently pursued, including, without limitation,
to employ and engage attorneys of its own choice reasonably acceptable to the Indemnified Party to handle and defend the same,
compromise or settle such claim, which compromise or settlement shall be made only with the written consent of the Indemnified
Party, such consent not to be unreasonably withheld or delayed.


 


(iii) In
the event the Indemnifying Party elects to assume control of the defense and investigation of such lawsuit or other legal action
in accordance with this Section 10.1(c), the Indemnified Party may participate in the investigation, trial and defense
of such Third-Party Claim.


 


(iv) If
the Indemnifying Party fails to notify the Indemnified Party in writing of its election to assume the defense of such Third-Party
Claim in accordance with this Section 10.1 within 30 days after receipt of the Claim Notice, the Indemnified Party against
which such Third-Party Claim has been asserted shall (upon delivering notice to such effect to the Indemnifying Party) have the
right to undertake, at the Indemnifying Party’s cost, risk and expense, the defense, compromise and settlement of such Third-Party
Claim on behalf of and for the account of the Indemnifying Party; provided that such Third-Party Claim shall not be compromised
or settled without the written consent of the Indemnifying Party, which consent shall not be unreasonably withheld or delayed.
In the event the Indemnifying Party assumes the defense of the claim, the Indemnifying Party shall keep the Indemnified Party
reasonably informed of the progress of any such defense, compromise or settlement, and in the event the Indemnified Party assumes
the defense of the claim, the Indemnified Party shall keep the Indemnifying Party reasonably informed of the progress of any such
defense, compromise or settlement. The Indemnifying Party shall be liable for any settlement of any Third-Party Claim effected
pursuant to and in accordance with this Section10.1 and for any final judgment (subject to any right of appeal), and the Indemnifying
Party agrees to indemnify and hold harmless each Indemnified Party from and against any and all Damages by reason of such settlement
or judgment so long as such settlement (a) involves only the payment of monetary Damages by the Indemnifying Party, (b) does not
include any injunctive or non-monetary obligations on the Indemnified Party, and (c) does not involve the admission of any facts
or liability on the part of the Indemnified Party.


 




    	 	38	 



    	 	 	 



    

 


10.2 Exclusive
Remedy, etc.


 


Except
for actions grounded in fraud or deceit, the parties hereto acknowledge and agree that from and after the Closing, the indemnification
provisions in this Article X shall be the exclusive remedy of Purchaser with respect to the transactions contemplated by
this Agreement. With respect to actions grounded in fraud or deceit, (A) the right of a party to be indemnified and held harmless
pursuant to this Article X shall be in addition to and cumulative of any other remedy of such party at law or in equity
and (B) no such party shall, by exercising any remedy available to it under this Article X, be deemed to have elected such
remedy exclusively or to have waived any other remedy, whether at law or in equity, available to it.


 


10.3
Payment.


 


With
respect to Third Party Claims for which indemnification is payable hereunder, the Indemnifying Party will pay the Indemnified
Party promptly after (a) the entry of judgment against the Indemnified Party and the expiration of any applicable appeal period,
(b) the entry of a non-appealable judgment or final appellate decision against the Indemnified Party or (c) the execution of any
settlement agreement referred to in Section 10.1. Notwithstanding the foregoing, expenses of the Indemnified Party for
which the Indemnifying Party is responsible shall be reimbursed on a current basis by the Indemnifying Party.


 


ARTICLE
XI. 

MISCELLANEOUS


 


11.1
Termination.


 


(a) Termination.
This Agreement may be terminated, and the purchase and sale of the Units abandoned, at any time prior to the Closing:


 


(i) by
mutual written consent of the Purchaser and the Seller at any time;


 


(ii) by
the Purchaser or the Seller if the Closing shall not have occurred on or before November 30, 2015, except that neither the Purchaser,
on the one hand, nor the Seller, on the other hand, may terminate this Agreement if the failure of the Closing to occur is due
to the failure of such party to perform in all material respects each of its obligations required to be performed at or prior
to the Closing;


 


(iii) by
the Purchaser, if one or more of the conditions set forth in Article VIII is not satisfied or waived in writing by the
Purchaser as of the Closing Date;


 




    	 	39	 



    	 	 	 



    

 


(iv) by
the Seller, if one or more of the conditions set forth in Article VII is not satisfied or waived in writing by the Seller
as of the Closing Date; or


 


(v) by
the Purchaser or the Seller, if there shall be any Law that makes consummation of the transactions contemplated hereby illegal
or otherwise prohibited or if any court of competent jurisdiction or other Governmental Entity shall have taken any Action permanently
restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby, and such Action shall
not be subject to appeal or shall have become final and appealable.


 


(b) Procedure
Upon Termination. In the event of termination of this Agreement:


 


(i) Each
party shall redeliver all documents relating to Confidential Information to the party from which they were received or confirm
that all such documents and all copies thereof have been destroyed;


 


(ii) No
Confidential Information received by any party with respect to the business or the assets of any other party or such party’s
Affiliates shall be disclosed to any third party, unless such disclosure is in accordance with the provisions of Section 6.5
of this Agreement;


 


 (iii) The
Earnest Money shall be disbursed pursuant to Section 2.1(d);


 


 (iv) All
obligations of the parties hereto under this Agreement shall terminate, except for the obligations under Section 6.5, this
Section 11.1(b) and Sections 11.4, 11.9, 11.10 and 11.12, and there shall be no Liability of
any party hereto to any other party and each party hereto shall bear its own fees, costs and expenses incurred by it or on its
behalf in connection with the negotiation, preparation, execution and performance of this Agreement and no party shall have any
further obligation to any other party; provided that termination of this Agreement by the Purchaser or the Sellers
pursuant to clause (ii), (iii) or (iv) of Section 11.1(a), respectively, by reason of any breach of this Agreement shall
not relieve the defaulting or breaching party (the “Breaching Party”), whether or not it is the terminating
party, of Liability for direct damages actually incurred by the other party, not including consequential, incidental and/or special
damages, as a result of any breach of this Agreement by the Breaching Party.


 


11.2
Assignment.


 


Purchaser
may not assign this Agreement to any affiliate or to any unaffiliated third party without the prior written consent of Seller.
Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, and no other person shall have any right, benefit or obligation hereunder.


 


11.3
Notices.


 


All
notices, consents, waivers, requests, demands and other communications which are required or may be given under this Agreement
shall be in writing and shall be deemed to have been duly given when received if personally delivered; when transmitted if transmitted
by telecopy upon receipt of telephonic or electronic confirmation, provided that a copy is mailed by regular mail, return receipt
requested; the day after it is sent, if sent for next day delivery to a domestic address by recognized overnight delivery service
(e.g., Federal Express); and upon receipt, if sent by certified or registered mail, return receipt requested. In each case
notice shall be sent to:


 




    	 	40	 



    	 	 	 



    

 


If
to the Company prior to the Closing or to the Seller:


 


Middle
Wilgat LLC


3801
PGA Boulevard, Suite 903


Palm
Beach Gardens, Florida 33410


Telephone:
(561) 626-4999


Facsimile:
(561) 626-4938


ATTN:
John Dickinson


 


with
a copy not constituting notice to:


 


Jennifer
Fahey


Bailey
& Glasser, LLP


209
Capitol Street


Charleston,
West Virginia 25301


Telephone:
(304) 345-6555


Facsimile:
(304) 342-1110


 


If
to the Company after the Closing or to the Purchaser:


 


Jet
Fuel, LLC, c/o Jet Ohio, LLC


Post
Office Box 276


Virgie,
Kentucky 41572


Telephone:
(606) 639-2300


ATTN:
Anthony Newsome


 


and


 


Jet
Fuel, LLC, c/o Royal Energy Resources, Inc.


56
Broad Street, Suite 2


Charleston,
South Carolina 29401


Telephone:
(843) 626-4999


Facsimile:
(888) 501-1528


ATTN:
William L. Tuorto


 


with
a copy not constituting notice to:


 


David
C. Stratton


Stratton
Law Firm, P.S.C.


111
Pike Street


Pikeville,
Kentucky 41501


Telephone:
(606) 437-7800


Facsimile:
(606) 437-7569


 




    	 	41	 



    	 	 	 



    

 


and


 


Robert
J. Mottern


Davis
Gillett Mottern & Sims LLC


1230
Peachtree Street NE, Suite 2445


Atlanta,
Georgia 30309


Telephone:
(404) 607-6933


Facsimile:
678-840-2126


 


or
to such other place and with such other copies as either party may designate as to itself by written notice to the others.


 


11.4
Choice of Law; Service of Process; Venue; JURY TRIAL WAIVER.


 


This
Agreement shall be construed and interpreted and the rights of the parties determined in accordance with the internal laws of
the State of West Virginia without giving effect to any choice or conflict of law provision or rule (whether of the State of West
Virginia or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of West
Virginia, except with respect to matters of law concerning the internal corporate affairs of any corporate entity which is a party
to or the subject of this Agreement, and as to those matters the law of the jurisdiction under which the respective entity derives
its powers shall govern. The Seller and the Company irrevocably consent to the service of any and all process in any action or
proceeding arising out of or relating to this Agreement by the registered or certified mailing of copies of such process to the
Seller at the addresses specified in Section 11.3. The Purchaser consents and agrees that such party may be served with
process in the same manner as a notice may be given under Section 11.3. Each of the parties hereto consents and voluntarily
submits to personal jurisdiction in the State of West Virginia and in the courts in such state located in Kanawha County and the
United States District Court for the Southern District of West Virginia in any proceedings arising out of or relating to this
Agreement, and the transactions contemplated hereby and agrees that all claims in respect of any such proceeding may be heard
and determined in any such court. Seller and Purchaser agree that any action instituted with respect to this Agreement will be
instituted exclusively in the United States District Court for the Southern District of West Virginia or, if such Court does not
have jurisdiction to adjudicate such action, in the courts of West Virginia located in Kanawha County. Each party hereto irrevocably
and unconditionally waives and agrees not to plead, to the fullest extent permitted by law, any objection that they may now or
hereafter have to the laying of venue or the convenience of the forum of any action with respect to this Agreement in the United
States District Court for the Southern District of West Virginia and the courts of the State of West Virginia located in Kanawha
County. Each party agrees that a final judgment, subject to appeal rights, in any proceeding so brought shall be conclusive and
may be enforced by suit on the judgment or in any other manner provided by law or in equity. SELLER AND PURCHASER EACH HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION INSTITUTED WITH RESPECT TO THIS AGREEMENT TO
THE FULLEST EXTENT PERMITTED BY LAW.


 




    	 	42	 



    	 	 	 



    

 


11.5
Effectiveness: Entire Agreement; Amendments and Waivers.


 


This
Agreement shall become effective on the parties hereto when all parties hereto have executed and delivered this Agreement. This
Agreement, together with all exhibits and schedules hereto (including, without limitation, the Disclosure Schedule), constitutes
the entire agreement among the parties pertaining to the subject matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the parties; provided that the forms of agreements and opinions
attached hereto as exhibits shall be superseded by the copies of such agreements and opinions executed and delivered by the respective
parties thereto, the execution and delivery of such agreements and opinions by the parties thereto to be conclusive evidence of
such parties’ approval of any change or modification therein. Except as set forth in the prior sentence, no amendment, supplement,
modification or waiver of this Agreement shall be binding unless executed in writing by all of the parties hereto indicating their
intention to amend this Agreement. Neither the failure nor any delay by any party in exercising any right, power or privilege
under this Agreement will operate as a waiver of any right, power or privilege under this Agreement, and no waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar),
nor shall such waiver constitute a continuing waiver unless otherwise expressly provided in such waiver in writing. In addition,
no notice to or demand on one party will be deemed a waiver of any obligation of such party or of the right of the party giving
such notice or demand to take further action without notice or demand as provided in this Agreement.


 


11.6
Multiple Counterparts.


 


This
Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.


 


11.7
Invalidity.


 


In
the event that any one or more of the provisions contained in this Agreement or in any other instrument referred to herein, shall,
for any reason, be held to be invalid, illegal or unenforceable in any respect, then to the maximum extent permitted by law, such
invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or any other such instrument;
provided, that in no event shall Purchaser be required to acquire less than all Equity Securities of the Company.


 


11.8
Titles; Currency; Schedules.


 


The
titles, captions or headings of the Articles and Sections herein are inserted for convenience of reference only and are not intended
to be a part of or to affect the meaning or interpretation of this Agreement. Unless otherwise specified, all references contained
in this Agreement to dollars or “$” will mean United States Dollars. The recital paragraphs or “whereas”
clauses appearing at the beginning of this Agreement are incorporated herein by reference and constitute binding terms hereof.
Information that is disclosed in any Disclosure Schedule will be deemed to be disclosed for purposes of any other Disclosure Schedule
or a different portion of the same Disclosure Schedule to the extent that such information can be reasonably deemed to be a disclosure
applicable to such other Disclosure Schedules or parts thereof.


 




    	 	43	 



    	 	 	 



    

 


11.9
Publicity.


 


No
party shall issue any press release or make any public statement regarding the transactions contemplated hereby or consummated
hereunder or thereunder, without the prior approval of the other parties, and the parties hereto shall issue a mutually acceptable
press release as soon as practicable after the execution and delivery of this Agreement and after the Closing Date. Notwithstanding
the preceding sentence, nothing herein shall be deemed to prohibit any party from making any disclosure which its counsel deems
reasonably necessary in order to fulfill such party’s disclosure obligations imposed by Law; provided that each such
party shall, to the extent reasonably practicable, afford the other parties the opportunity to review and comment on the proposed
disclosure in advance of such issuance; provided, further, that in the event that it is not reasonably practicable,
such party shall provide the other parties a copy promptly thereafter..


 


11.10
Fees and Expenses.


 


(a) The
Seller. Subject to the provisions of Article X hereof, the Seller shall pay all of the fees, costs and expenses incurred
by the Seller, and the Company incident to or in connection with the negotiation, preparation, execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated hereby and thereby, including, without limitation, legal,
investment banking and accounting expenses, payments made in connection with obtaining consents, waivers, agreements and Permits,
any stock transfer, real property transfer, documentary transfer or other similar taxes and sales, use or other taxes imposed
by reason of the sale of the Units and any deficiency, interest or penalty asserted with respect thereto (the “Seller
Expenses”).


 


(b) The
Purchaser. Purchaser shall pay all of the fees, costs and expenses incurred by it incident to or in connection with the negotiation,
preparation, execution, delivery and performance of this Agreement and the Loan Agreements and the consummation of the transactions
contemplated hereby and thereby.


 


11.11
Representation of Counsel; Mutual Negotiation.


 


Each
party has been represented by counsel of its choice in negotiating this Agreement. This Agreement shall therefore be deemed to
have been negotiated and prepared at the joint request, direction and construction of the parties, at arm’s length, with
the advice and participation of counsel, and will be interpreted in accordance with its terms without favor to any party.


 


11.12
No Third Party Beneficiaries.


 


This
Agreement shall be binding upon and inure solely to the benefit of each party hereto, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other person any legal or equitable right, benefit or remedy of any nature whatsoever
under or by reason of this Agreement, including, without limitation, by way of subrogation, except as specifically set forth in
Article X hereof.




    	 	44	 



    	 	 	 



    

 


11.13
Performance by the Company.


 


Seller
will cause to be performed and hereby guarantee the performance of all actions, agreements and obligations set forth herein to
be performed at or prior to the Closing by the Company. Purchaser will cause to be performed and hereby guarantee the performance
of all actions, agreements and obligations set forth herein to be performed after Closing by the Company.


 


11.14 Time
of Essence.


 


With
regard to all dates and time periods set forth or referred to in this Agreement, time is of the essence.


 


11.15 Limitation
of Damages.


 


Neither
party to this Agreement shall be entitled to recover any consequential, exemplary or punitive damages from the other party hereto.


 


[Signature
pages follow.]


 




    	 	45	 



    	 	 	 



    

 


In
Witness Whereof, the parties hereto have caused
this Agreement to be duly executed on their respective behalf, by their respective officers thereunto duly authorized, all as
of the day and year first above written.


 


	 	PURCHASER:
	 	 
	 	JET FUEL,
    LLC
	 	a Kentucky
    limited liability company
	 	 	 
	 	By:	 
	 	Name: 	 
	 	Title:	 
	 	 	 
	 	SELLER:
	 	 
	 	MIDDLE
    WILGAT LLC
	 	a Delaware
    limited liability company
	 	 	 
	 	By:	 
	 	Name: 	 
	 	Title:	 




 




    	 



    	 	 	 



    

 


Exhibit
A


 


Form
of Secured Promissory Note


 


	$6,000,000	[             ]
    __, 2015


 


FOR
VALUE RECEIVED, JET FUEL, LLC, a Kentucky limited liability company (the “Maker”), promises to pay to the order
of MIDDLE WILGAT, LLC, a Delaware limited liability company (the “Holder”), at such place as the Holder may
from time to time designate in writing to the Maker, in lawful money of the United States of America, or such other method of
payment the parties may hereinafter agree to, the principal sum of Six Million Dollars and No Cents ($6,000,000.00), at an interest
rate of Nine Percent (9%) per annum (the “Interest Rate”), with interest accruing on the principal balance
of this Note payable in monthly payments as specified herein, with a payment of One Million Dollars and No Cents ($1,000,000)
due and payable no later than six (6) months from the date of this Note, and all remaining principle and interest payable in full,
one year from the date hereof, in arrears, on [              ] __, 2016 (the “Maturity Date”).


 


This
secured promissory note (the “Note”) is being delivered by Maker to Holder in partial consideration for the
purchase by Maker of all of the outstanding membership units in GATLING LLC, a West Virginia limited liability company (“Gatling”),
GATLING OHIO LLC, a Delaware limited liability company (“Gatling Ohio”) and MEIGS POINT DOCK LLC, a Delaware
limited liability company (“Meigs Point Dock”) (together, the “Company”), pursuant to the
terms of a certain Unit Purchase Agreement (the “Agreement”), dated of even date herewith, between Maker and
Holder. All capitalized terms not defined herein shall have the meanings ascribed to them in the Agreement.


 


This
Note is being issued pursuant to and in accordance with the terms and conditions of the Agreement, is secured by a certain security
agreement (the “Security Agreement”) of even date herewith granted by Maker in certain collateral (as defined therein)
(the “Collateral”), is guaranteed by Royal Energy Resources, Inc., a Delaware corporation (“Royal”)
pursuant to a Guaranty Agreement of even date herewith, and is subject to and governed by the terms and conditions of the Agreement
and the Security Agreement.


 


Beginning
on [                  ], 2015, and
continuing on the [   ] day of each month thereafter until this Note is paid in full, a payment of interest
accrued on the principal balance outstanding on the Note shall be made to Holder. No later than six (6) months after the date
of this Note, a payment of One Million Dollars and No Cents ($1,000,000) shall be made to Holder. No later than the Maturity
Date, a payment of all remaining principal and interest due on this Note shall be made to Holder. All payments shall be
tendered to Holder at such physical address or pursuant to such bank wire transfer instructions as Holder may direct from
time to time. Interest shall accrue only on the amount of principal actually outstanding from time to time. The indebtedness
evidenced by this Note may be prepaid in whole only, at any time prior to the Maturity Date, without penalty of any kind or
nature whatsoever.


 




    	 



    	 	 	 



    

 


Upon
the failure of the Maker to pay, when due, any monthly interest payment required hereunder or to pay the remaining principal balance
together with all interest accrued thereon at the Maturity Date, the Holder shall have the option to declare Maker in default
of the terms of this Note and the right to declare the amount of the total unpaid principal balance hereafter due and payable
if the Maker fails to cure such default within ten (10) days after written notice to Maker of a notice of default and intention
to accelerate sent to the Maker by certified or registered mail to the last address of Maker known to the Holder. Upon the occurrence
and during the continuance of an event of default under this Note or the Security Agreement, all amounts due under the Note will
bear interest at Fifteen Percent (15%) per annum (the “Default Interest Rate”); provided, in no event will
the Interest Rate or Default Interest Rate exceed the maximum rate permitted by applicable law.


 


If
from any circumstances whatsoever fulfillment of any provision of this Note at the time performance of such provision shall be
due shall involve transcending the limit prescribed by any applicable usury statute or any other applicable law, with regard to
obligations of like character and amount, then, ipso facto, the obligation to be fulfilled shall be reduced to the limit
of such validity, so that in no event shall any exaction be possible under this Note or under any other instrument evidencing
or securing the indebtedness evidenced hereby, that is in excess of the current limit of such validity, but such obligation shall
be fulfilled to the limit of such validity.


 


Presentment
for payment, demand, protest and notice of demand, notice of dishonor and notice of nonpayment and all other notices are hereby
waived by Maker. No failure to accelerate the debt evidenced hereby by reason of default hereunder, or indulgences granted from
time to time shall be construed (1) as a novation of this Note or as a restatement of the indebtedness evidenced hereby or as
a waiver of such right of acceleration or of the right of the Holder thereafter to insist upon strict compliance with the terms
of this Note, or (2) to prevent the exercise of such right of acceleration or any other right granted hereunder or by applicable
law; and Maker hereby expressly waives the benefit of any statute or rule of law or equity now provided, or which may hereafter
be provided, which would produce a result contrary to or in conflict with the foregoing. No extension of the time for the payment
of this Note hereunder, made by agreement with any person now or hereafter liable for the payment of this Note shall operate to
release, discharge, modify, change or affect the original liability of the Maker under this Note, either in whole or in part,
unless the Holder agrees otherwise in writing. This Note may not be changed orally, but only by an agreement in writing signed
by the party against whom enforcement of any waiver, change, modification or discharge is sought.


 


Maker
hereby waives and renounces for itself, its heirs, successors and assigns, all rights to the benefits of any statute of limitations,
any moratorium, reinstatement, marshaling, forbearance, valuation, stay, extension, redemption, appraisement and exemption now
provided, or which may hereafter by provided, by the Constitution and laws of the United States of America and of the State of
West Virginia, against the enforcement and collection of the obligations evidenced by this Note except as described above.


 




    	 



    	 	 	 



    

 


In
the event that this Note is collected by law or through an attorney at law, or under advice therefrom, the Maker agrees to pay
all costs of collection, including reasonable attorneys’ fees actually incurred. This Note shall be governed by the laws
of the State of West Virginia.


 


AS
A SPECIFICALLY BARGAINED INDUCEMENT FOR THE HOLDER TO EXTEND CREDIT TO MAKER, AND AFTER HAVING THE OPPORTUNITY TO CONSULT COUNSEL,
THE MAKER EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING RELATED TO THIS NOTE OR ARISING IN ANY WAY
FROM ANY INDEBTEDNESS OR OTHER TRANSACTIONS INVOLVING THE HOLDER AND THE MAKER.


 


Given
under the hand and seal of the undersigned, the date and year indicated above.


 


DATED
this ___ day of [     ] 2015.


 


	 	MAKER:
	 	 
	 	JET
    FUEL, LLC, a Kentucky limited liability company
	 	 	 
	 	By:
    	 
	 	Name:
    	 
	 	Its:	 


 




    	 



    	 	 	 



    

 


Exhibit
B


 


Form
of Security Agreement


 


THIS
SECURITY AGREEMENT (this “Agreement”), made this ___ day of [            ] 2015, by and among JET FUEL, LLC, a Kentucky limited
liability company(the “Debtor”), and MIDDLE WILGAT, LLC, a Delaware limited liability company (the “Secured
Party”).


 


WITNESSETH:


 


WHEREAS,
on the date hereof, the Debtor is issuing a Secured Promissory Note in the principal amount of Six Million Dollars And No Cents
($6,000,000.00) (the “Note”); and


 


WHEREAS,
in order to induce the Secured Party to provide to the Debtor the financing evidenced by the Note, the Debtor has agreed to grant
to the Secured Party a first priority lien and security interest in the Collateral hereinafter described, in accordance with the
terms and conditions of this Agreement;


 


NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:


 


1.
Definitions.


 


 (a) All
references to the Secured Party and the Debtor herein, or to any other person herein, shall include their respective heirs, executors,
administrators, personal representatives, successors and permitted assigns. The words “hereof,” “herein,”
“hereunder,” “this Agreement” and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not any particular provision of this Agreement and as this Agreement now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.


 


 (b) In
addition to those capitalized terms defined elsewhere in this Agreement, the following terms shall have the following respective
meanings wherever used in this Agreement:


 


 “Account
Debtors” means any Person who is or may become obligated to any Grantor under, with respect to, or on account of an Account
or any Supporting Obligation related thereto.


 


 “Accounts”
means any and all accounts (as that term is defined in the UCC) of any Debtor, and includes, without limitation, all obligations
of every kind at any time owing to any Debtor, all contract rights under any coal sales contracts, orders or agreements, receivables
and any and all rights of any Debtor to payment for goods sold or leased or for services rendered whether due or to become due,
whether or not earned by performance and whether now existing or arising in the future, including without limitation, Accounts
from affiliates of any Debtor.


 




    	 



    	 	 	 



    

 


 “Agreement”
means this Security Agreement, as it may be amended or modified from time to time, together with all schedules and exhibits attached
hereto.


 


 “Chattel
Paper” means any and all chattel paper (as that term is defined in the UCC), whether tangible or electronic, of any Debtor.


 


 “Collateral”
means the following described property, whether now owned or hereafter acquired by any Debtor, whether now existing or hereafter
arising, and wherever located:


 


 (i) All
Accounts, General Intangibles, Documents, Chattel Paper and Instruments of Debtor, now existing or hereafter arising;


 


 (ii) all
guarantees of Debtor’s existing and future Accounts, General Intangibles, Chattel Paper and Instruments and all other security
held by Debtor for the payment or satisfaction thereof;


 


 (iii) all
Equipment owned or hereafter acquired by Debtor;


 


 (iv) all
Intercompany Claims now existing or hereafter arising;


 


 (v) any
and all now owned or hereafter acquired or arising Deposit Accounts, Commodities Accounts, Investment Related Property, Letter
of Credit Rights, Goods (as that term is defined in the UCC), Commercial Tort Claims and Supporting Obligations;


 


 (vi) all
books and records of Debtor (including, without limitation, computer records, tapes, disks and programs, and all other media,
written, electronic, magnetic or otherwise, containing such records) which relate to the Debtor’s Equipment, Accounts, Deposit
Accounts, Commodities Accounts, Investment Related Property, Letter of Credit Rights, Goods, Supporting Obligations, General Intangibles,
Chattel Paper and Instruments or guarantees thereof;


 


 (vii)
all insurance on all of the foregoing and all proceeds of that insurance; and


 


 (viii) all
cash and non-cash proceeds and products of all of the foregoing and the proceeds and products of other proceeds and products.


 


 “Commercial
Tort Claims” means all commercial tort claims as defined in the UCC, including, without limitation, all commercial tort
claims listed on the Schedule I attached hereto (as such schedule may be amended or supplemented from time to time).


 


 “Commodities
Accounts” means all commodity accounts of the Debtor as defined in Article 9 of the UCC, and shall include, without limitation,
all of the accounts listed on the Schedule I attached hereto (as such schedule may be amended or supplemented from time
to time).


 


 “Commodity
Contracts” means all commodity contracts of Debtor as defined in Article 9 of the UCC.


 




    	 



    	 	 	 



    

 


 “Deposit
Accounts” means deposit accounts (as that term is defined in the UCC) of the Debtor, including without limitation, any and
all moneys, sums and amounts now or hereafter on deposit with any banking institution or otherwise to the credit of or belonging
to the Debtor, including, without limitation, all of the accounts listed on the Schedule I attached hereto (as such schedule
may be amended or supplemented from time to time).


 


 “Documents”
means any and all documents (as that term is defined in the UCC) of any Debtor.


 


 “Equipment”
means and any and all equipment (as that term is defined in the UCC) of any Debtor and hall include, without limitation, all equipment,
machinery, appliances, tools, motor vehicles, furniture, furnishings, floor samples, office equipment and supplies, and tangible
personal property, whether or not the same are or may become fixtures, used or bought for use primarily in the business of the
Debtor or leased by the Debtor to or from others, of every nature, presently existing or hereafter acquired or created, wherever
located, additions, accessories and improvements thereto and substitutions therefor and all parts which may be attached to or
which are necessary for the operation and use of such personal property or fixtures, whether or not the same shall be deemed to
be affixed to real property, all manufacturer’s warranties therefor, all parts and tools therefor, and all rights under
or arising out of present or future contracts relating to the foregoing. All equipment is and shall remain personal property irrespective
of its use or manner of attachment to real property.


 


 “Event
of Default” shall have the meaning ascribed thereto in the Note.


 


 “General
Intangibles” means all general intangibles (as that term is defined in the UCC) of any Debtor (including, without limitation,
all payment intangibles (as that term is defined in the UCC), and software, company records (paper and electronic), correspondence,
credit files, records and other documents, computer programs, computer software, computer tapes and cards and other paper and
documents in the possession or control of the Debtor or in the possession or control of any affiliate or computer service bureau,
and all contract rights under any coal sales contracts, orders or agreements, claims, choses in action, bank balances, judgments,
rights as lessee under any and all leases of personal property, rights and/or claims to tax refunds and other claims and rights
to monies or property, warranties, patents, patent applications, trademarks, trade names, trade secrets, formulas, licensing agreements,
royalty payments, copyrights, service names, customer lists, service marks, logos, goodwill, intellectual property and deposit
accounts, and all other general intangibles of every kind, type or description).


 




    	 



    	 	 	 



    

 


 “Instruments”
means all instruments (as that term is defined in the UCC) of any Debtor, including without limitation, checks, notes, certificated
certificates of deposit, investment securities, negotiable instruments and writings evidencing a right to the payment of money
of a type transferred in the ordinary course of business by delivery with any necessary instrument or assignment.


 


 “Investment
Accounts” means all the Securities Accounts, Commodities Accounts and Deposit Accounts of any Debtor.


 


 “Investment
Related Property” means (i) any and all investment property (as that term is defined in the UCC) of the Debtor, including
without limitation, any and all securities, whether certificated or uncertificated, Security Entitlements, Security Accounts,
Commodity Contracts and Commodities Accounts and (ii) all of the following (regardless of whether classified as investment property
under the UCC): all (w) Pledged Equity Interests, (x) Pledged Debt, (y) the Investment Accounts and (z) certificates of deposit.


 


 “Intercompany
Claims” means any and all rights of a Debtor in respect of loans, advances or other claims owed to the Debtor by any of
its affiliates.


 


 “Holder”
shall mean Middle Wilgat, LLC, it successors or assigns.


 


 “Obligations”
shall mean the collective reference to all principal, interest, royalties, collection costs, expenses and other amounts owing
or payable from time to time under the Note and/or this Agreement, the Deed of Trust or the Mortgage, whether arising before or
after the commencement of any bankruptcy or insolvency case with respect to the Debtor (including, without limitation, the payment
of interest and other amounts which would accrue and become due but for the commencement of such case).


 


 “Person”
or “person” shall mean any individual, sole proprietorship, partnership, limited partnership, limited liability company,
corporation, business trust, unincorporated association, joint stock corporation, trust, joint venture or other entity or any
government or any agency or instrumentality or political subdivision thereof.


 


 “Pledged
Debt” means all indebtedness for borrowed money owed to the Debtor, whether or not evidenced by any instrument or promissory
note, including, without limitation, all indebtedness described on the Schedule I attached hereto (as such schedule may
be amended or supplemented from time to time), all monetary obligations owing to the Debtor from any affiliate of a Debtor (including
Intercompany Claims), the instruments evidencing any of the foregoing, and all interest, cash, instruments, and other property
or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the
foregoing.


 


 “Pledged
Equity Interests” means all shares of and interests in capital securities owned by the Debtor, including without limitation,
all shares of and interests in capital securities described on the Schedule I attached hereto (as such schedule may be
amended or supplemented from time to time), and the certificates, if any, representing such shares and any interest of the Debtor
in the entries on the books of the issuer of such shares or interests or on the books of any securities intermediary pertaining
to such shares or interests, and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other
property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all
of the foregoing.


 




    	 



    	 	 	 



    

 


 “Representation
Date” shall mean each of (i) the Closing Date and (ii) each Reporting Date. As used in this definition, “Reporting
Date” shall mean the date of delivery of any amendment or supplement to the Schedules hereto in accordance with the terms
of this Agreement, which delivery shall occur not less frequently than each fiscal quarter and shall occur promptly following
the end of each fiscal quarter, and in any event within 40 days following the end of each fiscal quarter and 75 days following
the end of each fiscal year.


 


 “Securities
Accounts” means all securities accounts as defined in Article 8 of the UCC and shall include, without limitation, all of
the accounts listed on the Schedule I attached hereto (as such schedule may be amended or supplemented from time to time).


 


 “Security
Entitlement” means any security entitlement of Debtor as defined in Article 8 of the UCC.


 


 “Security
Interests” shall mean the liens and security interests granted by the Debtor to the Secured Party, and all rights and remedies
in respect thereof, pursuant to this Agreement.


 


 “Supporting
Obligations” means any and all supporting obligations (as that term is defined in the UCC).


 


 “UCC”
means the Uniform Commercial Code as in effect in the State of West Virginia or, when the context relates to perfection or priority
of a security interest, the Uniform Commercial Code as in effect from time to time in any other applicable jurisdiction.


 


 (c) All
capitalized terms not otherwise defined herein shall have the meaning given to those terms in the Unit Purchase Agreement dated
[ ], 2015 entered into by Debtor and the Secured Party.


 


2. The
Security Interests. In order to secure the due and punctual payment and performance of all Obligations from time to time, the
Debtor hereby grants to the Secured Party a continuing lien and security interest in, and hereby assigns to the Secured Party
as collateral security, the Collateral of the Debtor, whether now owned or hereafter acquired or existing, and wherever located,
and all products and proceeds of the Collateral, in any form, including, without limitation, insurance proceeds and all claims
against third parties for loss or damage to or destruction of any or all of the foregoing.


 


3. Filing;
Further Assurances. The Debtor will, at its expense, execute, deliver, file and record (in such manner and form as the Secured
Party shall require), or permit the Secured Party to file and record, (a) all financing statements, (b) all carbon, photographic
or other reproductions of financing statements or this Agreement (which shall be sufficient as a financing statement hereunder),
(c) all endorsements to title to any vehicles or other Collateral as may be required in order to perfect the Security Interests
therein, and (d) all specific assignments or other papers that may be necessary or desirable, or that the Secured Party may request,
in order to create, preserve, perfect or validate any Security Interest or to enable the Secured Party to exercise and enforce
its rights hereunder with respect to any of the Collateral. The Debtor hereby appoints the Secured Party as the Debtor’s
attorney-in-fact to execute and file, in the name and on behalf of the Debtor, such additional financing statements and other
assignments and documents as the Secured Party may request. In addition, in the event and to the extent that any of the Collateral
consists of or is represented by instruments or other evidences of ownership such as would require physical possession of same
in order to perfect the Security Interests therein under applicable law, the Debtor will promptly, at its expense, deliver same
to the Secured Party, with any necessary endorsements thereon.


 




    	 



    	 	 	 



    

 


4. Representations
and Warranties of the Debtor. The Debtor hereby represents and warrants to and for the benefit of the Secured Party, as of the
Representation Date, as follows:


 


 (a) That
the Debtor is the valid and lawful owner of all of the Collateral, free from any and all adverse liens, security interests or
encumbrances.


 


 (b) That
the Debtor has full right, power and authority to grant to the Secured Party the Security Interests pursuant to the terms of this
Agreement, and that the Security Interests do not conflict with any rights of any other persons or any commitments of the Debtor
to any other persons.


 


 (c) That
no financing statement or other evidence of liens covering any of the Collateral is on file in any public office, other than financing
statements and other filings filed pursuant to this Agreement.


 


 (d) That
the Collateral is situated only at the collateral locations listed in Schedule II hereto (the “Collateral Locations”).


 


 (e) Schedule
I hereto (as such schedule may be amended or supplemented from time to time) sets forth all of the Pledged Debt owned by the Debtor
and all of such Pledged Debt has been fully authorized, authenticated or issued, and delivered and is the legal, valid and binding
obligation of the issuers thereof and is not in default and constitutes all of the issued and outstanding intercompany indebtedness
evidenced by an instrument or certificated security of the respective issuers thereof owing to the Debtor.


 


 (f) Schedule
I hereto (as such schedule may be amended or supplemented from time to time) sets forth all of the Securities Accounts and
Commodities Accounts in which the Debtor has an interest. The Debtor is the sole entitlement holder of each such Securities Account
and Commodities Account, and the Debtor has not consented to, and is not otherwise aware of, any Person (other than the Secured
Party pursuant hereto) having “control” (within the meaning of Sections 8-106 and 9-106 of the UCC) over, or any other
interest in, any such Securities Account or Commodity Account or any securities or other property credited thereto.


 




    	 



    	 	 	 



    

 


 (g) Schedule
I hereto (as such schedule may be amended or supplemented from time to time) sets forth all of the Deposit Accounts in which
the Debtor has an interest and the Debtor is the sole account holder of each such Deposit Account and the Debtor has not consented
to, and is not otherwise aware of, any Person having sole dominion and control (within the meaning of Section 9-104 of the UCC)
over, or any other interest in, any such Deposit Account or any money or other property deposited therein.


 


 (h) Schedule
I (as such schedule may be amended or supplemented from time to time) sets forth all Commercial Tort Claims of the Debtor.


 


 (i) Schedule
III (as such schedule may be amended or supplemented from time to time) lists all letters of credit to which the Debtor has
rights.


 


5. Covenants
of the Debtor. The Debtor hereby covenants and agrees as follows:


 


 (a) That
the Debtor will defend the Collateral and the Security Interests against all claims and demands of all Persons at any time claiming
any adverse interest therein or thereagainst.


 


 (b) That
the Debtor will give written notice thereof to the Secured Party at least thirty (30) days prior to (i) any change in the location
of the principal office of the Debtor or the office where the Debtor maintains its books and records pertaining to any Collateral,
and (ii) any change or movement in location of any Collateral from the Collateral Locations.


 


 (c) That
the Debtor will promptly pay any and all taxes, assessments and governmental charges upon the Collateral prior to the date that
penalties may attach thereto or same become a lien on any of the Collateral, except to the extent that such taxes, assessments
and charges shall be contested by the Debtor in good faith and through appropriate proceedings.


 


 (d) That
the Debtor will immediately notify the Secured Party of any event causing a material loss or diminution in the value of the Collateral,
and the amount (or the Debtor’s best estimate of the amount) of such loss or diminution. 


 


 (e) That
the Debtor will at all times have and maintain insurance (i) with respect to all insurable Collateral in amounts and of types
as are customarily maintained by other companies of comparable size and type of business, each of which insurance policies shall
name the Secured Party as a loss payee as its interests may appear, and (ii) with respect to the conduct and operation of the
Debtor’s business, against such liabilities and in such amounts as are customarily maintained by businesses of similar size,
scope and location, each of which insurance policies shall name the Secured Party as an additional insured. All policies of insurance
shall provide for a minimum of thirty (30) days’ written notice to the Secured Party prior to any cancellation, modification
or non-renewal thereof. The Debtor shall, on the date hereof and from time to time upon request hereafter, furnish the Secured
Party with certificates or other evidence satisfactory to the Secured Party of compliance with the foregoing insurance provisions.


 




    	 



    	 	 	 



    

 


 (f) That
the Debtor will keep all of the Collateral free from any and all adverse liens, security interests or encumbrances and in good
order and repair, reasonable wear and tear excepted, and will not waste or destroy the Collateral or any part thereof.


 


 (g) That
the Debtor will not operate or use any of the Collateral in violation of any applicable law.


 


 (h) That
if any of the Equipment Collateral or any records concerning the Collateral are at any time to be located on premises leased by
the Debtor or on premises owned by the Debtor subject to a mortgage or other lien, the Debtor shall so notify the Secured Party
and shall if reasonably requested by the Secured Party obtain and deliver or cause to be delivered to the Secured Party an agreement,
in form and substance satisfactory to the Secured Party, waiving the landlord’s or mortgagee’s or lienholder’s
right to enforce any claim against the Debtor for monies due under the landlord’s lien, mortgage or other lien by levy or
distraint or other similar proceeding against the Equipment Collateral or records concerning the Collateral and assuring the Secured
Party’s ability to have access to the Equipment Collateral and records concerning the Collateral in order to exercise its
right hereunder to take possession thereof.


 


 (i) That
the Debtor shall not take or permit any action which could materially impair the Secured Part’s rights in the Collateral,
subject to the Debtor’s right to dispose of rights in the Collateral to the extent permitted hereunder or under the Loan
Agreement, or the to grant Permitted Liens and Permitted Encumbrances.


 


 (j) In
the event the Debtor acquires rights in any Investment Related Property, Commercial Tort Claims or Letter of Credit Rights after
the date of this Agreement, it shall deliver to the Secured Party a completed Pledge Supplement, substantially in the form of
Annex A attached hereto, together with all supplements and schedules thereto, reflecting such new Investment Related Property,
Commercial Tort Claims, Letters of Credit Rights and all other Investment Related Property, Commercial Tort Claims, Letter of
Credit Rights; provided, however, that the Debtor shall only be required to provide an updated Pledge Supplement
with respect to Pledged Debt acquired during any fiscal quarter on or before the Reporting Date immediately following the end
of such fiscal quarter. Notwithstanding the foregoing, it is understood and agreed that the security interest of the Secured Party
shall attach to all Investment Related Property, Commercial Tort Claims, and Letter of Credit Rights immediately upon the Debtor’s
acquisition of rights therein and shall not be affected by the failure of the Debtor to deliver a supplement to Schedule I
as required hereby.


 




    	 



    	 	 	 



    

 


6.
 Records Relating to Collateral. The Debtor will keep and maintain complete and accurate records concerning the Collateral
at its principal executive office. The Debtor will (a) faithfully hold and preserve such records and chattel paper, (b) permit
representatives of the Secured Party, at any time during normal business hours, upon reasonable notice, and without undue material
disruption of the Debtor’s business, to examine and inspect the Collateral and to make copies and abstracts of such records
and chattel paper, and (c) furnish to the Secured Party such information and reports regarding the Collateral as the Secured Party
may from time to time reasonably request.


 


7. General
Authority.


 


 (a) In
the event that the Secured Party shall at any time be required to take action to defend the Security Interests, or the Debtor
shall fail to satisfy its obligations under Section 5(c) or 5(e) hereof, then the Secured Party shall have the right, but shall
not be obligated, to take such steps and make such payments as may be required in order to effect compliance, and the Secured
Party shall have the right either to demand and receive immediate reimbursement from the Debtor for all costs and expenses incurred
by the Secured Party in connection therewith, and/or to add such costs and expenses to the Obligations.


 


 (b) The
Debtor hereby irrevocably appoints the Secured Party the true and lawful attorney for the Debtor, with full power of substitution,
in the name of the Debtor, the Secured Party or otherwise, for the sole use and benefit of the Secured Party, but at the Debtor’s
expense, to the extent permitted by law to exercise, at any time and from time to time during the continuance of an Event of Default,
any or all of the following powers with respect to any or all of the Collateral (which powers shall be in addition and supplemental
to any powers, rights and remedies of the Secured Party described herein):


 


 (i) to
demand, sue for, collect, receive and give acquittance for any and all monies due or to become due upon or by virtue thereof;
and


 


 (ii) to
receive, take, endorse, assign and deliver any and all checks, notes, drafts, documents and other negotiable and non-negotiable
instruments and chattel paper taken or received by the Secured Party in connection therewith; and


 


 (iii) to
settle, compromise, discharge, extend, compound, prosecute or defend any action or proceeding with respect thereto; and


 


 (iv) to
sell, transfer, assign or otherwise deal in or with same, or the proceeds or avails thereof, as fully and effectually as if the
Secured Party were the absolute owner thereof; and


 


 (v)
to notify Account Debtors and/or obligors under Pledged Debt and indicate on all billings that payments thereon are to be made
to the Secured Party; and


 


 (vi) to
extend the time of payment of any or all thereof and to make any allowance and other adjustments with reference thereto; and


 




    	 



    	 	 	 



    

 


 (vii) to
discharge any taxes, liens, security interests or other encumbrances at any time placed thereon.


 


Anything
hereinabove contained to the contrary notwithstanding, the Secured Party shall give the Debtor not less than ten (10) days’
prior written notice of the time and place of any sale or other intended disposition of any of the Collateral, except any Collateral
which is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market.


 


8. Remedies
Upon Event of Default. If any Event of Default shall have occurred and be continuing under this Agreement, the Note, the Deed
of Trust or the Mortgage, then the Secured Party may exercise all of the rights and remedies of a secured party under applicable
law, and, in addition, the Secured Party may, without being required to give any notice, except as herein provided or as may be
required by mandatory provisions of law, (a) apply the cash, if any, then held by it as Collateral in the manner specified in
Section 10 hereof, and (b) if there shall be no such cash or if such cash shall be insufficient to pay all of the Obligations
in full, sell the Collateral, or any part thereof, at public or private sale or at any broker’s board or on any securities
exchange, for cash, upon credit or for future delivery, and at such price or prices as the Secured Party may deem satisfactory.
The Secured Party may require the Debtor to assemble all or any part of the Collateral and make it available to the Secured Party
at a place to be designated by the Secured Party which is reasonably convenient to the Debtor and the Secured Party. The Secured
Party has no obligation to repair, clean up or otherwise prepare the Collateral for sale. Any holder of an Obligation may be the
purchaser of any or all of the Collateral so sold and thereafter hold same, absolutely free from any right or claim of whatsoever
kind. Upon any such sale, the Secured Party shall have the right to deliver, assign and transfer to the purchaser thereof the
Collateral so sold. Each purchaser at any such sale shall hold the Collateral so sold absolutely, free from any claim or right
of whatsoever kind, including any equity or right of redemption of the Debtor. To the extent permitted by law, the Debtor hereby
specifically waives all rights of redemption, stay or appraisal, and all rights, if any, of marshalling the Collateral and any
other security for the Obligations, which it has or may have under any rule of law or statute now existing or hereafter adopted.
If required to do so by applicable law, the Secured Party shall give the Debtor not less than ten (10) days’ prior written
notice of its intention to make any such public or private sale or sales at a broker’s board or on a securities exchange.
Such notice, in case of a public sale, shall state the time and place fixed for such sale, and in case of sale at a broker’s
board or on a securities exchange, shall state the board or exchange at which such sale is to be made and the day on which the
Collateral, or the portion thereof being sold, will first be offered for sale at such board or exchange. Any such public sale
shall be held at such time or times within ordinary business hours and at such place or places as the Secured Party may fix in
the notice of such sale. At any such sale, the Collateral may be sold in one lot as an entirety or in separate parcels, as the
Secured Party may determine. The Secured Party shall not be obligated to make such sale pursuant to any such notice. The Secured
Party may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time
by announcement at the time and place fixed for the sale, and such sale may be made at any time or place to which the same may
be adjourned. Without precluding any other methods of sale, the sale of the Collateral shall have been made in a commercially
reasonable manner if conducted in conformity with reasonable commercial practices of banks disposing of similar property but in
any event the Secured Party may sell on such terms as the Secured Party may choose, without assuming any credit risk and without
any obligation to advertise or give notice of any kind. If the Secured Party sells any of the Collateral on credit, the Debtor
will be credited only with payments actually made by the purchaser, received by the Secured Party and applied to the indebtedness
of the purchaser. In case of any sale of all or any part of the Collateral on credit or for future delivery, the Collateral so
sold may be retained by the Secured Party until the selling price is paid by the purchaser thereof, but the Secured Party shall
not incur any liability in the case of the failure of such purchaser to take up and pay for the Collateral so sold and, in case
of any such failure, such Collateral may again be sold upon like notice. The Secured Party, instead of exercising the power of
sale herein conferred upon it, may proceed by a suit or suits at law or in equity to foreclose the Security Interests and sell
the Collateral, or any portion thereof, under a judgment or decree of a court or courts of competent jurisdiction. In the event
the Secured Party purchases any of the Collateral being sold, the Secured Party may pay for the Collateral by crediting some or
all of the Obligations of the Debtor. The Secured Party shall not be liable for failure to collect or realize upon any or all
of the Collateral or for any delay in so doing nor shall the Secured Party be under any obligation to take any action whatsoever
with regard thereto. The Secured Party has no obligation to attempt to satisfy the Obligations by collecting them from any other
person liable for them and the Secured Party may release, modify or waive any collateral provided by any other Person to secure
any of the Obligations, all without affecting the Secured party’s rights against the Debtor. The Debtor waives any right
it may have to require the Secured Party to pursue any third Person for any of the Obligations. The Secured Party may sell the
Collateral without giving any warranties to the Collateral and may specifically disclaim any warranties of title or the like.
This procedure will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral.


 




    	 



    	 	 	 



    

 


9. Right
of Secured Party to Use and Operate Collateral. Upon the occurrence and during the continuance of any Event of Default, to the
extent permitted by law, the Secured Party shall have the right and power, with or without legal process, to enter upon any or
all of the premises where the Collateral is located and/or any other location at which any Collateral may be maintained, to take
possession of all or any part of the Collateral, and to exclude the Debtor and all persons claiming under the Debtor wholly or
partly therefrom, and thereafter to sell same in accordance herewith and/or hold, store, and/or use, operate, manage and control
the same. Upon any such taking of possession, the Secured Party may, from time to time, at the expense of the Debtor, make all
such repairs, replacements, alterations, additions and improvements to the Collateral as the Secured Party may deem proper. The
Secured Party shall further have the right to manage and control the Collateral, and to carry on the business and to exercise
all rights and powers of the Debtor in respect thereof as the Secured Party shall deem proper, including the right to enter into
any and all such agreements with respect to the leasing and/or operation of the Collateral or any part thereof, and/or the sale
of Collateral, as the Secured Party may see fit; and the Secured Party shall be entitled to collect and receive all rents, issues,
profits, fees, revenues and other income of the same and every part thereof. Such rents, issues, profits, fees, revenues and other
income shall be applied to pay the expenses of holding and operating the Collateral and of conducting the business thereof, and
of all maintenance, repairs, replacements, alterations, additions and improvements, and to make all payments which the Secured
Party may be required or may elect to make, if any, for taxes, assessments, insurance and other charges upon the Collateral or
any part thereof, and all other payments which the Secured Party may be required or authorized to make under any provision of
this Agreement (including legal costs and reasonable attorneys’ fees). The remainder of such rents, issues, profits, fees,
revenues and other income shall be applied in accordance with Section 10 below, and, unless otherwise provided or required by
law or by a court of competent jurisdiction, any surplus shall be paid over to the Debtor. The Debtor shall, upon request of the
Secured Party, cooperate with the Secured Party in all lawful respects in connection with any exercise by the Secured Party of
its rights hereunder. Anything elsewhere contained in this Agreement to the contrary notwithstanding, no use or operation of any
of the Collateral, or the conduct of any business associated with any of the Collateral, shall constitute an assumption by the
Secured Party of any liabilities or obligations relating to such Collateral or the conduct of such business, and the Secured Party
hereby disclaims any responsibility for or in respect of any such liabilities and obligations.


 


10. Application
of Collateral and Proceeds. The proceeds of any sale of, or other realization upon, all or any part of the Collateral shall be
applied in the following order of priorities:


 


 (a) first,
to pay the expenses of such sale or other realization, and all expenses, liabilities and advances incurred or made by or on behalf
of the Secured Party in connection therewith, and any other unreimbursed expenses for which the Secured Party is to be reimbursed
pursuant to Section 11 hereof;


 


 (b) second,
to the payment of the Obligations to the Holder thereof, ratably in proportion to the respective amounts of Obligations held by
such Holder; and


 


 (c) finally,
to pay to the Debtor, or its successors or assigns, or as a court of competent jurisdiction may direct, any surplus then remaining
from such proceeds.


 


11. Expenses;
Secured Party’s Lien. The Debtor will, forthwith upon demand, pay to the Secured Party:


 


 (a) the
amount of any taxes or other charges which the Secured Party may have been required to pay by reason of the Security Interests
(including any applicable transfer taxes) or to free any of the Collateral from any lien thereon; and


 


 (b) the
amount of any and all reasonable out-of-pocket expenses, including the reasonable fees and disbursements of its counsel and of
any agents not regularly in its employ, which the Secured Party may incur in connection with (i) the operation, collection, sale
or other disposition of any of the Collateral, (ii) the exercise by the Secured Party of any of the powers conferred upon it hereunder,
and/or (iii) any default on the Debtor’s part hereunder.


 




    	 



    	 	 	 



    

 


12. Continuing
Security Interest. Any and all of the Secured Party’s rights with respect to the security interests hereunder shall continue
unimpaired, and the Debtor shall be and remain obligated in accordance with the terms hereof, notwithstanding the release or substitution
of any of the Collateral at any time or of any rights or interests therein, or any delay, extension of time, renewal, compromise,
or other indulgence granted by the Secured Party in reference to any of the Obligations, or any promissory note, draft, bill of
exchange or other instrument or document given in connection therewith, the Debtor hereby waiving all notice of any such delay,
extension, release, substitution, renewal, compromise or other indulgence, and hereby consenting to be bound thereby as fully
and effectually as if the Debtor had expressly agreed thereto in advance.


 


13. Termination
of Security Interests; Release of Collateral. Upon the indefeasible payment in full of all Obligations, the Security Interests
shall terminate and all rights in the Collateral shall revert to the Debtor. Upon any such termination of the Security Interests
or release of Collateral, the Secured Party will, at the Debtor’s expense, execute and deliver to the Debtor such documents
as the Debtor shall reasonably request to evidence the termination of the Security Interests or the release of such Collateral,
as the case may be.


 


14. Notices.
All notices, demands and other communications hereunder shall be given or made to the subject party at its address first set forth
above, or at such other address and/or telecopier number as the addressee may hereafter specify for the purpose by means of written
notice to the other party hereto. Such notices and other communications will be effectively given only if and when given in writing
and personally delivered, when sent by facsimile transmission to a party’s designated facsimile number, one (1) day after
being sent by Federal Express, DHL or other recognized overnight courier service with all charges prepaid or billed to the account
of the sender, or three (3) days after being mailed by first class mail with all postage prepaid.


 


15. Waivers;
Non-Exclusive Remedies. No failure on the part of the Secured Party to exercise, and no delay in exercising, and no course of
dealing with respect to, any right, power or remedy under this Agreement shall operate as a waiver thereof; nor shall any single
or partial exercise by the Secured Party of any right, power or remedy under this Agreement preclude any exercise of any other
right, power or remedy. The remedies in this Agreement are cumulative and are not exclusive of any other remedies provided by
law, in equity or otherwise.


 


16. Changes
in Writing. Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally but only by
a statement in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought.


 




    	 



    	 	 	 



    

 


17. Governing
Law; Waiver of Jury Trial.


 


 (a) This
Agreement shall (irrespective of where it is executed, delivered and/or performed) be governed by and construed in accordance
with the laws of the state of West Virginia (without giving effect to principles of conflicts of law), except as otherwise required
by mandatory, non-waivable provisions of law and except to the extent that remedies provided by the laws of any other jurisdiction
are governed by the laws of such jurisdiction.


 


 (b) THE
DEBTOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING UNDER OR RELATING TO THIS AGREEMENT, AND CONSENTS
THAT THE SECURED PARTY MAY FILE A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE DEBTOR WITH
RESPECT TO JURISDICTION AND THE WAIVER OF THE RIGHT TO TRIAL BY JURY.


 


18. Severability.
If any provision hereof is held invalid or unenforceable in any jurisdiction, such provision shall (for purposes of enforcement
in such jurisdiction only) be reduced in scope and effect to the extent necessary to render same enforceable, and the other provisions
hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of the Secured Party.


 


19. Headings.
The captions and Section headings in this Agreement are for convenience of reference only, and shall not limit or otherwise affect
the meaning or interpretation of any provision hereof.


 


20.
Assignment. This Agreement may not be assigned by the Debtor without the Secured Party’s prior written consent, but shall
otherwise be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.


 


[Signature
pages follow.]


 




    	 



    	 	 	 



    

 


In
Witness Whereof, the parties hereto have caused
this Agreement to be duly executed on their respective behalf, by their respective officers thereunto duly authorized, all as
of the day and year first above written.


 


	 	DEBTOR:
	 	 
	 	JET
    FUEL, LLC
	 	a
    Kentucky limited liability company
	 	 	 
	 	By:	 
	 	Name:
    	 
	 	Title:	 
	 	 	 
	 	SECURED
    PARTY:
	 	MIDDLE
    WILGAT LLC
	 	 
	 	a
    Delaware limited liability company
	 	 	 
	 	By:	 
	 	Name:
    	 
	 	Title:	 




 




    	 



    	 	 	 



    

 


SCHEDULE
I


 


Pledged
Investment Property,


 


Commercial
Tort Claims; Letter of Credit Rights


 




    	 



    	 	 	 



    

 


SCHEDULE
II


 


Collateral
Locations


 




    	 



    	 	 	 



    

 


ANNEX
A


 


TO
SECURITY AGREEMENT


 


FORM
OF PLEDGE SUPPLEMENT


 


This
PLEDGE SUPPLEMENT, dated ___________________, is delivered by JET FUEL, LLC, a limited liability company organized
under the laws of the State of Kentucky (the “Debtor”), pursuant to the Security Agreement, dated as of November [
], 2015 (as it may be from time to time amended, restated, modified or supplemented, the “Security Agreement”),
between Jet Fuel, LLC and Middle Wilgat LLC. Capitalized terms used herein not otherwise defined herein shall have the meanings
ascribed thereto in the Security Agreement.


 


Debtor
represents and warrants that the attached Supplement to Schedule I (the “Supplement”) accurately and completely
sets forth all information required pursuant to the Security Agreement. Debtor hereby (a) agrees that such Supplement shall constitute
part of Schedule I to the Security Agreement and (b) confirms the grant to the Secured Party set forth in the Security Agreement
of, and does hereby grant to the Secured Party a security interest in all of Debtor’s right, title and interest in, to and
under all Collateral to Secure the Obligations.


 


IN
WITNESS WHEREOF, Debtor has caused this Pledge Supplement to be duly executed and delivered by its duly authorized officer
as of _______________________.


 



	 	JET
    FUEL, LLC
	 	 	 
	 	By:	 
	 	 	 
	 	Its:	 


 




    	 



    	 	 	 



    

 


Exhibit
C


 


Form
of Guaranty Agreement


 


This
Guaranty Agreement (“Guaranty”), dated as of [              ] ___, 2015, is by Royal Energy Resources, Inc., a Delaware
corporation (“Guarantor”), for the benefit of Middle Wilgat, LLC, a Delaware limited liability company (“Lender”).


 


RECITALS


 


 A. The
Guarantor is a member of Jet Fuel, LLC, a Kentucky limited liability company (“Company”).


 


 B. Lender
has agreed to make a loan of Six Million Dollars and No Cents ($6,000,000) to the Company (the “Loan”) pursuant
to the terms of a Security Agreement of even date herewith (the “Security Agreement”) and a Secured Promissory
Note executed by Company in favor of the Lender of even date herewith (the “Note”) The Security Agreement and
the Promissory Note are collectively referred to herein as the “Transaction Documents”.


 


 C. Lender
has required, as a condition precedent to making the Loan to the Company, that Guarantor execute and deliver this Guaranty to
Lender. Since Guarantor will receive substantial financial benefits as a result of the Loan, Guarantor is willing to execute and
deliver this Guaranty to induce Lender to make such Loan to the Company.


 


AGREEMENTS


 


NOW,
THEREFORE, in order to induce Lender to provide enter into the Loan Agreement and make the Loan to the Company, Guarantor hereby
covenants and agrees as follows:


 


The
above stated Recitals are an integral part of this Guaranty Agreement and are hereby incorporated in their entirety herein by
reference.


 


1. DEFINITIONS
AND GENERAL RULES OF CONSTRUCTION


 


 1.1.1. Definitions.
In this Guaranty, any terms which are capitalized and not defined herein shall have the meaning ascribed to them in the Loan Agreement
or the Note.


 


 1.1.2. Tense;
Gender; Section Headings. In this Guaranty, the singular includes the plural and vice versa. Each reference to any gender also
applies to any other gender. The section headings are for convenience only and are not part of this Guaranty.


 




    	 



    	 	 	 



    

 


2. GUARANTY


 


 2.1. Guaranty
of Collection. The Guarantor guarantees to the Lender full and prompt collection of all monies payable by Company to Lender under
the Transaction Documents (the “Guaranteed Obligations”). This Guaranty is limited and conditional in that
it is a guaranty of collection only and the Guarantor is obligated to make payments hereunder only after the Lender has reduced
its claims with respect to the Loan to judgment and execution has been returned unsatisfied, or after the Company has become insolvent,
or after it has become otherwise apparent after reasonable due diligence that is useless for the Lender to proceed against the
Company. Furthermore, to the extent the Loan is secured by any property of the Company, the Guarantor is not obligated to make
payments hereunder unless and until there remains a balance outstanding under the Loan after all such collateral has been liquidated
and the net proceeds applied to the Loan. This Guaranty is a continuing guaranty which shall remain in full force and effect until
the Loan has been satisfied in full. Guarantor shall not be released from any obligations to Lender under this Guaranty as long
as any amount payable by Company to Lender under the Transaction Documents has not been satisfied, settled or paid in full.


 


 2.2. Form
of Payment. All payments under this Guaranty shall be made to Lender in immediately available funds, without reduction by any
recoupment, set-off, counterclaim or cross-claim against Lender.


 


 2.3. Subrogation.
Until the Guaranteed Obligations have been paid in full, the Guarantor irrevocably waives, relinquishes and renounces any right
of subrogation, contribution, indemnity, reimbursement or any claim whatsoever which the Guarantor may have against the Company.
The Guarantor will not assert any such claim against the Company in any proceeding, legal or equitable, including any bankruptcy,
insolvency or reorganization proceeding, before the Lender has been paid in full for the Guaranteed Obligations. This provision
will inure to the benefit of and will be enforceable by the Lender, the Company , and their successors and assigns, including
any trustee in bankruptcy or debtor-in-possession. This provision will not prevent the Guarantor from asserting a claim against
the Company once the Guaranteed Obligations have been paid in full to the Lender. Once the Guaranteed Obligations have been paid
in full, if the Guarantor has made any payment to Lender under this Guaranty, then the Lender will assign to the Guarantor, to
the extent of such payment, the Lender’s interest in the Transaction Documents and any judgments against the Company.


 


 2.4. Enforcement
Expenses. In the event that this Guaranty is collected by law or through an attorney at law, or under advice therefrom, the Guarantor
agrees to pay all costs of collection of the Lender, including reasonable attorneys’ fees actually incurred.


 


 2.5 Waivers.
Except as otherwise expressly set forth in this Guaranty, the Guarantor unconditionally and irrevocably waives each and every
defense which, under principles of guarantee and suretyship law, would otherwise operate to impair or diminish Guarantor’s
liability in respect of the Guaranteed Obligations; and nothing whatsoever except actual full payment of the Guaranteed Obligations
shall operate to discharge the Guarantor’s liability hereunder. The Guarantor hereby unconditionally waives (i) notice of
acceptance of this Guaranty, (ii) all presentments and protests, and (iii) notice of dishonor.


 




    	 



    	 	 	 



    

 


 2.6 Obligations
Absolute. Except as otherwise expressly set forth in this Guaranty, the Guarantor’s obligations are in all respects absolute
and unconditional, and will not be impaired, modified, released or limited by any occurrence or condition whatsoever, including,
without limitation, (i) any modification, discharge, renewal or extension of the Guaranteed Obligations or the Note, or any amendment,
modification or stay of the Lender’s rights under the Transaction Documents which may occur in any bankruptcy or reorganization
case or proceeding concerning the Company, whether permanent or temporary and whether or not assented to by the Lender, (ii) any
notice of withdrawal of this Guaranty, at any time and from time to time, before, at or after the Maturity Date of the Note, (iii)
any substitution or exchange, in whole or in part, of any collateral or any security held in connection with the Note, (iv) any
furnishing of additional collateral for the Note, (v) any determination that any collateral has been impaired or that any security
interest taken by the Lender to secure the Note is invalid or unperfected, (vi) any determination that any signatures on behalf
of the Company on the Transaction Documents re not genuine or that the Transaction Documents are not legal, valid and binding
obligations of the Company, or (vii) any defenses which the Company may have as to any of the Guaranteed Obligations.


 


3. REPRESENTATIONS
AND WARRANTIES


 


 3.1. Representations
and Warranties. Guarantor herby represents and warrants to Lender as follows:


 


 i) Organization
and Authorization. Guarantor has the power and authority to consummate the transactions contemplated hereby, and has the power
and authority to execute, deliver, and perform on, this Guaranty.


 


 ii) No
Breach of Other Agreements. The consummation of the transactions contemplated by this Guaranty and the performance of this Guaranty
will not result in any breach of, or constitute a default under, any mortgage, deed of trust, lease, loan or credit agreement,
or any other instrument or agreement to which Guarantor is a party or by which Guarantor may be bound or affected.


 


 iii) Condition
of Company. Guarantor is fully aware of the financial condition of the Company and is executing and delivering this Guaranty based
solely upon Guarantor’s own independent investigation of all matters pertinent hereto and is not relying in any manner upon
any representation or statement made by Lender. Guarantor hereby represents and warrants that Guarantor is in a position to obtain,
and Guarantor hereby assumes full responsibility for obtaining, any additional information concerning the Company’s financial
condition and any other matters pertinent to Guarantor’s decision to execute and deliver this Guaranty as Guarantor may
desire, and Guarantor is not relying upon or expecting Lender to furnish to Guarantor any information now or hereafter in Lender’s
possession concerning the same or any other matter whatsoever. By executing this Guaranty, Guarantor knowingly accepts the full
range of risks encompassed within a contract of this type, which risks Guarantor acknowledges.


 




    	 



    	 	 	 



    

 


 3.2. Continuing
Nature of Representations and Warranties. Unless Lender is notified to the contrary in writing, the representations and warranties
made by Guarantor in Section 3.1 shall remain true and accurate in all respects until all Guaranteed Obligations have been paid
and satisfied in full.


 


4. MISCELLANEOUS


 


 4.1. Notices.
Any communication to be made hereunder shall: (a) be made in writing, but unless otherwise stated, may be made by facsimile transmission
or electronic mail, all with electronic confirmation, or letter, and (b) any notice, demand or document which any party is required
or may desire to give or deliver to the other party shall be in writing and may be personally delivered or sent by mail, postage
prepaid [either by (i) United States registered or certified mail, return receipt required, or (ii) nationally recognized overnight
courier or delivery service], addressed to the party’s address first stated above in this Guaranty. Any notice, demand,
or document so given, shall be deemed to have been given, delivered or made, (i) when delivered if delivered in person, or by
a delivery service, or by overnight mail or courier service, (ii) when sent if sent by facsimile or electronic mail with electronic
confirmation, or (iii) three (3) days after it is deposited in the U.S. mail if sent registered or certified mail with return
receipt requested. Any party may change its address for purposes of this paragraph by giving the other party written notice of
such change of address via certified mail, return receipt requested.


 


 4.2. No
Waiver. No delay in the exercise of, or failure to exercise, any right, remedy, or power accruing upon any default or failure
of Guarantor in the performance of any obligation under this Guaranty shall impair any such right, remedy, or power or shall be
construed to be a waiver thereof, but any such right, remedy, or power may be exercised from time to time and as often as may
be deemed by Lender expedient. Lender need not give notice to Guarantor in order to entitle Lender to exercise any right, remedy,
or power reserved to Lender in this Guaranty. If Guarantor defaults in the performance of any obligation under this Guaranty,
and the default is waived by Lender, the waiver shall be limited to the particular default so waived. No waiver, amendment, release,
or modification of this Guaranty shall be established by conduct, custom, or course of dealing.


 


 4.3. Severability.
If any term of this Guaranty or any obligation under this Guaranty is held to be invalid, illegal, or unenforceable, the remainder
of this Guaranty and any other application of such term shall not be affected thereby.


 


 4.4. Modifications.
This Guaranty may not be terminated, amended, supplemented, waived, released, or modified orally, but may be terminated, amended,
supplemented, waived, released, or modified only by an instrument in writing signed by the party against which the enforcement
of the termination, amendment, supplement, waiver, release, or modification is sought.


 




    	 



    	 	 	 



    

 


 4.5. Choice
of Law. This Guaranty shall be deemed to be made in, and governed by, construed and enforced in accordance with the laws of, the
State of Delaware (without regard to principles of conflicts of laws), and shall be construed in accordance with and governed
by the laws of the State of Delaware applicable to agreements made and to be performed therein.


 


 4.6. Binding
Effect. All covenants and agreements of Guarantor set forth in this Guaranty shall bind Guarantor’s heirs, personal representatives,
successors, and assigns and shall inure to the benefit of, and be enforceable by, Lender and its successors and assigns, including
without limitation any holder of any or all of the Transaction Documents.


 


 4.7 Successors
and Assigns. The Guarantor agrees that this Guaranty shall inure to the benefit of, and be enforced by, Lender and any subsequent
holders of the Loan and shall be binding upon and enforceable against the Guarantor and its legal representatives, successors
and/or assigns.


 


 4.8. Time
of Essence. Time is of the essence of this Guaranty.


 


5. CONSENTS
AND WAIVERS


 


 5.1 Consent
to Jurisdiction and Venue. Each party hereby consents to the exclusive jurisdiction and venue of the United States District Court
for the Southern District of West Virginia, Charleston Division, or, if such Court does not have jurisdiction to adjudicate such
action, in the state courts of West Virginia situated in Charleston, Kanawha County. Guarantor hereby agrees that any controversy
arising under or in relation to this Guaranty or any of the other Transaction Documents shall be litigated exclusively in the
United States District Court for the Southern District of West Virginia, Charleston Division, or in West Virginia state courts
of competent jurisdiction sitting in Charleston, West Virginia, including without limitation those controversies relating to the
execution, interpretation, breach, enforcement or compliance with this Guaranty or any other issue arising under, related to,
or in connection with any of the Transaction Documents. Guarantor irrevocably consent to service, jurisdiction, and venue of such
courts for any litigation arising from this Guaranty or any other Transaction Document, and waives any other venue to which it
might be entitled by virtue of domicile, habitual residence or otherwise.


 


 5.2 Jury
Trial Waiver. Guarantor hereby waives trial by jury in any action or proceeding to which Guarantor may be a party, arising out
of or in any way pertaining to this Guaranty or any of the other Transaction Documents. It is agreed and understood that this
waiver constitutes a waiver of trial by jury of all claims against all parties to such actions or proceedings, including claims
against parties who are not parties to this Guaranty. This waiver is knowingly, willingly and voluntarily made by Guarantor, and
Guarantor hereby represents that no representations of fact or opinion have been made by any individual to induce this waiver
of trial by jury or to in any way modify or nullify its effect. Guarantor further represents that it has been represented in the
signing of this Guaranty and in the making of this waiver by independent legal counsel, selected of its own free will, and that
it has had the opportunity to discuss this waiver with counsel.


 




    	 



    	 	 	 



    

  


IN
WITNESS WHEREOF, Guarantor has signed and delivered this Guaranty as of the day and year first written above.


 


	 	GUARANTOR:
	 	 
	 	ROYAL
    ENERGY RESOURCES, INC., Delaware corporation
	 	 	 
	 	 	 
	 	By:	William
    L. Tuorto
	 	 	 
	 	Its:	Chief
    Executive Officer