Document:

Coal Facility Lease and Operation Agreement

					
		  		 	 CONFIDENTIAL TREATMENT
 INTERNATIONAL COAL GROUP, INC. HAS REQUESTED THAT THE
 MARKED PORTIONS OF THIS DOCUMENT BE ACCORDED
 CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF THE
 SECURITIES EXCHANGE ACT
OF 1934

 Exhibit 10.35 
 LOADOUT LLC 
 TO 
 ELK RIDGE, INC. 
 PREPARED: JULY 7, 2005 
 LESSOR: LOADOUT LLC 
 LESSEE: ELK RIDGE, INC. 
 DATE OF LEASE: JULY 7, 2005 
 TABLE OF CONTENTS TO COAL FACILITY LEASE AND
OPERATING AGREEMENT 
  

					
	ARTICLE (1):	  	TERM AND NATURE OF AGREEMENT	  	2
			
	ARTICLE (2):	  	FACILITY OPERATIONS	  	4
			
	ARTICLE (3):	  	PAYMENTS	  	8
			
	ARTICLE (4):	  	RELATIONSHIP OF PARTIES	  	10
			
	ARTICLE (5):	  	INDEMNIFICATION AND INSURANCE	  	10
			
	ARTICLE (6):	  	REPRESENTATIONS AND WARRANTIES	  	13
			
	ARTICLE (7):	  	DEFAULT AMD TERMINATION	  	14
			
	ARTICLE (8):	  	PROHIBITION AGAINST ASSIGNMENT, SUBCONTRACTING AND TRANSFER OF OWNERSHIP	  	17
			
	ARTICLE (9):	  	CONTRIBUTIONS, TAXES, FEES AND LICENSES	  	18
			
	ARTICLE (10):	  	DISPUTE SETTLEMENT AND ARBITRATION	  	18
			
	ARTICLE (11):	  	MISCELLANEOUS	  	20

  

					
		 	Elk Ridge, Inc. (7/7/05)	 	1

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

  
 COAL FACILITY
LEASE AND OPERATING AGREEMENT 
 THIS COAL FACILITY LEASE AND OPERATING AGREEMENT (this “Agreement”), is made and entered into this 7th day of
July, 2005, by and between LOADOUT LLC, a Delaware limited liability company (“Lessor”), and ELK RIDGE, INC., a Kentucky corporation (“Lessee”) . 
 WITNESSETH: 
 WHEREAS, Lessor is the owner of a coal facility more particularly described on Exhibit A attached
hereto, and roughly five miles of trackage, located on Caney Creek in Knott and Floyd Counties, Kentucky near the community of Wayland, Kentucky, all as more particularly identified on the map attached hereto as Exhibit B (the “Facility”);
and 
 WHEREAS, Lessor intends to lease the Facility to Lessee pursuant to this Agreement; 
 WHEREAS, Lessor and CSX Transportation (“CSXT”) have entered into an agreement to authorize the rehabilitation of a rail siding connected to the CSXT railway to facilitate service to Lessee by providing rail
service to the Facility, and Lessee shall enter into a Service Agreement (the “Service Agreement”) with CSXT regarding rail service to the Facility; and 
 WHEREAS, Lessee intends to utilize the Facility to load coal mined from the properties of Penn Virginia Operating Co., LLC, an affiliate of Lessor (“Affiliate Coal”), as well as coal mined from properties of others (“Adverse
Coal”) into trains for transportation to market via the CSXT rail transportation system. 
 NOW, THEREFORE, in consideration of the mutual promises and
agreements contained herein, and intending to be legally bound, the parties hereto agree as follows; 
 ARTICLE I—TERM AND NATURE OF AGREEMENT

 Section 1.1—Lease of Facility. That for and in consideration of the sum of [    *    ]
cash in hand paid by Lessee unto Lessor, the receipt and sufficiency of which is hereby acknowledged, and in further consideration of the minimum rentals and shipment royalties to be paid by Lessee to Lessor as hereinafter stipulated, and of the
covenants, provisions, stipulations and agreements hereinafter contained on part of Lessee to be kept, performed and observed, Lessor hereby exclusively leases to Lessee, and Lessee hereby leases from Lessor, the Facility for the purposes of
handling, preparing, storing, blending, loading and/or shipping certain coal mined by Lessee or others and certain coal designated by Lessor, from time to time, subject to and upon the terms and conditions set forth in this Agreement. 
  

					
		 	Elk Ridge, Inc. (7/7/05)	 	2

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

  
 Section 1.2—Ingress
and Egress. Lessor hereby grants to Lessee the non-exclusive right of ingress and egress to and from the Facility over existing roadways, or extensions thereof, located on property owned or controlled by Lessor and/or its affiliates as shown on
Exhibit B attached hereto. All of such roadways and extensions thereof shall for purposes of this Agreement be considered part of the “Facility” as defined above. Such rights of ingress and egress are granted only to the extent Lessor has
the right to grant the same. Lessor and Lessee agree to cooperate with each other and any other persons with the right to use the roadways, or extensions thereof, to coordinate and plan the use of the roads so as to minimize the interference with
each other’s operations. The cost of maintaining and repairing the roadways or extensions thereof used for ingress and egress to and from the Facility shall be shared on a pro-rated basis by Lessor, Lessee and any other persons with the right
to use such roadways or extensions thereof. 
 Section 1.3—Term. This Agreement will take effect as of
                     2005, and shall continue for an initial period of ten (10) years (“Initial Term”) . If Lessee is in
compliance with all terms and conditions of this Agreement and Lessee, together with any of its owners or other affiliated entities, is in compliance with all terms and conditions of any additional lease or other agreement in effect with 3. Lessor
at the time of the expiration of the Initial Term, then Lessee may renew this Agreement, subject to the same terms and conditions herein stated, for an additional five (5) year term by giving Lessor written notice of Lessee’s intention to
renew this Agreement at least three (3) months prior to expiration of the Initial Term. 
 Section 1.4—Investigation of Facility.
Lessee acknowledges that it has full and complete responsibility for making its own independent inspection, investigation and evaluation of the Facility (including, without limitation, roadways and extensions thereof) to determine existing
conditions, limitations of the areas involved, equipment necessary to conduct and complete operations, and laws affecting performance hereunder. Lessor makes no implied or express warranty or representation whatsoever 
  

					
		 	Elk Ridge, Inc. (7/7/05)	 	3

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

  
 
concerning the Facility, and Lessee covenants and agrees that no representations or warranties whatsoever, express or implied have been made by or on behalf
of Lessor or its employees, agents or representatives regarding the Facility (including, without limitation, roadways and extensions thereof), its condition, its fitness for a particular purpose, the use or operation that may be made thereof or the
income that may be derived therefrom. Lessor shall in no event assume or be liable for any loss Lessee under this Agreement. Lessor does not assume responsibility or liability for the present or future condition of the Facility (including, without
limitation, roadways and extensions thereof), and Lessor shall not be liable to Lessee for any damage to or destruction of the Facility (including, without limitation, roadways and extensions thereof) or Lessee’s property or the property of any
other person which occurs within, on or at the Facility (including, without limitation, roadways and extensions thereof). 
 ARTICLE II—FACILITY
OPERATIONS 
 Section 2.1—Maintenance. Except as expressly otherwise set forth below for those certain items set forth on Exhibit C
attached hereto, Lessee shall, at all times during the term hereof, including, without limitation, any idle times or times when the Facility is not in active operation, and at its sole cost and expense, maintain and keep secure the Facility and the
structures, fixtures and equipment situated thereon, and make all repairs thereto, interior and exterior, structural and non-structural, ordinary and extraordinary, foreseen and unforeseen, so as to keep the Facility and the structures, fixtures and
equipment thereon in a general condition equal to or exceeding the condition existing at the date on which the Facility is fully operational, subject to normal wear and tear. All repairs, replacements and renewals shall be equal in quality and class
to the original work. Lessor shall not be required to maintain, alter, repair, rebuild or replace the Facility or any of the structures, fixtures and equipment thereon, or any of the roadways or rail trackage in any way; provided, however, that
Lessor does agree that for a one (1) year period beginning on the date the Facility is first available for operation, it will repair or replace those certain used major component parts listed on Exhibit C that it has provided for the Facility,
unless the need for repair or replacement is due to Lessee’s negligence (such as failing to do routine maintenance, lubrication, etc.) . All repairs, replacements and renewals shall immediately become and shall remain the property of Lessor and
shall be part of the Facility. Lessee shall obtain prior written approval of Lessor 
  

					
		 	Elk Ridge, Inc. (7/7/05)	 	4

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

  
 before commencing any
maintenance or replacement activities that are not in the ordinary course of business, or before constructing any additional structures, fixtures and equipment at the Facility. The Facility is and shall remain the property of Lessor. 
 Section 2.2—Expenses of Operations. Any and all costs, expenses and liabilities accruing or resulting from Lessee’s operations at the Facility,
including, without limitation, security during non-operating hours, shall be borne solely by Lessee. 
 Section 2.3—Method of Operations.
Lessee shall conduct its operations at the Facility in a careful, skillful and workmanlike manner in accordance with recognized modern methods and practices so as to secure the most efficient handling, blending and shipping of coal as possible, and
in compliance with all applicable federal, state and local laws, regulations and ordinances, as well as the Service Agreement. Lessee shall be solely responsible for the scheduling of rail cars and other communication with CSXT for the providing of
rail cars and railroad services to the Facility and shall be solely responsible for all charges related to such rail cars and services provided by CSXT or others. 
 Section 2.4—Handling and Shipping of Coal to Lessor. Subject to (i) the delivery of coal to the Facility, (ii) reasonable coordination of such coal with Lessee’s delivery and shipping schedules and
(iii) events beyond the reasonable control of Lessee, Lessee shall prepare, handle and/or blend and/or load and ship coal designated by Lessor from time to time at the Facility. Lessee shall make the same payments under Article III of this
Agreement to Lessor for such coal designated by Lessor from time to time and shipped from the Facility as it does for other coal shipped from the Facility. Lessee shall be entitled to charge a shipment fee that does not exceed its
[    *    ] from the entity requesting shipment of the coal designated by Lessor. Lessee shall operate the Facility so as to give reasonable priority to all such coal designated by Lessor from time to time,
and Lessee shall handle and/or blend and/or load and ship such coal designated by Lessor from time to time so as to achieve the required specifications and shipping schedules for such coal, provided that such requirement does not unreasonably
interfere with Lessee’s operations. 
 Section 2.5—Refuse Disposal. Lessee shall dispose of all refuse produced or generated at the
Facility promptly in 
  

					
		 	Elk Ridge, Inc. (7/7/05)	 	5

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

  
 accordance with all federal,
state and local laws, regulations and ordinances, including, without limitation, all associated reclamation responsibilities in the permitted disposal areas. Lessor shall have no obligations or responsibilities to provide any land or property for a
refuse disposal site and all such disposal obligations and responsibilities shall be fulfilled by Lessee at its sole cost and expense. 
 Section 2.6—Electric Power, Telephone Service and Utilities. Lessee shall, at its sole cost and expense, be responsible for all electricity used at the Facility and for all charges for telephone service and other utilities
and shall maintain electric power, telephone service and such other utilities thereto. Upon Lessor’s request, at the expiration or termination of this Agreement, Lessee shall promptly assign to Lessor such of Lessee’s rights under any
agreements that exist between Lessee and the power company or any other utility providing service to the Facility. 
 Section 2.7—Inspection. Lessor shall have the right to inspect the Facility and the work performed thereon by Lessee at any and all reasonable times. 
 Section 2.8—Permits and Bonds. Lessee shall diligently work to obtain the transfer of all of the permits shown on Exhibit D (collectively, the “Permits”) into Lessee’s name as soon as
can practicably be done after notice from Lessor, at Lessee’s expense. Lessee agrees to substitute its bonds for the Permits. Lessee shall be responsible for obtaining all other permits, bonds, licenses and other agreements required for it to
operate the Facility. 
 In the event that Lessee does not (i) transfer of all of the Permits into its name and acquire bonds for the Permits within
ninety (90) after notice from Lessor or (ii) obtain all other permits, bonds, licenses and agreements required to operate the Facility as soon as practicable, but in no event later than one hundred eighty (180) days from the date of
the execution of this Agreement, then Lessor may, at its option, terminate this Agreement by serving written notice thereof to Lessee. If, however, Lessee has been diligent in its efforts to have the Permits transferred and the transfer of the
Permits is being held up through no fault of Lessees, then Lessor will give this due consideration. During the period when Lessee is operating the Facility prior to the transfer of the Permits, Lessee shall be bound by all terms and conditions of
the Permits and their bonds, maintain responsibility and liability therefore, perform all work 

  

					
		 	Elk Ridge, Inc. (7/7/05)	 	6

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

  
 
in accordance therewith and pay all fines, fees and assessments issued with regard to the Permits. Lessee shall also file all reports and notices necessary
to maintain the Permits, properly establish and serve notice of its exclusive responsibility for the Facility’s operation and properly establish its exclusive responsibility for the health and safety of Lessee’s employees. 
 Upon the expiration, termination or cancellation of this Agreement, Lessor may elect to (i) require Lessee to transfer to Lessor or Lessor’s designee any and
all permits and licenses, including the Permits and the Service Agreement, that Lessee holds for the Facility, without payment therefore, such transfers to be made at the expense of Lessor, (ii) require Lessee to complete its reclamations
obligations under the Permits after Lessor has had 180 days to remove such of the Facility as it may elect to recover, or (iii) require Lessee to immediately commence reclamation activities, including the removal of the Facility as required to
be removed under the Permits, with salvage proceeds of the Facility going to Lessee to offset any costs associated therewith. Upon election (i) above, Lessee shall promptly take all actions and execute all agreements and instruments necessary
to transfer the Permits. The above notwithstanding, Lessor acknowledges that if this Agreement terminates or expires and Lessor either operates the Facility itself, or leases or contracts the Facility to a third party, then Lessee would not be
expected to retain the Facility permits in its name. Upon the transfer of such permits and licenses to Lessor or its designee, any bonds of Lessee shall be replaced. 
 Section 2.9—Compliance With Laws; Environmental Obligations. Lessee covenants and agrees that in connection with its operations and related activities at the Facility under this Agreement it will
comply with any and all federal, state and local laws now enacted or which may be hereinafter enacted and any and all rules, regulations and orders promulgated thereunder governing Lessee’s operations on or with respect to the Facility. In
addition to all other obligations of Lessee set forth elsewhere in this Agreement, Lessee hereby agrees to indemnify, defend and hold Lessor and other assigns of Lessor harmless from and against all liability in any way arising out of, connected
with or related to the non-compliance by Lessee with any law, rules, regulation or order governing Lessee’s operations on or with respect to the Facility,, Copies of all permits, inspection reports, notices to comply, compliance, non-compliance
or other orders issued by any governmental authority shall, upon request, be made available by Lessee to Lessor for inspection and copying. It is expressly understood and agreed that the covenants, 

  

					
		 	Elk Ridge, Inc. (7/7/05)	 	7

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

  
 
obligations and agreements of Lessee as provided in this Section 2.9 shall survive the cancellation, forfeiture, expiration or termination of this
Agreement. 
 Without limitation of the foregoing, Lessee recognizes the importance of environmental protection and the necessity for proper ecological
balance and, to further these objectives, Lessee agrees to conduct with utmost caution all of its operations under this Agreement, for the purpose of, as nearly as possible, preserving or improving conditions as they previously existed by minimizing
any adverse alteration of the topography and interfering with, polluting, or impeding water courses as little as possible. Lessee further agrees, in order to promote these objectives, that at the expiration or termination of this Agreement, and in
addition to all other terms and conditions thereof, it will leave the Facility in a clean and sanitary condition, free of debris, and shall be responsible for compliance with all environmental laws and regulations now in effect or hereafter enacted
affecting the Facility (including retroactive regulations) or any activity carried on by Lessee thereon, regardless of whether any such laws or regulations impose liability of such condition or activity on Lessor as owner of the Facility.

 ARTICLE III—PAYMENTS 
 Section 3.1—Minimum Rental and Shipment Royalty. 
 a. During the term of
this Agreement, on or before the 25th day of each month, on account of the previous month, Lessee shall pay to Lessor by wire transfer of immediately available federal funds to such account as Lessor may designate, or to such other account or by
other method as Lessor may from time to time designate, the greater of (i) a shipment royalty (a “Shipment Royalty”) equal to (x) [    *    ] per ton on each and every ton of Affiliate Coal
and Adverse Coal shipped through the Facility during such previous month plus (y) [    *    ] per ton on each and every ton of coal owned by
[            *            ] shipped through the Facility in accordance with the Throughput Agreement dated as of the date hereof
between [            *            ] and Lessee during such previous month or (ii) a monthly minimum rental equal to
[    *    ] (the “Monthly Minimum Rental”). The Monthly Minimum Rental shall be first due and payable on the 25th day of the fourth month following the operational date of the Facility. 
  

					
		 	Elk Ridge, Inc. (7/7/05)	 	8

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

  
 b. Each month’s Shipment
Royalty shall be credited against the Monthly Minimum Rental so that no minimum Monthly Minimum Rental shall be due for any month where the Shipment Royalty equals or exceeds the Monthly Minimum Rental. In any month where the Shipment Royalty falls
short of the Monthly Minimum Rental, the difference between the Monthly Minimum Rental paid and the Shipment Royalty due for that month shall be credited to Lessee’s account for subsequent months. Lessee shall then have the right to ship,
without paying any Shipment Royalty, such quantities of coal as would produce, at the royalty rates prevailing at that time, a Shipment Royalty equal to that credit. In no event will Lessee pay less during any month than the Monthly Minimum Rental.
The right of recoupment may be exercised at any time during the period which includes the calendar year during which the payment is made plus the following calendar year. However, the right of recoupment shall expire upon the expiration or
termination of this Agreement. 
 Section 3.2—Records Relating to Payments; Reports; Audits. Lessee shall send appropriate documentation and
records with each payment to Lessor showing shipping records, weights, customers, calculation methods utilized and any other information requested by Lessor. Lessee shall keep accurate and correct books of accounting and records showing, without
limitation: (a) all Affiliate Coal and Adverse Coal shipped from the Facility; and (b) all coal designated from time to time by Lessor shipped from the Facility. Such books and records shall be available for inspection by Lessor and its
representatives at the offices of Lessee at all times during regular business hours for the purpose of auditing and verifying the information sent along with payments from Lessee to Lessor. 
 Section 3.3—Determination of Weights. The weights of coal prepared, handled, blended, loaded and/or shipped from the Facility hereunder shall be
determined by printouts of weights generated automatically at the Facility as part of the Facility’s certified batch load capabilities or certified truck scales in the case where coal is trucked out of the Facility. Lessee agrees to transmit to
Lessor this information within three business days after the end of each calendar month. Lessee shall be responsible for maintaining copies of all such records of weights and keeping the batch load out calibrated and maintained at all times in
proper operating order. Lessor reserves the right at all normal business times to observe the weighing of coal at the Facility and the development of printouts of such weights. Lessor shall have the right to request calibration of such weighing
system from time to time during the term of this 

  

					
		 	Elk Ridge, Inc. (7/7/05)	 	9

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

  
 
Agreement, and Lessee shall maintain the weighing system in accordance with ASTM standards and all other standards for measurement set out by the railroad
companies for intestate commerce. 
 ARTICLE IV—RELATIONSHIP OF PARTIES 
 Section 4.1—Independent Contractor. It is expressly agreed and understood that Lessee shall perform all work arising from or relating to this Agreement as an independent contractor. Lessee shall
exercise exclusive direction and control over its work force and labor relations policies and direct the manner, method and mode of performance in all other aspects of all work arising from or relating to this Agreement by Lessee. Lessee shall not
represent or hold itself out as an affiliate, subsidiary, partner, joint venturer, representative or agent of Lessor. 
 Section 4.2—Labor
Relations. Lessee shall exercise complete and exclusive control over and responsibility for all aspects of hiring, employment, supervision, direction, hours, working conditions, compensation, discipline and discharge for all individuals engaged
to carry on work arising from or relating to operations to be performed under this Agreement. Lessee shall comply with all present and future federal, state and local ordinances, rules and regulations pertaining to the duties and obligations arising
out of the employer/employee relationship, including, but not limited to, unemployment compensation, social security, withholding taxes, state workers’ compensation, wage and hours laws, wage payment and collection laws, federal and state
safety laws, occupational disease compensation and all other applicable rules and regulations promulgated under such laws. Lessee shall maintain supporting records showing evidence of its compliance with the requirements set out in this
Section 4.2, make records available to Lessor for inspection upon request, and certify to Lessor on a quarterly basis in writing that it has complied with this Section 4.2. 
 ARTICLE V—INDEMNIFICATION AND INSURANCE 
 Section 5.1—Indemnification. 
 (a)  Lessee shall indemnify, defend and hold harmless Lessor, its affiliated companies and assigns and lessees, as well as their officers, directors, employees
and agents, from and against, any and all claims, demands, suits, proceedings, judgments, losses, liabilities, damages, obligations, civil penalties, costs and expenses of every kind (including, without 

  

					
		 	Elk Ridge, Inc. (7/7/05)	 	10

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

  
 
limitation, reasonable attorney’s fees) (“Damages”), regardless of when made, arising from or growing out of or in connection with any of the
following (i) any operations, work or other act done by Lessee in, on or about the Facility or any part thereof or upon the adjacent properties; (ii) any use, non-use, possession, occupation, condition, operation, maintenance or management
by Lessee of the Facility or any part thereof or upon the adjacent properties; (iii) any negligence on the part of Lessee or any of its agents, contractors, servants, employees or invitees (other than Lessor or any of its officers, directors or
agents); (iv) any accident, injury (including death) or damage to any person or property (including loss of use) occurring in, on or about the Facility or any part thereof during the term of this Agreement; or (v) any breach of or default
in the performance by Lessee of any covenant, agreement or obligation to be performed or complied with by Lessee under this Agreement, including, without limitation, Lessee’s obligations to comply with and perform under any agreement(s) for
rail trackage entered into between Lessor and CSXT or any other entity. 
 (b)  Lessee’s indemnity obligations under this Agreement shall
survive the cancellation, termination or expiration of this Agreement. 
 Section 5.2—Insurance. Lessee shall maintain at its sole cost and
expense, and shall require any subcontractors it may engage to perform any work at the Facility to maintain, at all times during the term of this Agreement, the insurance coverages set forth below with full policy limits applying, but not less than
as stated: 
 (a)  Comprehensive general public liability, pollution coverage and property damage insurance with each underlying limit being not
less than One Million Dollars ($1,000,000.00) in respect of bodily injury to or death of one person, Two Million Dollars ($2,000,000.00) in respect of bodily injury to or death of more than one person in any one occurrence, and in an amount of not
less than Two Million Dollars ($2,000,000.00) in respect of damage to, pollution or destruction of property. 
 (b)  Employer’ s liability
insurance protecting against employee claims for bodily injury, actions outside the scope of the Workers’ Compensation immunity and all other employee claims against employers with each underlying limit being not less than One Million Dollars
($1,000,000.00) per person and Two Million Dollars ($2,000,000.00) for each occurrence. 
  

					
		 	Elk Ridge, Inc. (7/7/05)	 	11

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

  
 (c)  Fire, property
damage, extended and all risks coverage for all buildings and structures comprising the Facility for the replacement value of such buildings and structures, as well as for all coal located at or adjacent to the Facility in an amount not less than
Five Million Dollars ($5,000,000.00). 
 (d)  Automobile bodily injury liability insurance in the same bodily injury liability limits as set forth
in (a) above, and automobile property damage liability insurance in an amount of not less than One Million Dollars ($1,000,000.00). 
 (e)  Lessee shall obtain excess/umbrella insurance in the amount of Five Million Dollars ($5,000,000), if requested by Lessor. 
 (f)  Workers’ Compensation insurance, occupational diseases insurance, including federal and state Black Lung coverage, unemployment compensation and all other insurance coverage for occupational injury, disease or hazards as
required by the laws and regulations applicable to and covering employees of Lessee engaged in the performance of work under this Agreement. 
 Lessee’s
obligations to obtain and maintain the insurance coverage stated in this Section 5.2 shall not be construed in any way to limit Lessee’s obligations under this Agreement, including Lessee’s obligation to indemnify Lessor as provided
elsewhere under this Agreement, but shall serve as additional security therefor. In the event the Facility is damaged by fire, unless Lessor agrees to accept the full insurance proceeds in lieu of rebuilding, Lessee shall use all such insurance
proceeds to rebuild the Facility as promptly as possible in accordance with the original design criteria as modified by the actual construction of the Facility, and Lessee shall submit to Lessor for approval the plans for such reconstruction,
including the name of the proposed contractor who shall complete such reconstruction. If the Facility cannot be reconstructed in six (6) months following the damage, then, without limiting Lessor’s rights as set forth above concerning its
acceptance of insurance proceeds in lieu of rebuilding, Lessor may accept the full insurance proceeds and terminate this Agreement. 
 Section 5.3—Form of Insurance. All of the insurance coverages required under Section 5.2 above shall be obtained from a reputable insurer who is licensed to do business in the Commonwealth of Kentucky. All policies or
certificates of insurance obtained by Lessee under this Agreement (other than the policies required by Section 5.2 (f)) shall name Lessor as an additional insured, shall contain a provision for notice to 

  

					
		 	Elk Ridge, Inc. (7/7/05)	 	12

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

  
 
Lessor of any overdue or unpaid insurance premium, shall include an assumption of contractual obligations clause specifically referencing this Agreement and
shall provide for thirty (30) day advance written notice to Lessor of any proposed cancellation or substantial change in coverage. In addition, every insurance policy required under Section 5.2 (other than pursuant to clause
(f) thereof) above shall contain a waiver of subrogation by the insurer against Lessor, its owners, affiliates and subsidiaries. Each policy of insurance required hereunder shall be written as an “occurrence” contract unless the
policy is available only on a “claims made” basis, in which case Lessee shall continue such insurance policy after termination of this Agreement for a period of three (3) years. 
 Section 5.4—Proof of Insurance Coverage. Lessee shall furnish to Lessor copies of all certificates evidencing the insurance coverages required by
Section 5.2 above, including, but not limited to, copies of any bonds which may be required for such coverage, prior to commencing any operations at the Facility under this Agreement, and thereafter upon request by Lessor. 
 Section 5.5—Payment of Premiums. Lessor has the right (but not the obligation), in its sole discretion, to pay any overdue premium for the insurance
coverages required to be obtained by Lessee under Section 5.2 above, or to take out and maintain such insurance coverages and collect the cost of any such coverage from Lessee by sending Lessee an invoice therefor. Lessee specifically agrees
and acknowledges that its inability, failure, neglect or refusal to carry, maintain and keep current at all times during the term of this Agreement any insurance coverage required in Section 5.2 above, or its inability, failure, neglect or
refusal to be and remain at all times during the term of this Agreement a subscriber of self-insurer in good standing with Kentucky’s Workers’ Compensation Fund, federal and state Black Lung funds or any other occupational disease and
disability insurance fund, shall constitute a material breach of this Agreement which gives Lessor the right, in its discretion, to terminate this Agreement pursuant to Section 7.1 below. 
 ARTICLE VI—REPRESENTATIONS AND WARRANTIES 
 By Lessee:

 Section 6.1—Financial Condition of Lessee. Lessee represents and warrants to Lessor that it has and will continue to have throughout the
term of this Agreement sufficient working capital equipment and skilled personnel to permit it to operate the Facility and perform its obligations under this Agreement, 

  

					
		 	Elk Ridge, Inc. (7/7/05)	 	13

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

  
 
including, but not limited to, the capacity to prepare, handle, blend and/or load and ship at least
[    *    ] tons of coal per month. 
 Section 6.2—Legal Capacity. Lessee represents and
warrants to Lessor that Lessee is a corporation, duly organized, validly existing and in good standing under the laws of the Commonwealth of Kentucky and has all requisite power and authority to carry on its business as now being conducted and to
execute and deliver this Agreement and to consummate the transactions contemplated herein. 
 Section 6.3—Legal Proceedings. Lessee
represents and warrants to Lessor that neither Lessee, nor any of its assets, are subject to any judgment, order, writ, decree, citation or injunction, and Lessee is not a party to any judicial, administrative, investigation or arbitration
proceeding, now pending, or to the best of its knowledge, threatened, which could have a material adverse impact on the ability of Lessee to perform its obligations under this Agreement. 
 Section 6.4—No Hazardous Waste. Lessee represents and warrants to Lessor that it will not store, dispose of or otherwise handle any hazardous or otherwise illegal waste or substance at the Facility,
except in full compliance with applicable law. 
 By Lessor: 
 Section 6.5—Good Title; Disclaimer of Other Warranties . It is specifically understood and agreed that Lessor makes no warranties or covenants, express or implied, with respect to Lessor’s title to the Facility, other
than Lessor’s warranty to Lessee of Lessor’s right to lease the Facility to Lessee pursuant to this Agreement. 
 Section 6.6—Legal
Capacity. Lessor represents and warrants to Lessee that Lessor is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite power and authority to carry on
its business as now being conducted and to execute and deliver this Agreement and to consummate the transactions contemplated herein. 
 ARTICLE
VII—DEFAULT AMD TERMINATION 
 Section 7.1—Default. If at any time: 
  

					
		 	Elk Ridge, Inc. (7/7/05)	 	14

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

  
 (a)  Lessee shall fail
to pay as and when due any of the Monthly Minimum Rentals, Shipment Royalties or other sums of money required to be paid by Lessee to Lessor under the terms of this Agreement and any such failure continues for a period of ten (10) calendar days
after written notice of such failure shall have been given by Lessor to Lessee, 
 (b)  Lessee shall fail to perform, shall be guilty of a breach
of, or shall be in default of the performance of, anyone or more of the other material terms, conditions, covenants, stipulations and agreements of this Agreement relating to matters other than the payment of money, including, without limitation,
any of the following failures, breaches, violations or defaults: (1) failure to pay or perform all obligations and liabilities of Lessee pursuant to the Service Agreement; (2) failure to maintain repair and operate the Facility as set
forth in Section 2.1 above; (3) failure to obtain the written approval of Lessor prior to commencement of maintenance or repair outside the ordinary course of business or the construction of additional structures at the Facility in
accordance with Section 2.1 above; (4) failure to pay for the expenses of operation of the Facility in accordance with Section 2.2 above; (5) failure to conduct operations at the Facility in a careful, skillful and workmanlike
manner according to approved and modern methods and practices as set forth in Section 2.3 above; (6) failure to prepare, handle, blend, load and/or ship coal designated by Lessor as set forth in Section 2.4 above; (7) failure to
promptly and lawfully dispose of refuse when refuse is produced or generated at the Facility as set forth in Section 2.5 above; (8) failure to pay for electric power, telephone service and other utilities used at the Facility in accordance
with Section 2.6 above; (9) failure to allow Lessor access to the Facility for inspections as set forth in Section 2.7 above; (10) failure to obtain the transfer of the Permits into Lessee’s name or the failure to obtain all
permits, bonds and licenses required for the operation of the Facility as set forth in Section 2.8 above; (11) failure to conduct operations and activities at the Facility in accordance with all laws, rules and regulations, including,
without limitation, environmental obligations as set forth in Section 2.9 above; (12) failure to send any records, reports and weights required to be sent with payments to Lessor or to properly maintain such , books, records, etc. as set
forth in Sections 3.2 and 3.3 above; (13) failure to represent Lessee’s relationship to Lessor as being anything other than owner and independent contractor as required by Section 4.1 above; (14) failure to exercise complete and
exclusive control over Lessee’s employment activities and to comply with all laws, 

  

					
		 	Elk Ridge, Inc. (7/7/05)	 	15

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

  
 
rules, regulations and orders governing Lessee’s employment activities; (15) failure to indemnify, defend and hold Lessor harmless from and against
all Damages as required by Section 5.1 above; (16) failure to obtain and maintain insurance coverages, provide certificates thereof to Lessor, pay the premiums thereon or comply with the form of coverage provisions as set forth in Sections
5.2, 5.3, 5.4 and 5.5 above; (17) failure to maintain sufficient working capital, equipment and skilled personnel to operate the Facility and perform its obligations hereunder as set forth in Section 6.1 above; (18) failure to
maintain its status as a corporation in good standing as set forth in Section 6.2 above; (19) allowing the storage, disposal or handling of any hazardous or illegal waste or substance at the Facility as set forth in Section 6.4 above;
(20) any assignment, mortgage, sublease, transfer or pledge of all or any part of this Agreement or all or any part of its interests herein as prohibited by Section 8.2 below; (2.1) failure to pay all taxes, fees and licenses as set
forth in Sections 9.1 and 9.2 below, and any of the aforesaid failures, breaches, violations or defaults shall continue for a period of thirty (30) calendar days after written notice of the same shall have been given by Lessor to Lessee,
without being wholly cured, or 
 (c)  that certain Lease and Sublease Agreement dated as of the date hereof between Penn Virginia Operating Co.,
LLC and Greymont Mining Corp. is terminated pursuant to the terms thereof, 
 then in the case of any uncured events described in either of subparagraphs
(a) or (b), or in the event of the termination described in subparagraph (c), Lessor may, at its option, terminate this Agreement, whereupon all of Lessee’s rights hereunder and the leasehold estate hereby created shall immediately be
forfeited and terminated, and Lessor may avail itself of all remedies set forth in this Agreement, and Lessor shall have the right at any time thereafter, without further notice, demand or proceeding, to re-enter upon and take possession of the
Facility, and every part thereof, and be reinstated in its possession to hold as if this Agreement had not been made and exclude Lessee therefrom except for the purpose of performing any work required to be performed by Lessee by any governmental
authority. In such event, no further obligations shall accrue against Lessee hereunder, but Lessee shall remain liable to Lessor for all obligations which accrued prior to the effective date of such forfeiture and termination. 
 Section 7.2—Waiver of Performance or Default. A failure of either party to insist in any one or more instances upon strict 

  

					
		 	Elk Ridge, Inc. (7/7/05)	 	16

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

  
 
performance of any covenants, terms or conditions imposed upon or assumed by either party under this Agreement, or the failure of either party to exercise
any particular option or right granted by this Agreement, shall not be construed as a waiver or relinquishment for the future performance of any such covenant, term or condition, or as to the exercise of any such option or right. Moreover, a waiver
by either party of a default or breach hereunder shall not be deemed to be a waiver of any subsequent default or breach, and any delay in asserting a right shall not be deemed a waiver of such right. The preceding sentence shall not be construed as
a waiver of any applicable statute of limitations. 
 Section 7.3—Remedies. The rights and remedies of Lessor and Lessee as set forth in
this Agreement shall not be exclusive, but shall be taken and construed as cumulative and in addition to any and all other rights and remedies accorded to Lessor at law or equity. 
 Section 7.4—Condition of the Facility. Upon the termination, cancellation or expiration of this Agreement, for any reason Lessee shall leave the Facility in a normal working condition and in material
compliance with all applicable federal, state and local laws, regulations and ordinances, as well as the Service Agreement or any agreement(s) between Lessor and CSXT or others for rail trackage, so that either the ongoing operations at the Facility
are not interrupted or the ability to operate the Facility or return it to operation is not impeded. 
 ARTICLE VIII—PROHIBITION AGAINST
ASSIGNMENT, SUBCONTRACTING AND TRANSFER OF OWNERSHIP 
 Section 8.1—Rights Personal to Lessee. This Agreement is personal to Lessee
and requires the exercise of Lessee’s own services, skills and judgment. The parties acknowledge that the substitution of services, skills or judgment of any entity other than Lessee is not acceptable performance by Lessee hereunder. Lessee
specifically agrees to perform all of its duties and obligations under this Agreement alone without reliance upon any other person or entity. 
 Section 8.2—Prohibition Against Assignment, Subletting and Subcontracting. Lessee shall not (a) assign, sublease, subcontract, mortgage, encumber or otherwise transfer all or any part of this Agreement, or its
interests hereunder, (b) sublet any portion of the Facility or (c) delegate, subcontract or otherwise transfer any or all of its obligations under this 

  

					
		 	Elk Ridge, Inc. (7/7/05)	 	17

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

  
 
Agreement, in each case without obtaining the prior written consent of Lessor, which Lessor may grant or withhold in its sole discretion. For purposes of
this Agreement, any change in ownership of Lessee shall be considered an assignment by Lessee. Lessor may, at any time, assign, mortgage, encumber, delegate, subcontract or otherwise transfer all or any part of the Facility, this Agreement or its
rights or obligations hereunder. Lessee further covenants and agrees that this Agreement and all or any part of the Facility shall not be subject to an “equitable servitude” or any other incorporated property interest for the benefit of a
third party. Lessee further covenants and agrees that it shall not create an equitable servitude upon the Facility by virtue of any collective bargaining agreement, agreement of understanding, contract, subcontract, license, sublease, assignment,
employment practice, successorship clause or any other contract with a third party which has no interest in the Facility, but which would attempt to burden the Facility. Lessor shall have the right, the provisions of Article VII to the contrary
notwithstanding, at its option, to terminate this Agreement immediately and forfeit the leasehold estate without any further action by Lessor upon any attempt whatsoever to create an equitable servitude against the Facility. 
 ARTICLE IX—CONTRIBUTIONS, TAXES, FEES AND LICENSES 
 Section 9.1—Taxes. Lessee shall pay all sales, use, excise, ad valorem, property or similar taxes now or hereafter levied on the Facility and any supplies, equipment and materials (including fuels) utilized or furnished as
a result of this Agreement. It is not intended that Lessee shall pay, or be required to pay, any so-called income, profits, excise, occupational or privilege taxes levied or assessed upon the income of Lessor. 
 Section 9.2—Fees and Licenses. Lessee shall pay all fees and expenses for any permits, licenses, bonds and other agreements required for the performance
of work under this Agreement. Lessor shall not be responsible for any fines, assessments or penalties imposed against Lessee as a result of Lessee’s failure to comply with any laws, rules, regulations or other orders relating to any of the
permits, licenses, bonds or other agreements for the Facility, including, without limitation, the Permits. 
 ARTICLE X—DISPUTE SETTLEMENT AND
ARBITRATION 
 If at any time during the continuance of this Agreement, or any renewal thereof, any dispute shall arise between Lessor and 

  

					
		 	Elk Ridge, Inc. (7/7/05)	 	18

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

  
 
Lessee under this Agreement or under any of the terms and provisions hereof which cannot be agreed upon by the parties hereto, then such dispute shall be
referred to a board of arbitrators (the “Board”). The Board shall be composed of one representative of Lessor and one representative of Lessee, to be selected by Lessor and Lessee, respectively, and a third arbitrator who shall be chosen
by the two arbitrators herein provided for. Each arbitrator shall have at least ten (10) years experience in the coal-mining and/or coal land management business. In the event that the two arbitrators are unable to agree within ten
(10) days upon a third arbitrator, then the American Arbitration Association shall designate a disinterested person to act as such arbitrator; and, in the event that the Receiving Party (as defined below) should, for a period of ten
(10) days after receipt of an Arbitration Notice (as defined below), fail to select and make known, in writing to the Notifying Party (as defined below) the arbitrator selected by the Receiving Party, the Board shall be comprised of the one
sole arbitrator chosen by the Notifying Party. Either party (the “Notifying Party”) may at any time serve upon the other (the “Receiving Party”) a notice (an “Arbitration Notice”) setting forth the point or points upon
which the decision of said Board is desired. Within ten (10) days after the date of such Arbitration Notice, the Receiving Party shall deliver a counter-notice to the Notifying Party which shall identify the arbitrator chosen by the Receiving
Party and which may specify any additional points or differences arbitrable hereunder upon which the Receiving Party may desire a decision. The Board shall give ten (10) days written notice of the time and place of hearing to the respective
parties, and shall determine questions submitted to it for arbitration and make its decision and award in writing. The decision and award of a majority of the arbitrators (or the sole arbitrator as the case may be) shall be final, conclusive and
obligatory upon the said parties to this Agreement and their successors and assigns, and without appeal, and each party hereto agrees to abide by and comply with every such decision and award. Judgment on the award of the Board may be entered and
enforced by a court of competent jurisdiction. The costs of each party in connection with any such arbitration shall in the first instance be paid by such party but if such party substantially prevails therein it shall be reimbursed therefor by the
other party, and the question of costs shall in each case be determined by the Board when it renders its decision on the question or questions submitted to it. Notwithstanding foregoing, the costs of arbitration in respect of the imposition or
adjustment of Monthly Minimum Rentals or Shipping Royalties shall be shared equally by the parties hereto. Should the award of the Board declare that 

  

					
		 	Elk Ridge, Inc. (7/7/05)	 	19

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

  
 
any violation hereof or default hereunder exists, it shall also provide the time within which the party committing such default shall pay the award and cure
the breach which it decrees. Notwithstanding the requirement to arbitrate any dispute, any party may apply to a court for interim measures such as injunctions, attachments and conservation orders, which measures may be immediately enforced by court
order. Any decision with respect to such interim measures shall promptly be referred to the Board for review and final decision. 
 ARTICLE
XI—MISCELLANEOUS 
 Section 11.1—Force Majeure. In the event that any unforeseeable cause beyond the control of and not
resulting from the fault or negligence of the party affected thereby, such as Acts of God, acts of the public enemy, insurrections, riots, labor disputes, strikes, lockouts, fires, explosions, floods or unusual climatic conditions, interruptions of
transportation, embargoes, orders of acts of any duly authorized civil, governmental or military authority or any other cause of a like or similar nature (herein referred to as “force majeure”) wholly or partly prevents a party from
performing its obligations and responsibilities hereunder (other than obligations of either party to pay or expend money for or in connection with the performance of this Agreement), then if the party affected by such force majeure gives to the
other party written notice of the extent and probable duration of such force majeure, the obligations and responsibilities of the party giving such notice shall be suspended to the extent made necessary by such force majeure and during its
continuation, provided that the cause of such force majeure is eliminated insofar as possible with all reasonable dispatch. In the event any force majeure extends for beyond three (3) months in any calendar year, then either party may terminate
this Agreement by providing written notice of such termination to the other party and referencing this Section 11.1. 
 Section 11.2—Eminent Domain. If any part of the Facility shall be condemned, taken by eminent domain proceedings or sold under threat of such proceedings to any federal, state or local governmental or quasi-governmental
body having the power of eminent domain (“Condemning Authority”), then as to such portion of the Facility, for the purpose of computing Lessor’s right to any awards, judgments, payments or sales prices arising out of any such
proceedings, Lessor shall, at a minimum, be entitled to all proceeds or payments which are attributable to the ownership of any and all rights to the Facility. Lessee shall not be entitled to any part of any such awards, judgments, payments, 

  

					
		 	Elk Ridge, Inc. (7/7/05)	 	20

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

  
 
sales prices and proceeds, and Lessee hereby assigns to Lessor any and all interest it may have in such awards, judgments, payments, sales price and proceeds
to the extent attributable to ownership of the Facility. In addition, Lessor shall be entitled to any other damages which it may sustain as a result of such proceedings. Lessee may seek to recover from any such Condemning Authority, independent of
Lessor and not out of or from any such awards, judgments, payments, sales prices and proceeds of Lessor, any damages, if any, which it may have sustained as a result of such condemnation. This Agreement shall continue in full force and effect as to
the remaining portion of the Facility in the event of only a partial condemnation. 
 Section 11.3—Notices. All notices or other
communications or payments required hereunder shall be mailed by certified mail with return receipt requested, overnight, by U.S. mail or sent by reputable overnight courier service to the parties at the addresses set forth below: 
  

			
	To Lessee:	 	 Elk Ridge, Inc.
 P.O. Box 1349, 106 Fourth St.
Pikeville, Kentucky 41502

		
	To Lessor:	 	 Loadout LLC
 Suite 200, 2550 East Stone Drive Kingsport, Tennessee 37660

 Section 11.4—Integration. This Agreement contains the entire understanding and agreement of the
parties with regard to the transactions contemplated hereunder, and this Agreement supersedes all prior agreements, arrangements and understandings between the I parties relating to the subject matter of this Agreement. 
 Section 11.5—Modification. This Agreement shall not be modified, changed or altered in whole or in part, except by written agreement signed by all
parties hereto or their respective successors in interests. 
 Section 11.6—Choice of Law. This Agreement, and any breach hereof, shall be
governed by and construed in accordance with the laws of the Commonwealth of Kentucky. 
 Section 11.7—Headings. The headings appearing in
this Agreement are for convenience of reference only and shall not be considered or construed as affecting in any way the meaning of the provisions of this Agreement. 
  

					
		 	Elk Ridge, Inc. (7/7/05)	 	21

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

  
 Section 11.8—Counterparts. This Agreement may, for convenience, be executed in several counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one Agreement. 
 Section 11.9—Severability of Provisions. If any provision of this Agreement or the application thereof to any person or circumstances shall to any
extent be held in any proceeding to be invalid or unenforceable, the remainder of this Agreement, or the application of such provision to persons or circumstances other than those in which it was held to be invalid or unenforceable, shall not be
affected thereby, and shall be valid and be enforced to the fullest extent permitted by law, but only if and to the extent such enforcement would not materially and adversely frustrate the parties’ essential objectives as expressed herein.

 Section 11.10—Inference. No inference shall be drawn in favor of or against any party based on its participation in the drafting of this
Agreement. 
 [Signature Page Follows] 
  

					
		 	Elk Ridge, Inc. (7/7/05)	 	22

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

  
 IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be executed by their duly authorized officers. 
  

			
	LOADOUT LLC, a Delaware limited liability company
		
	By:	 	 /s/ Stephen F. Looney

	Name:	 	Stephen F. Looney
	Title:	 	Vice President - Virginia Operations
	
	ELK RIDGE, INC., a Kentucky corporation
		
	By:	 	 /s/ Michael E. Lyons

	Name:	 	Michael E. Lyons
	Title:	 	President

 STATE OF TENNESSEE 
 COUNTY OF SULLIVAN 
 The foregoing instrument was acknowledged before me on this the 7th day of July, 2005, by Stephen F. Looney, Vice
President-Virginia Operations, of Loadout LLC , a Delaware limited liability company, on behalf of the company. 
  

			
	My commission expires:	  	 3-27-06

		
		  	 /s/ Pamela P. Fields

		  	NOTARY PUBLIC

 [SEAL] 
 STATE OF
TENNESSEE 
 COUNTY OF SULLIVAN 
 The foregoing instrument was
acknowledged before me on this the 7th day of July 2005, by Michael E. Lyons, President, of Elk Ridge, Inc., a Kentucky corporation, on behalf of the corporation. 
  

			
	My commission expires:	  	 3-27-06

		
		  	 /s/ Pamela P. Fields

		  	NOTARY PUBLIC

 [SEAL] 
  

					
		 	Elk Ridge, Inc. (7/7/05)	 	23

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

  
 EXHIBIT A 

 DESCRIPTION OF FACILITY 
 See attached 
  

					
		 	Elk Ridge, Inc. (7/7/05)	 	24

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

  
 EXHIBIT B 

 MAP SHOWING LOCATION OF FACILITY AND ASSOCIATED AREAS 
 See attached 
  

					
		 	Elk Ridge, Inc. (7/7/05)	 	25

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

  
 EXHIBIT C 

 COMPONENTS THAT LESSOR WILL WARRANTY FOR ONE (1) YEAR FROM 
 DATE OF EXECUTION OF THE AGREEMENT 
 See attached 
 See Section 2.1 of the Agreement for exception for Lessee’s negligence. Also excepted from this warranty is replacement and repair of normal wear type items.

  

					
		 	Elk Ridge, Inc. (7/7/05)	 	26

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

  
 EXHIBIT D 

 PERMITS TO BE TRANSFERRED TO LESSEE 
 See attached 
  

					
		 	Elk Ridge, Inc. (7/7/05)	 	27

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

 ELK RIDGE LEASE—EXHIBIT A 
 DESCRIPTION OF THE LEASED FACILITIES 
 The proposed facility consists of a truck scale and dump; a screen and
crusher system; raw coal storage and feed system; a coal preparation plant; a clean coal storage and feed system; a stoker system with loadout; a batch weigh reclaim and loadout system, and 47000’ of railroad track. 
 The truck scales as proposed will be a Shamrock 70’ set of scales with computer controls for scaling trucks in and out of the facility. It will have
a card reader system to record light and loaded weights of the trucks. The system will keep track of incoming coals by source, by company, by seam, by any other parameter that we desire. The truck dump as proposed is a 75 -100 ton dump bin with a
500 tph feeder underneath it that is wide enough (20’) to accommodate on and off road haulage trucks in the 30 to 40 ton range. The dump will be made of steel and set on a concrete foundation and attaché to a concrete retaining
wall. The electrical controls, lighting, and transformers will be attached and hung above with remote starters. 
 The screen and crusher
system will be mounted on a pad next to the truck dump and will have the capability to crush the oversize product from the screen down to washable sizes. The feeder from the truck dump will convey by 36” belt into the screen where the oversize
will be screened off into the crusher. A magnet will be mounted on the beltline in front of the screen to remove tramp metal from the screening and crushing process. All electrical controls, lighting, and starters will be hard wired in with the
truck dump system. 
 The raw coal storage system will consist of a single 15000 ton stockpile. Coal will be fed into the stockpile by means
of a 36”/500 tph beltline from the screen and crusher location to the top a 65’ concrete stacking tube. A 10’ diameter tunnel will be constructed underneath the pile with a minimum of two 450 tph feeders to reclaim coal to the prep
plant via another 35”/450 tph beltline. All electrical controls, lighting, feeder marker lights, and starters coming to the stockpile will be hard wired in with the truck dump system. All electrical controls, lighting, reclaim feeders, reclaim
belts, and starters going to the prep plant will be hard wired in with the prep plant system. 
 The prep plant consists of three circuits,
heavy media vessel, heavy media cyclone, and classifying cyclones with spirals. All complementary equipment for each circuit such as screens, sieve bends, magnetic rollers, sumps, pumps, belts, thickeners, dryers, crushers, motor controls, plc
circuitry, lighting, and nuclear density gauges will be included to create a processing system rated at 450 tons per hour. The prep plant will produce a 2 x 0 clean product and a stoker product. Each will be sent to their respective stockpiles by
36” beltlines. 
 The clean coal storage system will consist of a two 18000 ton stockpiles for the 2 x 0 product. Coal will be fed into
the stockpile by means of a 36”/450 tph beltline from the prep plant location to the top a 70’ concrete stacking tube. A flop gate and head house arrangement will be used to send coal across a second 36” conveyor to a second stacking
tube. A 10’ high by 12’ wide tunnel will be constructed underneath the piles with a minimum of two 2500 tph 

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

 feeders per pile to reclaim coal to the loadout via a 60”/3500 tph beltline. All electrical controls,
lighting, storage belts, and starters going to the stockpiles will be hard wired in with the prep plant system. 
 The stoker coal storage
system will consist of a 30” beltline going to a single 8000 ton stockpile with no stacking tube. It will be ground storage overtop an existing feeder and tunnel system that will be rehabilitated to handle the stocker product. The stoker
loadout is just a chute over the tracks that will be capable of filling common cars. All electrical controls, lighting, storage belts, and starters going to the stockpile will be hard wired in with the prep plant system. 
 The batch weigh loadout system will consist of a new Kanawha Scales System double batch type loadout capable of loading 3500 tons per hour. The system
will be plc controlled and be able to load each car within 50 pounds of its design load. The system uses a 60” reclaim belt to feed a 160 ton surge hopper that measures coal into a 60 ton weigh bin. The weigh bin discharges coal into the rail
car. All electrical controls, lighting, reclaim feeders, reclaim belts, and starters going to the loadout will be hard wired in with the loadout system. 
 The loading and access railroad tracks are stated to be 47000’ in the CSX lease and service agreement. The exact amount of track will be whatever Loadout LLC obtains from CSX. 

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

 

 

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

 ELK RIDGE LEASE—EXHIBIT C 
 EQUIPMENT LIST FOR HUFF BRANCH LOADOUT AND PLANT 
 Since this list will be made in advance, note that used
equipment will be warranted by Loadout LLC for 1 year, however new and rebuilt purchased equipment will be warranted by the manufacturer or rebuilder. 
  

	 	1.	Truck dump 100 ton, with feeder, screen, and crusher 

  

	 	2.	Raw coal beltline to stacking tube, magnet, head house, flop gate 

  

	 	3.	Raw coal stockpile , stacking tube, tunnel with two hoppers and 500 tph feeders 

  

	 	4.	Plant reclaim beltline into plant with belt scale 

  

	 	5.	450 tph preparation plant (two designs see flowsheets) 

  

	 	6.	Stoker belt to stockpile 

  

	 	7.	Clean coal beltline to head house on clean coal stockpile stacking tube 

  

	 	8.	Refuse belt link and bypass 

  

	 	9.	Thickener 70’ diameter 

  

	 	10.	Various pumps and water/slurry system 

  

	 	11.	Clean coal stacking tubes (2) with tunnel and four feeders 3500 tph 

  

	 	12.	Reclaim belt 60” to loadout with sampler and analyzer 3500 tph 

  

	 	13.	KSS double batch loadout 

  

	 	14.	Stocker Loadout 

  

	 	15.	Freeze proof system 

  

	 	16.	Half mile of 12470 line and transformers for truck dump, plant, loadout 

  

	 	17.	3.5 miles of rail siding below loadout and 2 miles of siding at loadout 

  

	 	18.	Rescreen belt and building 

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

 ELK RIDGE LEASE—EXHIBIT D 
 Listing of the Kentucky surface reclamation permits to be transferred: 
  

								
	 REF #
	  	 KY DSMRE #
	  	Bonded Acres	  	Bond Amount
				
	4.	  	860-8011-Big Branch Impoundment	  		  		
				
		  	Increment No. 3	  	74.55 ac.	  	$	198,300.00
		  	Increment No. 4	  	17.3 ac.	  	$	51,900.00
		  		  		  	 	 
		  		  		  	$	250,200.00
	5.	  	860-0360-Plant Site and Contour	  		  		
		  	Increment No. 1	  	15.0 ac.	  	$	18,000.00
		  	Increment No. 2	  	47.6 ac.	  	 	115,300.00
		  	Increment No. 3	  	46.2 ac.	  	 	106,300.00
		  	Increment No. 4	  	8.70 ac.	  	 	8,000.00
		  	Increment No. 5	  	21.5 ac.	  	 	9,200.00
		  	Increment No. 6	  	13.2 ac.	  	 	19,600.00
		  	Increment No. 7	  	7.00 ac.	  	 	18,700.00
		  	Increment No. 8	  	30.2 ac.	  	 	133,300.00
		  	Increment No. 9	  	10.3 ac.	  	 	26,000.00
		  	Increment No. 10	  	13.1 ac.	  	$	5,300.00
		  		  		  	 	 
		  		  		  	$	459,700.00

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

 FIRST AMENDMENT TO COAL FACILITY LEASE AND OPERATING 
 AGREEMENT 
 (Facility Lease)

 This First Amendment to Coal Facility Lease and Operating Agreement (this “First Amendment”) made and entered into this 11th
day of November, 2005, by and between LOADOUT LLC, a Delaware limited liability company (“Lessor”), and ELK RIDGE, INC., a Kentucky corporation (“Lessee”). 
 RECITALS 
 A. Lessor and Lessee have entered into that certain Coal Facility
Lease and Operating Agreement dated July 7, 2005 (the “Original Agreement”). 
 B. Lessor and Lessee have agreed to amend
certain provisions of the Original Agreement as set forth herein. 
 WITNESSETH: 
 NOW, THEREFORE, for and in consideration of the foregoing recitals and the mutual agreements contained in this Amendment, the parties agree as follows:

 1. Term. Section 1.3 is amended by deleting the first sentence and inserting the following in its place: 
 “This Agreement will take effect as of July 7, 2005, and shall continue for an initial period of eleven (11) years (the “Initial
Term”). If Lessee is in compliance with all terms and conditions of this Agreement and Lessee, together with any of its owners or other affiliated entities, is in compliance with all terms and conditions of any additional lease or other
agreement in effect with Lessor at the time of the expiration of the Initial Term, then Lessee may renew this Agreement, subject to the same terms and conditions herein stated, for an additional five (5) year term by giving Lessor written
notice of Lessee’s intention to renew this Agreement at least three (3) months prior to expiration of the Initial Term. 
 The
“Remainder Term” shall commence at the end of the Initial Term, or any extended term, as applicable, and shall continue until 

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

 Lessee shall have fully complied with all of its reclamation, environmental, and other
obligations hereunder. During the Remainder Term, Lessee shall continue to comply with the terms hereof, although Lessee shall have no rights to handle, prepare, store, blend, load or ship coal on the Leased Premises. Lessee shall pay to Lessor as
rental during the Remainder Term the sum of [        *        ] per year, payable on the first day of each year, until all permits are released and this Agreement is
terminated.” 
 2. Minimum Rental and Shipment Royalty. Section 3.1 is by deleting subsection a. in its entirety and
inserting the following in its place: 
 “a. During the term of this Agreement, on or before the 25th day of each month, on account of
the previous month, Lessee shall pay to Lessor by wire transfer of immediately available federal funds to such account as Lessor may designate, or to such other account or by such other method as Lessor may from time to time designate, the greater
of (i) a shipment royalty (a “Shipment Royalty”) equal to (x) [            *            ] per ton on each and
every ton of coal owned by [            *            ] shipped through the Facility in accordance with the Throughput Agreement
dated as of the date hereof between [            *            ] and Lessee during the previous month
[            *            ] plus
(y) [            *            ] per ton on each and every ton of Affiliate Coal and Adverse Coal (other than
[            *            ] shipped through the Facility during the previous month until Lessee has shipped
[            *            ] tons through the Facility during the Operating Year of which the previous month was a part (the
“Relevant Year”) plus (z) [            *            ] per ton on each and every ton of Affiliate Coal and Adverse
Coal (other than [            *            ] shipped through the Facility during the previous month after Lessee has shipped
[            *            ] tons through the Facility during the Relevant Year or (ii) a monthly minimum rental equal
to [            *            ] (the “Monthly Minimum Rental”). The Monthly Minimum Rental shall be first due and
payable on the 25th day of the fourth month, following the commencement of the first Operating Year. An “Operating “Year” shall be a period of twelve (12) months, and the first Operating Year shall commence on the operational
date of the Facility.” 
 3. Indemnification. Section 5.1(a) is amended by inserting the following sentence at the end of
the subsection: 

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

 “Notwithstanding anything herein to the contrary, Lessee shall have no indemnity
obligation for any Damages caused by any act or omission of Lessor or its affiliated companies and assigns and lessees.” 
 4. No
Consequential Damages. Section 5.1 is amended by inserting a new-subsection at the end of the Section that reads as follows: 
 “Notwithstanding anything herein to the contrary, neither party shall be liable under this Agreement for indirect, consequential or punitive damages arising out of the breach or non-performance of this Agreement (except to the extent
that such damages are required to be paid to a third party and are the subject of an indemnification claim under this Agreement).” 
 5.
Legal Capacity. Section 6.2 is amended by inserting “or limited liability company” after “corporation” and by deleting “Commonwealth of Kentucky” and inserting “state of organization” in its place.

 6. Default. Section 7.1(b)(18) is amended by inserting “or limited liability-company” after “corporation”.

 7. Assignment. Section 8.2 is amended inserting the following at the end of the paragraph: 
 “Notwithstanding anything herein to the contrary, (i) Lessee may assign or transfer all or any part of this Agreement, sublease all or any part
of the Facility, or delegate, subcontract or transfer all or any of its obligations under this Agreement to any direct or indirect wholly-owned subsidiary of International Coal Group, Inc., ICG, Inc. or ICG, LLC (an “ICG Affiliate”),
without consent of Lessor; and (ii) no transfer of ownership of Lessee to an ICG Affiliate, no transfer of ownership in a publicly traded entity that directly or indirectly controls Lessee, and no issuance of publicly traded stock by Lessee or
any entity that directly or indirectly controls Lessee shall be considered an assignment hereunder. Notwithstanding any assignment, sublease, mortgage, encumbrance, transfer, delegation, subcontract or other substitution of the parties to this
Agreement by operation of law or proceedings in equity or bankruptcy, Lessee shall remain liable for the performance of each and every one of 

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

 Lessee’s obligations hereunder, including without limitation, the payment of Monthly
Minimum Rentals and Shipment Royalties.” 
 8. Lessee Financings. Section 8.2 is further amended by adding a paragraph at
the end of the Section that reads as follows: 
 “Upon the request of Lessee, Lessor shall reasonably cooperate with Lessee and any
financing provider to Lessee to enter into consent agreement acceptable to Lessor allowing Lessee to grant a leasehold mortgage on the Leased Premises to such financing provider.” 
 9. Force Majeure. Section 11.1 is amended, by deleting the last sentence and inserting the following in its place: 
 “In the event any force majeure extends beyond six (6) months in any calendar year, then either party may terminate this Agreement by providing
written notice of such termination to the other party and referencing this Section 11.1.” 
 10. Notices. Section 11.3
is amended by inserting the following sentence at the end of the Section: 
 “Either party may change its address from time to time by
giving notice to the other party in the manner set forth in this Section.” 
 11. Capacity and Thickener. Exhibits A and C are
amended by deleting “450 tph” every place it appears and inserting “650 tph rate capacity” in its place. Exhibit C is amended by deleting “9. Thickener 70’ diameter” and inserting “9. Thickener 75’
diameter in its place. 
 12. Effect of Amendment. Except as specifically amended hereby, the terms of the Original Agreement shall
remain in full force and effect, and, from and after the date hereof, all references to the “Agreement” shall mean the Original Agreement as amended, hereby. 
 (The rest of this page is intentionally left blank.) 

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

 IN WITNESS WHEREOF, Lessor and Lessee have executed this First Amendment as of the day and
year first above written. 
  

			
	 LESSOR:
  
 LOADOUT LLC

		
	By:	 	 /s/ Stephen F. Looney

	Name:	 	Stephen F. Looney
	Title:	 	Vice President Virginia Operations
	
	 LESSEE:
  
 ELK RIDGE, INC.

		
	By:	 	 /s/ Michael E. Lyons

	Name:	 	Michael E. Lyons
	Title:	 	President

 COMMONWEALTH OF KENTUCKY 
 COUNTY OF PIKE 
 The foregoing instrument was
acknowledged before me this 11th day of November, 2005, by Stephen F. Looney, Vice President-Virginia Operations, of Loadout LLC, a Delaware limited
liability company, on behalf of the company. 
  

			
	My Commission expires:	  	 10/19/2007

		  	  
 /s/ Andrew Daune
Thacher

		  	NOTARY PUBLIC

 [SEAL] 
 COMMONWEALTH
OF KENTUCKY 
 COUNTY OF PIKE 
 The foregoing instrument was acknowledged before me this the 11th day of November, 2005, by Michael E. Lyons, President, of Elk Ridge, Inc., a Kentucky corporation, on behalf of the corporation. 
  

			
	My Commission expires:	  	 10/19/2007

		  	  
 /s/ Andrew Daune
Thacher

		  	NOTARY PUBLIC

 [SEAL] 

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

 ASSIGNMENT AND ASSUMPTION AGREEMENT 
 (Facility Lease) 
 THIS ASSIGNMENT
AND ASSUMPTION AGREEMENT (this “Agreement”) is made and entered into effective as of November 11, 2005, by and between ELK RIDGE, INC., a Kentucky corporation (“Elk Ridge”), and ICG KNOTT COUNTY, LLC, a Delaware
limited liability company (“ICG”). 
 R E C I T A L S: 
 A. ICG and Elk Ridge have entered into an Asset Purchase Agreement dated November 11, 2005 (the “Purchase Agreement”), pursuant to which Elk
Ridge and Greymont Mining Corp. (“Greymont”) have agreed to sell to ICG, and ICG has agreed to purchase from Elk Ridge and Greymont, the Acquired Assets. 
 B. By the Purchase Agreement, Elk Ridge has agreed to assign to ICG all of Elk Ridge’s right, title and interest in, to and under that certain Coal Facility Lease and Operating Agreement dated July 7, 2005,
between Loadout LLC, as lessor, and Elk Ridge, as lessee, as amended (the “Facility Lease”). 
 C. As partial consideration for the
Acquired Assets, ICG has agreed to assume and perform the Facility Lease. 
 W I T N E S S E T H: 
 NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby promise and
agree as follows: 
 1. All capitalized terms used in this Agreement and not otherwise defined herein shall have the meaning given such terms
in the Purchase Agreement. 
 2. Elk Ridge hereby assigns and transfers to ICG all of Elk Ridge’s right, title and interest in, to and
under the Facility Lease. 
 3. ICG hereby (i) accepts the assignment of the Facility Lease, and (ii) agrees to pay, assume, perform and
fully and timely discharge, in accordance with their terms, all of Elk Ridge’s obligations under the Facility Lease arising and accruing after the date of this Agreement. Except for Elk Ridge’s obligations under the Facility Lease, ICG
assumes no other debt, liability or obligation of Elk Ridge and it is expressly understood and agreed that such non-assumed debts, obligations and liabilities shall remain the obligations of Elk Ridge. 
 4. The provisions of this Agreement are subject, in all respects, to the terms and conditions of the Purchase Agreement including, without limitation,
the indemnification provisions thereof. 

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

 5. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto
and their respective successors and permitted assigns. 
 6. This Agreement and all questions arising in connection herewith shall be
governed by and construed in accordance with the laws of the Commonwealth of Kentucky. 
 7. This Agreement may be executed in counterparts,
each of which shall be deemed an original but all of which taken together shall constitute but one and the same document. 
 IN WITNESS
WHEREOF, the undersigned have caused this Agreement to be executed by their thereinto duly authorized officers effective as of the time, day, month and year first above written. 
  

			
	ELK RIDGE, INC.
		
	By:	 	 /s/ Michael E. Lyons

	Name:	 	Michael E. Lyons
	Title:	 	President
	
	ICG KNOTT COUNTY, LLC
		
	By:	 	 /s/ Verlin Robinson

	Name:	 	Verlin Robinson
	Title:	 	President

  

 2 

					
		  		  	 CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND
 FILED
SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION. BOXES AND ASTERISKS
 DENOTE SUCH OMISSION.

 Resource 
 PENN VIRGINIA OPERATING CO., LLC 
 February 12, 2007 
 Mr. Charles Snavely 
 Vice President, Planning & Acquisitions

 International Coal Group 
 300 Corporate Centre Drive

 Scott Depot, WV 25560 
  

	RE:	Reduction on direct-ship tonnage 

 Dear Charles: 
 In response to your written request dated December 01, 2006 and follow up letter dated
January 10th 2007, we have reviewed your accounting controls which will be utilized in monitoring the direct-ship tonnage you propose to
process through the Raven facility and are satisfied that these controls will allow an accurate account of the tons being direct shipped. Therefore, Penn Virginia will grant the reduction in through put royalty to
[        *        ] per ton on the foreign direct ship tonnage provided the total in any month does not exceed
[        *        ] of the tonnage shipped from Penn Virginia Reserves. 
 Please signify your acceptance of the above terms and conditions by signing and returning the original of this letter to me. 
  

			
	Sincerely,
	
	 /s/ Stephen F. Looney

	Stephen F. Looney
	Vice President – Virginia Operations
	
	 International Coal Group, Inc.

  
  

			
	By:	 	 /s/ Charles Snavely

	Its:	 	Vice President

 2550 East Stone Drive, Suite 200 Ÿ Kingsport, TN 37660
Ÿ Phone (423) 723-0200 Ÿ Fax (423) 723-0210BroadWebAsia, Inc.: Exhibit 10.35 - Prepared by TNT Filings Inc.

  

Exhibit 10.35

Original Issue Date:  December 5, 2007

$600,000.00

$600,000 Junior Secured Note

THIS NOTE is a duly authorized and validly issued Note of BroadWebAsia, Inc., a corporation organized under the laws of the British Virgin Islands, having its principal place of business at 9255 Sunset Blvd., West Hollywood, California 90069 and its registered office at Commonwealth Trust Limited, PO Box 3321, Road Town, Tortola, BVI (the “Company”), designated as its $600,000 Junior Secured Note (the “Note”).

FOR VALUE RECEIVED, the Company promises to pay to the order of Europlay Capital Advisors, LLC, or its registered assigns (the “Holder”), or shall have paid pursuant to the terms hereunder, the principal sum of Six Hundred Thousand Dollars ($600,000) (the “Principal Amount”), no later than the Maturity Date, and to pay interest to the Holder on the aggregate outstanding Principal Amount of this Note in accordance with the provisions hereof.  

THIS NOTE IS SUBORDINATE IN THE RIGHT OF PAYMENT AND SECURITY TO THE SENIOR INDEBTEDNESS AND IS SUBJECT TO THE TERMS OF AN INTERCREDITOR AGREEMENT, DATED CONCURRENTLY WITH THE DATE OF THIS NOTE.

Capitalized terms used herein without definition have the meanings set forth on Exhibit A hereto.  This Note is subject to the following additional provisions:

Section 1.

Advance of Funds; Conditions to Advance.  

(a)

On the Original Issue Date, the Holder shall advance the Principal Amount of this Note to the Company by wire of immediately available funds (less any other amounts that may be deducted therefrom pursuant to the terms of this Note).  

(b)

Prior to the Holder having the obligation of making the foregoing advance, the following shall have occurred to the satisfaction of the Holder in its sole discretion: (i) this Note shall have been duly executed and delivered by the Company to the Holder; (ii) the Guaranty (the “Guaranty”) of Brad Greenspan (“Greenspan”) shall have been duly executed and delivered to the Holder; (iii) the Share Pledge Agreement, pledging 10,575,000 shares of the Company, representing approximately 92% of the outstanding shares of the Company, shall have been duly executed and delivered to the Holder by Greenspan, along with an accompanying stock power, executed in blank; (iv) the Securities Account Pledge Agreement, pledging 763,336 shares of New Motion, Inc. to the Holder, shall have been duly executed and delivered to the Holder by Greenspan; (v) the Account Control Agreement, by and among First Montauk Securities Corp. (the “Broker”), Greenspan and the Lender shall have been duly executed and delivered to the Holder by Greenspan and the Broker; (vi) one or more security agreements (each being a “Security Agreement”) from the Company to the Holder with respect to all of its assets, shall have been duly executed and delivered by the Company to the Holder; (vii) the Secretary of the Company shall have delivered to the Holder certified copies of the Memorandum and Articles and Resolutions of the Board of Directors of the Company; (viii) the Company shall have paid to the Holder a fee in the amount of $10,000 as reimbursement for legal expenses incurred by the Holder in connection with the preparation of this Note and the other Transaction Documents; (ix) there shall have been duly executed and delivered to the Holder a warrant to purchase shares (the “Common Stock”) of the Company in the form attached hereto as Exhibit 1(b); and (x) the Company shall have paid to the Holder an origination fee of $18,000.

 

1

(c)

The delivery of the foregoing documents and the advance of funds by the Holder to the Company shall occur on the Original Issue Date in accordance with, and subject to, the terms and conditions hereof, at the offices the Holder as follows: Europlay Capital Advisors, LLC, 15260 Ventura Blvd., Sherman Oaks, CA 91403.

Section 2.

Payment of Principal and Interest; Security; Subsequent Financing.

a)

Payment of Principal.  Subject to the terms of the Intercreditor Agreement, the Principal Amount hereof shall be paid in full on the Maturity Date or, if earlier, upon acceleration of this Note in accordance with the terms hereof. Any amount of principal repaid hereunder may not be reborrowed.

b)

Payment of Interest. Interest on the aggregate outstanding Principal Amount of this Note shall accrue at the rate of 18.00% per annum, payable every two months in arrears, beginning on January 31, 2008, and on the Maturity Date.   Upon and after an Event of Default and written notice from the Holder to the Company, this principal and unpaid interest under this Note shall bear interest at the lesser of 25.00% per annum or the Maximum Rate (as defined below).

c)

Interest Calculations. Interest shall be calculated on the basis of a 360-day year and shall accrue daily commencing on the Original Issue Date until payment in full of the Principal Amount, together with all accrued and unpaid interest and other amounts which may become due hereunder, has been made.  

d)

Prepayment.  The Company may prepay all or any portion of the Principal Amount of this Note, without penalty or premium, upon at least two days’ notice to the Holder.   Upon prepayment of this Note in full, all accrued and unpaid interest hereunder shall be immediately due and payable.  

e)

Payments.  Notwithstanding anything to the contrary contained herein or in any other document delivered by the Company or Greenspan pursuant hereto (together with this Note and including the documents described in Section 1(b) hereof, the “Transaction Documents”), all payments made by the Company shall be applied to principal, interest, fees and other charges due the Holder hereunder in such order of priority as the Holder shall elect.  

 

2

f)

Security.  The obligations of the Company under this Note are secured by the Guaranty and the collateral identified in the Security Agreements.
 

g)

Use of Proceeds.  The proceeds of this Note shall be used by the Company for working capital and general corporate purposes (including loans to, joint ventures with or investments in portfolio companies consistent with the Company’s business plan in effect on the date hereof), and not to redeem any Common Stock or securities convertible, exercisable or exchangeable into Common Stock or to settle any outstanding litigation.

Section 3.

Representations and Warranties.  The Company hereby represents and warrants to the Holders as follows:
 

(a)

The Company has been duly incorporated and is validly existing under the laws of its jurisdiction of organization, is in good standing or duly qualified as a foreign corporation in all jurisdictions where the conduct of its business so requires, and has all requisite power and authority to execute, deliver and perform its obligations under this Note and all other Transaction Documents to which it is a party.  The Company does not directly or indirectly own or have any investment in the capital stock of or any proprietary interest in any Person other than the Persons (and in the percentages) listed on Schedule 3(a) hereto.  The consolidated subsidiaries of the Company are listed on Schedule 3(b) hereto (such consolidated subsidiaries, the “Subsidiaries”). Each of this Note and all other Transaction Documents have been duly authorized, executed and delivered by the Company and constitute its legal, valid and binding obligation, enforceable against it in accordance with the terms hereof and thereof.  The execution, delivery and performance by the Company of this Note and all other Transaction Documents to which it is a party, and the incurrence by it of obligations hereunder and thereunder, do not contravene or conflict with the Company’s memorandum or articles of association or any law applicable to the Company or other instrument binding on or otherwise affecting the Company or give rise to any lien, security interest or other charge or encumbrance (other than in favor of the Holder) upon any of the Company’s properties. No consent or approval of or notice to or filing with any governmental authority or other third party is or will be required as a condition to the validity or enforceability of this Note or the other Transaction Documents, other than such consents which have been obtained and are in full force and effect.

(b)

The Company and the Subsidiaries have good and marketable title to their assets disclosed in their most recent Financial Reports (as defined below). The Company and each of the Subsidiaries are in compliance in all material respects with all laws and regulatory requirements to which they or their properties are subject. Except as set forth in the Financial Reports, there is no litigation pending, or, to the knowledge of the Company, threatened against the Company or any of the Subsidiaries that could reasonably be expected to have a material adverse effect on the financial condition, business, properties or prospects of the Company and its Subsidiaries, taken as a whole (a “Material Adverse Effect”).  The Company’s principal place of business and registered office are the addresses set forth at the beginning of this Note.  The Company has paid all federal, foreign, state and local taxes required to be paid by it on or prior to the date they were due.  All documents, instruments and other written material heretofore or hereafter furnished to the Holder pursuant to the terms of any Transaction Document contain no misstatements of a material fact and do not fail to disclose any material fact and the Company has not failed to disclose to the Holder any information that could result in a Material Adverse Effect.
 

3

(c)

The Company has delivered to the Holder true, correct and complete copies of its preliminary financial statements for the fiscal year ended December 31, 2006, and its unaudited financial statements for the fiscal quarters ended March 31, 2007 and June 30, 2007 (collectively, the “Financial Reports”).  None of the Financial Reports, as of their date (or as of the date delivered to the Holder, to the extent such Financial Reports are preliminary), contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  The Financial Reports comply in all material respects with applicable accounting requirements as in effect at the date of such Financial Reports.  To the Company’s knowledge, such Financial Reports have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified therein and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

(d)

Since December 31, 2006 and except as set forth in the Financial Reports, (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 material liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice, (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP and (C) the Senior Indebtedness and $100,000 of unsecured indebtedness, (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, except pursuant to existing Company stock option plans and the issuance of 345,000 shares of the Company to James Iacabucci.   The Financial Reports set forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company and its consolidated subsidiaries, or for which the Company or its Subsidiaries have commitments, other than the Senior Indebtedness and $100,000 of unsecured indebtedness incurred subsequent thereto.  The Company and its Subsidiaries are not in default with respect to any such Indebtedness.  

(e)

Except as disclosed in the Financial Reports, the Company is not a party to any written or oral contract, instrument, agreement, commitment, obligation, plan or arrangement, a copy of which would be required to be filed with the Securities and Exchange Commission (collectively, “Material Agreements”) if the Company were registering securities under the Securities Act of 1933, as amended (the “Securities Act”).  The Company has, in all material respects, performed all the obligations required to be performed by it to date under the foregoing agreements, have received no notice of default and, to the best of the Company’s knowledge is not in default under any other Material Agreement now in effect, the result of which could cause a Material Adverse Effect.
 

4

(f)

 Except as disclosed in the Financial Reports, there are no loans, leases, agreements, contracts, royalty agreements, management contracts or arrangements or other continuing transactions between (a) the Company, its Subsidiaries or any of their respective customers or suppliers on the one hand, and (b) on the other hand, any executive officer, 5% or greater stockholder, director or employee of the Company, or its Subsidiaries, or, to the knowledge of the Company, any member of the immediate family of such persons or any corporation or other entity controlled by such persons or their immediate family members.

(g)

The Company is not, and is not an affiliate of, and immediately after the transactions contemplated hereby, will not be an affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

(h)

The Company has not received notice of a default and is not in default under, or with respect to, any contractual obligation, nor does any condition exist that with notice or lapse of time or both would constitute a default thereunder

(i)

The authorized shares of the Company currently issued and outstanding as of the date hereof are set forth on Schedule 3(i) hereto.  All of the outstanding shares of the Company’s Common Stock and any other security of the Company have been duly and validly authorized.  No shares of Common Stock or any other security of the Company are entitled to preemptive rights or to registration rights which have not already been complied with, and except as set forth in Schedule 3(i), there are no outstanding options, warrants, scrip, rights to subscribe to, call or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of the Company.  Furthermore, except as set forth in this Agreement and as set forth in Schedule 3(i), there are no contracts, commitments, understandings, or arrangements by which the Company is or may become bound to issue additional shares of the Company or options, securities or rights convertible into shares of the Company.  The Company is not a party to or bound by any agreement or understanding granting registration or anti-dilution rights to any person with respect to any of its equity or debt securities.  The Company is not a party to, and it has no knowledge of, any agreement or understanding restricting the voting or transfer of any shares of the Company.  The offer and sale of all shares, convertible securities, rights, warrants, or options of the Company issued prior to the date hereof complied with all applicable federal and state securities laws, and no holder of such securities has a right of rescission or claim for damages with respect thereto which could have a Material Adverse Effect.  The Company has furnished or made available to the Holder true and correct copies of the Company’s memorandum and articles of association as in effect on the date hereof (the “M&A”).

5

(j)

There are no brokerage commissions, finder’s fees or similar fees or commissions payable by the Company or any Subsidiary in connection with the transactions contemplated hereby based on any agreement or understanding with the Company or any Subsidiary or any action taken by any such Person.  

Section 4.

Covenants. As long as any portion of this Note remains outstanding, the Company agrees as follows:

a)

other than Permitted Liens, the Company shall not enter into, create, incur, assume or suffer to exist any liens, security interests, charges, claims or other encumbrances of any kind (collectively, “Liens”) on or with respect to any of its assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

b)

the Company shall not amend its constitutional documents, including without limitation, its M&A, in any manner that adversely affects any rights of the Holder;

c)

the Company shall not enter into, create, incur, assume or suffer to exist any Indebtedness, other than Indebtedness existing on the date hereof in the amount in effect on the date hereof and which Indebtedness is set forth in the Financial Reports and other than the Senior Indebtedness and $100,000 of unsecured indebtedness;
 

d)

the Company shall comply with its obligations under this Note and the other Transaction Documents;

e)

the Company shall comply with law and duly observe and conform in all material respects to all valid requirements of governmental authorities relating to the conduct of its business or to its properties or assets;
 

f)

the Company shall not engage in any transactions with any officer, director, employee or any Affiliate of the Company, including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner, in each case in excess of $50,000, other than (i) for payment of reasonable salary, reasonable bonus or consulting fees for services actually rendered, as approved by the Board of Directors of the Company as fair in all respects to the Company, and (ii) reimbursement for expenses incurred on behalf of the Company;

g)

the Company shall not (i) declare or pay any dividends or make any distributions to any holder(s) of shares or other equity security of the Company, or (ii) purchase or otherwise acquire for value, directly or indirectly, any shares or other equity security of the Company;
 

h)

the Company shall not (i) merge or consolidate or sell or dispose of all its assets or any substantial portion thereof or (ii) in any way or manner alter its organizational structure or effect a change of entity; provided, that, the Company shall be permitted to enter into a merger in connection with which the holders of the Company’s shares receive securities listed on a national securities exchange (as defined in the Securities Exchange Act of 1934) or quoted on Nasdaq or the Over the Counter Bulletin Board (i.e., an “alternate public offering”);  

 

6

i)

 the Company shall promptly pay and discharge, or cause to be paid and discharged, when due and payable, all lawful taxes, assessments and governmental charges or levies imposed upon the income, profits, property or business of the Company except for such failures to pay that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect; provided, however, that any such tax, assessment, charge or levy need not be paid if the validity thereof shall currently be contested in good faith by appropriate proceedings and if the Company shall have set aside on its books adequate reserves with respect thereto, and provided, further, that the Company will pay all such taxes, assessments, charges or levies forthwith upon the commencement of proceedings to foreclose any lien which may have attached as security therefor;
 

j)

the Company shall maintain in full force and effect its corporate existence, rights and franchises and all licenses and other rights to use property owned or possessed by it and reasonably deemed to be necessary to the conduct of its business;
 

k)

the Company shall conduct its businesses in a manner so that it will not become subject to the Investment Company Act of 1940, as amended;
 

l)

the Company shall keep its properties in good repair, working order and condition, reasonable wear and tear excepted, and from time to time make all necessary and proper repairs, renewals, replacements, additions and improvements thereto; and the Company shall at all times comply with each provision of all leases to which it is a party or under which it occupies property if the breach of such provision could reasonably be expected to have a Material Adverse Effect; and

m)

the Company shall not, and shall not permit any Subsidiary to, make any payment on any indebtedness owed to officers, directors or affiliates.
 

Section 5.

Events of Default; Intercreditor Agreement.  

a)

“Event of Default” means, wherever used herein, any of the following events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

i.

any default in the payment of (A) the principal amount of this Note or (B) interest or other amounts owing to the Holder on this Note, as and when the same shall become due and payable (whether on the Maturity Date or by acceleration or otherwise);

 

7

 

ii.

the Company shall fail to observe or perform any other covenant or agreement contained in this Note which failure is not cured, if possible to cure, within the earlier to occur of (A) three days after notice of such failure sent by the Holder and (B) five days after the Company has become or should have become aware of such failure;

iii.

a default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument) shall occur under any of the Transaction Documents (including without limitation, the Guaranty), or the failure or invalidity of the Guaranty or the Security Agreement;

iv.

any representation or warranty made in this Note, any other Transaction Documents, any written statement pursuant hereto or thereto or any other report, financial statement or certificate made or delivered to the Holder shall be untrue or incorrect in any material respect as of the date when made or deemed made;

v.

the Company or Greenspan shall be subject to a Bankruptcy Event;

 

vi.

the Company or Greenspan shall default on any obligations under any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument (other than those referred to in the foregoing clause (iii) under which there may be issued, or by which there may be secured or evidenced, any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation greater than $100,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable; or

vii.

any monetary judgment, writ or similar final process shall be entered or filed against the Company or Greenspan or any of their respective property or other assets for more than $100,000, and such judgment, writ or similar final process shall remain unvacated, unbonded or unstayed for a period of 20 calendar days.
 

a)

Remedies Upon Event of Default. Subject to the terms of the Intercreditor Agreement, if any Event of Default occurs, the outstanding principal amount of this Note plus accrued but unpaid interest and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder’s election, immediately due and payable upon written notice to the Company, except for a default under Section 5(a)(v) above, which shall cause an automatic and immediate acceleration.  In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand or protest of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law and the Transaction Documents.  Such acceleration may be rescinded and annulled by the Holder at any time prior to payment hereunder and the Holder shall have all rights as the holder of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 5(b).  No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

b)

Intercreditor Agreement.  Notwithstanding any other provision of this Agreement to the contrary, this Note and the other Transaction Documents, and the Holder’s rights hereunder and thereunder, are subject to the terms of an Intercreditor Agreement, substantially in the form of Exhibit C hereto, to be entered into on the Original Issue Date, by and between the Holder and Lakewood Group, LLC, the holder of the Senior Indebtedness (the “Intercreditor Agreement”).

 

8

Section 6.

Miscellaneous.  

a)

Notices.  Any and all notices or other communications or deliveries to be provided by the Holder hereunder shall be delivered to the address of the Company’s principal place of business set forth above.   Notices to the Holder shall be delivered to the address set forth in Section 1(c).

b)

Absolute Obligation. No provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and accrued interest, as applicable, on this Note at the time, place, and rate, and in the coin or currency, herein prescribed.  This Note is a direct, unconditional and secured debt obligation of the Company.  

 

c)

Lost or Mutilated Note.  If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.

d)

Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof.  Subject to Section 6(k) below, each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”).  Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, or such New York Courts are improper or inconvenient venue for such proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby. If either party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other reasonable costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.  Any enforcement action relating to this Note may be brought by motion for summary judgment in lieu of a complaint pursuant to Section 3213 of the New York Civil Practice Law and Rules.   

 

9

e)

Waiver.  Any waiver by the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note.  The failure of the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note.  Any waiver by the Holder must be in writing.

 

f)

Severability.  If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances.  

g)

Next Business Day.  Whenever any payment or other obligation hereunder shall be due on a day other than a business day in the State of New York, such payment shall be made on the next succeeding business day.

h)

Headings.  The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit or affect any of the provisions hereof.

i)        

Usury.  To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time hereafter in force, in connection with any claim, action or proceeding that may be brought by the Holder in order to enforce any right or remedy under any Transaction Document; provided that, notwithstanding any provision to the contrary contained in any Transaction Document, it is expressly agreed and provided that the total liability of the Company under the Transaction Documents for payments in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”), and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in the nature of interest that the Company may be obligated to pay under the Transaction Documents exceed such Maximum Rate.  It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Transaction Documents is increased or decreased by statute or any official governmental action subsequent to the date hereof, the new maximum contract rate of interest allowed by law will be the Maximum Rate applicable to the Transaction Documents from the effective date forward, unless such application is precluded by applicable law.  If under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to the Holder with respect to indebtedness evidenced by the Transaction Documents, such excess shall be applied by the Holder to the unpaid principal balance of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at the Holder’s election.

10

j)          

Indemnification.  The Company will indemnify and hold the Holder harmless from any loss, liability, damages, judgments, and costs of any kind relating to or arising directly or indirectly out of (a) this Note or any other Transaction Document, (b) any credit extended or committed by the Holder to the Company hereunder, and (c) any litigation or proceeding related to or arising out of this Note, any such Transaction Document, or any such credit.  This indemnity includes but is not limited to reasonable attorneys' fees.  This indemnity extends to the Holder, its affiliates, partners, directors, officers, employees, agents, successors, attorneys, and assigns.  This indemnity will survive repayment of the Company’s obligations to the Holder.  All sums due to the Holder hereunder shall be due and payable immediately without demand.

k)

 Assignment; Successors and Assigns.  This Note shall be binding upon and inure to the benefit of the Company and the Holder and their respective successors and assigns, except that the Company may not assign or transfer any of its rights or obligations under any Transaction Document without the prior written consent of the Holder.  The Holder shall be permitted to assign its rights and obligations hereunder and under the other Transaction Documents in its sole discretion.  Notwithstanding the provisions of 6(d) hereof, in connection with such an assignment, at the election of such assignee, the Company shall be deemed to submit to the jurisdiction of the state or federal courts of the jurisdiction of formation of such assignee or the state of the principal place of business of such assignee; provided such jurisdiction shall be within the United States.     

(Signature Page Follows)

 

11

IN WITNESS WHEREOF, each of the Holder and the Company has caused this Note to be duly executed by its duly authorized officer as of the date first above indicated.

	
  
  BROADWEBASIA, INC.

	
  
  By:__________________________________________

     Name:

     Title:

 

 

12

	
  
  EUROPLAY CAPITAL ADVISORS, LLC

	
  
  By:__________________________________________

     Name:

     Title:

 

 

13

 EXHIBIT A

(Certain Defined Terms)

 

“Bankruptcy Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or any Significant Subsidiary thereof; (b) there is commenced against the Company or any Significant Subsidiary thereof any such case or proceeding that is not dismissed within 60 days after commencement; (c) the Company or any Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered; (d) the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 60 calendar days after such appointment; (e) the Company or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors; (f) the Company or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or (g) the Company or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.

“Indebtedness” means (a) all obligations for borrowed money, (b) all obligations evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other obligations in respect of letters of credit, bankers acceptances, current swap agreements, interest rate hedging agreements, interest rate swaps, or other financial products, (c) all capital lease obligations that exceed $50,000 in the aggregate in any fiscal year, (d) all obligations or liabilities secured by a lien or encumbrance on any asset of the Company, irrespective of whether such obligation or liability is assumed, (e) all obligations for the deferred purchase price of assets, together with trade debt and other accounts payable that exceed $50,000 in the aggregate in any fiscal year, (f) all synthetic leases, and (g) any obligation guaranteeing or intended to guarantee (whether directly or indirectly guaranteed, endorsed, co-made, discounted or sold with recourse) any of the foregoing obligations of any other person; provided, however, Indebtedness shall not include (a) usual and customary trade debt incurred in the ordinary course of business and (b) endorsements for collection or deposit in the ordinary course of business.

“Maturity Date” means the earlier of (i) March 14, 2008, and (ii) the date the Senior Indebtedness is repaid in full.

“Original Issue Date” means the date of the first issuance of this Note, regardless of any transfers of this Note and regardless of the number of instruments which may be issued to evidence this Note.

“Permitted Lien” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Company) have been established in accordance with GAAP; (b) Liens imposed by law which were incurred in the ordinary course of the Company’s business, such as carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising in the ordinary course of the Company’s business, and which (x) do not individually or in the aggregate materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business of the Company and its consolidated subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien and (c) Liens securing the Senior Indebtedness.

14

“Person” means any individual, firm, corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company, governmental authority or other entity of any kind.

“Senior Indebtedness” means Indebtedness evidenced by that certain $750,000 Senior Secured Note, with an original issue date of September 12, 2007, by and between the Company and Lakewood Group, LLC.    

 

 

 

 

 

15

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}]]