Document:

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                                                                   Exhibit 10.14

      THIS CONSOLIDATED AND AMENDED LEASE AGREEMENT made in triplicate as of the
23rd day of December, 1997, but effective as of the 1st day of September, 1996,
by and between ANR COAL COMPANY, LLC a Delaware limited liability company, P.O.
Box 1871, Roanoke, Virginia 24008, hereinafter called "Lessor" and LESLIE
RESOURCES, INC., a Kentucky corporation, 1021 Tori Drive, Hazard, Kentucky
41701, hereinafter called "Lessee."

      WHEREAS, Lessee or Lessee's affiliate companies, Pro-Land, Inc., d/b/a Kem
Coal Company and Mountain Clay, Incorporated, leases from Lessor (successor in
interest to Enterprise Coal Company through merger) certain coal and coal mining
rights more particularly set forth in the following agreements (hereinafter
collectively called the "Prior Leases"):

      1. Lease Agreement dated December 14, 1994, known as lease number K-K-23;

      2. Partial Assignment and Consent Agreement dated November l, 1993, known
as lease number K-L-19;

      3. Lease Agreement dated January 1, 1986, known as lease number K-M-5;

      4. Partial Assignment and Consent Agreement dated December 31, 1990, known
as lease number K-K-21;

      5. Lease Agreement dated October 31, 1994, known as lease number K-L-20;
and

      6. Lease Agreement dated February 1, 1984, known as lease number K-L-13;
and

      WHEREAS, Lessor and Lessee are desirous of consolidating the Prior Leases
subject to the terms and conditions set forth herein.

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                              W I T N E S S E T H:

      That for and in consideration of Ten and no/100 ($10.00) Dollars, cash in
hand paid by Lessee to Lessor, the receipt of which is hereby acknowledged, and
in further consideration of the rents and royalties to be paid by Lessee to
Lessor as hereinafter stipulated, and of the mutual agreements, provisions,
stipulations and covenants hereinafter set out, Lessor does hereby let, lease
and demise unto Lessee for the purpose of mining all of the coal contained in
those seams of coal underlying the tracts or parcels of land specified in
Exhibits 1-6 (hereinafter the "leased premises") which are incorporated by
reference. Such coal shall be mined by the surface mining method(s) identified
on said Exhibits, it being expressly understood that Lessee shall not mine by
the auger mining method on any of the leased premises, except as specifically
set forth on the Exhibits hereto, without first obtaining the written consent of
Lessor, it being recognized by the parties hereto that Lessor shall be under no
obligation to give such consent.

      The terms and covenants and conditions of this Lease are as follows:

                                       I.

      Where Lessor has the right, and only so far as it has the right so to do,
under its deed or deeds and title papers to said lands and interest in said
lands, Lessor does hereby further grant unto Lessee as appurtenant to the demise
aforesaid, and during the continuance of this Lease, subject, however, to the
exceptions and reservations hereinafter referred to, all the mining rights,
easements and privileges which are owned by Lessor and are set out and defined
in the deed or deeds and title papers under which Lessor holds title to the said
coal. Provided, that where Lessor owns under a mineral deed any of the coal
embraced and included in this Lease, it grants unto Lessee only such mining
rights and privileges therein as it owns, and only insofar as it has the right
to grant, and said Lessor does grant unto Lessee the right to enter in and upon
the said lands and erect all such buildings, houses, machinery, plants, and
other structures, roadways, tramroads, air shafts, power

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lines, substations, drains, drainways and operate the same therein or thereunder
as may be necessary or convenient for the mining, excavating and removal of said
coal to market. Lessee is also granted the right and privilege of dumping
refuse, slate and draining water from said lands when necessary or convenient
for the mining and removal of said coal, but such right and privilege shall be
exercised in strict compliance with all state and federal environmental
regulations. Lessor excepts and reserves from this Lease all coal, mineral, oil
and gas and mineral substances or combinations thereof, other than the coal
herein leased, together with the exclusive right to mine, bore for, produce,
store, manufacture and market such excepted oil, gas, other coal, mineral and
mineral substances; and, also excepts and reserves the right to build, maintain,
operate and use under, over, across and through the leasehold such roads, ways,
tramroads, railroads, sidings, and other transportation facilities, and power
and telephone lines, water and pipelines, to transport from any source wherever
located, coal, by-products of coal, water, timber, oil and gas, and other
minerals and substances for any and all purposes. Provided, however, that Lessee
shall have and is hereby granted the right to take and use such water, stone,
clay, sand, gravel and slate on said lands as may be reasonably required in
connection with its operations hereunder. Lessor further excepts and reserves
all timber lying and being upon said leased premises on each and every tract
upon which Lessor owns the surface or fee, of whatever species. Lessee shall
notify Lessor at least ninety (90) days in advance prior to the time it intends
to mine an area where Lessor owns the surface or fee so that Lessor can cut and
remove the timber from such surface if it desires to do so. Lessee shall not be
liable for damage to any timber not removed within the ninety (90) day notice
period. However, where Lessor owns the mineral and mining rights only, Lessee is
granted such timber rights on such mineral tracts as Lessor has the lawful right
to grant. Provided, however, that the rights above reserved and excepted shall
be exercised with due regard for the requirements,

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convenience and safety of the operations of Lessee hereunder, and interference
with said operations shall be avoided whenever practicable. Lessor does not
warrant the quantity or quality of coal covered hereby.

      Lessee shall ascertain what mining rights and privileges Lessor owns and
shall thoroughly familiarize itself with the boundary lines of the leasehold
before the removal of any coal therefrom. If, in order to mine and remove said
coal by the mining methods herein provided for, Lessee shall need any rights,
easements and privileges in addition to those owned by Lessor, including,
without limitation, surface disturbance rights, Lessee shall be responsible for
obtaining the same at its own expense. Lessee covenants and agrees that it will
make a good faith effort to obtain any such surface disturbance rights; however,
Lessor agrees that in the event Lessee is unsuccessful in obtaining the
necessary rights, Lessee shall not be required to mine the coal contained in
such areas.

                                       II.

      Lessee covenants to commence mining said mineable and merchantable coal
immediately and to continue mining the same with due diligence and without
interruptions of any nature during the term of this Lease except when prevented
by circumstances beyond Lessee's control. The term "mineable and merchantable
coal" as used in this Lease, means such coal as can, at the time the same is
reached in the mining operations, be mined at a profit by the use of machinery
and methods which at the time are modern and efficient. Lessee covenants to work
and mine the said coal in an efficient, workmanlike and proper manner, according
to approved and suitable modern mining methods and to use and follow customary
modern engineering practices, and such as shall be approved by the engineer of
Lessor, and Lessee shall conduct its operations in such a way as to make the
greatest recovery of coal practicable; provided, however, the mining operations
of Lessee shall be planned, developed and carried on in such manner that the
mining of said coal shall not

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damage, injure or render unmineable any other mineable seams of coal on the
leasehold. Lessee shall comply in every respect with the laws now existing, or
that may hereafter be passed by the Commonwealth of Kentucky or the United
States regulating the proper working of mines and the removal of coal by the
mining methods herein provided for, including, but not limited to, the obtaining
of all required permits, the furnishing of bonds and the restoration of the
surface of the leasehold, and Lessor reserves unto itself the benefits of all
such laws.

                                      III.

      The term of this Lease shall be from the date hereof and shall continue
through December 31, 2001, or until all of the coal hereby leased shall have
been mined and removed, whichever shall first occur, unless sooner cancelled or
forfeited pursuant to the terms and conditions hereinafter set out. Provided,
however, if Lessee has met all of the terms and conditions of this Lease
Agreement during the initial term, it shall have the right to extend the term of
this Lease Agreement for two additional periods of five (5) years each or until
all of the coal hereby leased shall have been mined and removed, whichever shall
first occur, by giving Lessor notice in writing of its intention to do so ninety
(90) days prior to the end of the initial term or the first extended term, as
the case may be.

      During the initial or extended term(s) of this lease Lessee shall have the
right to surrender one or more of the six (6) areas identified in Exhibit 1-6
hereto upon exhaustion of all of the coal in such area(s). Lessee shall give
Lessor written notice at least thirty (30) days prior to the surrender date and
shall provide Lessor with reasonable documentation supporting the exhaustion of
coal within the area(s) to be surrendered.

      For purposes of this grammatical paragraph only, the term "Lessor" shall
mean and include ANR Coal Company, LLC and any person or entity, directly or
indirectly, owning or controlling ANR Coal Company, LLC or owned or controlled
by ANR Coal Company, LLC or under common ownership or control with ANR Coal
Company, LLC. For purposes of this grammatical paragraph

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only, the term "Lessee" shall mean and include Leslie Resources, Inc. and any
person or entity, directly or indirectly, owning or controlling Leslie
Resources, Inc. or owned or controlled by Leslie Resources, Inc. or under common
ownership or control with Leslie Resources, Inc. Should Lessee, at any time
during the term of this Lease, fail to comply with any federal or state laws or
regulations governing surface mining, including but not limited to the failure
of Lessee to promptly and fully abate any circumstance giving rise to a notice
of violation or similar enforcement action or to timely and fully pay any fines
or penalties levied against Lessee as a result of any such violations or
enforcement actions, and if, as a result of such failure on the part of Lessee,
Lessor's ability to obtain or maintain any licenses, permits or authorizations
from any federal, state, local or other governmental or administrative authority
is blocked, terminated, or otherwise threatened as a result of Lessor being
linked with Lessee in any applicant violator system maintained by any state or
federal agency pursuant to the Surface Mining Control and Reclamation Act of
1977 and related state laws and regulations, as such may exist today or be
hereafter enacted or amended, then and in that event Lessor, at its option, may
give written notice of such fact to Lessee. Lessee shall have three business
days from and after receipt of such notice within which to commence all actions
that may be required in order to prevent Lessor's ability to obtain or maintain
any such licenses, permits or authorizations from continuing to be blocked,
terminated, or otherwise threatened. Should Lessee fail to commence such action
or if the actions of Lessee should not eliminate or stay the permit block within
the allowed time of three business days, Lessor shall have the right to
terminate this Lease.

                                       IV.

      Lessee covenants and agrees to pay Lessor as royalty for each and every
ton of two thousand (2,000) pounds of coal mined and removed from the leased
premises the greater of the percentage of the gross sales price or the minimum
rate per ton as specified on the applicable

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Exhibit attached hereto covering the portion of the leased premises from which
said coal was mined and removed.

      The term "gross sales price" as used herein means the sale price to the
ultimate consumer F.O.B. at the shipping point after final preparation and
loading and without any deduction of commission or selling expenses. However,
coal sold for export, transshipment by lake or to independent retail coal yards,
or under comparable conditions, if in arm's length transactions, shall be
considered as sold to the ultimate consumer. In the event that Lessee shall
blend the coals mined hereunder with coals of an inferior quality, then it is
agreed and understood that the "gross sales price" shall mean that price which
the coals mined hereunder would have produced in an arm's length transaction
with an independent third party buyer.

      In case of any coal not sold at arm's length or consumed on or off the
leased premises without sale by Lessee or stored by Lessee on or off the leased
premises, sale price for the purpose of computing the percentage royalty shall
be the fair market value of such coal F.O.B. at the shipping point at the time
of shipment from the leased premises, or if stored or used on the leased
premises at the time of placement in storage or of use.

      The basic tonnage royalty or percentage royalty, whichever is greater,
shall be calculated at the end of each month based upon the current gross sales
price per ton and paid to Lessor not later than the 20th day of the month
following the month in which the coal was mined and removed, and payment shall
be accompanied by a report, on forms approved by Lessor, showing the quantity of
coal by seam mined from the leased premises and the sale price thereof, during
the preceding calendar month, using the weights at the tipple or loading point
furnished by the railroad company over whose railroad the coal is shipped, for
all coal shipped direct from mine to purchaser; and if coal shall be taken and
not shipped by rail direct from mine to purchaser, the quantity thereof shall

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be ascertained by truck weights or in a manner satisfactory to Lessor. Lessee
shall comply with any further reasonable rules and regulations that may be
prescribed by Lessor for the correct ascertainment and report of the quantity of
coal mined hereunder and the sale price received therefor; and Lessor, its
officers, accountants and authorized employees shall have free access at all
reasonable times to the books and records of Lessee to check the tonnage shipped
and sold, the sale price of the coal and the amount received therefor for the
purpose of making calculations of the amount of royalty due Lessor under the
terms hereof or for other lawful purposes in connection herewith. Lessee shall
keep, until three years after termination of this Lease, all books and records
concerning the mining, shipping and selling of coal from the leasehold. Lessor
shall have the right to verify tonnages directly with Lessee's buyers and/or the
railroad company transporting the same, and Lessee does hereby expressly
authorize any such parties to give Lessor such information with respect to
dates, weights, qualities and prices paid as Lessor may request.

      Lessor, its agents or engineers, shall at all reasonable times have the
right and privilege of entering the leased premises including tipple and
cleaning plant, or other loading facility, whether on or off said leased
premises, and surface overlying and adjacent to same in order to inspect,
examine, survey or measure the same, or any part thereof, for the purpose of
verifying the reports of Lessee as to the amount and quality of coal mined or
removed, or for any other lawful purpose, and for such purposes to use freely
the means of access to said leased premises and surface overlying and adjacent
to same without hindrance or molestation, but in so doing Lessor shall not
unreasonably interfere with the operations of Lessee; and if from any
measurement it appears that Lessee has mined and removed more coal than has been
accounted for on the basis of the weights furnished by Lessee, then Lessor shall
notify Lessee of such discrepancy. If the difference cannot be mutually resolved
then such difference shall be submitted to a qualified third party engineer

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acceptable to the parties hereto and said engineer shall have the full authority
to arbitrate said difference and his decision shall be binding upon the parties
hereto. Any payment due as a result of said engineer's decision shall be made on
the next payment date. The cost and expense of said engineer shall be borne
equally by the parties.

                                       V.

      Beginning September 1, 1996, Lessee shall pay to Lessor a minimum monthly
royalty or rental under this Lease the sum of Sixty Thousand ($60,000) Dollars,
or such adjusted amount pursuant to the terms of this Article, for each calendar
month during the term of this lease; whether the amount of coal mined and
removed during any such respective calendar month shall produce that amount of
royalty or not.

      The minimum monthly royalty or rental amount shall be reduced by Five
Thousand ($5,000.00) Dollars for each area covered by the Exhibits hereto which
Lessee surrenders pursuant to Article III herein. Such reduction shall be
effective with the first full month following such surrender.

      Provided, however, if Lessee shall fail in any such month to mine the
tonnage required to pay the minimum monthly royalty or rental aforesaid by
payment of tonnage or percentage royalties as hereinbefore provided, Lessee
shall have the right during the next succeeding thirty-six (36) months, after
the minimum monthly royalty or rental for each of said months shall have been
paid, to mine and remove sufficient coal, free of royalty, to reimburse itself
for the royalty or rental paid for such preceding month or months in excess of
coal actually mined during said month. But such right of reimbursement shall be
limited to the above prescribed recoupment period following any month of minimum
deficit, and no credit shall be carried forward to any subsequent month for coal
mined in excess of the minimum requirement. It is understood, however, that
should the term of this Lease be extended, any recoupable royalty credit
remaining at that time shall be carried

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forward into such extension. It is further understood that Lessee shall have the
right to recoup the balance of recoupable minimum royalty which exists under the
Prior Leases within the terms of this Lease as if the lump sum totals of the
recoupable minimum royalty under the Prior Leases had been made for the month of
August, 1996.

      Payment of any amount necessary to complete the minimum monthly royalty or
rental for any month shall be made on or before the 20th day of the month for
the preceding calendar month. Notwithstanding the provisions of any other
article of this Lease, to the contrary, it is the intent of this article that
Lessor be guaranteed minimum royalty or rental payments in the aforesaid amounts
and nothing contained in any other article of this Lease shall be construed to
alter or diminish this requirement.

                                       VI.

      Lessor agrees that Lessee shall be excused from mining the coal leased
hereunder in the event its operations on the leasehold are unavoidably
interrupted due to acts of God, strikes, accidents, governmental impositions or
interventions, or other causes beyond the control of Lessee. Lessee shall give
to Lessor written notice of such an event of force majeure and shall use all
reasonable diligence in removing the cause of same and resuming its operations
hereunder. Such an event of force majeure shall not excuse Lessee from paying to
Lessor the minimum royalties required to be paid under Article V of this Lease,
but the length of time of such event of force majeure shall be added to the
applicable recoupment period(s) prescribed therein for the recoupment of
recoupable royalty credit accrued prior to and during such event of force
majeure. However, such extension of any recoupment period shall not affect said
period for the recoupment of recoupable royalty credit accrued after the event
of force majeure.

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                                      VII.

      Lessee shall have the right to commingle coal mined from the leased
premises with other coals, and in such event Lessee shall adopt and use after
receipt of written approval of Lessor such method of ascertainment and
apportionment by weights, satisfactory to Lessor, as will provide for an
accurate determination of the number of tons of coal for which payment is due to
Lessor. If necessary, Lessee shall adopt and use such method of ascertainment of
unmerchantable material, which will be rejected in preparation, and
apportionment of weights, in accordance with generally accepted practice, as
will provide for an accurate determination of the number of tons of coal from
the leased premises for which tonnage royalty is due to Lessor.

                                      VIII.

      Lessee shall pay full royalty at the rate herein stipulated upon all
mineable and merchantable coal, whether in place or mined, which is burned lost,
destroyed or injured by fire or explosion, when such loss is caused by the
negligence of Lessee, its agents or employees or failure of Lessee to properly
mine or store, or provide for the mining and storage of said coal by acceptable
and proper methods. Any such coal lost in place shall be paid for at a Ninety
(90%) percent recovery rate for strip mining of tons in place calculated on an
acre basis using the basic tonnage rate and gross sales price of Lessee during
the month preceding the date of the loss hereunder.

                                       IX.

      Lessee agrees to employ an experienced and competent registered mining
engineer, who shall make accurate transit surveys and prepare plans and maps for
mining, showing accurately and completely mine workings, coal seams being mined
or to be mined, seam thickness, refuse disposal areas, extent, location, length
and width of all coal pits, bench widths, edges and toes of spoil, highwalls or
faces of coal, sedimentation ponds and other structures, reclamation methods
after

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removal of said coal, seam elevations, drainage, electrical and haulage
facilities, oil and gas wells, leasehold boundaries and property lines, railroad
tracks and rights of way, improvements and other such additional information as
may be required by Lessor, the Commonwealth of Kentucky or the United States.
Said maps shall be prepared upon scales of one hundred (100) feet to the inch
and four hundred (400) feet to the inch and upon such other scales as may at the
time be required by the laws of the Commonwealth of Kentucky or the United
States. All surveys and maps required hereunder shall be made using and with
reference to the Kentucky State Plane Coordinate System (South Zone).

      Lessee shall thirty (30) days before the commencement of any mining
operation and on or before January 20 of each calendar year furnish to Lessor a
copy of its mining plan consisting of such maps of mine progress and future
projections, together with all mine permit applications. Lessor shall within
twenty (20) days after receipt of the plan notify Lessee in writing of Lessor's
acceptance or rejection of such plan, and if any difference shall arise as to
Lessee's plan which cannot be mutually resolved to both parties' satisfaction,
then such plan shall be submitted to a qualified engineer mutually acceptable to
the parties hereto and said engineer shall have full authority to arbitrate such
differences and his decision shall be binding upon the parties hereto. Lessee
shall not deviate from the approved mining plan without the written consent of
Lessor except for changes which are necessary in order to comply with any
governmental rules and regulations. It is expressly understood and agreed that
Lessor's approval of Lessee's mining plans hereunder is for the sole purpose of
insuring the maximum recovery of coal from the leasehold and not for the purpose
of controlling the day-to-day operations of Lessee, and neither Lessor's
approval of mining plans that are submitted by Lessee from time to time nor the
termination of this Lease shall release Lessee from liability for failure to
comply with this Lease.

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      Lessee shall update and post the above specified mine maps quarterly and
at such other times as may be requested by Lessor and shall furnish a copy of
same to Lessor on or before the 20th day of January, April, July and October of
each year (and at such times as may reasonably be requested by Lessor) for the
quarterly period ending on the last day of the calendar month immediately
preceding said months.

      Lessee shall also prepare on a yearly basis a mining map to the scale of
one hundred (100) feet to the inch, and shall furnish to Lessor on or before the
25th day of January of each year subsequent to the date of execution of this
Lease, and at such other times as may be fixed by law or required for tax
assessments, three (3) copies of the said 100' scale mining map and a statement
numerically describing the acreage of the seam(s) of coal mined, abandoned, lost
and remaining as of the first day of January of said year.

      Furthermore, Lessee agrees to make available to Lessor the results of all
core drillings by furnishing a copy of the logs, reports and other data made
from each hole so drilled on said leasehold during the term of this Lease,
together with analytical data on the seam(s), when requested by Lessor.

      All maps and information to be provided pursuant to this Article shall be
forwarded to Lessor at P.O. Box 1267, Hazard, Kentucky, 41702.

                                       X.

      Lessee covenants and agrees to so locate all dumps, overburden and spoil
banks and to so dispose of all refuse and waste material as to avoid slides or
slipping or falling of same into or across any roadway or into any stream of
water and so as to prevent the formation of any water holes, ponds or other
dammed up bodies of water; it being understood and agreed that Lessee assumes
all liability for any damage caused to adjacent landowners and riparian owners
by reason

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of the disposal of the said refuse, waste material or overburden, or the
location thereof, or the sliding, falling, washing down or slipping thereof.

      Lessee shall so conduct its operations hereunder as not to violate any
rights of lateral or subjacent support belonging to any owner or Lessee of the
surface of any of the lands herein described, or pertaining to any other
interest or estate therein; and, if there shall arise any question of damage to
the surface lands herein described which may not be owned by Lessor, including,
without limitation, damage to any gas, electric or other utility lines, wells
and underground water courses, Lessee shall assume, as between Lessee and
Lessor, all responsibility therefor without claim upon Lessor, except to
Lessor's assistance and support in the proper defense of all mining rights and
privileges covered by Lessor's deeds or other title papers, Lessee bearing all
cost and expense relative thereto.

                                       XI.

      Notwithstanding the provisions in Article I hereof, but where Lessor has
the right, and only so far as it has the right so to do, Lessor grants unto
Lessee the right to transport onto, over, or through the leased premises or ship
onto or therefrom coal mined from lands other than those owned or controlled by
Lessor. For such right, Lessee shall pay to Lessor for each and every ton of
2,000 pounds of such coal a wheelage fee of ten ($.10) cents or Four-Tenths
Percent (.4%) of the gross sales price, whichever is greater. Lessee shall
account to Lessor and pay such wheelage fees at the same times and in the same
manner as provided for in this Lease for royalty payments, it being understood
and agreed that wheelage payments shall not be applied towards satisfaction of
the minimum monthly royalty requirements set forth in Article V herein.

                                      XII.

      Lessee agrees to observe and perform all conditions limitations and
covenants with reference to the mining of said coal contained in any of the
instruments under which Lessor holds

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title, and to save Lessor harmless from the breach of any such limitations or
covenants. Lessee hereby covenants and agrees that it shall indemnify and save
harmless Lessor from and against all claims, demands and law suits seeking to
impose liability upon Lessor for any damages resulting from injuries to persons
(including occupational diseases) or property arising out of the operations of
Lessee under this Lease, including in such indemnification, without limitations,
all damages recovered and all court costs, counsel fees and other expenses so
arising. Lessee further agrees that it shall indemnify and save harmless Lessor
from and against all claims and liens for labor, materials, supplies and
equipment used in the performance of the work under this Lease. The
indemnification provided for herein shall survive the expiration or termination
of this Lease.

                                      XIII.

      Lessee shall comply with all state and federal laws governing the removal
of coal by the mining methods herein provided for and shall pay any business,
occupation, black lung or severance tax (whether assessed as a tax upon minerals
under development or as a severance tax upon the sale of coal mined and removed)
which may be required in connection with the mining of any coal from the leased
premises, or any State or Federal tax or fee which may be imposed for
reclamation purposes or in connection with the mining methods herein provided
for, and any state or federal transportation tax and any other tax which may be
assessed against any property, equipment or improvements which it may at any
time have upon the leased premises or in connection with its performance of this
Lease, including payment of all property taxes and unmined mineral taxes. If
such taxes or assessments are paid by Lessor, Lessee agrees to promptly repay
Lessor the amount thereof.

      Lessee shall also pay any fines, penalties, damages imposed by any present
or future state or federal statutes, laws, ordinances, or regulations,
including, but not limited to, the Federal Coal Mine Health and Safety Act of
1969, as amended by the Black Lung Benefits Act of 1972, the

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Federal Mine Safety and Health Act of 1977, the Black Lung Benefits Act of 1977,
the Black Lung Benefits Reform Act of 1977, and the Black Lung Benefits
Amendments of 1981, and the Surface Mining Control and Reclamation Act of 1977,
as now or hereafter amended, and all rules and regulations adopted pursuant
thereto, and shall indemnify and hold harmless Lessor for and against any
consequence and all monetary losses, including counsel fees and court costs, due
to Lessee's failure to abide by any of said statutes, laws, ordinances and
regulations.

      Lessee acknowledges that it is, and shall be deemed to be, the operator of
any coal mine for the mining of coal from the leased premises and of all related
activities engaged in by Lessee or persons under contract with Lessee pursuant
to the terms of this Lease with respect to any claim for Black Lung Benefits
filed by or on account of its employees or former employees.

                                      XIV.

      Before beginning its mining operations, Lessee shall give to the
Commonwealth of Kentucky or the United States the bonds and pay the fees
required by statute and shall obtain from the appropriate governmental
authority, whether state or federal, such permit or permits as are required by
law for carrying on the business of mining. Upon the completion of any mining
operations, the Lessee shall promptly comply with the specifications and
requirements of the laws of the Commonwealth of Kentucky or the United States
relating to mining and the conditions of any permits as may be imposed by the
governmental body issuing same.

                                       XV.

      Without limiting the indemnification set forth in Article XII and Lessee's
obligation under this Lease, as a condition precedent to the commencement of
operations hereunder, Lessee shall take out with an insurance company acceptable
to Lessor and pay all premiums on, and keep in force during the entire term of
this Lease, public liability insurance in an amount not less than One Million
($1,000,000) Dollars for any one person, Two Million ($2,000,000) Dollars for
any one

                                      -16-
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accident, and One Million ($1,000,000) Dollars property damage for any one
accident, and shall deliver a certificate of insurance to Lessor evidencing such
coverage. This coverage shall also include any trucks or other equipment hired,
rented or leased by Lessee in its operations and all such coverage shall name
Lessor as an additional insured. Lessee agrees to comply with Federal and
Kentucky laws pertaining to Workmen's Compensation insurance coverage and Black
Lung payments and coverage.

      If at any time such insurance shall cease to be in force and effect, then
Lessee shall suspend and Lessor may stop all operations of Lessee hereunder
until such insurance is reinstated.

                                      XVI.

      A. In any of the following events, that is to say:

            (1) Lessee shall fail for a period of ten days after written demand
therefor to pay any installment of rent or royalty after the same becomes due
and payable; or

            (2) Lessee shall abandon the leased premises; or

            (3) Lessee shall fail to

                  (a) provide the plan of development or other maps or
information called for under this Lease to Lessor;

                  (b) diligently commence and continue its operations as
required in Article II hereof;

                  (c) provide worker's compensation coverage, black lung
coverage, and insurance as required in Article XV hereof;

                  (d) pay taxes as provided in Article XIII hereof; or

                  (e) keep and perform any of the other terms, conditions,
covenants and agreements of this Lease to be kept and performed;

                                      -17-
<PAGE>

and if any such failure shall continue, or if Lessee fails to undertake to
remedy the condition produced by such failure for a period of thirty (30) days
after Lessor shall have given written notice of such default to Lessee; or

            (4) Lessee be adjudicated a bankrupt or discharged by any court as
an insolvent debtor, or if any receiver or assignee or other person or persons
be appointed by an court to take charge of the leased premises or the property
of Lessee, or the mines and equipment upon the same; then in any such event this
Lease and the leasehold estate hereby created, and all rights of Lessee
hereunder, shall at the option of Lessor (except for an event specified in
subparagraph (4) immediately above, which event shall cause a forfeiture and
termination ipso facto), become forfeited and cease and determine, and Lessor
shall have the right to reenter the leased premises and to exclude Lessee
therefrom, and to hold the leased premises and all improvements thereon free of
any claims of Lessee, anything herein contained to the contrary notwithstanding.

      B. Upon the declaration of forfeiture, all estate, rights and privileges
of Lessee hereunder shall cease and determine, and Lessor may thereupon or at
any time thereafter, without further notice, demand or action by it or any of
its agents, reenter and take possession of the leased premises, or any part
thereof in the name of the whole, to the extent and with like effect as though
this Lease had never been made, and Lessor in making said reentry and taking
possession of said property shall have the right to do so without legal action,
or without notice or process, as may be required by the laws of the Commonwealth
of Kentucky, as amended. In case Lessor exercises the right herein provided to
declare this Lease forfeited, it shall not be liable to Lessee for any injury or
damage by reason thereof, and Lessee hereby expressly waives and releases any
and every claim for any such injury or damage.

                                      -18-
<PAGE>

      C. All provisions herein contained for the collection of rents, royalties
or other payments, or concerning the remedy of Lessor in case of breach by
Lessee of any condition, covenant or agreement herein contained, shall be deemed
to be cumulative and not exclusive, and shall not deprive Lessor of any of its
other legal or equitable remedies which may now or hereafter be provided under
the laws of the Commonwealth of Kentucky. Upon any such default by Lessee and so
long as the same shall continue, Lessee agrees that it will not remove or permit
to be taken away from the leased premises any personal property, mining
machinery or equipment of any kind or description situate in or upon the leased
premises, all of which shall remain subject to the lien herein reserved by
Lessor. In the event of any sale hereunder for any cause whatsoever, Lessor
shall have the right to require that this Lease and the leasehold estate hereby
created and all improvements and property of Lessee upon the leased premises
shall be sold together, as a whole.

      D. No delay or omission of Lessor to exercise any right, remedy or lien
accruing upon any default or forfeiture hereunder, or otherwise available to it,
shall impair, prejudice or waive any such right, remedy or lien, but every such
right, remedy and lien may be exercised by Lessor on account of any subsequent
breach in the same manner and to the same extent as if such delay or omission
had not occurred.

                                      XVII.

      Lessor warrants specially the title to the property rights and privileges
hereby leased unto Lessee. Provided, however, if the title to any of the coal
the right to mine and remove which is hereby leased, shall be defeated by the
holder of an outstanding superior title, by reason of which any of said coal is
lost to Lessee, and the same is so adjudged by a court of last resort, then and
in that event no royalty shall be paid to Lessor by Lessee on account of the
coal so lost. If royalty has been paid to Lessor on the coal so lost Lessor
shall repay such amounts, without interest. In the

                                      -19-
<PAGE>

event the coal so lost is purchased by Lessor, the same shall become forthwith a
part of the leasehold as though included herein by perfect title in the first
instance.

      All suits against Lessor affecting the title to the property covered
hereby and all suits against Lessee affecting the same, when Lessor is notified
thereof by Lessee, shall be defended by, and at the exclusive cost of Lessor,
but Lessee may on its own account and at its own expense have associate counsel
in any and all litigation.

      Notwithstanding any other provision of this article, until such time as
suit is actually instituted affecting the title to any property covered under
this Lease, it shall be Lessee's sole responsibility to protect the property
covered hereunder from any trespass of any nature and to take such action and to
conduct all such proceedings as may be necessary to that end. Lessee agrees and
understands that Lessor shall hold Lessee solely responsible for royalties on
all coal mined or removed from this leasehold.

                                     XVIII.

      Lessee shall not assign or transfer this Lease nor subcontract or sublease
the premises hereby leased without the written consent of Lessor first had and
obtained, it being understood by the parties hereto that Lessor is under no
obligation to grant such consent. If such consent be granted, it shall not be
construed to be a waiver of the foregoing covenant as to any future assignment,
transfer, sublease or subcontract, and each successive assignment, transfer,
sublease or subcontract shall so stipulate. Any assignment, transfer, sublease
or subcontract either voluntarily or involuntarily, in violation of this
article, shall cause an immediate forfeiture hereof, and the rights and
interests of Lessee shall forthwith cease and determine. If Lessee is a
corporation, then the sale of 50 percent or more of the capital stock in said
corporation shall be deemed an assignment and the stockholders of the
corporation shall execute a covenant to that effect. All of the terms,
conditions, covenants, stipulations and agreements to be performed by the
parties hereto

                                      -20-
<PAGE>

shall be binding upon their successors and assigns and shall inure to the
benefit of the other of said parties and its successors and assigns.

                                      XIX.

      Lessee agrees that at any termination of this Lease Agreement other than
by forfeiture, and provided Lessee is not in default hereunder, all or any part
of the improvements, not including permanent buildings and such other supports
and structures as are necessary for the preservation of the mine or maintenance
of embankments made and placed by Lessee on the leased premises, shall, if
requested by Lessor, be valued by three (3) disinterested persons, one to be
chosen by Lessor, one by Lessee, and these two shall choose a third, and the
three thus chosen, or a majority of them, shall value the said improvements and
Lessor may, in case of such appraisal, purchase said improvements at such
valuation within thirty (30) days after notice of such valuation. If Lessor
shall not request such appraisal and valuation, or in the event of such
appraisal and valuation Lessor fails to purchase same, then Lessee shall have
the privilege of removing such of said improvements, not including permanent
buildings and such other supports and structures as are necessary for the
preservation of the mine or maintenance of embankments which shall be and remain
a part of the realty, as may be removed from said lands within six (6) months
from the expiration of this Lease Agreement. Upon the termination of the said
Lease, the permanent buildings, as well as other improvements that are not
removed within the six (6) months' period, shall become the property of Lessor
at no cost to it.

                                       XX.

      The giving of any notice, or the making of any demand on Lessee, under the
provisions hereof, shall be sufficient if in writing, addressed to Lessee at
1021 Tori Drive, Hazard, Kentucky 41701, and forwarded by registered or
certified mail (return receipt requested) and like notice upon Lessor shall be
in writing addressed to Lessor at P.O. Box 1871, Roanoke, Virginia 24008.

                                      -21-
<PAGE>

                                      XXI.

      Anything herein to the contrary notwithstanding, it is the intention of
the parties hereto that Lessee shall be an independent operator with regard to
any and all acts and operations performed and conducted by it under and pursuant
to the terms hereof. Lessor shall have no right of supervision or control over
said acts and operations of Lessee, the right of inspection and survey herein
reserved being solely for the purpose of assuring Lessor that the royalties paid
hereunder accurately reflect the quantity of coal mined and removed from the
leased premises and that Lessee is conducting its mining operations in
conformity with its covenants hereinabove set forth. Upon execution of this
Lease the Prior Leases shall be null and void and the obligations and covenants
of each party relative to the leased premises shall be governed by the terms of
this Lease.

                                      XXII.

      This Lease shall be interpreted in accordance with the laws of the
Commonwealth of Kentucky and no presumption shall be deemed to arise in favor of
or against either party hereof as a result of the negotiation and/or preparation
of the same; and no inference or covenant shall be implied against either party
hereto, the full contractual obligations and covenants of each party being
herein fully and expressly set forth. Upon execution of this Lease, the Prior
Leases shall be terminated and the obligations and covenants of each party
relative to the leased premises shall be governed by the terms of this Lease.
Provided, however, such termination of the Prior Leases shall in no way negate
Lessee's obligation to indemnify Lessor for liabilities arising out of
operations under the Prior Leases up to the date of such termination.

                                     XXIII.

      Lessor and Lessee agree that upon the request of either party it will
execute a Memorandum of Lease suitable for recording and likewise upon
termination of this Lease a Memorandum of Release.

                                      -22-
<PAGE>

                                      XXIV.

      This Lease shall not be amended, modified or changed in any manner except
by written agreement between the parties hereto.

      WITNESS the following signatures and seals, all as of the day and year
first above written.

                                        ANR COAL COMPANY, LLC

                                        By: /s/ Barry L. Ketron
                                            -------------------------

                                        Its: Vice President

ATTEST:

By: /s/ William S. Hudgins, Jr.
    ----------------------------
        Assistant Secretary

                                        LESLIE RESOURCES, INC.

                                        By: /s/  Greg Wells
                                            -------------------------

                                        Its:  President

ATTEST:

By : ___________________________

Its: ___________________________

                                      -23-
<PAGE>

STATE OF VIRGINIA

CITY OF ROANOKE, to-wit:

      I, Donna F. Adams, a Notary Public of said city do hereby certify that
Bobby L. Ketron, Vice President, and William S. Hudgins, Jr., Assistant
Secretary, who signed the writing above, bearing date the 23rd of December,
1997, for ANR Coal Company, LLC a Delaware limited liability company, have this
day in said city, before me, acknowledged the said writing to be the act and
deed of said organization.

      Given under my hand and notarial seal this 23rd day of December, 1997.

      My commission expires August 31, 2001.

                                /s/ Donna F. Adams
                                -------------------------
                                Notary Public

                                      -24-
<PAGE>

STATE OF VIRGINIA

CITY OF PERRY, to-wit:

      I, Karl W. Baker, a Notary Public of said city do hereby certify that Greg
Wells, President, and ___________, ___________, who signed the writing above,
bearing date the ____ day of _________, 1997, for Leslie Resources, Inc., a
Kentucky corporation, have this day in said county, before me, acknowledged the
said writing to be the act and deed of said corporation.

      Given under my hand and notarial seal this 26th day of November, 1997.

      My commission expires 11-10-2000.

                                /s/ Karl Baker
                                -------------------------
                                Notary Public

                                      -25-
<PAGE>

                     ASSIGNMENT OF REAL PROPERTY AGREEMENTS

      This Assignment of Real Property Agreements (this "Agreement"), dated as
of September 30, 2004, is among ICG HAZARD LAND, LLC, a Delaware limited
liability company, with an address of 2000 Ashland Drive, Ashland, Kentucky
41101 (the "Buyer"), and LESLIE RESOURCES, INC., a Kentucky corporation, with an
address of 2000 Ashland Drive, Ashland, Kentucky 41101 (the "Seller").

                                    RECITALS

      A. This Agreement is being entered into to effect the transactions
contemplated by the Asset Purchase Agreement, dated May 13, 2004 as amended and
restated on June 2, 2004 (as the same may be hereafter amended or supplemented,
the "Purchase Agreement"), between the Buyer and Horizon Natural Resources
Company ("Parent") and certain of its subsidiaries (collectively, the
"Sellers"). Capitalized terms not otherwise defined herein shall have the
meanings given to such terms in the Purchase Agreement.

      B. The Seller is one of the Sellers, and is a party to the real property
agreements set forth on Schedule A hereto, which pertain to real property
located in Perry County, Kentucky (the "Real Property Agreements").

      C. The Seller desires to assign to the Buyer, and the Buyer desires to
assume, all of the Seller's right, title and interest in and to the Real
Property Agreements, pursuant to the terms of the Purchase Agreement.

      D. The assignment of the Real Property Agreements covered hereby has been
approved by Order Pursuant to 11 U.S.C. Sections 105(A), 362, 363, 365, 1123 and
1146(C) and Fed. R. Bankr. P. 2002, 6004, 6006 and 9014: (A) Approving Asset
Purchase Agreements, (B) Authorizing Sale of Substantially All Assets Free and
Clear of All Liens, Claims, Interests and Other Encumbrances, and (C)
Authorizing Assumption and Assignment of Certain Agreements, entered on
September 16, 2004, by the United States Bankruptcy Court for the Eastern
District of Kentucky, Ashland Division, in the Chapter 11 proceeding styled In
Re: Horizon Natural Resources Company, et al. (including Seller) (the "Sale
Order," a copy of which is attached hereto and made a part hereof as Exhibit 1),
such proceedings being jointly administered under Case No. 02-14261. Pursuant to
the Sale Order and Section 1146 of the U.S. Bankruptcy Code, the execution and
delivery of this instrument shall not be taxed under any law imposing a transfer
tax, stamp tax or similar tax.

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

      1. Assignment. The Seller hereby grants, assigns, transfers, conveys,
delivers and sets over unto the Buyer all of its right, title, interest, duties
and obligations in, to and under the Real Property Agreements.

                                       1

<PAGE>

      2. Assumption. The Buyer hereby assumes all of the Seller's right, title,
interest, duties and obligations in, to and under the Real Property Agreements
and agrees to be bound by all of the terms and conditions of the Real Property
Agreements and to pay, perform and discharge when due, all duties and
obligations of the Seller under the Real Property Agreements, in each case,
however, only to the extent such obligations are Assumed Liabilities.

      3. Conflict. This Agreement is subject to all the terms and conditions of
the Purchase Agreement and Sale Order. No provision of this Agreement shall be
deemed to enlarge, alter or amend the terms or provisions of the Purchase
Agreement or the Sale Order. Notwithstanding anything to the contrary set forth
herein, if there is any conflict between the terms and conditions of this
Agreement and the terms and conditions of the Purchase Agreement and the Sale
Order, the terms and conditions of the Purchase Agreement and the Sale Order
shall control.

      4. Governing Law. Except to the extent inconsistent with the United States
Bankruptcy Code, this Agreement shall be governed by and construed according to
the laws of the State of Delaware, without regard to or application of its
conflict of laws rules. The parties to this Agreement agree that the Bankruptcy
Court shall have exclusive jurisdiction, and the parties hereby submit to such
jurisdiction, of any dispute arising under or related to this Agreement.

      5. Counterparts. This Agreement may be executed in one or more
counterparts (including by means of facsimile signature pages) and all such
counterparts taken together shall constitute one and the same Agreement.

      6. Severability. If any provision of this Agreement or its application is
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of all other applications of that provision, and of all other
provisions and applications hereof, will not in any way be affected or impaired.
If any court shall determine that any provision of this Agreement is in any way
unenforceable, such provision shall be reduced to whatever extent is necessary
to make such provision enforceable.

      7. Entire Agreement. All prior negotiations and agreements by and among
the parties hereto with respect to the subject matter hereof are superseded by
this Agreement, the Purchase Agreement, the Sale Order and the Related
Agreements, and there are no representations, warranties, understandings or
agreements with respect to the subject matter hereof other than those expressly
set forth in this Agreement, the Purchase Agreement, the Sale Order and the
Related Agreements.

      8. Headings. Section headings are not to be considered part of this
Agreement, are solely for convenience of reference, and shall not affect the
meaning or interpretation of this Agreement or any provision in it.

      9. No Third-Party Beneficiaries. Nothing in this Agreement shall confer
any rights upon any person or entity other than the parties hereto and their
respective successors and permitted assigns.

                                       2

<PAGE>

      10. Successors and Assigns. The terms of this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.

      11. Further Assurances. Each party hereto agrees, upon the reasonable
request of the other party hereto, to make, execute and deliver any and all
documents or instruments of any kind or character, and to perform all such other
actions, that may be reasonably necessary or proper (without the expenditure of
funds) to effectuate, confirm, perform or carry out the terms or provisions of
this Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       3

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused their authorized
representatives to execute this Agreement as of the date first set forth above.

BUYER:                                 ICG HAZARD LAND, LLC

                                       By:    /s/ William D. Campbell
                                         ---------------------------------------
                                       Name:  William D. Campbell

                                       Title:  VP, Secretary & Treasurer

SELLER:                                LESLIE RESOURCES, INC.

                                       By:    /s/ Daniel L. Stickler
                                         ---------------------------------------
                                       Name:  Daniel L. Stickler

                                       Title: Secretary

                                       4

<PAGE>

STATE OF KENTUCKY

COUNTY OF GREENUP

      The foregoing Assignment of Real Property Agreements was acknowledged
before me on January 4, 2005, by William D. Campbell, as VP, Secretary &
Treasurer of ICG Hazard Land, LLC, a Delaware limited liability company, for and
on behalf of company.

                                        /s/ Pamela Arnold
                                        -----------------------------------
                                        Notary Public, State at Large
                                        My Commission Expires July 29, 2005

STATE OF WEST VIRGINIA

COUNTY OF KANAWAHA

      The foregoing Assignment of Real Property Agreements was acknowledged
before me on December 28, 2004, by D. Stickler, as Secretary of Leslie
Resources, Inc., a Kentucky corporation, for and on behalf of the company.

                                        /s/ Jeannie Hampton
                                        ----------------------------------------
                                        Notary Public, State at Large
                                        My Commission Expires: September 9, 2007

                                       5

<PAGE>

THIS INSTRUMENT PREPARED BY:

/s/ Warren J. Hoffman
------------------------------
Warren J. Hoffmann, Esq.
Frost Brown Todd LLC
250 West Main Street
Suite 2700
Lexington, Kentucky 40507-1749
(859) 231-0000

                                       6

<PAGE>

                                   SCHEDULE A

      The real property agreements being assigned or otherwise transferred by
this instrument are those leases or instruments described in this Schedule A and
being recorded at the indicated book/volume and page numbers identified in the
charts in this Schedule A.

                                       7

<PAGE>

                                                                  ICG-HZLAND-A-4

                                   SCHEDULE A

<TABLE>
<CAPTION>
CONTRACT #  CONTRACT TYPE  LESSEE           LESSOR              CTY   ST  CONTRACT DATE  BOOK     PAGE          DOC
----------  -------------  ---------------  -----------------  -----  --  -------------  ----  ----------  -------------
<S>         <C>            <C>              <C>                <C>    <C>  <C>           <C>   <C>         <C>
  100037      Fee Lease    Leslie           Cstl Llc           Perry  KY   12/23/1997     49   572 (Perry   Leslie Co.
                           Resources, Inc.                                                        Co.)       10/04/00
                           (017)                                                                           Lb-59, Pg 64.

  100025    Surface Lease  Leslie           Mountain           Perry  KY   06/03/1997     51       598
                           Resources, Inc.  Properties, Inc.
                           (017)            (J-5)
</TABLE>

                                       8

<PAGE>

STATE OF KENTUCKY

COUNTY OF PERRY

      I, Haven King, Clerk of the State and County aforesaid do certify that the
foregoing instrument was lodged for record in my office and it the foregoing and
this my certificate have been duly recorded in my office in Mtg. Book No. 237
page 113.

      Witness my hand this 20 day of January 2005.

                                                               Haven King, Clerk
                                                                    Perry County

                                                    By:  /s/ Karen Fields  D.C.
                                                         ----------------

                                       9<PAGE>

                                                                   EXHIBIT 10.15

      THIS AGREEMENT OF LEASE made and entered into this 30th day of June, 1982,
by and between KENTUCKY RIVER COAL CORPORATION, a corporation of the State of
Virginia, party of the first part, hereinafter referred to as LESSOR, and
SHAMROCK COAL COMPANY, a corporation of the State of Tennessee, party of the
second part, hereinafter referred to as LESSEE;

      WITNESSETH: That pursuant to the power and authority vested in the parties
hereto to enter into this lease agreement, and for and in consideration of the
payment of the rents and royalties hereinafter provided, and the performance and
observance by the Lessee of all of the terms, conditions, covenants, and
stipulations hereinafter provided, the Lessor has and does hereby demise, lease,
and let the coal and mining rights described in the schedules attached hereto
unto the Lessee for the term of five (5) years or until all of the mineable and
merchantable coal herein leased has been mined and removed, whichever is later.
The Lessee shall have the exclusive right and privilege of mining, extracting
and removing and marketing all of the said mineable and merchantable coal
located in, on, and under the leasehold hereinafter described; but all other
property, rights, and privileges in, on, or said leasehold or appertaining
thereto are expressly reserved. Provided, further, that where the Lessor owns
under a mineral deed any of the coal embraced and included in the hereinafter
described leasehold, it grants unto the Lessee only such mining rights and
privileges therein as it owns under its deed or deeds by which it holds title,
and only insofar as it has the legal right to grant. The Lessor does hereby
grant unto the Lessee the right to enter in, upon, and under said lands and
erect or place thereon such buildings, houses, machinery, commissaries, plants,
and other structures, roads, ways, tram roads, air shafts, power lines,
substations, drains and drainways; and the right to operate the same therein or
thereunder to such extent as may be necessary or convenient for the mining,
excavating, removing and preparing said coal for marketing. Lessee is also
granted the right and privilege of dumping slate and refuse and draining water
upon said land when necessary or convenient for the mining and removal of said
coal. And Lessee is granted the right of ingress, egress, and regress over and
through said lands for mining purposes as may be necessary and insofar as Lessor
has the right to grant said privileges by the deeds under which it holds title.
However, where timber is located on fee or surface lands belonging to Lessor,
there is excepted herefrom all of such timber of all sizes of the following
species, to wit: walnut, poplar, cucumber, ash and linden. If any of the said
excepted timber interferes with the mining

<PAGE>

operations of the Lessee, and the Lessor shall fail to remove such timber within
thirty (30) days after being requested in writing so to do, the Lessee shall
have the right to remove, destroy and/or use said timber without liability
therefor.

      It is understood and agreed that all the rights and privileges granted
shall be construed as limited to such rights and privileges as the Lessor has
the lawful right to grant.

      Lessor excepts and reserves from this lease all coal and mining rights
which may have been heretofore leased; and all seams of coal other than that
herein leased; and all other minerals and mineral rights together with the
exclusive right to mine, bore for, produce, store, manufacture, and market such
excepted coal, mineral and mineral rights; and the right to store and use water
from this leasehold for any of the purposes aforesaid; but water impounded by
Lessee shall not be subject to use by the Lessor under this exception. Lessor
also excepts and reserves the right to build, maintain, and operate roads, tram
ways, railroads, sidings, power lines, water and pipe lines and ways for any of
the purposes aforesaid. Provided, however, that the Lessee shall have and is
hereby granted the right to take and use such water, stone, clay, sand, gravel,
and slate on said lands as may reasonably be required in connection with its
operations hereunder. The Lessor further reserves the right to construct,
operate, and maintain, or to grant to another the right to construct, operate
and maintain on and over said tracts or parcels of land, railroads, roads, and
highways, telephone, telegraph, and electric lines, water lines, oil and gas
pipe lines, and other ways. Provided, further, that the rights herein reserved
shall be exercised with due respect for the requirements, convenience, and
safety of the operations of the Lessee hereunder, and interference with said
operations shall be avoided whenever practicable; and the Lessee shall not by
these reservations be construed to have waived any actual damage to the Lessee's
improvements or operations resulting from the exercise of the rights herein
reserved.

      The Lessor agrees upon request of Lessee to grant such additional rights
as it may have, not otherwise herein granted, to easements and rights of way
over the said tracts or parcels of land as may be necessary, convenient or
useful to the Lessee in prosecution of its mining operations hereunder.

                                       2
<PAGE>

      The Lessee covenants to and with the Lessor as follows, vis:

      [1] To start work immediately and to develop and prosecute the mining of
the coal herein leased as rapidly as possible and insofar as market conditions,
labor supply, and other like conditions permit.

      [2] Lessee agrees and binds itself to pay Lessor as a basic tonnage
royalty, the sum of Two ($2.00) Dollars per ton for each and every ton of 2,000
pounds for all merchantable coal mined and/or shipped and sold from the lease
boundary; but during the first five years of the lease term, when the average
gross sales price of the coal produced and sold therefrom amounts to the sum of
$25.00 per ton or more, the actual royalty per ton shall be Eight (8%) per cent
of the average gross sales price of such coal per ton, whether sold separately
or in an admixture with other coal; and for the next succeeding five years of
the lease term, the actual royalty shall be Two ($2.00) Dollars per ton or Nine
(9%) per cent of the gross sales price per ton, whichever is greater; and
thereafter during the lease term, the actual royalty shall be Two ($2.00)
Dollars per ton or Ten (10%) per cent of the gross sales price, whichever is
greater.

      The term "gross sales price" as used herein means the sale price to the
ultimate consumer F.O.B. at the shipping point after final preparation and
loading and without any deduction of commission or selling expenses. However,
coal sold for export, transshipment by lake or to independent coal yards, or
under comparable conditions, shall be considered as sold to the ultimate
consumer.

      The basic tonnage royalty and any additional royalty above the basic
tonnage royalty will be calculated at the end of the each month based upon the
current gross sales price per ton and paid to Lessor not later than the 25th day
of the succeeding month. However, at the end of each calendar year, a
recalculation shall be made of the royalties payable hereunder based upon the
average gross sales price for the immediately preceding calendar year, and
should recalculation show an overpayment by Lessee, the Lessor will credit
Lessee with such overpayment; and should it show a deficit, Lessee will promptly
pay such deficit.

      The Lessee on or before the 15th day of each calendar month shall furnish
to the Lessor a report, on forms approved by the Lessor, showing the quantity of
coal mined from the leasehold and the sale price thereof during the preceding
calendar month, using the weights at the tipple or loading point furnished by
the railroad over whose railroad the coal is shipped, for all coal shipped
direct from mine to purchaser; and if coal shall be taken and not shipped by
rail

                                       3
<PAGE>

direct from mine to purchaser, the quantity thereof shall be ascertained in a
manner satisfactory to Lessor. The Lessee shall comply with any further
reasonable rules and regulations that may be prescribed by Lessor for the
correct ascertainment and report of the quantity of coal mined hereunder and the
sale price received therefor; and the Lessor, its officers, accountants, and
authorized employees shall have free access at all reasonable times to the books
and records of the Lessee to check the tonnage shipped and sold, the sale price
of the coal, and the amount received therefor, for the purpose of making
calculations of the amount of royalty due it under the terms of this lease or
for other lawful and relevant purposes in connection herewith.

      [3] Lessee further covenants that it will during the year 1983, mine from
the lease premises at least 150,000 tons of coal, and that it will during the
year 1984, mine from the lease premises at least 400,000 tons of coal; and that
it will during each and every calendar year thereafter mine from the lease
premises at least 600,000 tons of coal until said coal is exhausted; and if the
Lessee fails to mine said minimum tonnage herein required in any one year, then
it shall pay to the Lessor as a rental an amount equal to the difference between
the actual royalty on the tonnage actually mined and paid for and the aforesaid
minimum tonnage required herein to be mined. The Lessee shall pay the royalty on
any minimum deficit on or before the 25th day of January following the year
during which such deficit occurred; and the amount of royalty due on such
deficit shall be calculated on the same basis as the royalty for the coal mined
and sold during the period such deficit accrued; or if none was mined and sold
during said period, the calculation shall be on the basis of the prevailing
market price during the year such deficit accrued, but in no event shall such
minimum royalty be less than the basic tonnage royalty hereinabove set out.

      However, should Lessee fail in any year to mine tonnage sufficient to pay
the minimum rental, then it shall and does have the right in any one of the
immediately succeeding next five years during the life of this lease, and after
the required minimum tonnage for such succeeding year or years shall have been
mined and paid for, to mine and remove sufficient coal free of rental or royalty
to reimburse itself for the minimum rental in excess of actual royalty paid in
any such preceding year or years; but in no event shall any credit be carried
forward to any subsequent year for any coal mined in excess of the required
minimum during any given year.

                                       4
<PAGE>

      At any time after the mineable and merchantable coal remaining in the
leasehold shall have been reduced to 1,000,000 tons, based upon the joint
estimate of Lessor and Lessee, the Lessee may elect to pay for such coal at the
rate provided hereinabove for tonnage royalty, and to either abandon such
remaining coal or mine and remove the same free from any further payments of
royalty. Provided, however, that Lessee's subsequent mining operations shall be
designed and prosecuted in such manner and degree as will achieve the maximum
rate of production and earliest total recovery.

      [4] It is further mutually agreed between the parties hereto that in the
event of unavoidable delays in the operations of the Lessee due to strikes,
accidents, or other causes not within the control of Lessee, the Lessee shall be
released from an equitable portion of the required minimum annual production
provided by Article [3] above; but it must be shown by the Lessee that such
causes are in good faith and beyond its control; and provided further, that no
reduction of the minimum production shall be made under this article unless the
operations of the mines shall be suspended for a period of sixty (60)
consecutive days, and in no event will any suspension continue for a period of
time longer than one year.

      [5] The Lessee agrees to pay all taxes, assessments, and governmental
charges that may be levied or assessed against the property, property rights,
and privileges hereby leased and let, or against the Lessor as owner thereof;
and to pay all taxes on all equipment, improvements, or betterments erected or
placed thereon by the Lessee, and upon all coal mined or produced hereunder; and
in the event any such taxes, assessments, or governmental charges payable by the
Lessee are paid by the Lessor, which it may do, the same shall be promptly paid
to it by the Lessee. The Lessee agrees to pay all taxes or assessments that may
be levied or assessed by the United States of America, the State of Kentucky, or
any county or taxing district upon the production or output of coal produced
from the leased premises, or based thereon, whether levied or assessed against
the Lessor or Lessee. All such taxes, assessments, and governmental charges,
general or special, shall be paid promptly by the Lessee as the same become due
and payable, and the Lessee covenants that it will exhibit to the Lessor at any
time upon request, legal evidence of the payment of all such taxes, assessments,
and governmental charges. The Lessor shall pay all income taxes levied or
assessed against it by any taxing power vested with the authority to levy same.

                                       5
<PAGE>

      [6] The Lessee agrees to mine all the mineable and merchantable coal
covered by this lease according to efficient and modern methods of mining and
according to general mining plans approved by Lessor in advance as hereinafter
provided, complying in every respect with with the laws, rules, and regulations
now existing or that may hereafter be adopted by the State of Kentucky or the
United States of America or any agency thereof regulating the working of mines
or appertaining in any manner thereto.

      [7] The Lessee agrees to employ an experienced and competent mining
engineer with necessary assistants, whose duties it shall be to make accurate
transit surveys, prepare the plans for mining, give direction and courses for
all entries, airways, rooms, and other mine workings; extent and location of all
strip pits, highwall or face of coal, in the event surface mining is permitted
hereunder, determine elevations sufficient for the study and promotion of good
drainage and prepare and keep upon a scale of one hundred feet to the inch or
upon such scale as may be at the time required by the laws of the State of
Kentucky and/or the United States of America, a map which shall be posted
semi-annually and at such other times as may be requested by Lessor, which shall
show accurately and completely all leasehold boundaries and property lines, haul
roads, highways, railroad tracks, and rights of way, streams, improvements, oil
and gas wells and pipe lines, mine workings, elevations, thickness of seam of
coal, as the same is mined, and such additional information as may reasonably be
required by Lessor, a copy of which shall be furnished to Lessor on or before
the 20th day of January and July of each year, and at such other times as may be
requested by Lessor, properly posted in accordance herewith, for the semi-annual
period ending on the last day of December and June of each year.

      [8] The Lessee agrees that the Lessor, its agents, engineers, or other
authorized persons in its behalf, with their assistants, shall have the right at
all reasonable times to enter upon the leasehold and the mines and works
connected therewith, including the tipple, cleaning plant or other loading
facilities, whether on or off said property, in order to inspect, examine,
survey or measure the same or any part thereof, or for any other lawful
purposes, and for said purposes to use freely any of the means of access thereto
without hindrance or molestation.

      [9] The Lessee agrees that if at any time the Lessee does not conduct its
mining operations according to the general plans provided for hereinafter, or
according to modern and efficient methods of mining, and loss of coal shall
thereby result, then Lessee shall

                                       6
<PAGE>

pay Lessor for coal so lost at the rate of royalty provided for herein as though
said coal had been actually mined and sold. And in case of Lessee's failure to
conduct its operations in accordance with the terms hereof, the Lessor may give
the Lessee notice in writing stating wherein and in what particular Lessee is
not complying with the requirements of this paragraph; and Lessee shall have ten
(10) days after said notice within which to remedy or diligently begin to
prosecute the work of remedying the default or condition complained of; and if
still in default at the end of such period, it shall be grounds for cancellation
of this lease.

      [10] The Lessee agrees that it will not mortgage, encumber, assign,
convey, lease, underlet, sublease, transfer, or set over by any agreement or
contract whatever, any of its estate, interests, or rights hereunder, or any
part thereof, or the improvements made or placed upon the said leasehold, or any
part of said improvements, to any person or persons whomsoever, or any
corporation whatsoever, without the written consent of the Lessor for that
purpose being first had and obtained.

      [11] The Lessee covenants that it will not haul, transport, into, over,
through, or under said tracts or parcels of land, or ship therefrom, any coal or
products thereof not mined by the Lessee hereunder, nor use any improvements or
equipment or any tracks or haulways or other appurtenances of said leasehold in
the mining, processing or shipping of coal from other lands without the written
consent of the Lessor for that purpose being first had and obtained.

      [12] The Lessee agrees that its operations hereunder shall be so conducted
as not to violate the legal rights of any person, firm or corporation
whomsoever, or laws, rules, regulations, or rights of any governmental body or
agency whatsoever; and in the event there shall arise at any time whensoever,
any claims for damages or any other lawful claim of any kind whatsoever, growing
out of or arising from Lessee's operations under this lease or by virtue of
anything done in pursuance of the terms thereof; and any such claim or claims
shall be asserted against the Lessor, either jointly with the Lessee or
severally, the Lessee agrees and binds itself, at its own cost and expense to
defend any and all such claims and to save Lessor harmless in all respects from
any liability by reason thereof. Provided, however, that in any such event, the
Lessor may employ its own counsel to represent it and to make any defense it may
have, either jointly or severally, to any such claim or claims.

      [13] The Lessee agrees to observe and perform all conditions, limitations,
and covenants affecting the mining of the coal herein leased contained in any of
the instruments

                                       7
<PAGE>

under which Lessor holds title and to save the Lessor harmless from the breach
of any such conditions, limitations and covenants.

      [14] The Lessee agrees to work and mine the coal herein leased in
accordance with general plans of mining and descriptions thereof, which shall in
advance of development be prepared by Lessee's engineer upon a map showing the
proposed plans and which shall be submitted by the Lessee to the Lessor and
shall be subject to the approval of Lessor. Such approval shall be given in
writing within fifteen (15) days after the plans are submitted, or disapproved
within that time. If the plans are disapproved upon substantial reasons, such
disapproval shall be final.

      [15] The royalties, rentals, and other payments herein agreed to be paid
shall be deemed and treated as rents reserved upon contract by the Lessor, which
reserves to itself all rights and remedies of land owners under all present and
future laws of the State of Kentucky for the collection thereof; and if any of
the royalties, rentals, or other payments shall remain unpaid for sixty (60)
days after the same shall become due and payable, as herein provided, and thirty
(30) days after notice of such default has been given to the Lessee in writing,
the Lessor shall have the right to enforce the payment thereof by remedies given
by law to landlords against delinquent tenants for nonpayment of rent; and not
only shall the personal property of Lessee on the leased premises and that used
in connection with the mining and shipping of coal therefrom, whether on or off
the leased premises, be subject to distress as contemplated and directed by law;
but the Lessor may also enter upon the leasehold and sell the same, or any part
thereof, or of the improvements used in connection with the mining and shipping
of coal therefrom, the Lessor shall have the right to become the purchaser
thereof free from any and all claims of the Lessee.

      [16] Lessee agrees that the Lessor shall, and does hereby have as
additional security for the performance of all of the terms of this lease, a
further lien upon all the improvements and personal property made or placed by
the Lessee on said leasehold, and upon all property and equipment used in the
mining, transporting, cleaning and shipping of the coal mined hereunder, whether
located on or off the leasehold. Said lien is in addition to all other statutory
liens and is given as further security for the payment of the royalties,
rentals, and other payments herein provided, and for the performance of each and
all of the covenants in this lease contained upon the part of the Lessee to be
observed, kept, and performed.

                                       8
<PAGE>

      [17] All the provisions contained herein for the collection of royalty,
rentals, or other payments or for the enforcement or protection of the rights of
Lessor shall be deemed cumulative and not exclusive, and shall not deprive the
Lessor of the benefit of any other legal, statutory, or equitable remedies, or
other remedies in this lease provided.

      [18] Lessee agrees that all coal mined from this leasehold shall be
processed over and through and shipped from a tipple or tipples or preparation
plant or loading facilities located on the leasehold or other land owned by the
Lessor and that no part of said coal will be shipped from any other point or
processed over any other tipple or facilities without the written consent of the
Lessor for that purpose being first had and obtained. This provision shall not
apply to the coal herein which is located in Leslie County.

      [19] The Lessee agrees that all the preceding terms, conditions,
covenants, and agreements to be observed and performed by it, and the covenant
to observe and perform the same, shall inure to the benefit of the Lessor, its
successors and assigns; and the Lessor, its successors or assigns, may by proper
action at law or suit in equity, re-entry, distress, or other proper proceeding,
enforce any and all of said terms, conditions, covenants, stipulations and
agreements; and the covenants of the Lessee to observe and perform the same.

      [20] In case the Lessee shall fail in the observance or performance of any
of the terms, conditions, covenants, stipulations, or agreements herein
contained, and any such failure shall continue for a period of sixty (60) days
after the Lessor shall have given notice of such default to the Lessee, then in
that event, at the election of the Lessor, the term and leasehold interests
created hereby and all the rights and privileges of the Lessee hereunder shall
forthwith cease and determine; and this lease shall be forfeited, and the Lessor
shall be entitled to re-enter and take possession of the property, rights, and
privileges hereby leased and let, and all improvements and personal property
thereon and to exclude the Lessee therefrom, and to hold all of the same free
from claims of Lessee, anything herein contained to the contrary
notwithstanding. This provision shall be in addition to any other legal or
equitable remedy for the enforcement of the terms hereof.

      [21] The Lessee agrees that if at any time it should be placed into
voluntary or involuntary bankruptcy, or receivership, or permit or suffer any
assignment for the benefit of creditors, this lease shall immediately become
henceforth null and void and cancelled; and the Lessor may at its option,
declare this lease and all the equipment, improvements, and personal

                                       9
<PAGE>

property thereon forfeited to the Lessor; and the Lessor shall have the right to
take possession of said leasehold, mining plant, equipment, and personal
property thereon and to exclude the Lessee, its receiver or trustee therefrom
without cost or liability to the Lessor.

      [22] A waiver by the Lessor of any particular default or cause of
forfeiture shall not prevent the forfeiture or cancellation of this lease for
any other cause of forfeiture or for the same cause occurring at any subsequent
time. Nor shall the waiver of any breach of any covenant herein contained
constitute a waiver of any other breach or of the same breach occurring at a
subsequent time.

      [23] Lessee agrees that if in the prosecution of its mining operations
hereunder, it encounters or leaves unmined, as unmineable and unmerchantable
coal, any part or portion of the coal covered hereby (it being understood that
such coal can only be left as unmineable and unmerchantable with the consent of
the Lessor, or after it has been determined as a matter of fact to be unmineable
and unmerchantable) and the workings of the Lessee hereunder have advanced to
the point where it is no longer practicable to mine such coal from its
underground workings, and to the point where such removal of such coal will not
injure or damage Lessee's mine workings, then in that event, Lessor at its
election, may declare such coal so left as no longer being a part of the
leasehold and may mine and remove such coal or lease the same to another for the
purpose of mining and removing the same as though it had not been included in
this lease in the first instance.

      By the term "mineable and merchantable" coal as used in this lease is
meant, coal which when reached in the prosecution of Lessee's operations
hereunder could with sound business management be mined at a profit by the use
of machinery and methods which at the time are modern and efficient.

      [24] The Lessee agrees that at any termination of this lease, other than
by forfeiture, and provided Lessee is not in default hereunder, all or any part
of the mining machinery, equipment, plant and improvements, not including
miners' houses and permanent buildings, made and placed by the Lessee on the
leasehold and all or any part of the surface or surface rights overlying any
part of the leasehold acquired by Lessee for use in its operations hereunder,
shall, if requested by Lessor, be valued by three disinterested persons, one to
be chosen by the Lessor, one to be chosen by the Lessee, and these two shall
choose a third, and the three thus chosen, or a majority of them, shall appraise
and value the said property (other than

                                       10
<PAGE>

miners' houses and permanent buildings); and the Lessor may, in the case of such
appraisal, purchase said property at such valuation within thirty (30) days
after the notice thereof. If the Lessor shall not request such appraisal and
valuation, or in the event thereof, fails to purchase said property, then the
Lessee shall have the privilege of removing such of said property, not including
miners' houses and permanent buildings,as may be removed from said lands within
six (6) months from the date of termination of this lease. Upon the termination
of this lease, as contemplated in this article, the miners' houses and permanent
buildings, as well as the other improvements that are not removed within six (6)
months from the date of termination of this lease, shall become the property of
the Lessor free of any cost therefor.

      [25] The Lessor warrants specially the title to the property rights and
privileges hereby leased and let unto the Lessee and not otherwise. Provided,
however, if the title of the Lessor to any of the mineable and merchantable
coal, the right to mine and remove which is hereby leased and let, shall be
defeated by the holder of an outstanding superior title, by reason whereof any
of the mineable and merchantable coal is lost to the Lessee; and the same is so
adjudged by a court of last resort in the State of Kentucky or of the United
States, then in that event no royalty shall be paid to the Lessor by Lessee on
account of the coal so lost; and if royalty on the coal so lost to the holder of
such outstanding superior title has been actually paid by the Lessee, the Lessor
shall repay to the Lessee such royalty together with interest at six (6%) per
cent per annum from such final adjudication until paid; and no additional
recovery shall be had against the Lessor by reason thereof. In the event the
coal so lost is purchased by the Lessor, which it may do, the same shall
forthwith become a part of the leasehold as though included herein by perfect
title in the first instance.

      [26] All suits against the Lessor affecting the title to the property
herein leased and let and all suits against the Lessee affecting such title
(when the Lessor shall be notified by the Lessee) shall be defended by, and at
the exclusive cost of the Lessor, but the Lessee may on its own account and at
its own expense, have associate counsel in any and all litigation. All suits
affecting the exercise of the mining rights covered by Lessor's titles shall be
defended by the Lessee at its own cost and expense, but the Lessor shall supply
such information as it may have and assist generally in such defense.

                                       11
<PAGE>

      [27] The Lessee shall not purchase, lease, or otherwise acquire any coal
or lands or interests in lands within the boundaries of or adjacent to the lands
herein described without the consent of the Lessor in writing for that purpose
being first had and obtained.

      [28] The giving of any notice or the making of any demand on the Lessee
under the provisions hereof, shall be sufficient if in writing addressed to the
Lessee at its office at 300 Forest Boulevard, Knoxville, Tennessee and Post
Office Box 97, Manchester, Kentucky, and forwarded by registered or certified
mail, and like notice upon the Lessor shall be in writing addressed to it at its
office at 167 West Main Street, Suite 804, Lexington, Kentucky 40507 and Post
Office Box 269, Hazard, Kentucky 41701. Unless a longer period is specifically
herein required, ten (10) days shall be considered reasonable notice or demand.
In case of change of office of either party hereto, the one so changing shall
give notice thereof and designate the address to which it desires notices to be
sent; and in the absence of such notice, notice or demand executed in accordance
with this section and given to the addresses herein designated, shall be deemed
sufficient.

      [29] The term "Lessee" as used herein shall include each and all of the
parties of the second part herein, jointly and severally.

      [30] All the terms, conditions, covenants, stipulations, and agreements to
be performed and observed by the parties hereto shall be binding upon and inure
to the benefit of the said parties and their successors and assigns; and their
lawful successors or assigns may enforce any or all of said terms, conditions,
covenants, stipulations, and agreements.

      [31] It is understood and agreed that the Lessor does not warrant either
the quantity or quality of the coal covered hereby.

      [32] The description of the property herein leased and let is contained in
the schedule or schedules attached hereto and which are hereby referred to and
made a part of this lease as though set out verbatim herein. Said schedule or
schedules shall be signed by the parties upon the execution hereof, and when so
authenticated, any conflict between the typed statements in this lease and those
contained in said schedule or schedules shall be construed in favor of the
latter.

                                       12
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have hereunto subscribed their
names the day and date first hereinabove written.

ATTEST:                                  KENTUCKY RIVER COAL CORPORATION

/s/ Robert C. Halvorsen                  /s/ Catesby W. Clay
--------------------------------         ---------------------------------------
Robert C. Halvorsen, Secretary           Catesby W. Clay, President and Chairman
                                         of the Board

ATTEST:                                  SHAMROCK COAL COMPANY

/s/ Kenneth A. Ritcher                   /s/ Orville Smith
--------------------------------         ---------------------------------------

                                       13
<PAGE>

STATE OF KENTUCKY  )
                   :  SCT.
COUNTY OF FAYETTE  )

      I, ___________, a Notary Public in and for the county and state aforesaid,
hereby certify that the foregoing Lease Agreement between KENTUCKY RIVER COAL
CORPORATION and SHAMROCK COAL COMPANY was this day produced to me in my county
aforesaid and duly acknowledged before me by Catesby W. Clay, known to me to be
the President and Chairman of the Board of Kentucky River Coal Corporation, to
be the act and deed of Kentucky River Coal Corporation and of himself as
President and Chairman of the Board thereof; also that the same was duly
attested before me by Robert C. Halvorsen, known to me to be the Secretary of
Kentucky River Coal Corporation.

      Witness my hand this 30th day of June, 1982.

      My commission expires: May 25, ____

                                         --------------------------------------
                                                    NOTARY PUBLIC

STATE OF KENTUCKY   )
                    :  SCT.
COUNTY OF FAYETTE   )

      I, Larry C. Difon, a Notary Public in and for the county and state
aforesaid, hereby certify that the foregoing Lease Agreement between KENTUCKY
RIVER COAL CORPORATION and SHAMROCK COAL COMPANY was this day produced to me in
my county aforesaid and duly acknowledged before me by Orville Smith known to me
to be the President of Shamrock Coal Company to be the act and deed of said
Shamrock Coal Company and of himself as President thereof; also that the same
was duly attested before me by Kenneth A. Ritcher known to me to be the
Assistant Secretary of said Shamrock Coal Company.

      Witness my hand this 30th day of June, 1982.

      My commission expires: April 24, 1984 .

                                           /s/ Larry C. Difon
                                         --------------------------------------
                                                   NOTARY PUBLIC

                                       14
<PAGE>

                             AGREEMENT OF ASSIGNMENT

      THIS AGREEMENT OF ASSIGNMENT is made and entered into as of the 8 day of
July, 1992, by and between SHAMROCK COAL COMPANY, INCORPORATED, a Delaware
corporation with its principal place of business in Manchester, Kentucky
("Assignor") and RAY COAL COMPANY, INC., a Kentucky corporation with its
principal place of business in Hazard, Kentucky ("Assignee").

                                 R E C I T A L S

      WHEREAS, Assignor, as successor by merger to Shamrock Coal Company,
Incorporated, a Tennessee corporation, is the lessee of a Lease Agreement, dated
June 30, 1982, as amended and supplemented (the "Lease"), in which Kentucky
River Coal Corporation (the "Lessor") is the Lessor; and

      WHEREAS, Assignor is desirous of assigning its right, title and interest
in the Lease to Assignee and Assignee is willing to accept such an assignment
and the obligations contained in the Lease, all under the terms and conditions
hereinafter set forth.

      NOW, THEREFORE, in consideration of the premises which are incorporated
herein as part of this Agreement, and subject to the terms, conditions,
covenants and agreements hereinafter set forth, it is hereby stipulated,
contracted and agreed as follows:

      1.    The Assignor assigns its right, title and interest under the Lease,
a copy of which is annexed hereto as Exhibit A, to Assignee and the Assignee
accepts the assignment of the Lease and the obligations contained therein and
agrees that its operations shall not violate the terms of the Lease.

<PAGE>

      2.    The right to recoup minimum royalties paid by Assignor shall pass to
Assignee and shall be recouped within the time periods specified in the Lease
after Assignee has mined the minimum tonnage required in the year of recoupment.

      3.    In order to secure the consent of the Lessor to this Assignment,
Assignor and Assignee agree to execute the Agreement and Consent, of even date
herewith, by and among Lessor, Assignor and Assignee in the form required by
Lessor.

<PAGE>

      IN WITNESS WHEREOF, the parties have caused this Agreement of Assignment
to be executed by their duly authorized representatives as of the day and year
first above written.

                                          SHAMROCK COAL COMPANY, INCORPORATED
                                          ("ASSIGNOR")

                                          By: /s/ Robert A. McGregor
                                              ----------------------------------

                                          Its: President

ATTEST
By: /s/ J. D. Farmer
    -----------------------------------

Its: Asst. Sec./Asst. Treas.
                                          RAY COAL COMPANY, INC.
                                          ("ASSIGNEE")

                                          By: /s/ J. William Huber
                                              ----------------------------------

                                          Its: President

ATTEST
By: /s/ Curtis J. Asher
    -----------------------------------

Its: Asst. Secretary/Asst. Treasurer

<PAGE>

STATE OF KENTUCKY )
                    Sct.
COUNTY OF CLAY    )

      I, the undersigned, a notary public in and for the county and state
aforesaid do hereby certify that the foregoing Agreement of Assignment between
SHAMROCK COAL COMPANY, INCORPORATED and RAY COAL COMPANY, INC., was produced,
acknowledged and delivered before me by Robert A. McGregor, known to me to be
the President of SHAMROCK COAL COMPANY, INCORPORATED, to be the act and deed of
said SHAMROCK COAL COMPANY, INCORPORATED, and of himself as President, thereof;
also that same was duly attested before me by Jack D. Farmer known to me to be
the Assistant Secretary of said SHAMROCK COAL COMPANY, INCORPORATED.

      Given under my hand this 8th day of July, 1992.

      My commission expires: 10-16-93.

                                              /s/ Nancy Karen Isom
                                              ----------------------------------
                                              Notary Public

<PAGE>

STATE OF KENTUCKY )
                    Sct.
COUNTY OF PERRY   )

      I, the undersigned, a notary public in and for the county and state
aforesaid do hereby certify that the foregoing Agreement of Assignment between
SHAMROCK COAL COMPANY, INCORPORATED and RAY COAL COMPANY, INC., was produced,
acknowledged and delivered before me by J. William Huber, known to me to be the
President of RAY COAL COMPANY, INC. to be the act and deed of said RAY COAL
COMPANY, INC., and of himself as President, thereof; also that same was duly
attested before me by Curtis J. Asher known to me to be the Assistant Secretary
of said RAY COAL COMPANY, INC.

      Given under my hand this 31st day of July, 1992.

      My commission expires: 12/10/93.

                                              /s/ Rhonda Reid
                                              ----------------------------------
                                              Notary Public

<PAGE>

                       ASSIGNMENT AND ASSUMPTION AGREEMENT

      This Agreement and Assumption Agreement (this "Agreement") made and
entered into as of the 30 day of June, 1994, by and among Ray Coal Company, Inc.
and Whitaker Coal Corporation (collectively "Assignors") and Ikerd-Bandy Co.,
Inc. ("Assignee").

                               W I T N E S S E T H

      WHEREAS, the parties hereto have entered into a Purchase and Sale
Agreement dated as of June 28, 1994 wherein the Assignors agreed to assign to
the Assignee certain leases, subleases, surface consents and right-of-way, and;

      WHEREAS, in that Purchase and Sale Agreement, the parties agreed upon the
terms under which such assignment would be made, including the allocation of
certain liabilities and the providing of certain indemnifications, and;

      WHEREAS, the Assignors desire to assign each of the leases, subleases,
surface consents, easements and rights-of-way referenced by that Purchase and
Sale Agreement.

      NOW THEREFORE, in consideration of the mutual agreements and covenants
contained herein and in further consideration of the payments and mutual
agreements and covenants contained in the Purchase and Sale Agreement among
these same parties dated June 28, 1994, the parties agree as follows:

            (1)   The Assignors hereby assign, transfer and convey to the
                  Assignee, effective as of the date of this Agreement, all of
                  their respective rights, title, interest and estate in, under
                  and to each of the leases and subleases referred to in
                  Schedule 2.1(a)(I) of the Purchase and Sale Agreement which
                  Schedule is attached hereto as Exhibit A.

            (2)   The Assignors hereby assigns, transfer and convey to the
                  Assignee, effective as of the date of this Agreement, all of
                  their respective rights, title, interest and estate in, under
                  and to each of the surface consents, easements and
                  rights-of-way listed on Schedule 2.1(a)(III) of the Purchase
                  and Sale Agreement, which Schedule is attached hereto as
                  Exhibit B.

            (3)   The Assignee hereby accepts the assignment of each of these
                  leases, subleases, surface consents, easements of
                  rights-of-way from the Assignors, and assumes all of the
                  Assignors' respective duties, obligations and liabilities
                  under each of them in accordance with the terms and conditions
                  of the Purchase and Sale Agreement.

            (4)   This Agreement shall be governed by and construed in
                  accordance with the laws of the Commonwealth of Kentucky.

<PAGE>

            (5)   This Agreement shall be binding upon and shall inure to the
                  benefit of the parties hereto and their respective successors
                  and assigns.

            (6)   The invalidity or unenforceability of any one or more of the
                  provisions of this Agreement shall not impair or affect the
                  validity and enforceability of all of the other provisions of
                  this Agreement.

                                                  RAY COAL COMPANY, INC.

                                             By: /s/ J. Blair McGill
                                                 -------------------------------
                                                 Title:  President

                                                 WHITAKER COAL CORPORATION

                                             By: /s/ J. Blair McGill
                                                 -------------------------------
                                                 Title:  President

                                                 IKERD-BANDY, CO., INC.

                                             By: /s/ William N. Ruth
                                                 -------------------------------
                                                 Title:  President

STATE OF KENTUCKY )
                  )
COUNTY OF PERRY   )

      Acknowledged before me by /s/ J. Blair McGill as President of Ray Coal
Corporation on this the 30th day of June, 1994.

      MY COMMISSION EXPIRES: 12/13/97

                                             /s/ Rhonda Reid
                                             -----------------------------------
                                             NOTARY PUBLIC

<PAGE>

                EXHIBIT A TO ASSIGNMENT AND ASSUMPTION AGREEMENT

                              LEASES AND SUBLEASES

(The Lease and Tract numbers indicated below are assigned by Sellers' numbering
 system)

      LEASE NO. 8002. Assignment of Lease, dated December 14, 1990, by and
      between Kem Coal Company, as "Assignor," and Whitaker Coal Corporation, as
      "Assignee" assigning to Assignee a certain Surface Agreement, dated
      January 26, 1987. Memorandum of Assignment of Lease was recorded on March
      20, 1991, in Lease Book 40, Page 141, in the property records of Perry
      County, Kentucky.

      LEASE NO. 8004. Series of Leases covered by: (a) Memorandum of Assignment
      of Leases, dated December 14, 1990, by and between Kem Coal Company, as
      "Assignor," and Ray Coal Company, as "Assignee," recorded on March 20,
      1991, in Lease Book 40, Page 118, in the property records of Perry County,
      Kentucky, and (b) Memorandum of Assignment of Leases, dated December 14,
      1990, by and between Leeco, Inc., as "Assignor," and Ray Coal Company, as
      "Assignee," recorded on March 20, 1991, in Lease Book 40, Page 135, in the
      property records of Perry County, Kentucky.

      LEASE NO. 8006. Series of Leases covered by: (a) Memorandum of Assignment
      of Leases, dated December 14, 1990, by and between Kem Coal Company, as
      "Assignor," and Ray Coal Company, as "Assignee," assigning rights in: (i)
      that certain Lease Agreement by and between Glen Engle, et al., as
      "Lessors," and Kem Coal Company as Lessee, and a memorandum of which is
      recorded in Lease Book 36, Page 405, in the property records of Perry
      County, Kentucky, and (ii) that certain Lease Agreement by and between
      Blanche Courrejolles, and her husband Teobaldo Courrejolles, as "Lessors,"
      and Kem Coal Company as Lessee, and a memorandum of which is recorded in
      Lease Book 35, Page 228, in the property records of Perry County,
      Kentucky; and (b) Memorandum of Assignment of Leases, dated December 14,
      1990, by and between Leeco, Inc., as "Assignor," and Ray Coal Company, as
      "Assignee," recorded on March 20, 1991, in Lease Book 40, Page 135, in the
      property records of Perry County, Kentucky.

      LEASE NO. 8008. Leases covered by: (a) Memorandum of Assignment of Leases,
      dated December 14, 1990, by and between Kem Coal Company as "Assignor,"
      and Ray Coal Company, as "Assignee," recorded in Lease Book 40, Page 123
      in the property records of Perry County, Kentucky. The Assignment of
      Leases assigns Kem Coal's rights in the following to Ray Coal: (1) that
      certain Lease Agreement by and between Hagar Campbell, et ux., as
      "Lessors," and Kem Coal Company as Lessee, including that certain Addendum
      Agreement dated September 14, 1981, and including that certain Second
      Addendum Agreement, and being more particularly described by deeds of
      record in Deed Book 116, Page 150 and Deed Book 108, Page 238, in the
      property records of Perry County, Kentucky, and (ii) that certain Lease
      Agreement by and between Hiram Clemons, et al., as "Lessors," and Kem Coal
      Company as Lessee, dated February 27, 1980, and covering that certain
      tract or tracts of land lying and being on Cat Hollow of Troublesome
      Creek, Perry County, Kentucky, comprising 50 acres, more or less, and

<PAGE>

                EXHIBIT A TO ASSIGNMENT AND ASSUMPTION AGREEMENT

                        LEASES AND SUBLEASES (Continued)

      including that certain Addendum Agreement dated September 4, 1981, and
      that certain Second Addendum Agreement, dated August 25, 1989.

      LEASE NO. 8010:

      [Surface] Lease, dated February 17, 1989, by and between Lottie Boggs, as
      "Lessor," and Shamrock Coal Company, as "Lessee," leasing the surface
      estate of a certain tract described by "Exhibit A" to this Lease. Shamrock
      Coal Company has assigned all of its rights and obligations under this
      Lease to Whitaker Coal Corporation, pursuant to an Assignment of Leases,
      dated April 7, 1994; and

      [Mineral] Lease, dated February 17, 1989, by and between Lottie Boggs, as
      "Lessor," and Shamrock Coal Company, as "Lessee," leasing the real
      property and all of the merchantable and mineable coal in, on and under
      the tract of land described in Deed Book 100, Page 600, Perry County Court
      Clerk's Office, Hazard, Kentucky, except the Hazard No. 7 coal seam, which
      is owned by Kentucky River Coal Corporation. Shamrock Coal Company has
      assigned all of its rights and obligations under this Lease to Whitaker
      Coal Corporation, pursuant to an Assignment of Leases, dated April 7,
      1994.

      LEASE NO. 8012. Agreement of Lease [mineral and tipple lease], dated June
      30, 1982, by and between Kentucky River Coal Corporation, as "Lessor," and
      Shamrock Coal Company, as "Lessee." This Lease Agreement has been amended
      and supplemented by: (i) a Supplemental Lease Agreement between the
      parties, dated June 17, 1986; (ii) an Assignment and Consent, dated
      December 14, 1990, by and among Kentucky River Coal Corporation, Bledsoe
      Coal Leasing Company, Inc., and Shamrock Coal Company, pursuant to which
      Shamrock assigned a portion of its Lease to Bledsoe, with Kentucky River's
      consent; (iii) an Agreement and Consent, dated June 29, 1992, by and among
      Kentucky River Coal Corporation, Ray Coal Company, Inc., and Shamrock Coal
      Company, pursuant to which Shamrock assigned the remainder of its Lease to
      Ray Coal, with Kentucky's River's consent; and (iv) miscellaneous letter
      agreements.

      LEASE NO. 8014. Lease, dated March 22, 1989, by and between Argene Jones,
      and his wife Cleatrice Jones, as "Lessors," and Shamrock Coal Company, as
      "Lessee," leasing the surface estate of a certain tract of land lying and
      being in Perry County, Kentucky and more particularly described in
      "Exhibit A" to this Lease. This Lease has been amended by that certain
      First Amendment of Coal Lease Agreement between the parties, dated March
      19, 1992. Shamrock Coal Company has assigned all of its rights and
      obligations under this Lease to Whitaker Coal Corporation, pursuant to an
      Assignment of Leases, dated April 7, 1994.

      LEASE NO. 8015. Lease, dated May 16, 1989, by and between Jeannette C.
      Smith, et al., as "Lessors," and Shamrock Coal Company, as "Lessee,"
      leasing the surface estate of a certain tract of land lying and being in
      Perry County, Kentucky and more particularly described in "Exhibit A" to
      this Lease. This Lease has been amended by that certain First Amendment of
      Coal Lease Agreement between the parties, dated March 19, 1992.

<PAGE>

                EXHIBIT A TO ASSIGNMENT AND ASSUMPTION AGREEMENT

                        LEASES AND SUBLEASES (Continued)

      Shamrock Coal Company has assigned all of its rights and obligations under
      this Lease to Whitaker Coal Corporation, pursuant to an Assignment of
      Leases, dated April 7, 1994.

      LEASE NO. 8017. [Surface Lease] Contract, dated February 16, 1978, by and
      between E. H. Kramer, and her husband Curtis G. Kramer, as lessors and
      Tesoro Coal Company, as lessee, leasing the surface of a certain tract of
      land on Upper Bad Creek which flows into Greasy Creek in Leslie County,
      Kentucky, more particularly described by deed of conveyance from W. A.
      Morgan Comm. to H. M. Hensley, dated February 27, 1911, and recorded in
      deed Book 20, Page 69, in the property records of Leslie County, Kentucky.
      Excluded from this property is the parcel sold to B. M. Yager on March 25,
      1918, pursuant to deed recorded in Deed Book 29, Page 569. Lessors derive
      title from the Will of H.M. Hensley, and a deed of conveyance from Fanny
      Hensley and Emily H. McGuire, dated May 10, 1952, and recorded in the
      Leslie County (Kentucky) Court Clerk's Office Deed Book 53, Page 547. In
      August, 1982, the lessors assigned this Contract to Shamrock Coal Company,
      as successor in interest to Tesoro Coal Company. On May 12, 1994, Shamrock
      assigned all of its right, title and interest to Whitaker.

      LEASE NO. 8018. Lease, dated September 28, 1992, by and between Villis
      Edwin Jones, and his wife Matilda Jones, as "Lessors," and Whitaker Coal
      Corporation, as "Lessee," leasing all of the merchantable and mineable
      coal and mining rights contained in, on or under those certain tracts of
      land situated in Perry County, Kentucky, and more particularly described
      by deed of conveyance between Anderson Jones, et ux., as grantors and
      Edwin Jones as grantee, recorded in Deed Book 164, Page 410, dated July 1,
      1971.

      LEASE NO. 8022. Surface Lease Agreement, dated August 16, 1993, by and
      among Lola Jones and her husband James C. Jones, and Barbara Ann Ritchie
      and her husband Shelby Ritchie, collectively, the "Lessor" and Whitaker
      Coal Corporation as "Lessee." Memorandum of Surface Lease Agreement,
      pursuant to this Surface Lease Agreement was recorded on August 19, 1993,
      in Lease Book 43, Page 45, in the property records of Perry County,
      Kentucky.

      LEASE NO. 8023. Surface Lease Agreement, dated October 14, 1993, by and
      among Cyprus Southern Realty Corporation as "Grantor" and Whitaker Coal
      Corporation as "Grantee." Memorandum of Surface Lease Agreement, pursuant
      to this Surface Lease Agreement was recorded on October 21, 1993, in Lease
      Book 43, Page 329, in the property records of Perry County, Kentucky.

      LEASE NO. 8025. Surface Lease Agreement, dated December 1, 1993, by and
      among Lindon Campbell, et al., collectively, as "Lessor" and Whitaker Coal
      Corporation as "Lessee." Memorandum of Surface Lease Agreement, pursuant
      to this Surface Lease Agreement was recorded on March 10, 1994, in Lease
      Book 43, Page 734, in the property records of Perry County, Kentucky.

      SURFACE AGREEMENT. Surface Agreement, dated March 29, 1993, by and among
      Forrest Grigsby, and his wife Eliza Grigsby (as "Grantors") and Whitaker
      Coal Corporation (as "Grantee"). This agreement grants Whitaker certain
      surface mining and related rights

<PAGE>

                EXHIBIT A TO ASSIGNMENT AND ASSUMPTION AGREEMENT

                        LEASES AND SUBLEASES (Continued)

      across a portion of the surface of that property more particularly
      described by deed of record in Deed Book 164, Page 420, and a Boundary
      Line Agreement and Quitclaim Deed in Deed Book 240, Page 329 in the Office
      of the Perry County Clerk. This Surface Agreement was recorded on March
      31, 1993, in Lease Book 42, Page 490, in the property records of Perry
      County, Kentucky.

<PAGE>

STATE OF KENTUCKY

COUNTY OF PERRY

      I, CLARENCE HOWARD, CLERK OF THE STATE AND COUNTY AFORESAID DO CERTIFY
THAT THE FOREGOING INSTRUMENT WAS LODGED FOR RECORD IN MY OFFICE AND IT THE
FOREGOING AND THIS MY CERTIFICATE HAVE BEEN DULY RECORDED IN MY OFFICE IN Lease
BOOK NO. 44 AT PAGE 292.

      WITNESS THIS 29th DAY OF Sept 1994.

                                             CLARENCE HOWARD, CLERK
                                             PERRY COUNTY

                                             By: /s/ Barbara Sue Franks   D.C.
                                                 -------------------------
<PAGE>

                     ASSIGNMENT OF REAL PROPERTY AGREEMENTS

      This Assignment of Real Property Agreements (this "Agreement"), dated as
of September 30, 2004, is among ICG HAZARD, LLC, a Delaware limited liability
company, with an address of 2000 Ashland Drive, Ashland, Kentucky 41101 (the
"Buyer"), and IKERD-BANDY CO., INC. (SUCCESSOR-IN-INTEREST TO AND/OR f/k/a
AND/OR d/b/a IKERD-BANDY COMPANY, INC.), a Kentucky corporation, with an address
of 2000 Ashland Drive, Ashland, Kentucky 41101 (the "Seller").

                                    RECITALS

A.          This Agreement is being entered into to effect the transactions
      contemplated by the Asset Purchase Agreement, dated May 13, 2004 as
      amended and restated on June 2, 2004 (as the same may be hereafter amended
      or supplemented, the "Purchase Agreement"), between the Buyer and Horizon
      Natural Resources Company ("Parent") and certain of its subsidiaries
      (collectively, the "Sellers"). Capitalized terms not otherwise defined
      herein shall have the meanings given to such terms in the Purchase
      Agreement.

B.          The Seller is one of the Sellers, and is a party to the real
      property agreements set forth on Schedule A hereto, which pertain to real
      property located in Perry County, Kentucky (the "Real Property
      Agreements").

C.          The Seller desires to assign to the Buyer, and the Buyer desires
      to assume, all of the Seller's right, title and interest in and to the
      Real Property Agreements, pursuant to the terms of the Purchase Agreement.

D.          The assignment of the Real Property Agreements covered hereby has
      been approved by Order Pursuant to 11 U.S.C. Sections 105(A), 362, 363,
      365, 1123 And 1146(C) and Fed. R. Bankr. P. 2002, 6004, 6006 and 9014: (A)
      Approving Asset Purchase Agreements, (B) Authorizing Sale of Substantially
      All Assets Free and Clear of All Liens, Claims, Interests and Other
      Encumbrances, and (C) Authorizing Assumption and Assignment of Certain
      Agreements, entered on September 16, 2004, by the United States Bankruptcy
      Court for the Eastern District of Kentucky, Ashland Division, in the
      Chapter 11 proceeding styled In Re: Horizon Natural Resources Company, et
      al. (including Seller) (the "Sale Order," a coy of which is attached
      hereto and made a part hereof as Exhibit 1), such proceedings being
      jointly administered under Case No. 02-14261. Pursuant to the Sale Order
      and Section 1146 of the U.S. Bankruptcy Code, the execution and delivery
      of this instrument shall not be taxed under any law imposing a transfer
      tax, stamp tax or similar tax.

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

<PAGE>

      1.    Assignment. The Seller hereby grants, assigns, transfers, conveys,
            delivers and sets over unto the Buyer all of its right, title,
            interest, duties and obligations in, to and under the Real Property
            Agreements.

      2.    Assumption. The Buyer hereby assumes all of the Seller's right,
            title, interest, duties and obligations in, to and under the Real
            Property Agreements and agrees to be bound by all of the terms and
            conditions of the Real Property Agreements and to pay, perform and
            discharge when due, all duties and obligations of the Seller under
            the Real Property Agreements, in each case, however, only to the
            extent such obligations are Assumed Liabilities.

      3.    Conflict. This Agreement is subject to all the terms and conditions
            of the Purchase Agreement and Sale Order. No provision of this
            Agreement shall be deemed to enlarge, alter or amend the terms or
            provisions of the Purchase Agreement or the Sale Order.
            Notwithstanding anything to the contrary set forth herein, if there
            is any conflict between the terms and conditions of this Agreement
            and the terms and conditions of the Purchase Agreement and the Sale
            Order, the terms and conditions of the Purchase Agreement and the
            Sale Order shall control.

      4.    Governing Law. Except to the extent inconsistent with the United
            States Bankruptcy Code, this Agreement shall be governed by and
            construed according to the laws of the State of Delaware, without
            regard to or application of its conflict of laws rules. The parties
            to this Agreement agree that the Bankruptcy Court shall have
            exclusive jurisdiction, and the parties hereby submit to such
            jurisdiction, of any dispute arising under or related to this
            Agreement.

      5.    Counterparts. This Agreement may be executed in one or more
            counterparts (including by means of facsimile signature pages) and
            all such counterparts taken together shall constitute one and the
            same Agreement.

      6.    Severability. If any provision of this Agreement or its application
            is invalid, illegal or unenforceable in any respect, the validity,
            legality and enforceability of all other applications of that
            provision, and of all other provisions and applications hereof, will
            not in any way be affected or impaired. If any court shall determine
            that any provision of this Agreement is in any way unenforceable,
            such provision shall be reduced to whatever extent is necessary to
            make such provision enforceable.

      7.    Entire Agreement. All prior negotiations and agreements by and among
            the parties hereto with respect to the subject matter hereof are
            superseded by this Agreement, the Purchase Agreement, the Sale Order
            and the Related Agreements, and there are no representations,
            warranties, understandings or agreements with respect to the subject
            matter hereof other than those expressly set forth in this
            Agreement, the Purchase Agreement, the Sale Order and the Related
            Agreements.

<PAGE>

      8.    Headings. Section headings are not to be considered part of this
            Agreement, are solely for convenience of reference, and shall not
            affect the meaning or interpretation of this Agreement or any
            provision in it.

      9.    No Third-Party Beneficiaries. Nothing in this Agreement shall confer
            any rights upon any person or entity other than the parties hereto
            and their respective successors and permitted assigns.

      10.   Successors and Assigns. The terms of this Agreement shall be binding
            upon and shall inure to the benefit of the parties hereto and their
            respective successors and permitted assigns.

      11.   Further Assurances. Each party hereto agrees, upon the reasonable
            request of the other party hereto, to make, execute and deliver any
            and all documents or instruments of any kind or character, and to
            perform all such other actions, that may be reasonably necessary or
            proper (without the expenditure of funds) to effectuate, confirm,
            perform or carry out the terms or provisions of this Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused their authorized
representatives to execute this Agreement as of the date first set forth above.

BUYER:                                     ICG HAZARD, LLC

                                           By: /s/ William D. Campbell
                                               -------------------------------
                                           Name: William D. Campbell

                                           Title:

SELLER:                                    IKERD-BANDY CO., INC. (SUCCESSORS-IN-
                                           INTEREST TO AND/OR f/k/a AND/OR d/b/a
                                           IKERD-BANDY COMPANY, INC.)

                                           By:  Scott Tepper

                                           Name: /s/ Scott Tepper
                                                 -------------------------------
                                           Title: President

<PAGE>

STATE OF KENTUCKY
COUNTY OF GREENUP

      The foregoing Assignment of Real Property Agreements was acknowledged
before me on October 8, 2004, by William D. Campbell, as Secretary/Treasurer of
ICG Hazard, LLC, a Delaware limited liability company, for and on behalf of
company.

                                           /s/ Pamela Arnold
                                           -------------------------------------
                                             Notary Public, State at Large
                                             My Commission Expires July 29, 2005

STATE OF NEW YORK
COUNTY OF NEW YORK

      The foregoing Assignment of Real Property Agreements was acknowledged
before me on 9/30, 2004, by Scott Tepper, as President of Ikerd-Bandy Co., Inc.
(successor-in-interest to and/or f/k/a and/or d/b/a Ikerd-Bandy Company, Inc.),
for and on behalf of the company.

                                           /s/ Andrea Payne
                                           -------------------------------------
                                             Notary Public, State at Large
                                             My Commission Expires 11/24/05

THIS INSTRUMENT PREPARED BY:

/s/ Warren J. Hoffman
-------------------------------
Warren J. Hoffman, Esq.
Frost Brown Todd LLC
250 West Main Street
Suite 2700
Lexington, Kentucky  40507-1749
(859) 231-0000

<PAGE>

                                   SCHEDULE A

      The real property agreements being assigned or otherwise transferred by
this instrument are those leases or instruments described in this Schedule A and
being recorded at the indicated book/volume and page numbers identified in the
charts in this Schedule A.

<PAGE>

                                                                      ICG-HZ-A-8

                                   SCHEDULE A

<TABLE>
<CAPTION>
 CONTRACT                                                              CONTRACT
    #        CONTRACT TYPE    LESSEE         LESSOR        CTY   ST      DATE      BOOK    PAGE     DOC
----------  --------------  -----------  ---------------  -----  ---  ----------  ------  -------  -----
<S>         <C>             <C>          <C>              <C>    <C>  <C>         <C>     <C>      <C>
LA-193-017  Easement/Right  Ikerd Bandy  Campbell, Tisha  Perry  KY   10/19/1992   238       77
                Of Way      (011)        Noble (Heirs)

LA-193-010  Easement/Right  Ikerd Bandy  Campbell, Wayne  Perry  KY   10/19/1992    44      292
                Of Way      (011)        & Pearolee

LA-193-012   Intercompany   Ikerd Bandy  Cyprus Southern  Perry  KY   10/14/1993    43      329
               Agreement    (011)        Realty Corp.

300044        Assignment    Ikerd Bandy  Ray Coal         Perry  KY   06/30/1994    44      292
                            (011)        Company, Inc.
                                         Et Al

LA-193-004  Easement/Right  Ikerd Bandy  Sidham, James &  Perry  KY   06/04/1993   241      598
                Of Way      (011)        Lyla, Et Al

LA-193-009   Surface Lease  Ikerd Bandy  Allen, Albert &  Perry  KY   01/26/1987    40      141
                            (011)        Augusta, Et Al

LA-193-013   Surface Lease  Ikerd Bandy  Campbell ,       Perry  KY   03/04/1996    51      638
                            (011)        Eddie N. &
                                         Wilma J.

LA-193-002   Surface Lease  Ikerd Bandy  Hensley, Sinda   Perry  KY   08/17/1993    44      292
                            (011)

LA-193-025   Surface Lease  Ikerd Bandy  Jones, Argene &  Perry  KY   08/14/1998    51      633
                            (011)        Cleatice

LA-193-042    Coal Lease    Ikerd Bandy  Jones, Chester   Perry  KY   05/04/1999    48       94
                            (011)        & Marlene

LA-193-043    Coal Lease    Ikerd Bandy  Jones, Chester   Perry  KY   05/04/1999    48       85
                            (011)        & Marlene, Et Al

LA-193-011   Surface Lease  Ikerd Bandy  Jones, Lola, Et  Perry  KY   08/16/1993    44      363
                            (011)        Al

LA-193-003   Surface Lease  Ikerd Bandy  Jones, Villis    Perry  KY   09/28/1992    42       1
                            (011)        Edwin & Matilda

LA-193-016     Fee Lease    Ikerd Bandy  Kentucky River   Perry  KY   06/30/1982  61, 51  561,736
                            (011)        Coal
                                         Corporation
                                         (Job 44)

LA-193-018   Surface Lease  Ikerd Bandy  Landrum, Lena &  Perry  KY   03/16/1998    46      479
                            (011)        Omer

LA-193-007   Surface Lease  Ikerd Bandy  Miller, Hester   Perry  KY   02/20/1995    44      504
                            (011)        & Rushia

LA-193-006   Surface Lease  Ikerd Bandy  Miller, Silas &  Perry  KY   11/24/1994    44      402
                            (011)        Edith

LA-193-029   Surface Lease  Ikerd Bandy  Neace, Adna,     Perry  KY   10/13/1998    47      150
                            (011)        Et Al

LA-193-037   Surface Lease  Ikerd Bandy  Noble, Elbert    Perry  KY   02/24/1999    51    697,629
                            (011)        Ray & Brenda
</TABLE>

<PAGE>

                                                                     ICG-HZ-A-8c

                                   SCHEDULE A

<TABLE>
<CAPTION>
 CONTRACT                                                                        CONTRACT
    #      CONTRACT TYPE    LESSEE       LESSOR        CTY      ST       DATE      BOOK     PAGE    DOC
---------  -------------  ----------  ------------  ---------  ----  ----------  --------  -------  ----
<S>        <C>            <C>         <C>           <C>        <C>   <C>         <C>       <C>      <C>
100022     Surface Lease  Mountain    Mountain      Breathitt   KY   07/01/1997  28, 51    614,663
                          Clay, Inc.  Properties,
                          (018)       Inc. (P Br.)
</TABLE>

<PAGE>

                                                                     ICG-HZ-A-8d

                                   SCHEDULE A
<TABLE>
<CAPTION>
 CONTRACT                                                             CONTRACT
    #      CONTRACT TYPE    LESSEE       LESSOR        CTY      ST      DATE       BOOK     PAGE    DOC
---------  -------------  ----------  ------------  ---------  ----  ----------  --------  -------  ----
<S>        <C>            <C>         <C>           <C>        <C>   <C>         <C>       <C>      <C>
05-048     Surface Lease  Mountain    Smith, Rutha    Knott     KY   08/12/1983     54       246
                          Clay, Inc.
                          (018)
</TABLE>

<PAGE>

                                                                     ICG-HZ-A-8e

                                   SCHEDULE A

<TABLE>
<CAPTION>
 CONTRACT                                                                   CONTRACT
    #          CONTRACT TYPE       LESSEE         LESSOR       CTY     ST     DATE       BOOK     PAGE      DOC
----------  ------------------  -----------  ---------------  ------  ----  ----------  ------  ---------  -----
<S>         <C>                 <C>          <C>              <C>     <C>   <C>         <C>     <C>        <C>

03-003        Surface Lease     Mountain     Bowling, Goldie  Leslie   KY   11/01/1985    37       225
                                Clay, Inc.
                                (018)

05-011        Surface Lease     Mountain     Coots, Dillard   Leslie   KY   11/28/1984    35       400
                                Clay, Inc.   & Lorraine
                                (018)

05-015        Surface Lease     Mountain     Eversole,        Leslie   KY   10/31/1986    61       137
                                Clay, Inc.   Virgil (Estate)
                                (018)

05-023        Surface Lease     Mountain     Hensley, Delvor  Leslie   KY   02/09/1997    52        62
                                Clay, Inc.   & Easter, Et Al
                                (018)

05-022          Coal Lease      Mountain     Hensley, Paul    Leslie   KY   10/01/1977  61.63    555, 119
                                Clay, Inc.   H. & Bettye, Et
                                (018)        Al

100050      Wheelage Agreement  Mountain     Hoskins, Elden   Leslie   KY   09/23/1996    51       672
                                Clay, Inc.
                                (018)

100054          Coal Lease      Mountain     Hoskins, Elden,  Leslie   KY   10/14/1996    51       666
                                Clay, Inc.   Et Al
                                (018)

05-026          Coal Lease      Mountain     Hoskins, Will    Leslie   KY   07/14/1986    38       181
                                Clay, Inc.   C. Et Al
                                (018)

200057          Fee Lease       Mountain     Joseph, Celeste  Leslie   KY   01/26/2001    60       201
                                Clay, Inc.
                                (018)

03-043          Fee Lease       Mountain     Joseph, William  Leslie   KY   09/16/1994    51       474
                                Clay, Inc.   Peyton, Et Al
                                (018)

03-018        Surface Lease     Mountain     Loveridge,       Leslie   KY   04/30/1985    58       306
                                Clay, Inc.   Lonnie, Et Al
                                (018)

03-017          Fee Lease       Mountain     Loveridge        Leslie   KY   03/17/1986    58       297
                                Clay, Inc.   Lonnie, Et Al
                                (018)

03-021        Surface Lease     Mountain     Melton, Donald,  Leslie   KY   10/25/1984    35       402
                                Clay, Inc.   Et Al
                                (018)

05-084          Fee Lease       Mountain     Morgan, Charles  Leslie   KY   12/21/1993    49       304
                                Clay, Inc.   & Effie
                                (018)

05-041          Fee Lease       Mountain     Morgan, Lester   Leslie   KY   10/18/1989    43    384, 2:18
                                Clay, Inc.   & Pebble, Et Al                                        pm
                                (018)
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
 CONTRACT                                                                   CONTRACT
    #          CONTRACT TYPE       LESSEE         LESSOR       CTY     ST     DATE       BOOK     PAGE      DOC
----------  ------------------  -----------  ---------------  ------  ----  ----------  ------  ---------  -----
<S>         <C>                 <C>          <C>              <C>     <C>   <C>         <C>     <C>        <C>

100020        Surface Lease     Mountain     Mountain         Leslie   KY   07/01/1997    61       539
                                Clay, Inc.   Properties,
                                (018) Inc.   (Camp Ck)

100031          Coal Lease      Mountain     Mountain         Leslie   KY   12/20/1996    59       247
                                Clay, Inc.   Properties,
                                (018) Inc.   (Medaris)

05-045          Fee Lease       Mountain     Rader, Herman &  Leslie   KY   03/08/1985    35       656
                                Clay, Inc.   Beatrice, Et Al
                                (018)

05-047        Surface Lease     Mountain     Roberts, Daisy   Leslie   KY   05/29/1986    38       141
                                Clay, Inc.   & Joe
                                (018)

05-046          Fee Lease       Mountain     Roberts, Daisy   Leslie   KY   09/26/1978    44       299
                                Clay, Inc.   (#4)
                                (018)

03-027        Surface Lease     Mountain     Turner, William  Leslie   KY   11/01/1985    37       228
                                Clay, Inc.   Marcus, Et Al
                                (018)
</TABLE>

<PAGE>

                                                                     ICG-HZ-A-8f

                                   SCHEDULE A
<TABLE>
<CAPTION>
 CONTRACT                                                                   CONTRACT
    #          CONTRACT TYPE       LESSEE         LESSOR       CTY    ST      DATE      BOOK     PAGE      DOC
----------  ------------------  -----------  ---------------  -----  ----  ----------  ------  ---------  -----
<S>         <C>                 <C>          <C>              <C>    <C>   <C>         <C>     <C>        <C>
100009         Surface Lease     Mountain    Spicer, Curtiss  Perry   KY   12/14/1984    33       353
                                 Clay, Inc.  & Velma Kay, Et
                                 (018)       Al
</TABLE>

<PAGE>

STATE OF KENTUCKY

COUNTY OF PERRY

      I, Haven King, Clerk of the State and County aforesaid do certify that the
foregoing instrument was lodged for record in my office and it the foregoing and
this my certificate have duly recorded in my office in Deed Book Bo. 311 Page
507.

      Witness my hand this 5th day of November 2004.

                                           Haven King, Clerk
                                           PERRY COUNTY

                                           By: /s/ Barbara Sue Franks     D.C.
                                               --------------------------

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}]]