Document:

Exhibit 10.1

 

	
Form 3400-12
    	
 
    	
 
    
	
(September 2010)
    	
UNITED STATES
    	
FORM APPROVED
    
	
 
    	
DEPARTMENT OF THE INTERIOR
    	
OMB NO. 1004-0073
    
	
 
    	
BUREAU OF LAND MANAGEMENT
    	
Expires: June 30, 2013
    
	
 
    	
 
    	
 
    
	
 
    	
COAL LEASE
    	
Serial   Number
    
	
 
    	
 
    	
WYW177903
    

 

PART 1. LEASE RIGHTS GRANTED

 

This lease, entered into by and between the UNITED STATES OF AMERICA, hereinafter called lessor, through the Bureau of Land Management (BLM), and (Name and Address)

 

Antelope Coal LLC

P. O. Box 3009

Gillette, Wyoming 82717-3009

 

hereinafter called lessee, is effective (date) 9/1/11, for a period of 20 years and for so long thereafter as coal is produced in commercial quantities from the leased lands, subject to readjustment of lease terms at the end of the 20th lease year and each 10-year period thereafter.

 

Sec. 1. This lease is issued pursuant and subject to the terms and provisions of the:

 

x          The Mineral Leasing Act of 1920, as amended, 30 U.S.C. 181 - 287; or

o            The Mineral Leasing Act for Acquired Lands, 30 U.S.C. 351 - 359;

and to the regulations and formal orders of the Secretary of the Interior which are now or hereafter in force, when not inconsistent with the express and specific provisions herein.

 

Sec. 2. Lessor, in consideration of any bonuses, rents, and royalties to be paid, and the conditions and covenants to be observed as herein set forth, hereby grants and leases to lessee the exclusive right and privilege to drill for, mine, extract, remove, or otherwise process and dispose of the coal deposits in, upon, or under the following described lands:

 

	
 
    	
T. 40 N., R. 71 W., 6 th P. M.,   Wyoming
    
	
 
    	
Sec.
    	
5:
    	
Lot 18;
    
	
 
    	
Sec.
    	
8:
    	
Lots 1 through 3, 6 through 11,   14 through 16;
    
	
 
    	
Sec.
    	
9:
    	
Lots 2 through 16;
    
	
 
    	
Sec.
    	
10:
    	
Lots 5, 6, 11 through 14;
    
	
 
    	
Sec.
    	
14:
    	
Lot 13;
    
	
 
    	
Sec.
    	
15:
    	
Lots 2 through 7, 10 through 16.
    

 

containing 1, 908.60  acres, more or less, together with the right to construct such works, buildings, plants, structures, equipment and appliances and the right to use such on-lease rights-of-way which may be necessary and convenient in the exercise of the rights and privileges granted, subject to the conditions herein provided.

 

PART II. TERMS AND CONDITIONS

 

Sec. 1. (a) RENTAL RATE - Lessee must pay lessor rental annually and in advance for each acre or fraction thereof during the continuance of the lease at the rate of $ 3. 00 for each lease year.

 

(b) RENTAL CREDITS - Rental will not be credited against either production or advance royalties for any year.

 

Sec. 2. (a) PRODUCTION ROYALTIES - The royalty will be 12. 5 percent of the value of the coal as set forth in the regulations. Royalties are due to lessor the final day of the month succeeding the calendar month in which the royalty obligation accrues.

 

(b) ADVANCE ROYALTIES - Upon request by the lessee, the BLM may accept, for a total of not more than 20 years, the payment of advance royalties in lieu of continued operation, consistent with the regulations. The advance royalty will be based on a percent of the value of a minimum number of tons determined in the manner established by the advance royalty regulations in effect at the time the lessee requests approval to pay advance royalties in lieu of continued operation. 

 

Sec. 3. BONDS - Lessee must maintain in the proper office a lease bond in the amount of $6,000.00. The BLM may require an increase in this amount when additional coverage is determined appropriate.

 

Sec. 4. DILIGENCE - This lease is subject to the conditions of diligent development and continued operation, except that these conditions are excused when operations under the lease are interrupted by strikes, the elements, or casualties not attributable to the lessee. The lessor, in the public interest, may suspend the condition of continued operation upon payment of advance royalties in accordance with the regulations in existence at the time of the suspension. Lessee’s failure to produce coal in commercial quantities at the end of 10 years will terminate the lease. Lessee must submit an operation and reclamation plan for the BLM’s approval pursuant to 30 U.S.C. 207(c) prior to conducting any development or mining operations or taking any other action on a leasehold which might cause a significant disturbance of the environment.

 

The lessor reserves the power to assent to or order the suspension of the terms and conditions of this lease in accordance with, inter alia, Section 39 of the Mineral Leasing Act, 30 U.S.C. 209.

 

5. LOGICAL MINING UNIT (LMU) - Either upon approval by the lessor of the lessee’s application or at the direction of the lessor, this lease will become an LMU or part of an LMU, subject to the provisions set forth in the regulations.

 

The stipulations established in an LMU approval in effect at the time of LMU approval will supersede the relevant inconsistent terms of this lease so long as the lease remains committed to the LMU. If the LMU of which this lease is a part is dissolved, the lease will then be subject to the lease terms which would have been applied if the lease had not been included in an LMU.

 

 

Sec. 6. DOCUMENTS, EVIDENCE AND INSPECTION - At such times and in such form as lessor may prescribe, lessee must furnish detailed statements showing the amounts and quality of all products removed and sold from the lease, the proceeds therefrom, and the amount used for production purposes or unavoidably lost.

 

Lessee must keep open at all reasonable times for the inspection by BLM the leased premises and all surface and underground improvements, works, machinery, ore stockpiles, equipment, and all books, accounts, maps, and records relative to operations, surveys, or investigations on or under the leased lands.

 

Lessee must allow lessor access to and copying of documents reasonably necessary to verify lessee compliance with terms and conditions of the lease.

 

While this lease remains in effect, information obtained under this section will be closed to inspection by the public in accordance with the Freedom of Information Act (5 U.S.C. 552).

 

Sec. 7. DAMAGES TO PROPERTY AND CONDUCT OF OPERATIONS - Lessee must comply at its own expense with all reasonable orders of the Secretary, respecting diligent operations, prevention of waste, and protection of other resources.

 

Lessee must not conduct exploration operations, other than casual use, without an approved exploration plan. All exploration plans prior to the commencement of mining operations within an approved mining permit area must be submitted to the BLM.

 

Lessee must carry on all operations in accordance with approved methods and practices as provided in the operating regulations, having due regard for the prevention of injury to life, health, or property, and prevention of waste, damage or degradation to any land, air, water, cultural, biological, visual, and other resources, including mineral deposits and formations of mineral deposits not leased hereunder, and to other land uses or users. Lessee must take measures deemed necessary by lessor to accomplish the intent of this lease term. Such measures may include, but are not limited to, modification to proposed siting or design of facilities, timing of operations, and specification of interim and final reclamation procedures. Lessor reserves to itself the right to lease, sell, or otherwise dispose of the surface or other mineral deposits in the lands and the right to continue existing uses and to authorize future uses upon or in the leased lands, including issuing leases for mineral deposits not covered hereunder and approving easements or rights-of-way. Lessor must condition such uses to prevent unnecessary or unreasonable interference with rights of lessee as may be consistent with concepts of multiple use and multiple mineral development.

 

Sec. 8. PROTECTION OF DIVERSE INTERESTS, AND EQUAL OPPORTUNITY - Lessee must: pay when due all taxes legally assessed and levied under the laws of the State or the United States; accord all employees complete freedom of purchase; pay all wages at least twice each month in lawful money of the United States; maintain a safe working environment in accordance with standard industry practices; restrict the workday to not more than 8 hours in any one day for underground workers, except in emergencies; and take measures necessary to protect the health and safety of the public. No person under the age of 16 years should be employed in any mine below the surface. To the extent that laws of the State in which the lands are situated are more restrictive than the provisions in this paragraph, then the State laws apply.

 

Lessee will comply with all provisions of Executive Order No. 11246 of September 24, 1965, as amended, and the rules, regulations, and relevant orders of the Secretary of Labor. Neither lessee nor lessee’s subcontractors should maintain segregated facilities.

 

Sec. 9. (a) TRANSFERS -

 

XX      This lease may be transferred in whole or in part to any person, association or corporation qualified to hold such lease interest.

 

This lease may be transferred in whole or in part to another public body or to a person who will mine coal on behalf of, and for the use of, the public body or to a person who for the limited purpose of creating a security interest in favor of a lender agrees to be obligated to mine the coal on behalf of the public body.

 

This lease may only be transferred in whole or in part to another small business qualified under 13 CFR 121.

 

Transfers of record title, working or royalty interest must be approved in accordance with the regulations.

 

(b) RELINQUISHMENT - The lessee may relinquish in writing at any time all rights under this lease or any portion thereof as provided in the regulations. Upon lessor’s acceptance of the relinquishment, lessee will be relieved of all future obligations under the lease or the relinquished portion thereof, whichever is applicable.

 

Sec. 10. DELIVERY OF PREMISES, REMOVAL OF MACHINERY, EQUIPMENT, ETC. - At such time as all portions of this lease are returned to lessor, lessee must deliver up to lessor the land leased, underground timbering, and such other supports and structures necessary for the preservation of the mine workings on the leased premises or deposits and place all workings in condition for suspension or abandonment. Within 180 days thereof, lessee must remove from the premises all other structures, machinery, equipment, tools, and materials that it elects to or as required by the BLM. Any such structures, machinery, equipment, tools, and materials remaining on the leased lands beyond 180 days, or approved extension thereof, will become the property of the lessor, but lessee may either remove any or all such property or continue to be liable for the cost of removal and disposal in the amount actually incurred by the lessor. If the surface is owned by third parties, lessor will waive the requirement for removal, provided the third parties do not object to such waiver. Lessee must, prior to the termination of bond liability or at any other time when required and in accordance with all applicable laws and regulations, reclaim all lands the surface of which has been disturbed, dispose of all debris or solid waste, repair the offsite and onsite damage caused by lessee’s activity or activities incidental thereto, and reclaim access roads or trails.

 

Sec. 11. PROCEEDINGS IN CASE OF DEFAULT - If lessee fails to comply with applicable laws, existing regulations, or the terms, conditions and stipulations of this lease, and the noncompliance continues for 30 days after written notice thereof, this lease will be subject to cancellation by the lessor only by judicial proceedings. This provision will not be construed to prevent the exercise by lessor of any other legal and equitable remedy, including waiver of the default. Any such remedy or waiver will not prevent later cancellation for the same default occurring at any other time.

 

Sec. 12. HEIRS AND SUCCESSORS-IN-INTEREST - Each obligation of this lease will extend to and be binding upon, and every benefit hereof will inure to, the heirs, executors, administrators, successors, or assigns of the respective parties hereto.

 

Sec. 13. INDEMNIFICATION - Lessee must indemnify and hold harmless the United States from any and all claims arising out of the lessee’s activities and operations under this lease.

 

Sec. 14. SPECIAL STATUTES - This lease is subject to the Clean Water Act (33 U.S.C. 1252 et seq.), the Clean Air Act (42 U.S.C. 4274 et seq.), and to all other applicable laws pertaining to exploration activities, mining operations and reclamation, including the Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. 1201 et seq.).

 

Sec. 15. SPECIAL STIPULATIONS -

 

See pages 5 through 11.

 

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ANTELOPE COAL LLC
    	
 
    	
THE UNITED STATES OF   AMERICA
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By
    	
/s/ Donald A. Simpson         
    
	
(Company or Lessee Name)
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ A.N.H. Taylor
    	
 
    	
Donald A. Simpson
    
	
(signature of Lessee)
    	
 
    	
(BLM)
    
	
 
    	
 
    	
 
    
	
Senior VP, Technical   Services
    	
 
    	
State Director
    
	
(Title)
    	
 
    	
(Title)
    
	
 
    	
 
    	
 
    
	
7/13/11
    	
 
    	
Aug 11, 2011
    
	
(Date)
    	
 
    	
(Date)
    

 

Title 18 U.S.C. Section 1001, makes it a crime for any person knowingly and willfully to make to any department or agency of the United States any false, fictitious or fraudulent statements or representations as to any matter within its jurisdiction.

 

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DEFERRED BONUS PAYMENT SCHEDULE

TO BE ATTACHED TO AND MADE A PART OF

FEDERAL COAL LEASE WYW177903

 

This lease is issued subject to the payment of $ 39,449,200.00 by the lessee as a deferred bonus. Payment of the deferred bonus by the lessee shall be made as follows:

 

Total amount of bid: $ 49,311,500.00.

 

One-fifth in the amount of $ 9,862,300.00 submitted on the date of sale. Balance is due and payable in equal annual installments on the first four anniversary dates of the lease:

 

One-fifth in the amount of $ 9,862,300.00 due on September 1, 2012.

 

One-fifth in the amount of $ 9,862,300.00 due on September 1, 2013.

 

One-fifth in the amount of $ 9,862,300.00 due on September 1, 2014.

 

One-fifth in the amount of $ 9,862,300.00 due on September 1, 2015.

 

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SEC. 15.  SPECIAL STIPULATIONS -

 

In addition to observing the general obligations and standards of performance set out in the current regulations, the lessee shall comply with and be bound by the following special stipulations.

 

These stipulations are also imposed upon the lessee’s agents and employees. The failure or refusal of any of these persons to comply with these stipulations shall be deemed a failure of the lessee to comply with the terms of the lease. The lessee shall require his agents, contractors and subcontractors involved in activities concerning this lease to include these stipulations in the contracts between and among them. These stipulations may be revised or amended, in writing, by the mutual consent of the lessor and the lessee at any time to adjust to changed conditions or to correct an oversight.

 

(a) CULTURAL RESOURCES - (1) Before undertaking any activities that may disturb the surface of the leased lands, the lessee shall conduct a cultural resource intensive field inventory in a manner specified by the Authorized Officer of the BLM or of the surface managing agency, if different, on portions of the mine plan area and adjacent areas, or exploration plan area, that may be adversely affected by lease-related activities and which were not previously inventoried at such a level of intensity. The inventory shall be conducted by a qualified professional cultural resource specialist (i.e., archeologist, historian, historical architect, as appropriate), approved by the Authorized Officer of the surface managing agency (BLM, if the surface is privately owned), and a report of the inventory and recommendations for protecting any cultural resources identified shall be submitted to the Regional Director of the Western Region of the Office of Surface Mining (the Western Regional Director), the Authorized Officer of the BLM, if activities are associated with coal exploration outside an approved mining permit area (hereinafter called Authorized Officer), and the Authorized Officer of the surface managing agency, if different. The lessee shall undertake measures, in accordance with instructions from the Western Regional Director, or Authorized Officer, to protect cultural resources on the leased lands. The lessee shall not commence the surface disturbing activities until permission to proceed is given by the Western Regional Director or Authorized Officer.

 

(2) Any existing Class III inventory report covering the lease area that has not received federal agency review must be reviewed and accepted by the agency, site NRHP eligibility determinations made, and consultation with the State Historic Preservation Officer completed before any surface disturbing activities take place.

 

(3) Native American consultation is currently being conducted on cultural resource sites 48CA3929, 48CO2934, 48CO2996, and 48CO2997. The lessee shall protect these sites from lease-related activities until the consultation is complete and potential mitigation measures can be implemented as part of an approved mining and reclamation or exploration plan unless modified by mutual agreement in consultation with the Tribal Historical Preservation Officer, Tribal Chairman, or appointed Tribal Cultural Representative.

 

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(4)  The lessee shall protect all cultural resource properties that have been determined eligible or unevaluated to the National Register of Historic Places within the lease area from lease-related activities until the cultural resource mitigation measures can be implemented as part of an approved mining and reclamation or exploration plan unless modified by mutual agreement in consultation with the State Historic Preservation Officer.

 

(5)  The cost of conducting the inventory, preparing reports, and carrying out mitigation measures shall be borne by the lessee.

 

(6)  If cultural resources are discovered during operations under this lease, the lessee shall immediately bring them to the attention of the Western Regional Director or Authorized Officer, or the Authorized Officer of the surface managing agency, if the Western Regional Director is not available. The lessee shall not disturb such resources except as may be subsequently authorized by the Western Regional Director or Authorized Officer. Within two (2) working days of notification, the Western Regional Director or Authorized Officer will evaluate or have evaluated any cultural resources discovered and will determine if any action may be required to protect or preserve such discoveries. The cost of data recovery for cultural resources discovered during lease operations shall be borne by the lessee unless otherwise specified by the Authorized Officer of the BLM or of the surface managing agency, if different.

 

(7)  All cultural resources shall remain under the jurisdiction of the United States until ownership is determined under applicable law.

 

(b) PALEONTOLOGICAL RESOURCES - If paleontological resources, either large and conspicuous, and/or of significant scientific value are discovered during mining operations, the find will be reported to the Authorized Officer immediately. Mining operations will be suspended within 250 feet of said find. An evaluation of the paleontological discovery will be made by a BLM approved professional paleontologist within five (5) working days, weather permitting, to determine the appropriate action(s) to prevent the potential loss of any significant paleontological value. Operations within 250 feet of such discovery will not be resumed until written authorization to proceed is issued by the Authorized Officer. The lessee will bear the cost of any required paleontological appraisals, surface collection of fossils, or salvage of any large conspicuous fossils of significant scientific interest discovered during the operations.

 

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(c)  THREATENED, ENDANGERED, CANDIDATE, OR OTHER SPECIAL STATUS PLANT AND ANIMAL SPECIES - The lease area may now or hereafter contain plants, animals, or their habitats determined to be threatened or endangered under the Endangered Species Act of 1973, as amended, 16 U.S.C. 1531 et seq., or that have other special status. The Authorized Officer may recommend modifications to exploration and development proposals to further conservation and management objectives or to avoid activity that will contribute to a need to list such species or their habitat or to comply with any biological opinion issued by the Fish and Wildlife Service for the proposed action. The Authorized Officer will not approve any ground-disturbing activity that may affect any such species or critical habitat until it completes its obligations under applicable requirements of the Endangered Species Act. The Authorized Officer may require modifications to, or disapprove a proposed activity that is likely to result in jeopardy to the continued existence of a proposed or listed threatened or endangered species, or result in the destruction or adverse modification of designated or proposed critical habitat.

 

The lessee shall comply with instructions from the Authorized Officer of the surface managing agency (BLM, if the surface is private) for ground disturbing activities associated with coal exploration on federal coal leases prior to approval of a mining and reclamation permit or outside an approved mining and reclamation permit area. The lessee shall comply with instructions from the Authorized Officer of the Office of Surface Mining Reclamation and Enforcement, or his designated representative, for all ground-disturbing activities taking place within an approved mining and reclamation permit area or associated with such a permit.

 

(d)  MULTIPLE MINERAL DEVELOPMENT - Operations will not be approved which, in the opinion of the Authorized Officer, would unreasonably interfere with the orderly development and/or production from a valid existing mineral lease issued prior to this one for the same lands.

 

(e)  OIL AND GAS/COAL RESOURCES -  The BLM realizes that coal mining operations conducted on Federal coal leases issued within producing oil and gas fields may interfere with the economic recovery of oil and gas; just as Federal oil and gas leases issued in a Federal coal lease area may inhibit coal recovery. BLM retains the authority to alter and/or modify the resource recovery and protection plans for coal operations and/or oil and gas operations on those lands covered by Federal mineral leases so as to obtain maximum resource recovery.

 

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(f) RESOURCE RECOVERY AND PROTECTION - Notwithstanding the approval of a resource recovery and protection plan (R2P2) by the BLM, lessor reserves the right to seek damages against the operator/lessee in the event (i) the operator/lessee fails to achieve maximum economic recovery (MER) (as defined at 43 CFR 3480.0-5(21)) of the recoverable coal reserves or (ii) the operator/lessee is determined to have caused a wasting of recoverable coal reserves. Damages shall be measured on the basis of the royalty that would have been payable on the wasted or unrecoverable coal.

 

The parties recognize that under an approved R2P2, conditions may require a modification by the operator/lessee of that plan. In the event a coal bed or portion thereof is not to be mined or is rendered unmineable by the operation, the operator/lessee shall submit appropriate justification to obtain approval by the Authorized Officer to leave such reserves unmined. Upon approval by the Authorized Officer, such coal beds or portions thereof shall not be subject to damages as described above. Further, nothing in this section shall prevent the operator/lessee from exercising its right to relinquish all or portion of the lease as authorized by statute and regulation.

 

In the event the Authorized Officer determines that the R2P2, as approved, will not attain MER as the result of changed conditions, the Authorized Officer will give proper notice to the operator/lessee as required under applicable regulations. The Authorized Office will order a modification if necessary, identifying additional reserves to be mined in order to attain MER. Upon a final administrative or judicial ruling upholding such an ordered modification, any reserves left unmined (wasted) under that plan will be subject to damages as described in the first paragraph under this section.

 

Subject to the right to appeal hereinafter set forth, payment of the value of the royalty on such unmined recoverable coal reserves shall become due and payable upon determination by the Authorized Officer that the coal reserves have been rendered unmineable or at such time that the operator/lessee has demonstrated an unwillingness to extract the coal.

 

The BLM may enforce this provision either by issuing a written decision requiring payment of the Office of Natural Resources Revenue demand for such royalties, or by issuing a notice of non-compliance. A decision or notice of non-compliance issued by the lessor that payment is due under this stipulation is appealable as allowed by law.

 

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(g)  PUBLIC LAND SURVEY PROTECTION - The lessee will protect all survey monuments, witness corners, reference monuments, and bearing trees against destruction, obliteration, or damage during operations on the lease areas. If any monuments, corners or accessories are destroyed, obliterated, or damaged by this operation, the lessee will hire an appropriate county surveyor or registered land surveyor to reestablish or restore the monuments, corners, or accessories at the same locations, using the surveying procedures in accordance with the “Manual of Surveying Instructions for the Survey of the Public Lands of the United States.” The survey will be recorded in the appropriate county records, with a copy sent to the Authorized Officer.

 

(h)   PUBLIC ROAD RIGHT-OF-WAY AND BUFFER ZONE - No mining activity of any kind may be conducted within the Converse County Road 37 right-of-way and its associated 100-foot buffer zone while the public road remains in its current (2008) location. The lessee shall recover all legally and economically recoverable coal from all leased lands not within the foregoing right- of-way and associated buffer zone. If a permit is obtained to relocate the public road and it is approved by the appropriate authority, the lessee shall recover all legally and economically recoverable coal from all leased lands within the foregoing right-of-way and associated buffer zone. The lessee shall pay all royalties on any legally and economically recoverable coal which it fails to mine without the written permission of the Authorized Officer.

 

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NOTICE FOR LANDS OF THE NATIONAL FOREST SYSTEM UNDER JURISDICTION OF DEPARTMENT OF AGRICULTURE

 

	
R2-FS-2820-13 (92)
    	
 
    	
Serial No WYW177903       
    

 

The permittee/lessee must comply with all the rules and regulations of the Secretary of Agriculture set forth at Title 36, Chapter II, of the Code of Federal Regulations governing the use and management of the National Forest System (NFS) when not inconsistent with the rights granted by the Secretary of Interior in the permit. The Secretary of Agriculture’s rules and regulations must be complied with for (1) all use and occupancy of the NFS prior to approval of an exploration plan the Secretary of the Interior, (2) uses of all existing improvements, such as forest development roads, within and outside the area permitted by the Secretary of the Interior, and (3) use and occupancy of the NFS not authorized by an exploration plan approved by the Secretary of the Interior.

 

All matters related to this stipulation are to be addressed to:

Forest Supervisor

Medicine Bow-Routt National Forests & Thunder Basin National Grassland 

2468 Jackson Street

Laramie, WY 82070

307-745-2300

who is the authorized representative of the Secretary of Agriculture.

 

NOTICE

 

CULTURAL AND PALEONTOLOGICAL RESOURCES - The FS is responsible for assuring that the leased lands are examined to determine if cultural resources are present and to specify mitigation measures. Prior to undertaking any surface-disturbing activities on the lands covered by this lease, the lessee or operator, unless notified to the contrary by the FS, shall:

 

1.               Contact the FS to determine if a site specific cultural resource inventory is required. If a survey is required, then:

 

2.               Engage the services of a cultural resource specialist acceptable to the FS to conduct a cultural resource inventory of the area of proposed surface disturbance. The operator may elect to inventory an area larger than the area of proposed disturbance to cover possible site relocation which may result from environmental or other considerations. An acceptable inventory report is to be submitted to the FS for review and approval at the time a surface disturbing plan of operation is submitted.

 

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3.               Implement mitigation measures required by the FS and BLM to preserve or avoid destruction of cultural resource values. Mitigation may include relocation of proposed facilities, testing, salvage, and recordation or other protective measures. All costs of the inventory and mitigation will be borne by the lessee or operator, and all data and materials salvaged will remain under the jurisdiction of the U.S. Government as appropriate.

 

The lessee or operator shall immediately bring to the attention of the FS and BLM any cultural or paleontological resources or any other objects of scientific interest discovered as a result of surface operations under this lease, and shall leave such discoveries intact until directed to proceed by FS and BLM.

 

ENDANGERED OR THREATENED SPECIES - The FS is responsible for assuring that the leased land is examined prior to undertaking any surface-disturbing activities to determine effects upon any plant or animal species listed or proposed for listing as endangered or threatened, or their habitats. The findings of this examination may result in some restrictions to the operator’s plans or even disallow use and occupancy that would be in violation of the Endangered Species Act of 1973 by detrimentally affecting endangered or threatened species or their habitats.

 

The lessee/operator may, unless notified by the FS that the examination is not necessary, conduct the examination on the leased lands at his discretion and cost. This examination must be done by or under the supervision of a qualified resource specialist approved by the FS. An acceptable report must be provided to the FS identifying the anticipated effects of a proposed action on endangered or threatened species or their habitats.

 

	
/s/ A.N.H. Taylor
    	
7/13/11
    
	
Signature of Licensee   /Permittee/Lessee
    	
 
    

 

11Exhibit 10.1

 

RECIPROCAL LOAN AGREEMENT

 

This RECIPROCAL LOAN AGREEMENT (this “Agreement”), dated as of April 1, 2011, between ING Life Insurance and Annuity Company, a Connecticut life insurance company (“ILIAC” or “Company”), located at One Orange Way, Windsor, Connecticut 06095 and ING America Insurance Holdings, Inc., a Delaware corporation (“INGAIH” or “Company”) located at 1105 North Market Street, Wilmington, Delaware 19809 (collectively referred to as the “Companies”).

 

WITNESSETH:

 

WHEREAS, each of the Companies may have, from time to time, a need to borrow funds on a revolving basis; and

 

WHEREAS, each of the Companies may have, from time to time, excess cash available to lend to the other on a revolving basis; and

 

WHEREAS, the Companies are affiliated entities and as such are willing to extend financing to, and borrow from each other as provided herein; and

 

WHEREAS, each of the Companies desires to enter into this Agreement providing for, among other things, the making of such Loans by and among each other;

 

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

 

ARTICLE 1

 

DEFINITIONS

 

Section 1.1.            Defined Terms.  For purposes of this Agreement:

 

“Agreement” shall have the meaning set forth in the preamble hereto.

 

“Authorized Person” shall mean the CFO, Treasurer, Treasury Officer, or Treasury Manager of the Borrowing Company, or a person so designated.

 

“Borrowing Company” shall mean each of the Companies to which a Loan is outstanding or is to be made pursuant to a Request for Borrowing.

 

“Business Day” shall mean a day on which U.S. financial markets are open for the transaction of business required for this Agreement.

 

 

“Companies” shall have the meaning set forth in the preamble hereto.

 

“Company” shall have the meaning set forth in the preamble hereto.

 

“Default” shall mean any of the events specified in Section 6.1, regardless of whether there shall have occurred any passage of time or giving of notice, or both, that would be necessary in order to constitute such an Event of Default.

 

“Event of Default” shall mean any of the events specified in Section 6.1.

 

“INGAIH” shall have the meaning set forth in the preamble hereto.

 

“Interest Period” shall mean the number of days or months that a particular interest rate applies to a particular Loan advanced hereunder.

 

“Lending Company” shall mean each of the Companies that has made, or is obligated to make, in accordance with a Request for Borrowing one or more Loans hereunder.

 

“Loans” shall mean the amounts advanced by a Lending Company to a Borrowing Company under this Agreement.

 

“Notice of Borrowing” shall have the meaning set forth in Section 2.2(b) of this Agreement.

 

“Obligations” shall mean all payment and performance obligations of every kind, nature and description of each Borrowing Company to the Lending Company, or either of them, under this Agreement (including any interest, fees and other charges on the Loans or otherwise), whether such obligations are direct or indirect, absolute or contingent, due or not due, contractual or tortious, liquidated or unliquidated, arising by operation of law or otherwise, now existing or hereafter arising.

 

“Regional Treasury Office” (“RTO”) shall mean the Treasurer’s office of ING North America Insurance Corporation.

 

“Request for Borrowing” shall have the meaning set forth in Section 2.2(a) of this Agreement.

 

“Revolving Loan Commitment” shall mean the maximum outstanding amount to be funded by the Lending Company to the Borrowing Company. The aggregate sum which the Lending Company may loan to the Borrowing Company under this Agreement shall not exceed three percent of ILIAC’s admitted assets as of the thirty-first day of December next preceding.

 

“Termination Date” shall mean April 1, 2016, or such earlier date as payment of the Obligations shall be due (whether by acceleration or otherwise).

 

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Section 1.2.            Terminology.  Each definition of a document in this Article 1 shall include such document as amended, modified, or supplemented from time to time, and, except where the context otherwise requires, definitions imparting the singular shall include the plural and visa versa. Except where specifically restricted, reference to a party shall include that party and its successors and assigns.  All personal pronouns used in this Agreement, whether used in the masculine, feminine, or neuter gender, shall include all other genders.  Titles of articles and sections in this Agreement are for convenience only, and neither limit nor amplify the provisions of this Agreement, and all references in this Agreement to articles, sections, subsections, paragraphs, clauses, subclauses or exhibits shall refer to the corresponding article, section, subsection, paragraph, clause, subclause of, or exhibit attached to, this Agreement, unless otherwise provided.

 

Section 1.3.            Accounting Terms.  Except as otherwise expressly provided herein, all accounting terms used herein shall be interpreted in accordance with customary insurance accounting practices consistently applied.

 

ARTICLE 2

 

TERMS OF THE LOANS

 

Section 2.1.            Revolving Credit.

 

(a)           Subject to and upon the terms and conditions set forth in this Agreement, each Lending Company agrees to advance Loans to the Borrowing Company, from time to time prior to the Termination Date.  Loans advanced under the Revolving Loan Commitment shall be repaid in accordance with Section 2.4 and may be reborrowed from time to time on a revolving basis.

 

(b)           Each Borrowing Company’s obligation to pay to the Lending Company the principal of and interest on the Loans shall be evidenced by the records of the RTO in lieu of a promissory note or notes.

 

Section 2.2.            Notice and Manner of Borrowing.

 

(a)           Whenever the Borrowing Company desires to borrow money hereunder, it shall give the RTO a written or facsimile request(or verbal request promptly confirmed in writing or by facsimile) of such borrowing or reborrowing (a “Request for Borrowing”).  Such Request for Borrowing shall be given by an Authorized Person to the RTO prior to 10:00 a.m. (Wilmington, Delaware time).  Any Request for Borrowing received after 10:00 a.m. shall be deemed received on the next Business Day.

 

(b)           The RTO, upon receipt of a Request for Borrowing, shall determine if the requested funds are available and the interest rates in accordance with Section 2.3(a) of this Agreement (and related Interest Periods, if any) at which the Borrowing Company can

 

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borrow money in a principal amount equal to, and on the date of, the proposed borrowing or reborrowing described in each such Request for Borrowing, and shall notify the Lending Company of such interest rates and the related Interest Periods, if any, and the principal amount of the proposed borrowing or reborrowing (a “Notice of Borrowing”) by telephone (confirmed in writing) or by facsimile no later than 12 p.m. (Wilmington, Delaware time) on the Business Day of the requested borrowing or reborrowing.  The RTO shall promptly convey to the Borrowing Company the information contained in the Notice of Borrowing by telephone (confirmed in writing) or by facsimile.

 

(c)           On the date of each borrowing, the Lending Company will make available the amount of such borrowing or reborrowing in immediately available funds to the Borrowing Company by depositing such amount in the account of the Borrowing Company by wire transfer via electronic funds transfer (EFT).

 

(d)           The RTO shall maintain on its books a control account for each Company in which shall be recorded (i) the amount and payment terms of each Loan made hereunder to each such Company, (ii) the interest rate applicable with respect to each Loan, (iii) the amount of any principal, interest or fees due or to become due from each Borrowing Company with respect to the Loans, (iv) the payment dates for any principal, interest or fees due or to become due from each Borrowing Company with respect to each Loan made hereunder, and (v) the amount of any sum received by each Lending Company hereunder in respect of any such principal, interest or fees due on such Loans.  The entries made in the RTO’s control accounts shall be prima facie evidence, in the absence of manifest error, of the existence and amounts of Obligations therein recorded and any payments thereon.  Accordingly, the Companies acknowledge and agree that the payment terms and due dates set out in the RTO’s control accounts with respect to each Loan made hereunder shall be deemed incorporated herein by this reference and shall govern as the payment terms and due dates for each such Loan made hereunder.

 

(e)           The RTO shall account to each Company on a quarterly basis with a statement of borrowings, interest rates, charges and payments made pursuant to this Agreement with respect to the Loans and Revolving Loan Commitment.  An Authorized Person of the Companies shall review each quarterly accounting for accuracy within thirty days of receipt thereof from the RTO.  Each such account rendered by the RTO shall be deemed final, binding and conclusive unless the RTO is notified by the Lending Company or the Borrowing Company within thirty days after the date the account is so rendered that either the Lending Company or the Borrowing Company disputes any item thereof.  Disputes for which the RTO receives notice in accordance with this Section 2.2(e) will be settled in accordance with Section 7.5 only if an amicable understanding cannot be reached by the parties within sixty (60) days of receipt of the notice of dispute.

 

(f)            The RTO shall be justified in assuming, for purposes of carrying out its duties and obligations under this Agreement, including, without limitation, its obligation to maintain accounts and provide accountings of the Loans pursuant to Section 2.2(d) and (e)

 

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above, that (1) Loans are disbursed by the Lending Company to the Borrowing Company in accordance with the terms of the Notice of Borrowing, (2) payments on the Loans are made to the Lending Company when due, and (3) no prepayments of any Loans prior to the date that they are due and payable under Section 2.4(a) have occurred, unless the RTO is otherwise notified by either Company within seven Business Days of any such delayed disbursement, overdue payment, or receipt of a prepayment.

 

Section 2.3.            Interest.

 

(a)           The Borrowing Company agrees to pay interest in respect of all unpaid principal amounts of the Loans from the respective dates such principal amounts were advanced until the respective dates such principal amounts are repaid at a rate per annum  as determined by the RTO and agreed upon by the Companies pursuant to Section 2.2(b)of this Agreement.  ILIAC shall pay interest on each Loan at a per annum rate which is based on the cost of funds for INGAIH for the interest period for such Loan plus .15%.  INGAIH shall pay interest on each Loan at a per annum rate which is based on the prevailing interest rate of U.S. commercial paper available for purchase with a similar duration.  The interest rate  shall be determined by the RTO in accordance with its usual practices.

 

(b)           Overdue principal and, to the extent not prohibited by applicable law, overdue interest in respect of any of the Loans and all other overdue amounts owing hereunder shall bear interest from each date that such amounts are overdue at the rate otherwise applicable to such underlying Loans plus an additional 2% per annum.  Interest on each Loan shall accrue from and including the date of such Loan to, but excluding, the date of any repayment thereof; provided, however, that if a Loan is repaid on the same day it is made, one day’s interest shall be paid on such Loan.  Interest shall be computed on the basis of a year of 360 days for the actual number of days elapsed.

 

(c)           The Companies hereby agree that the only charges imposed or to be imposed by the Lending Company hereunder for the use of money in connection with the Loans is and will be the interest required to be paid under the provisions of Sections 2.2(b).  In no event shall the amount of interest due and payable under this Agreement or any other documents executed in connection herewith exceed the maximum rate of interest allowed by applicable law and, in the event any such payment is made by the Borrowing Company or received by the Lending Company, such excess sum shall be credited as a payment of principal.  It is the express intent hereof that the Borrowing Company not pay and the Lending Company not receive, directly or indirectly in any manner, interest in excess of that which may be lawfully paid under applicable law.

 

Section 2.4.            Repayment of Principal and Interest.

 

(a)           The entire outstanding principal balance of the Loans shall be due and payable by no later than 5:00 p.m. (Eastern time) on the Business Day on which the Loan is due, together with all remaining accrued and unpaid interest thereon, unless an extension of no

 

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more than three additional days is authorized by the Lending Company.  The maximum term of any Loan shall be 270 days.

 

(b)           Any of the Loans may be prepaid in whole or in part at any time without premium or penalty.  Any such prepayment made on any Loan shall be applied, first, to interest accrued thereon through the date thereof and then to the principal balance thereof.

 

(c)           Each payment and prepayment of principal of any Loan and each payment of interest on any Loan shall be made to the Lending Company and applied to outstanding Loan balances in the following order; first, toward any Loan or Loans then due and payable; and, second, towards the Loan or Loans which are next due and payable at the time of such prepayment.

 

ARTICLE 3

 

REPRESENTATIONS AND WARRANTIES

 

Section 3.1.            Representations and Warranties.  In order to induce the Lending Company to enter into this Agreement, the Borrowing Company hereby represents and warrants as set forth below:

 

(a)           Organization; Power; Qualification.  The Borrowing Company is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation, has the power and authority to own or lease and operate its properties and to carry on its business as now being conducted, and is duly qualified and in good standing as a foreign corporation, and authorized to do business, in each jurisdiction in which the character of its properties or the nature of its business require such qualification or authorization.

 

(b)           Authorization; Enforceability.  The Borrowing Company has the power and has taken all necessary action to authorize it to execute, deliver and perform this Agreement in accordance with the terms hereof and to consummate the transactions contemplated hereby.  This Agreement has been duly executed and delivered by the Borrowing Company and is a legal, valid and binding obligation of the Borrowing Company, enforceable in accordance with its respective terms, (i) subject to limitations imposed by general principles of equity and (ii) subject to applicable bankruptcy, reorganization, insolvency and other similar laws affecting creditors’ rights generally and to moratorium laws from time to time in effect.

 

(c)           No Conflict.  The execution, delivery and performance of this Agreement in accordance with its terms and the consummation of the transactions contemplated hereby do not and will not (i) violate any applicable law or regulation, (ii) conflict with, result in a breach of, or constitute a default under the articles or certificate of  incorporation or by-laws of the Borrowing Company or under any indenture, agreement or other instrument to which the Borrowing Company is a party or by which it or any of its properties may be bound, or (iii) result in or require the creation or imposition of any lien upon or with respect to any property now owned or hereafter acquired by the Borrowing Company.

 

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(d)           Compliance with Law; Absence of Default.  The Borrowing Company is in compliance with all applicable laws the failure to comply with which has or could reasonably be expected to have a materially adverse effect on the business, assets, liabilities, financial condition or results of operations of the Borrowing Company, and no event has occurred or has failed to occur which has not been remedied or waived, the occurrence or non-occurrence of which constitutes a Default.

 

Section 3.2.            Survival of Representations and Warranties.  All representations and warranties made under this Agreement shall be deemed to be made, and shall be true and correct, as of the date hereof and as of the date of each Loan.

 

ARTICLE 4

 

AFFIRMATIVE COVENANTS

 

So long as this Agreement is in effect:

 

Section 4.1.            Preservation of Existence.  The Borrowing Company will (a) preserve and maintain its existence, rights, franchises, licenses and privileges in its jurisdiction of organization and (b) qualify and remain qualified and authorized to do business in each jurisdiction in which the character of its properties or the nature of its business requires such qualification or authorization.

 

Section 4.2.            Compliance with Applicable Laws and Regulations.  The Borrowing Company will comply with the requirements of all applicable laws and regulations the failure with which to comply could have a materially adverse effect on the business, assets, liabilities, financial condition or results of operations of the Borrowing Company.

 

Section 4.3.            Visits and Inspections.

 

(a)           Upon reasonable advance notice from the Lending Company, the Borrowing Company will permit representatives of the Lending Company to (a) visit and inspect the properties of the Borrowing Company during normal business hours, (b) inspect and make extracts from and copies of its books and records, and (c) discuss with its principal officers its businesses, assets, liabilities, financial positions and results of operations.

 

(b)           Each Company agrees that upon reasonable advance notice from an auditor of either Company or any regulatory official employed by the Department of Insurance of any state in which either Company is engaged in business, each Company will prepare and deliver to such auditor or regulatory official, within a reasonable time following such request, a written verification of all Loans made to and by the relevant Company.  Upon reasonable advance notice to each Company, the books and records of the RTO and each Company relating to the subject matter of this Agreement shall be available for inspection by any auditor of either Company or any regulatory official during normal business hours, and the RTO and each Company will cooperate with said auditor or regulatory official in making any audit which requires inspection of said books and records.

 

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ARTICLE 5

 

NEGATIVE COVENANTS

 

So long as this Agreement is in effect:

 

Section 5.1.            Liquidation; Merger; Sale of Assets; Change of Business.  The Borrowing Company shall not at any time, without proper notice to the Lending Company:

 

(a)           Liquidate or dissolve itself (or suffer any liquidation or dissolution) or otherwise wind up;

 

(b)           Merge or consolidate with any other person or entity;

 

(c)           Sell, lease, abandon or otherwise dispose of or transfer all or substantially all of its assets other than in the ordinary course of business; or

 

(d)           Make any substantial change in the type of business conducted by the Borrowing Company as of the date hereof without the prior written consent of the Lending Company if such action would have a material adverse effect on the business, assets, liabilities, financial condition or results of operations of the Borrowing Company.

 

Any corporation into which either Company may be merged, converted or with which either Company may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which either Company shall be a party, shall succeed to all either Company’s rights, obligations and immunities hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.

 

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ARTICLE 6

 

DEFAULT

 

Section 6.1.            Events of Default. Each of the following shall constitute an Event of Default:

 

(a)           Any representation or warranty made by the Borrowing Company under this Agreement shall prove incorrect or misleading in any material respect when made;

 

(b)           The Borrowing Company shall default in the payment of (i) any interest payable under this Agreement within five days of when due, or (ii) any principal payable under this Agreement within three days of when due;

 

(c)           The Borrowing Company shall default in the performance or observance of any agreement or covenant contained in this Agreement, and such Default shall not be cured within a period of 30 days from the occurrence of such Default;

 

(d)           The Borrowing Company shall default under any other agreement or instrument evidencing or relating to any indebtedness which Default shall not have been cured within any applicable grace period set forth therein;

 

(e)           There shall be entered a decree or order by a court having jurisdiction in the premises constituting an order for relief in respect of the Borrowing Company under Title 11 of the United States Code, as now constituted or hereafter amended, or any other applicable federal or state bankruptcy law or similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator, or similar official of the Borrowing Company or of any substantial part of its properties, or ordering the winding-up or liquidation of the affairs of the Borrowing Company and any such decree or order shall continue in effect for a period of sixty consecutive days;

 

(f)            The Borrowing Company shall file a petition, answer or consent seeking relief under Title 11 of the United States Code, as now constituted or hereafter amended, or any other applicable federal or state bankruptcy law or other similar law, or the Borrowing Company shall consent to the institution of proceedings thereunder or to the filing of any such petition or to the appointment or taking of possession of a receiver, liquidator, assignee, trustee, custodian, sequestrator, or other similar official of the Borrowing Company or of any substantial part of its properties, or the Borrowing Company shall fail generally to pay its debts as such debts become due, or the Borrowing Company shall take any corporate action in furtherance of any such action; or

 

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(g)           This Agreement or any provision hereof shall at any time and for any reason be declared by a court of competent jurisdiction to be null and void, or a proceeding shall be commenced by the Borrowing Company or any other person or entity seeking to establish the invalidity or unenforceability thereof, or the Borrowing Company shall deny that it has any liability or any obligation for the payment of principal or interest purported to be created under this Agreement.

 

Section 6.2.            Remedies.  If an Event of Default shall have occurred and shall be continuing,

 

(a)           The obligation of the Lending Company to make Loans hereunder shall immediately cease;

 

(b)           With the exception of an Event of Default specified in Section 6.1(e) or (f), the Lending Company, shall declare the principal of and interest on the Loans and all other amounts owed under this Agreement to be forthwith due and payable, whereupon all such amounts shall immediately become absolute and due and payable, without presentment, demand, protest, or notice of any kind, all of which are hereby expressly waived, anything in this Agreement to the contrary notwithstanding, and whereupon all such amounts shall be immediately due and payable;

 

(c)           Upon the occurrence and continuance of an Event of Default specified in Section 6.1(e) or (f), such principal, interest and other amounts shall thereupon and concurrently therewith become absolute and due and payable, all without any action by the Lending Company, all of which are hereby expressly waived, anything in this Agreement to the contrary notwithstanding;

 

(d)           The Lending Company shall have the right and option to exercise all of the post-default rights granted to them hereunder; and

 

(e)           The Lending Company shall have the right and option to exercise all rights and remedies available to them at law or in equity.

 

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ARTICLE 7

 

MISCELLANEOUS

 

Section 7.1.            Notices.  Except as otherwise provided herein, all notices and other communications required or permitted under this Agreement shall be in writing and, if mailed, shall be deemed to have been received on the earlier of the date shown on the receipt or three Business Days after the postmarked date thereof and, if sent by facsimile, shall be followed forthwith by letter and shall be deemed to have been received on the next Business Day following dispatch and acknowledgment of receipt by the recipient’s facsimile machine.  In addition, notices hereunder may be delivered by hand or overnight courier, in which event the notice shall be deemed effective when delivered.  All notices and other communications under this Agreement shall be given to the parties at the address or facsimile number listed below such party’s signature line hereto, or such other address or facsimile number as may be specified by any party in a writing addressed to the other parties hereto.

 

Section 7.2.            Indemnification.

 

(a)           ILIAC shall indemnify and hold harmless INGAIH against any and all losses, claims, damages, liabilities, or expenses (including reasonable counsel fees and expenses) resulting from any claim, demand, action, or suit arising out of, or in connection with (i) ILIAC’s failure to perform its duties and responsibilities under this Agreement; or (ii) the breach of any representation or warranty under this Agreement by ILIAC.

 

(b)           INGAIH shall indemnify and hold harmless ILIAC against any and all losses, claims, damages, liabilities, or expenses (including reasonable counsel fees and expenses) resulting from any claim, demand, action, or suit arising out of, or in connection with (i) INGAIH’s failure to perform its duties and responsibilities under this Agreement; or (ii) the breach of any representation or warranty under this Agreement by INGAIH.           

 

Section 7.3.            Waivers.  The rights and remedies of the Lending Company under this Agreement shall be cumulative and not exclusive of any rights or remedies which they would otherwise have.  No failure or delay by the Lending Company in exercising any right shall operate as a waiver of it.  The Lending Company expressly reserves the right to require strict compliance with the terms of this Agreement.  In the event the Lending Company decides to fund a request for a Loan at a time when the Borrowing Company is not in strict compliance with the terms of this Agreement, such decision by the Lending Company shall not be deemed to constitute an undertaking by the Lending Company to fund any further requests for Loans or precluding the Lending Company from exercising any rights available to it under the Agreement or at law or equity with respect to the Borrowing Company.  Any waiver or indulgence granted by the Lending Company shall not constitute a modification of this Agreement, except to the extent expressly provided in such waiver or indulgence, or constitute a course of dealing by the Lending Company at variance with the terms of this Agreement such as to require further notice by the Lending Company of its intent to require

 

11

 

strict adherence to the terms of this Agreement in the future.  Any such actions shall not in any way affect the ability of the Lending Company, in their respective sole discretion, to exercise any of their respective rights under this Agreement or under any other agreement.

 

Section 7.4.            Assignment; Successors.

 

(a)           The Borrowing Company may not assign or transfer any of its rights or obligations hereunder without notice to the Lending Company.  Assignment by the Borrowing Company of all or a portion of its rights or obligations under this Agreement to any affiliate shall be undertaken in accordance with the Connecticut insurance holding company act notice and/or approval provisions.  An assignee of the Borrowing Company shall be required to assume and agree to perform and discharge the obligations of the Borrowing Company hereunder that are outstanding as of the date of such assignment and those arising after such assignment.

 

(b)           The Lending Company may not at any time assign or participate its interest under this Agreement without notice to the Borrowing Company.  Assignment by the Lending Company of all or a portion of its rights or obligations under this Agreement to any affiliate shall be undertaken in accordance with the Connecticut insurance holding company act notice and/or approval requirements.  An assignee of the Lending Company shall be required to assume and agree to perform and discharge the obligations of the Lending Company hereunder that are outstanding as of the date of such assignment and those arising after such assignment.  Any holder of a participation in, and any assignee or transferee of, all or any portion of any amount owed by the Borrowing Company under this Agreement may exercise any and all rights provided in this Agreement with respect to any and all amounts owed by the Borrowing Company to such assignee, transferee or holder as fully as if such assignee, transferee or holder had made the Loans in the amount of the obligation in which its holds a participation or which is assigned or transferred to it.

 

(c)           This Agreement shall be binding upon, and inure to the benefit of, the Borrowing Company, the Lending Company, and the permitted successors and assigns of each party hereto.

 

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Section 7.5             Arbitration.

 

(a)           Any dispute or difference with respect to the operation or interpretation of this Agreement on which an amicable understanding cannot be reached shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association and the Expedited Procedures thereof.

 

(b)           The arbitration shall be held in New York, New York, or such other place as may be mutually agreed between the parties, and the arbitration panel shall consist of three arbitrators.  ILIAC shall appoint one arbitrator and INGAIH the second.  Such arbitrators shall then select the third arbitrator before the arbitration commences.  Should one of the parties decline to appoint an arbitrator or should the two arbitrators be unable to agree upon the choice of a third, such appointment shall be left to the American Arbitration Association.

 

(c)           Decisions of the arbitrators shall be by majority vote.  The award rendered by the arbitrators shall be final and binding upon the parties, and the judgment upon the award rendered by the arbitrators may be entered in any Court having jurisdiction thereof.  Each party shall bear its own costs of the arbitration, except that the fees of the arbitrators shall be borne equally by the parties.

 

Section 7.6.            Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

 

Section 7.7.            Severability.  Any provision of this Agreement which is prohibited or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof in that jurisdiction or affecting the validity or enforceability of such provision in any other jurisdiction.

 

Section 7.8.            Entire Agreement; Amendments.  This Agreement represents the entire agreement among the parties hereto with respect to the subject matter of this transaction. No amendment or modification of the terms and provisions of this Agreement shall be effective unless such amendment or modification is:  (i) in writing and signed by both Companies and (ii) undertaken in accordance with the Connecticut insurance holding company act notice and/or approval provisions.

 

Section 7.9.            Payment on Non-Business Days.  Whenever any payment to be made hereunder shall be stated to be due on a non-Business Day, such payment may be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest hereunder.

 

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Section 7.10.          Termination.  This Agreement may be terminated with respect to any party hereto by such party upon its giving the other parties thirty days notice of its intent to terminate.  In the event of termination as provided in this paragraph, the Lending Company’s obligation to make Loans to the Borrowing Company shall cease; provided, however, that the Borrowing Company shall continue to be obligated to make all repayments of Loans and all other amounts due and payable by it as provided under this Agreement.

 

Section 7.11.          Governing Law.  This Agreement shall be construed in accordance with and governed by the laws of Delaware and Connecticut, without regard to the conflict of laws rules thereof.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused it to be executed by their duly authorized officers, all as of the day and year first above written.

 

	
 
    	
ING   LIFE INSURANCE AND ANNUITY
    
	
 
    	
COMPANY
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Spencer   T. Shell
    
	
 
    	
Name:
    	
Spencer   T. Shell
    
	
 
    	
Title:
    	
Vice   President, Assistant Treasurer and
    
	
 
    	
 
    	
Assistant   Secretary
    
	
 
    	
Dated:
    	
April 15,   2011
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Address   for notices:
    
	
 
    	
5780   Powers Ferry Road
    
	
 
    	
Suite P1
    
	
 
    	
Atlanta,   Georgia 30327
    
	
 
    	
Phone:   770/980-5114
    
	
 
    	
Fax:   612/492-0869
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ING   AMERICA INSURANCE HOLDINGS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/  David   S. Pendergrass
    
	
 
    	
Name:
    	
David   S. Pendergrass
    
	
 
    	
Title:
    	
Senior   Vice President and Treasurer
    
	
 
    	
Dated:
    	
April 15,   2011
    
	
 
    	
 
    	
 
    
	
 
    	
Address   for notices:
    
	
 
    	
5780   Powers Ferry Road N.W.
    
	
 
    	
Suite 300
    
	
 
    	
Atlanta,   Georgia 30327
    
	
 
    	
Phone:   770/980-3300
    
	
 
    	
Fax:   770/980-3301
    

 

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