Document:

Exhibit 10.2

 

AMENDMENT NO. 1

TO CREDIT AGREEMENT

 

THIS AMENDMENT
NO. 1 TO CREDIT AGREEMENT, dated as of March 12, 2007 (this “Amendment”),
is made by and among Bowie Resources, LLC, a Delaware limited liability company
(“Bowie”); Colorado Holding Company, Inc., a Delaware corporation (“CHC”);
Bowie Resources Management Partner, LLC, a Nevada limited liability company (“BRMP”);
and General Electric Capital Corporation, as agent for the lenders party to the
Credit Agreement described below (the “Agent”) and as a Lender under the
Credit Agreement.  Capitalized terms used
in this Amendment and not otherwise defined have the meanings set forth in the Credit
Agreement, as amended hereby.

 

 W I T N E S S E T H: 

 

WHEREAS, Bowie, CHC, BRMP, the Lenders and the Agent are parties to that
certain Credit Agreement, dated as of December 20, 2006 (as the
same may hereafter be amended, modified or supplemented from time to time, the “Credit
Agreement”); and

 

WHEREAS,
Bowie, the Lenders and the Agent wish to amend certain provisions of the Credit
Agreement in certain respects;

 

NOW,
THEREFORE, in consideration of the agreements herein contained, the parties
hereto hereby agree as follows:

 

ARTICLE
1.

 

AMENDMENT

 

Section 5.20
of the Credit Agreement shall be amended in its entirety to read as follows:

 

5.20        BLM
Lease Title Opinion.  No later than May 15,
2007, Borrower shall have provided, or caused to be provided to Agent, a title
report, in form and substance reasonably satisfactory to the Agent, covering
the BLM Lease with assigned serial number D-036955.

 

ARTICLE
2.

 

EFFECTIVENESS

 

This Amendment
shall become effective on the date (the “Effective Date”)
when the Agent shall have received counterparts of this Amendment, duly
executed and delivered on behalf of Bowie, CHC, BRMP and the Requisite Lenders.

 

 

ARTICLE 3.

 

ACKNOWLEDGMENT; COVENANTS; REPRESENTATIONS

 

3.1           Acknowledgment and Reaffirmation.  Each
of Bowie, CHC and BRMP hereby reaffirms, as of the Effective Date, the
covenants and agreements contained in each Loan Document to which it is a
party, including, in each case, as such covenants and agreements may be
modified by this Amendment and the transactions contemplated thereby.  As herein amended, the Credit Agreement (as
so amended, the “Amended Credit Agreement”) and each of the other Loan
Documents shall remain in full force and effect and is hereby ratified and
confirmed in all respects.  After the
Effective Date, all references in the Credit Agreement to “Agreement” or
similar terms shall refer to the Amended Credit Agreement.

 

3.2           Representations and Warranties, Etc.  Each
of Bowie, CHC and BRMP represents and warrants to each other party hereto that:

 

3.2.1        each
of the representations and warranties of Bowie, CHC and BRMP, as applicable,
set forth in the Credit Agreement and the other Loan Documents is true and
correct in all respects as of the date of the execution and delivery of this
Amendment by Bowie, CHC and BRMP (unless stated to relate to a specific earlier
date, in which case such representations and warranties shall be true and
correct in all respects as of such date), with the same effect as if made on
such date;

 

3.2.2        the
execution and delivery by Bowie, CHC and BRMP of this Amendment and the
performance by Bowie, CHC and BRMP of their respective obligations under the
Amended Credit Agreement, (i) are within the powers of Bowie, CHC and BRMP,
as applicable, (ii) have been duly authorized by all necessary action on
the part of Bowie, CHC and BRMP, as applicable, (iii) have received all
necessary governmental approval and (iv) do not and will not contravene or
conflict with (A) any provision of law or the certificate of incorporation
or by-laws or operating agreement or other organizational documents of Bowie,
CHC or BRMP, as applicable, or (B) any agreement, judgment, injunction,
order, decree or other instrument binding upon Bowie, CHC or BRMP or any of
their respective Subsidiaries; and

 

3.2.3        both
this Amendment and the other Loan Documents are the legal, valid and binding
obligations of Bowie, CHC and BRMP enforceable against Bowie, CHC and BRMP in
accordance with their respective terms, except as enforceability may be limited
by bankruptcy, insolvency or other similar laws of general application
affecting the enforcement of creditors’ rights or by general principles of
equity limiting the availability of equitable remedies.

 

3.3           Course of Dealing, Etc. 
Bowie, CHC and BRMP hereby acknowledge and agree that the acceptance by
each Lender and the Agent of this document shall not be construed in any manner
to establish any course of dealing on any Lender’s or the Agent’s part,
including the providing of any notice or the requesting of any acknowledgment
not otherwise expressly provided for in any Loan Document with respect to any
future consent, amendment, waiver, supplement or other modification to any Loan
Document or any arrangement contemplated by any Loan Document.

 

2

 

ARTICLE
4.

 

MISCELLANEOUS

 

4.1           Loan Document Pursuant to Credit Agreement.  This
Amendment is a Loan Document executed pursuant to the Credit Agreement and
shall be construed, administered and applied in accordance with all of the
terms and provisions of the Credit Agreement.

 

4.2           Counterparts.  This
Amendment may be executed by the parties hereto in several counterparts, each
of which when executed and delivered shall be deemed to be an original and all
of which shall constitute together but one and the same agreement.  Delivery of an executed counterpart of a
signature page to this Amendment by facsimile shall be effective as
delivery of a manually executed counterpart of this Amendment.

 

4.3           Governing Law.  THIS
AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN THAT STATE AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.

 

4.4           Lenders.  The Agent acknowledges and
agrees that its execution of this Agreement as Agent and as a Lender
constitutes the approval and consent of the Agent and the Requisite Lenders
(each as defined in the Credit Agreement) to the transactions herein described.

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

 

3

 

IN WITNESS WHEREOF, the signatories hereto have caused this Amendment to
be executed by their respective duly authorized representatives as of the day
and year first above written.

 

	
   

  	
  BOWIE RESOURCES, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott Dyer

  
	
   

  	
  Name:

  	
  Scott Dyer

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COLORADO HOLDING COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen Addington

  
	
   

  	
  Name:

  	
  Stephen Addington

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BOWIE RESOURCES MANAGEMENT

  
	
   

  	
  PARTNER, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Keith H. Sieber

  
	
   

  	
  Name:

  	
  Keith H. Sieber

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC CAPITAL

  
	
   

  	
  CORPORATION, as Agent and Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Matthew A. Toth, III

  
	
   

  	
  Name:

  	
  Matthew A. Toth, III

  
	
   

  	
  Title:

  	
  Authorized Signatory

  

 

S-1Exhibit 10.3

 

EXECUTION COPY

 

AMENDMENT NO. 2 TO
THE CREDIT AGREEMENT AND LIMITED CONSENT

 

THIS
AMENDMENT NO. 2 TO THE CREDIT AGREEMENT  AND LIMITED CONSENT, dated as of May 8,
2007 (this “Amendment and Consent”), is made by and among BOWIE RESOURCES, LLC, a Delaware limited liability company
(the “Borrower”); COLORADO HOLDING
COMPANY, INC., a Delaware corporation (“CHC”); BOWIE RESOURCES MANAGEMENT PARTNER, LLC, a Nevada limited
liability company (“BRMP” and together with the Borrower and CHC,
collectively the “Loan Parties”); and GENERAL
ELECTRIC CAPITAL CORPORATION, a Delaware corporation, as
administrative agent (the “Agent”) for the lenders (the “Lenders”)
party from time to time to the Credit Agreement described below and, for
itself, as a Lender. Capitalized terms used in this Amendment and Consent and
not otherwise defined herein have the same meanings as set forth in the Credit
Agreement, as amended hereby.

 

 W I T N E S S E T H: 

 

WHEREAS,
the Loan Parties, the other Credit Parties signatory
thereto from time to time, the Lenders and the Agent are parties to that
certain Credit Agreement, dated as of December 20, 2006 (as
amended, amended and restated, modified or supplemented from time to time, the “Credit
Agreement”) pursuant to which the Lenders made certain loans and certain
other extensions of credit to the Borrower;

 

WHEREAS,
the Borrower currently owns Three Thousand Six Hundred Ninety-One (3,691)
shares of the capital stock (Class 2 Stock) of The Fire Mountain Canal and
Reservoir Company as represented by Certificate Nos. 2969, 2970, 2971, and 2972
(collectively, the “Water Shares”).

 

WHEREAS,
the Agent, in its capacity as agent for itself and the Lenders, has a perfected
security interest in the Borrower’s right, title and interest in, to and under
the Water Shares (the “Water Shares Lien”) pursuant to that certain Deed of Trust, Assignment of
Production, Security Agreement, Financing Statement, Fixture Filing and
As-Extracted Collateral Filing dated as of December 19, 2006 among
Borrower, the Public Trustee of Delta County, Colorado and the Agent (the “Deed
of Trust”);

 

WHEREAS,
the Borrower will agree to cause the Water Shares to be transferred to Keith H.
Sieber (the “Water Shares Transfer”) pursuant to that certain Water
Rights Deed (Quitclaim) dated as of even date herewith by the Borrower (the “Water
Rights Deed”);

 

WHEREAS,
Section 6.8 of the Credit Agreement prohibits the sale and transfer of the
Water Shares without the prior written consent of the Lenders;

 

WHEREAS,
the Borrower has requested that the Agent and the Lenders (i) grant their respective
consent to the Water Shares Transfer, the execution and delivery of the Water
Rights 

 

1

 

Deed and the execution and delivery of that certain Amendment of Water
Use Agreement (the “Amendment of Water Use Agreement”) dated as of even
date herewith by and between the Borrower and the Agent that amends the Water
Use Agreement recorded under Reception No. 610725 in the records of Delta
County, Colorado (the “Consent”) and (ii) agree to certain
amendments to the Credit Agreement, all as more particularly set forth herein;

 

WHEREAS,
the Agent and the Lenders are willing to grant the Consent and amend certain
terms and provisions of the Credit Agreement on the terms and conditions set
forth herein; and

 

NOW, THEREFORE,
in consideration of the mutual agreements herein contained and for other good
and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto hereby agree as follows:

 

1.                                       Amendment. Section 6.16 of the Credit Agreement is
hereby amended by adding thereto in the appropriate order the following
additional clause:

 

“(c)                          The Borrower shall not (i) change
or amend any of the terms of that certain Water Use Agreement dated as of May 8,
2007 by and between the Borrower and Keith H. Sieber (the “Water Use
Agreement”), (ii) terminate the Water Use Agreement prior to the
satisfaction in full of all Obligations or (iii) consent to the transfer
of the Water Shares (as such term is defined in the Water Use Agreement), in
each case, without the prior written consent of the Agent.”

 

2.                                       Consent. Subject to Section 3 herein,
the Agent and the Lenders hereby acknowledge and consent to the following: (i) the
execution and delivery by the Borrower of the Water Use Agreement dated as of
even date herewith by and between the Borrower and Keith H. Sieber in the form
attached hereto as Exhibit A (the “Water Use Agreement”), (ii) the
release of the Water Shares Lien pursuant to that certain Request for Partial
Release of Deed of Trust and Partial Release in connection with the Delta
County, Colorado recorded Deed of Trust with recording number 610671, dated as
of even date herewith, and that certain UCC-3 Financing Statement Amendment
partially terminating that certain Delta County, Colorado recorded Deed of
Trust, filed as a fixture filing, with recording number 610672, with respect to
the Water Shares Lien (collectively, the “Deed of Trust Releases” and
each, a “Deed of Trust Release”); (iii) the Water Shares Transfer
pursuant to the terms of the Water Rights Deed, (iv) the execution and
delivery by the Borrower of the Water Rights Deed and (v) the execution
and delivery by the Borrower of the Amendment of Water Use Agreement.

 

3.                                       Conditions Precedent. This Amendment and Consent shall not become
effective until the date (the “Effective Date”) on which the following
have been completed:

 

(a)                                  the Borrower and Keith H. Sieber have executed and
delivered to the Agent counterparts of the Water Use Agreement and that certain
Memorandum of Agreement (Water Use Agreement) dated as of or about the date
hereof; and

 

(b)                                 the Borrower has delivered to the Agent executed
counterparts of the Water Rights Deed and the Amendment of Water Use Agreement.

 

2

 

4.                                       Representations and Warranties. To induce the Agent
and the Lenders to enter into this Amendment and Consent, each Loan Party
hereby represents and warrants that as of the date hereof:

 

(a)                                  all representations and warranties made under the
Credit Agreement and the other Loan Documents, to the extent applicable to such
Loan Party, shall be deemed to be made, and shall be true and correct in all
respects, at and as of the Effective Date except to the extent that any such
representation or warranty expressly relates to an earlier date, in which case
such representation and warranty shall have been true and correct in all
respects as of such earlier date, or previously fulfilled in accordance with
the terms hereof;

 

(b)                                 there exists no Default or Event of Default under
the Credit Agreement or any of the Loan Documents;

 

(c)                                  the execution and delivery by the Loan Parties of
this Amendment and Consent, (i) are within the powers of the Loan Parties,
as applicable, (ii) have been duly authorized by all necessary action on
the part of the Loan Parties, as applicable, (iii) have received all
necessary governmental approval and (iv) do not and will not contravene or
conflict with (A) any provision of law or the certificate of incorporation
or by-laws or operating agreement or other organizational documents of the Loan
Parties, as applicable, or (B) any agreement, judgment, injunction, order,
decree or other instrument binding upon the Loan Parties or any of their
respective Subsidiaries; and

 

(d)                                 this Amendment and Consent
has been duly executed and delivered by the duly authorized officers of each
Loan Party, and this Amendment and Consent and the Credit Agreement as amended
hereby are the legal, valid and binding obligation of each Loan Party
enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting creditors’ rights generally and
by general principles of equity.

 

All representations and warranties made under this Amendment and
Consent shall survive, and not be waived by, the execution of this Amendment
and Consent by the Lenders and the Agent, any investigation or inquiry by any
Lender or the Agent, or the making of any loans under the Credit Agreement.

 

5.                                       Acknowledgment and Reaffirmation. The Loan Parties hereby reaffirm and ratify in all
respects, as of the Effective Date, the covenants and agreements contained in
each Loan Document to which it is a party, including, in each case, as such
covenants and agreements may be modified by this Amendment and Consent and the
transactions contemplated thereby. Except as amended by this Amendment and
Consent, the Deed of Trust Releases and the Amendment of Water Use Agreement,
as applicable, the Credit Agreement and the other Loan Documents shall remain
unchanged and in full force and effect in accordance with their respective
terms and shall constitute the legal, valid, binding and enforceable obligations
of the Credit Parties to the Lenders and the Agent, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting creditors’ rights generally and
by general principles of equity. This Amendment and Consent shall not be
construed to (i) impair the validity, perfection or priority of any lien
or security interests securing 

 

3

 

the Obligations; (ii) waive or impair any rights, powers or remedies
of the Agent or the Lenders under the Credit Agreement and the other Loan
Documents; (iii) constitute an agreement by the Agent or the Lenders or
require the Agent or the Lenders to extend the time for payment of any of the
Obligations; or (iv) constitute a waiver of any right of the Agent or the
Lenders to insist on strict compliance by the Credit Parties with each and
every term, condition and covenant of this Amendment and Consent and the other
Loan Documents in accordance therewith.

 

6.                                       Course of Dealing, Etc. Each Loan Party hereby acknowledges and agrees
that the execution, delivery and performance of this Amendment and Consent by
the Agent and the Lenders do not and shall not create (nor shall the Loan
Parties rely upon the existence of or claim or assert that there exists) any
obligation of the Agent or the Lenders to consider or agree to any other
amendment of or consent with respect to, any of the Loan Documents, or any
other instrument or agreement to which the Agent or any Lender is a party
(collectively, a “Modification or Waiver”), and in the event that the
Agent or any of the Lenders subsequently agree to consider any requested
Modification or Waiver, neither the existence of this Amendment and Consent nor
any other conduct of the Agent or any of the Lenders related hereto, shall be
of any force or effect on the Agent’s or any of the Lenders’ consideration or
decision with respect to any such requested Modification or Waiver, and the
Agent and the Lenders shall not have any obligation whatsoever to consider or
agree to any such Modification or Waiver.

 

7.                                       Miscellaneous.

 

(a)                                  Loan Document Pursuant to Credit Agreement. This Amendment and Consent is a Loan Document
executed pursuant to the Credit Agreement and shall be construed, administered
and applied in accordance with all of the terms and provisions of the Credit
Agreement.

 

(b)                                 Counterparts. This Amendment and Consent may be executed by the parties hereto in
several counterparts, each of which when executed and delivered shall be deemed
to be an original and all of which shall constitute together but one and the
same agreement. Delivery of an executed counterpart of a signature page to
this Amendment and Consent by facsimile shall be effective as delivery of a
manually executed counterpart of this Amendment and Consent.

 

(c)                                  Governing Law. THIS AMENDMENT AND CONSENT SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA.

 

(d)                                 Lenders. The Agent acknowledges and agrees that its execution of this Amendment
and Consent as Agent and as a Lender constitutes the approval and consent of
the Agent and the Requisite Lenders to the transactions herein described.

 

(e)                                  Relationship of the Parties. The relationship of the Loan Parties and the
Agent has been and shall continue to be, at all times, that of debtors and
creditors and not as joint 

 

4

 

venturers or partners. Nothing contained in this Amendment and Consent,
any instrument, document or agreement delivered in connection herewith or in
the Credit Agreement or any other Loan Document shall be deemed or construed to
create a fiduciary relationship between or among the parties.

 

(f)                                    Further Actions; Successors and Assigns. Each of the Loan Parties agrees to take any
further action that the Lenders or the Agent shall reasonably request from time
to time in connection herewith to evidence the agreements set forth herein. This
Amendment and Consent shall be binding upon and inure to the benefit of the
successors and permitted assigns of the parties hereto.

 

[signature
pages follow]

 

5

 

IN WITNESS
WHEREOF, the signatories hereto have caused this Amendment and Consent to be
executed by their respective duly authorized representatives as of the day and
year first above written.

 

	
   

  	
  BOWIE RESOURCES, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott Dyer

  
	
   

  	
  Name:

  	
  Scott Dyer

  
	
   

  	
  Title:

  	
  CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  COLORADO HOLDING COMPANY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen Addington

  
	
   

  	
  Name:

  	
  Stephen Addington

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BOWIE RESOURCES MANAGEMENT

  PARTNER, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Keith H. Sieber

  
	
   

  	
  Name:

  	
  Keith H. Sieber

  
	
   

  	
  Title:

  	
  President

  

 

[Signature
Page to Amendment No. 2 and Limited Consent]

 

 

	
   

  	
  GENERAL ELECTRIC CAPITAL 

  CORPORATION, as Agent and Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Matthew A. Toth, III

  
	
   

  	
  Name:

  	
  Mathew A. Toth, III

  
	
   

  	
  Title:

  	
  Authorized Signatory

  

 

[Signature
Page to Amendment No. 2 and Limited Consent]

 

 

EXHIBIT
A

 

 

WATER USE AGREEMENT

 

This WATER USE
AGREEMENT (this “Agreement”), is dated as of May 8, 2007, between BOWIE
RESOURCES, LLC, a Delaware limited liability company (“Bowie”), and Keith
Sieber (“Sieber”).

 

W I T N E S S E T H 

 

WHEREAS, Bowie
currently owns Three Thousand Six Hundred Ninety-One (3,691) shares of the
capital stock (Class 2 Stock) of The Fire Mountain Canal and Reservoir
Company (the “Water Shares”), as represented by Certificate Nos. 2969, 2970,
2971, and 2972.

 

WHEREAS, the
Water Shares are subject to perfected security interests granted in favor of
General Electric Capital Corporation (“GECC”), in its capacity as agent for
itself and the lenders party to that certain Credit Agreement between Bowie,
GECC and other signatory parties thereto, dated December 20, 2006 (as
amended, amended and restated, replaced, restructured or otherwise modified
from time to time, the “GE Credit Agreement”).

 

WHEREAS,
pursuant to that certain Special Warranty Deed, dated July 12, 2005, and
that certain Special Warranty Deed, dated August 16, 2006, Sieber acquired
certain real property from Bowie as described in Exhibit A attached hereto
(the “Sieber Property”).

 

WHEREAS, in
connection with Sieber’s acquisition of the Sieber Property, Sieber was to have
received the Water Shares; provided, however, that such shares could not be
transferred to Sieber because they were encumbered by a security interest in
favor of Bowie’s lender at such time and that such shares were to be transferred
to Sieber once (i) all coal reserves controlled by Bowie are exhausted, or
(ii) such shares are not used or needed by Bowie in the conduct of its
business, including, without limitation, to satisfy any then existing water
augmentation plan obligations.

 

WHEREAS, Bowie
has agreed to cause the Water Shares to be transferred to Sieber provided that
Sieber executes and delivers this Agreement.

 

WHEREAS, it is
a condition to GECC providing its consent to the transfer of the Water Shares
by Bowie to Sieber, that Bowie and Sieber execute and deliver this Agreement.

 

WHEREAS, Bowie
currently owns and operates the Bowie Mine #1 and Bowie Mine #2 and related
mining facilities, sedimentation ponds and operations, as subject to and more
fully described in the GE Credit Agreement and the other loan documents
executed in connection therewith, and such mines and mining operations may
require use of water subject to the Water Shares for future mining related
operations, including expansion of such mines and operations.

 

WHEREAS, in
order to ensure that the water subject to the Water Shares is available for use
in Bowie’s mining operations if needed, as determined by Bowie, Sieber wishes
to grant to Bowie, the first priority right to exclusively use all the water
available under the Water Shares (“Available Water”) for purposes related to
the conduct of its business.

 

 

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

 

1.                                       Grant of Use of Water Rights. Sieber hereby grants to Bowie and its successors
and assigns, pursuant to the terms and conditions hereof, the first priority
right to exclusively use the Available Water at Bowie’s sole discretion. Sieber’s
rights and interests in use of the Available Water shall be subject to and
subordinated to Bowie’s first priority use of Available Water.

 

2.                                       Bowie has First Priority Exclusive Use. Bowie and its successors and assigns shall have
first priority exclusive use of the Available Water, including the right to
fully consume all Available Water to exhaustion at Bowie’s sole discretion,
without any restriction or limitation on such use by Sieber’s need or use of
Available Water. Bowie and its successors and assigns may elect, without advance
notice to or further consent or approval from Sieber, to commence, increase,
reduce, interrupt or otherwise modify its use of Available Water pursuant to
this Agreement in the event Bowie determines, in its sole discretion, that all
or a portion of the Available Water is needed for any purposes related to the
conduct of its business; provided, however, that Bowie shall notify Sieber no
less than thirty (30) days prior to commencing use of the Available Water. Bowie
shall have the right to change or seek to change the water rights for and
related to the Available Water, to include the water rights for the Available
Water in augmentation plans, replacement plans, and temporary supply plans, and
to otherwise utilize the Available Water for its purposes, all without notice
to Sieber and without the necessity of obtaining Sieber’s approval or consent;
provided, however, that Bowie will notify Sieber of any such change. Sieber
shall fully support and cooperate with Bowie, as needed, in any efforts to
change such water rights and in any proceedings initiated by Bowie to change
such water rights.

 

3.                                       Sieber’s Duties and Obligations.

 

(a)                                  Sieber shall not change or seek to change the
water rights for and related to the Available Water. Sieber agrees not to abandon
all or any portion of the water rights for the Available Water, nor shall
Sieber act or fail to act in such a manner that could be construed to be an
abandonment of all or any portion of such water rights.

 

(b)                                 If required by Bowie in order for it to utilize
all or any portion of the Available Water for Bowie’s purposes, Sieber shall
retire all or portions of the Sieber Property from irrigation by the Available
Water, and shall execute all documents required by Bowie to evidence and
document such dry-up.

 

(c)                                  Sieber shall not sell, assign or transfer the
Water Shares or his rights under this Agreement, nor shall he allow any use of
the Available Water by third parties or on lands other than the Sieber
Property, without the prior written consent of Bowie.

 

(d)                                 Sieber shall comply with all applicable laws,
statutes, rules, regulations and orders from federal, state and local
governmental agencies and officials, and all leases and agreements, water use
and/or delivery contracts, State Engineer Office permits and orders, and ditch
company bylaws, rules and policies relating to the Water Shares or the
Available Water, as

 

 

well as with all augmentation plans and water court decrees and orders
to which the Water Shares or the Available Water are subject, or to which they
may be subject in the future.

 

4.                                       Modification or Amendment. No modification or amendment to this Agreement
shall be effective unless the same shall be in writing and signed by all the
parties hereto.

 

5.                                       Governing Law. This Agreement shall be governed by and construed under the laws of the
State of Colorado.

 

6.                                       Captions. The captions and headings in this Agreement are for convenience only and
shall not define, limit, or describe the scope of this Agreement or the intent
of any provision thereof.

 

7.                                       Severability. In the event that any provision of this Agreement shall be adjudicated
to be void, illegal, invalid, or unenforceable, the remaining terms and
provisions of this Agreement shall not be affected hereby, and each of such
remaining terms and provisions shall be valid and enforceable to the fullest
extent permitted by law.

 

8.                                       No Consequential Damages. Except as prohibited by law, each party hereto
waives any right it may have to claim or recover any special, exemplary,
punitive or consequential (including business interruption) damages, or any
damages other than, or in addition to, actual damages.

 

9.                                       Waiver. Waiver by any party herein of any breach by the other of any covenant,
condition, or obligation herein or by failure to exercise any right or remedy
with respect to any such breach shall not constitute a waiver or relinquishment
for any further such breach or failure.

 

10.                                 Entire Agreement. This Agreement constitutes the entire understanding and agreement of the
parties with respect to the subject matter hereof and shall supersede and
replace all prior understandings and agreements, whether verbal or in writing. The
parties confirm and acknowledge that there are no other promises, covenants,
understandings, agreements, representations, or warranties with respect to the
subject matter of this Agreement except as expressly set forth herein.

 

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

 

12.                                 No Partnership, etc. Nothing in this Agreement is intended or shall be
construed as constituting either of the parties as the partner of the other nor
to create any partnership, mining partnership, joint venture or other
relationship in which the parties shall have any duties to each other or any
authority as against third parties to bind the other except as may be expressly
set forth in this Agreement.

 

13.                                 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the successors and permitted assigns of the respective
parties hereto; provided, however, that Sieber shall not assign this Agreement
or his rights hereunder to any other party without the prior written consent of
Bowie.

 

 

14.                                 Notices. Wherever notice, request, or demand is required by this Agreement, it
shall be served by the party giving such notice, request or demand on the party
to whom directed, addressed as follows:

 

	
  If to Bowie:

  	
   

  	
  BOWIE RESOURCES, LLC

  	
   

  	
   

  
	
   

  	
   

  	
  Post Office Box 483

  	
   

  	
   

  
	
   

  	
   

  	
  43659 Bowie Road

  	
   

  	
   

  
	
   

  	
   

  	
  Paonia, Colorado 81428

  	
   

  	
   

  
	
   

  	
   

  	
  Attention: President

  
	
   

  	
   

  	
  Telephone:

  	
    (970)
  929-5257

  
	
   

  	
   

  	
  Facsimile:

  	
    (970)
  929-5256

  
	
   

  	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Frost Brown Todd LLC

  	
   

  	
   

  
	
   

  	
   

  	
  West Main Street, Suite 2700

  	
   

  	
   

  
	
   

  	
   

  	
  Lexington, Kentucky 40507

  	
   

  	
   

  
	
   

  	
   

  	
  Attention: Jeffrey L. Hallos

  
	
   

  	
   

  	
  Telephone:

  	
    (859)
  231-0000

  
	
   

  	
   

  	
  Facsimile:

  	
    (859)
  231-0011

  
	
   

  	
   

  	
   

  	
   

  
	
  If to Sieber:

  	
   

  	
  Keith Sieber

  	
   

  	
   

  
	
   

  	
   

  	
  1326 Imperia Drive

  	
   

  	
   

  
	
   

  	
   

  	
  Henderson, Nevada 89052

  	
   

  	
   

  
						

 

Any party may
change its address for notice and/or add the names of successors or assigns by
written notice given in accordance with this section. Any such notice, request
or demand (“Notices”) shall be given (a) by personal delivery; (b) by
registered or certified mail, postage prepaid, return receipt requested; or (c) by
nationally recognized overnight or other express courier services. All Notices
shall be effective and shall be deemed delivered (i) if by personal
delivery, on the date of delivery if delivered during normal business hours of
the recipient and, if not delivered during such normal business hours, on the
next business day following delivery; (ii) if by courier service, on the
second (2nd) business day after dispatch thereof; and (iii) if
by registered or certified mail, on the fifth (5th) business
day after dispatch thereof.

 

15.                                 Memorandum. At the request of Bowie, Sieber shall execute and deliver to Bowie a
memorandum of this Agreement, in form and substance sufficient for recording,
which shall be recorded by Bowie in the real estate records of Delta County,
Colorado.

 

16.                                 Termination. This Agreement shall terminate (a) at such time as may be agreed to
by Bowie and Sieber, or (b) when all principal, interest, fees, expenses,
costs and other obligations (collectively, the “Obligations”) outstanding under
the GE Credit Agreement have been irrevocably satisfied in full. Notwithstanding
any other provision of this Agreement to the contrary, in the event Bowie is
using Available Water at the time the Obligations under the GE Credit Agreement
are irrevocably satisfied in full and such satisfaction is achieved using
borrowed funds, this Agreement shall not be terminated until all of the
Obligations arising from

 

 

the credit agreement or similar agreement pursuant to which such funds
were borrowed are irrevocably satisfied in full.

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 

 

IN WITNESS
WHEREOF, the parties hereto have duly executed and delivered this Agreement, or
caused this Agreement to be duly executed and delivered by their respective
representatives, as of the date first above written.

 

	
   

  	
  BOWIE RESOURCES, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott Dyer

  
	
   

  	
  Name: 

  	
  Scott Dyer

  
	
   

  	
  Title:

  	
  CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Keith Sieber

  
	
   

  	
  Keith Sieber

  

 

S-1

 

EXHIBIT
A

 

Description of Sieber Property

 

Parcel 1:

 

Bowie Resources and Johnson Boundary
Adjustment

Recorded February, 2001

Plat Book 25, Page 6

 

Parcel 1

 

A portion of the E1/2 NE1/4, Section 31 and a portion of the W1/2
NW1/4, Section 32,

Township 13 South, Range 91 West, 6th P.M.

Described as follows:

 

Beginning at a point on the southeasterly right of way of Colorado
State Highway 133 whence the northwest corner of said Section 32 bears N
18°50’14” E, 1,457.73
feet,

 

Thence along said highway right of way on the arc of a curve to the
left  213.26 feet with a radius of 995.00
feet, and a chord which bears N 49°47’
04” E, 212.85 feet,

Thence N 43°38’
40” E, 278.73 feet, along said highway right of way,

Thence leaving said highway right of way S 89°12’
13” E, 90.98 feet,

Thence N 01°21’
47” E, 99.15 feet, along the west line of the NW 1/4, said Section 32, back
to said highway right of way

Thence N 43°38’
40” E, 296.55 feet, along said highway right of way,

Thence along said highway right of way on the arc of a curve to the
right 97.98 feet

with a radius of 5690.00 feet, and a chord which bears N 44°08’
16” E,  97.98 feet,

Thence leaving said highway right of way

S 25°36’
22” E, 59.88 feet,

Thence S 85°52’
17” E, 170.80 feet,

Thence S 37°05’
05” E, 26.14 feet,

Thence N 63°21’
01” E, 34.55 feet,

Thence N 57°59’
30” E, 111.41 feet,

Thence S 33°28’
55” E, 103.87 feet,

Thence S 56°31’
05” W, 807.79 feet to a point on the west line of the NW1/4, said Section 32,

Thence S 17°38’
28” E, 119.36 feet,

Thence S 25°50’
10” E,  222.66 feet,

Thence S 65°20’
09” E,  253.92 feet,

Thence S 68°00’
54” E,    71.11 feet,

Thence S 21°19’
50” W,  638.80 feet,

Thence N 41°45’
00” W,  268.00 feet,

Thence N 70°15’
00” W,    41.30 feet to a point on the
west line of the NW1/4, said Section 32,

Thence N 70°15’
00” W,      5.65 feet,

 

 

Thence N 46°45’
41” W,  127.55 feet,

Thence N 35°42’
09” W,  147.99 feet,

Thence N 28°18’
00” W,  501.32 feet, to the point of
beginning,

containing 14.44 acres
more or less.

 

Bearings are based on the assumption that the west line of the NW1/4 of

Section 32
bears N 01°21’47” E

 

Parcel
2:

 

Bowie
Resources Boundary Adjustment

Recorded
February, 2006

Plat Book 34, Pages 5-8

 

Parcel 1

 

A portion of
the SW1/4, Section 29 and the NW1/4 Section 32,

Township 13
South, Range 91 West, of the 6th P.M.

Delta County,
Colorado, described as follows:

 

Beginning at a
point on the southeasterly right of way line of state highway 133

Whence the
Northwest corner said Section 32 bears S 88°04’11” W, 1002.95 feet,

Thence along
the arc of a curve to the left 323.42 feet,

with a radius
of 2905.00 feet, a central angle of 06°22’44”

and a chord
which bears N 39°48’02” E, 323.25 feet,

along the ROW
line of Highway 133,

Thence N 36°36’40”
E,  173.30 feet along the ROW line of
Highway 133,

Thence along
the arc of a curve to the right 199.09 feet,

with a radius
of 1870.00 feet, a central angle of 06°06’00”

and a chord
which bears N 39°39’40” E, 199.00 feet,

along the ROW
line of Highway 133,

Thence N 42°42’40”
E,  195.00 feet along the ROW line of
Highway 133,

Thence N 85°01’15”
E,  151.76 feet,

Thence N 49°16’44”
E,  225.00 feet,

Thence S 10°34’50”
E,  512.59 feet,

Thence along
the arc of a curve to the right 777.73 feet

with a radius
of 2922.20 feet, a central angle of 15°14’56”

and a chord
which bears S 47°29’48” W, 775.43 feet,

Thence S 72°05’43”
W,  144.41 feet,

Thence N 50°26’04”
W,  358.40 feet,

to the point
of beginning, containing 11.89 acres.

 

Bearings are
based on the assumption that the

south line of
the SW1/4 of Section 29 Bears  S
88°58’07” E

 

 

Parcel
3:

 

Bowie Resources
Boundary Adjustment

Recorded
February, 2006

Plat Book 34, Pages 5-8

 

Parcel 3

 

Portions of
the South 1/2 Section 29,

Township 13
South, Range 91 West, of the 6th P.M.

Delta County,
Colorado, Described as follows:

 

Beginning at
the  South 1/4 corner, Section 29

Thence N 34°25’05”
E, 497.00 feet along the river channel,

Thence N 45°38’52”
E, 628.00 feet along the river channel,

Thence N 26°39’18”
E, 518.00 feet along the river channel,

Thence N 27°17’12”
E, 285.00 feet along the river channel,

Thence N 28°29’51”
E, 665.66 feet along the river channel,

Thence leaving
the river,

Thence N 58°27’08”
W,  90.38 feet,

Thence along
the arc of a curve to the left 438.88 feet

with a radius
of 418.28 feet, a central angle of 60°07’01”

and a chord
which bears N 88°30’38” W, 419.02 feet,

Thence S 61°25’51”
W,     51.26 feet,

Thence S 27°40’55”
W,     90.00 feet,

Thence S 61°26’03”
W,   295.77 feet,

Thence S 49°26’11”
W,   312.69 feet,

Thence S 36°37’03”
W,   470.07 feet,

Thence S 36°37’03”
W, 1073.60 feet,

Thence along
the arc of a curve to the right 136.64 feet

with a radius
of 2977.20 feet, a central angle of 02°37’47”

and a chord
which bears S 37°55’52” W, 136.63 feet,

Thence S 10°34’49”
E,   56.61 feet,

Thence S 89°40’00”
E, 221.48 feet,

Thence S 00°16’02”
E,   59.37 feet,

Thence S 00°11’55”
E, 164.93 feet,

Thence S 82°59’03”
W,   82.11 feet,

Thence N 82°40’55”
W, 102.50 feet,

Thence S 30°08’23”
E,   16.42 feet,

Thence S 79°52’48”
E, 271.31 feet,

Thence S 78°15’24”
E, 356.73 feet to the point of beginning,

containing 43.28 acres.

 

Bearings are
based on the assumption that the

south line of the SW1/4 of Section 29 Bears  S 88°58’07” E

 

 

Parcel 4:

 

	
  Portions of the NE1/4 Section 31 and
  the NW1/4 Section 32,

  
	
  Township 13 South, Range 91 West, of the
  6th P.M.

  
	
  Delta County, Colorado

  
	
  Described as follows:

  
	
   

  
	
  Beginning at the 1/4 between Sections 31
  and 32,

  
	
  (Southeast corner of the NE1/4
  Section 31)

  
	
  Thence N 89o02’27” W, 987.85 feet along the
  south line of the NE1/4 Section 31,

  
	
  Thence 89o02’27” W, 180.26 feet along the
  south line of the NE1/4 Section 31,

  
	
  Thence N 57o00’39” W, 157.07,

  
	
  Thence N 00o15’51” E, 253.51 feet,

  
	
  Thence N 79o59’20” W, 201.51 feet,

  
	
  Thence N 13o29’08” W, 265.21 feet,

  
	
  Thence N 64o39’00” W, 45.00 feet,

  
	
  Thence N 25o21’00” E, 54.50 feet,

  
	
  Thence N 15o04’20” E, 107.29 feet to the
  south ROW line of State Highway 133,

  
	
  Thence along the arc of a curve to the
  right 237.57 feet,

  
	
  With a radius of 1106.00 feet, a central
  angle of 12o18’26”

  
	
  and a chord which bears N 66o25’27” E,
  237.11 feet,

  
	
  Thence N 72o34’40” E, 695.20 feet,

  
	
  Thence along the arc of a curve to the left
  289.20 feet

  
	
  with a radius of 995.00 feet, a central
  angle of 16o39’11”

  
	
  and a chord which bears N 64o15’04” E,
  288.18 feet,

  
	
  Thence S 28o18’00” E, 501.32 feet,

  
	
  Thence S 35o42’09” E, 147.99 feet,

  
	
  Thence S 46o45’41” E, 127.55 feet,

  
	
  Thence S 70o15’00” E, 5.65 feet to a point
  on the East line of Section 31

  
	
  Thence S 70o15’00” E, 41.30 feet,

  
	
  Thence S 41o45’00” E, 268.00 feet,

  
	
  Thence S 06o02’02” E, 155.17 feet

  
	
  Thence S 46o48’00” W, 340.00 feet to the
  point of beginning,

  
	
  containing 34.88
  acres;

  
	
   

  
	
  LESS, SAVE AND EXCEPT the following parcel
  sometimes described as the “Area of Conflict”:

  
	
   

  
	
  Portion of the NE1/4 Section 31,

  
	
  Township 13 South, Range 91 West, of the
  6th P.M.

  
	
  Delta County, Colorado

  
	
  Described as follows:

  
	
   

  
	
  Beginning at a point whence the 1/4 between
  Sections 31 and 32,

  
	
  bears S 67o19’03” E, 1689.49 feet,

  
	
  Thence N 64o39’00” W, 45.00 feet,

  

 

 

Thence N 25o21’00” E, 54.40 feet,

Thence S 14o11’46” E, 70.68 feet to the point
of beginning,

containing 1,226 square feet, or 0.03 acres.

 

Bearings are based on the assumption that the
South line

of the NE1/4 Section 31 bears N 89o02’27”
W

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