UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION

Transcription

1 Main Document Page 1 of 17 UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION ) In re: ) Chapter 11 ) MISSION COAL COMPANY, LLC, et al., 1 ) Case No TOM11 ) Debtors. ) (Jointly Administered) ) NOTICE OF FILING OF FOURTH AMENDED PLAN SUPPLEMENT PLEASE TAKE NOTICE that, on February 8, 2019, the United States Bankruptcy Court for the Northern District of Alabama (the Court ) entered an order (the Disclosure Statement Order ), (a) authorizing the Debtors and its affiliated debtors and debtors in possession (collectively, the Debtors ), to solicit acceptances for the First Amended Joint Chapter 11 Plan of Mission Coal Company, LLC and Certain of Its Debtor Affiliates (as modified, amended, or supplemented from time to time, the Plan ), 2 (b) approving the Disclosure Statement for the First Amended Joint Chapter 11 Plan of Mission Coal Company, LLC and Certain of Its Debtor Affiliates (as modified, amended, or supplemented from time to time, the Disclosure Statement ) as containing adequate information pursuant to section 1125 of the Bankruptcy Code, (c) approving the solicitation materials and documents to be included in the solicitation packages, and (d) approving procedures for soliciting, receiving, and tabulating votes on the Plan and for filing objections to the Plan. PLEASE TAKE FURTHER NOTICE that, on February 5, 2019, the Debtors filed the First Amended Joint Chapter 11 Plan of Mission Coal Company, LLC and Certain of Its Debtor Affiliates [Docket No. 681]. PLEASE TAKE FURTHER NOTICE that, on February 7, 2019, the Debtors filed a modified First Amended Joint Chapter 11 Plan of Mission Coal Company, LLC and Certain of Its Debtor Affiliates [Docket No. 732] (the Modified First Amended Plan ). 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, include: Mission Coal Company, LLC (8465); Beard Pinnacle, LLC (0637); Oak Grove Land Company, LLC (6068); Oak Grove Resources, LLC (0300); Pinnacle Land Company, LLC (6070); Pinnacle Mining Company, LLC (7780); Seminole Alabama Mining Complex, LLC (6631); Seminole Coal Resources, LLC (1795); Seminole West Virginia Mining Complex, LLC (7858); Seneca Coal Resources, LLC (1816); and Seneca North American Coal, LLC (5102). The location of the Debtors service address is: 7 Sheridan Square, Suite 300, Kingsport, Tennessee Capitalized terms not otherwise defined herein shall have the same meanings set forth in the Plan or Disclosure Statement, as applicable. KE

2 Main Document Page 2 of 17 PLEASE TAKE FURTHER NOTICE that, on February 8, 2019, the Debtors filed a solicitation version of the Modified First Amended Plan [Docket No. 771]. PLEASE TAKE FURTHER NOTICE that, on March 4, 2019, the Debtors filed the Notice of Filing of Plan Supplement [Docket No. 916] with the Court. PLEASE TAKE FURTHER NOTICE that, on March 30, 2019, the Debtors filed the Notice of Filing of Second Amended Joint Chapter 11 Plan of Mission Coal Company, LLC and Certain of its Debtor Affiliates [Docket No. 1140] with the Court. PLEASE TAKE FURTHER NOTICE that, on April 2, 2019, the Debtors filed the Notice of Filing of Amended Plan Supplement - Executed Investigation Settlement Term Sheet [Docket No. 1190] with the Court. PLEASE TAKE FURTHER NOTICE that, on April 2, 2019, the Debtors filed the Notice of Filing of Third Amended Joint Chapter 11 Plan of Mission Coal Company, LLC and Certain of its Debtors Affiliates [Docket No. 1209] (the Third Amended Plan ) with the Court. PLEASE TAKE FURTHER NOTICE that, on April 2, 2019, the Debtors filed the Notice of Filing of Second Amended Plan Supplement [Docket No. 1212] with the Court. PLEASE TAKE FURTHER NOTICE that, on April 4, 2019, the Debtors filed the Notice of Filing of Third Amended Plan Supplement [Docket No. 1239] with the Court. PLEASE TAKE FURTHER NOTICE THAT as contemplated by the Plan and the Disclosure Statement Order, the Debtors hereby file the following Fourth Amended Plan Supplement (the Fourth Amended Plan Supplement ) exhibits with the Court: Exhibit N Form of McCoy/Castlelake Note PLEASE TAKE FURTHER NOTICE that the hearing at which the Court will consider Confirmation of the Plan (the Confirmation Hearing ) will resume on April 9, 2019, at 1:00 p.m., prevailing Central Time, before the Honorable Tamara O. Mitchell, at the United States Bankruptcy Court for the Northern District of Alabama, Southern Division, Courtroom #3, Robert S. Vance Federal Building, 1800 Fifth Avenue North, Birmingham, Alabama PLEASE TAKE FURTHER NOTICE that if you would like to obtain a copy of the Disclosure Statement, the Plan, the Plan Supplement, the Amended Plan Supplement, or related documents, you should contact Omni Management Group, the notice and claims agent retained by the Debtors in the chapter 11 cases (the Notice and Claims Agent ), by: (a) calling the Notice and Claims Agent at (888) (U.S. and Canada) or (818) (International), (b) visiting the Debtors restructuring website at: (c) writing to the Notice and Claims Agent at Omni Management Group, Re: Mission Coal Company, LLC, et al., 5955 DeSoto Ave., Suite 100, Woodland Hills, CA 91367; and/or (d) ing missioninfo@omnimgt.com and requesting paper copies of the corresponding materials previously received in electronic format. You may also obtain copies of any pleadings filed in the chapter 11 cases for a fee via PACER at: 2

3 Main Document Page 3 of 17 ARTICLE IX OF THE PLAN CONTAINS RELEASE, EXCULPATION, AND INJUNCTION PROVISIONS, AND ARTICLE IX.E CONTAINS A THIRD-PARTY RELEASE. THUS, YOU ARE ADVISED TO REVIEW AND CONSIDER THE PLAN CAREFULLY BECAUSE YOUR RIGHTS MIGHT BE AFFECTED THEREUNDER. THIS NOTICE IS BEING SENT TO YOU FOR INFORMATIONAL PURPOSES ONLY. IF YOU HAVE QUESTIONS WITH RESPECT TO YOUR RIGHTS UNDER THE PLAN OR ABOUT ANYTHING STATED HEREIN OR IF YOU WOULD LIKE TO OBTAIN ADDITIONAL INFORMATION, CONTACT THE NOTICE AND CLAIMS AGENT. [Remainder of page intentionally left blank.] 3

4 Main Document Page 4 of 17 Birmingham, Alabama Dated: April 8, 2019 /s/ Daniel D. Sparks Daniel D. Sparks Bill D. Bensinger CHRISTIAN & SMALL LLP 505 North 20th Street, Suite 1800 Birmingham, Alabama Telephone: (205) Facsimile: (205) ddsparks@csattorneys.com bdbensinger@csattorneys.com - and - James H.M. Sprayregen, P.C. Brad Weiland (admitted pro hac vice) Melissa N. Koss (admitted pro hac vice) KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 300 North LaSalle Chicago, Illinois Telephone: (312) Facsimile: (312) james.sprayregen@kirkland.com brad.weiland@kirkland.com melissa.koss@kirkland.com - and - Stephen E. Hessler, P.C. (admitted pro hac vice) Ciara Foster (admitted pro hac vice) KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 601 Lexington Avenue New York, New York Telephone: (212) Facsimile: (212) stephen.hessler@kirkland.com ciara.foster@kirkland.com Co-Counsel to the Debtors

5 Main Document Page 5 of 17 Exhibit N Form of McCoy/Castlelake Note

6 Main Document Page 6 of 17 White & Case Draft: April 8, 2019 SECURED PROMISSORY NOTE $4,000, April [ ], 2019 FOR VALUE RECEIVED, Kenneth McCoy and Jason McCoy, on a joint and several basis, (collectively referred to herein as the Borrower ), hereby unconditionally promises to pay to the order of MC Southwork LLC (the Lender ), in lawful money of the United States of America, in immediately available funds, the principal sum of FOUR MILLION DOLLARS ($4,000,000.00), in lawful money of the United States of America, or such amount as may be advanced and outstanding hereunder (the Loan ) as set forth herein, together with interest on the outstanding amount thereof, from the date hereof until such principal amount is paid in full, at the rate or rates determined in accordance with, and payable at the times set forth in, Section 2 below. 1. DEFINITIONS As used in this secured promissory note (this Note ), the following terms shall have the following meanings: Affiliate as to any Person, means any other Person that, directly or indirectly through one or more intermediaries, is in control of, is controlled by, or is under direct or indirect common control with, such Person. For purposes of this definition, control of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the election of directors (or Persons performing similar functions) of such Person or (b) direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise. AMCI Group means [ ]. Bay Point means Bay Point Capital Partners, LP, a Delaware limited partnership. Bankruptcy Order has the definition assigned to such term in Section Business Day means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by law to be closed in the City of New York. Chapter 11 Cases means the chapter 11 cases of Mission Coal and its affiliated subsidiaries, currently pending in the Bankruptcy Court for the Northern District of Alabama. Chapter 11 Plan means the [need to fill in whenever final plan is filed], in form and substance satisfactory to the Lender. Clarke Settlement means the settlement pursuant to [ ]. Conuma Stock has the definition assigned to such term in Section Debtor Relief Laws means the Bankruptcy Code of the United States, if applicable, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium,

7 Main Document Page 7 of 17 rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally. Debtors means Mission Coal Company and its affiliates who are debtors in the Chapter 11 Cases. Default Rate means, at any time, a rate of interest equal to the Interest Rate in effect at such time, plus 5.00% per annum. Equity Interests means, with respect to any Person, all of the shares, interests, rights, participations or other equivalents (however designated) of capital stock of (or other ownership or profit interests or units in) such Person and all of the warrants, options or other rights for the purchase, acquisition or exchange from such Person of any of the foregoing (including through convertible securities). Escrow Account has the definition assigned to such term in Section 2.7. Escrow Agreement has the definition assigned to such term in Section 2.7. Governmental Authority means any United States federal, state or local or any foreign government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal or judicial or arbitral body. Guaranteed Obligations has the meaning assigned to such term in Section 3.1. Guarantors means each person listed as a Guarantor on the signature pages hereto. Interest Rate means a rate per annum equal to the LIBOR Rate plus 10.00%. LIBOR Rate means the one-month LIBOR rate as published from time to time in the "Money Rates" section of The Wall Street Journal (Midwest Edition) or any successor thereto, which will be that one-month LIBOR rate in effect on the first business day of that month. Notwithstanding the foregoing, if Lender determines that (a) the interest rate hereunder is not ascertainable and such circumstances are unlikely to be temporary, or (b) ICE Benchmark Administration (or any entity that takes over the administration of such rate) discontinues its administration and publication of interest settlement rates for deposits in Dollars, Lender may designate a substitute index that (i) is reasonably acceptable to the Lender, and (ii) gives due consideration to the then prevailing market convention for determining a rate of interest for bank-originated commercial loans in the United States at such time. Liens means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), security interest, preference, priority or other security agreement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing or similar statement or notice filed under the UCC or any other similar recording or notice statute, and any lease having substantially the same effect as any of the foregoing). Liquidity Event means any event, occurrence, circumstance, transaction or otherwise that results in a cash or any other form of payment, distribution, dividend, or other receipt of consideration to holders of the Conuma Stock, including, without limitation, an initial public offering, a dividend, a payment from a third party, a purchase of by or from an existing equityholder, or otherwise. 2

8 Main Document Page 8 of 17 Loan Parties means the Borrower and the Guarantors. Maturity Date means [ ]. 1 Person means any natural person, corporation, partnership, limited liability company, trust, joint venture, association, unincorporated organization or Governmental Authority. ROFR has the meaning assigned to such term in Section 5.5. Settlement means [to fill in the name of the Settlement filed with the Bankruptcy Court on Tuesday][Docket No. ]. York. UCC means the Uniform Commercial Code as in effect from time to time in the State of New 2. ADVANCES; PAYMENTS; INTEREST; CONDITIONS 2.1 Loan to Borrower. On the date hereof, the Lender has advanced the Loan to the Borrower. The Loan may be repaid or prepaid in accordance with the terms and conditions set forth herein, but once repaid or prepaid, may not be reborrowed. 2.2 Payments; Prepayments. Interest (calculated as set forth in this Note) on the Loan shall be due and payable in cash by the Borrower monthly in arrears on the last Business Day of each calendar month. The Borrower may prepay any portion of the principal amount of the Loan without premium or penalty provided that, (a) the Borrower shall notify the Lender at least three (3) Business Days prior to such prepayment, (b) such prepayment may only be made on a Business Day, and (c) any such prepayment shall also include payment of the accrued and unpaid interest attributable to the principal amount of the Loan being prepaid. The outstanding principal, together with interest thereon as hereinafter provided, shall be due and payable by the Borrower on the Maturity Date. 2.3 Interest; Overdue Amounts. Interest on the outstanding principal amount of the Loan will accrue at the Interest Rate. Interest will be calculated on the basis of a year of 360 days, and charged for the actual number of days elapsed, provided, however, that any amounts of principal and/or interest owing under this Note and not paid when due shall bear interest for each day from the due date thereof until paid in full at a rate per annum equal to the Default Rate with such interest to be payable on demand. 2.4 Default Rate. Upon the occurrence (and during the continuation) of an Event of Default, the then outstanding and unpaid principal balance of the Loan shall automatically, and without requiring notice from the Lender, accrue interest at the Default Rate and in addition to the requirements of Section 2.2, Default Interest will be due and payable on demand. 2.5 Manner of Payment. Principal, interest, and all other amounts due under this Note will be payable in U.S. dollars to the Lender to such account or at such address as designated from 1 Note to Draft: To be the date that is four months from the Closing Date. 3

9 Main Document Page 9 of 17 time to time by the Lender in writing to the Borrower. If any payment of principal or interest on this Note is due on a day that is not a Business Day, such payment will be due on the next succeeding Business Day, and such extension of time will be taken into account in calculating the amount of interest payable under this Note. All amounts due under this Note shall be payable without setoff, counterclaim or any other defense or deduction whatsoever. 2.6 Mandatory Prepayments. Upon the occurrence of a Liquidity Event with respect to the Conuma Stock, 100% of the proceeds from such Liquidity Event (net of reasonable transaction costs) shall be immediately applied to repay the outstanding amount of the Loan. 2.7 Conditions to Loan The Borrower shall deposit two (2) shares of Conuma Coal Resources held by ERP Steel Works, LLC (the Conuma Stock ), which shares shall be evidenced by stock certificates, together with the related endorsements into an escrow account (the Escrow Account ) which shall be subject to an escrow agreement on terms and conditions reasonably satisfactory to the Lender (the Escrow Agreement ). The Borrower shall enter into a power of attorney with respect to the Conuma Stock reasonably satisfactory to the Lender. For the avoidance of doubt, once the Conuma Stock is placed in to the Escrow Account, it shall no longer be an asset of, or part of the estate of, the Borrower or any Guarantor The Lender shall have received a legal opinion of White & Case LLP, in form and substance reasonably satisfactory to the Lender, regarding, among other things (x) the ability of the Borrower to place the Conuma Stock in to the Escrow Account and enter in to the Escrow Agreement, (y) the authority of the Borrower to sell the Conuma Stock free and clear of all Liens (subject to the ROFR), and (z) the authority of the Borrower to sell the Conuma Stock to the Lender in the event the ROFR is not exercised An order shall have been entered by the United States Bankruptcy Court for the Northern District of Alabama in the Debtors Chapter 11 Cases that (w) approves the Settlement, (x) provides that this Note is binding and fully enforceable against the Loan Parties without any defense of any kind, (y) provides that the Escrow Account and the Escrow Agreement are fully enforceable against the Loan Parties and (z) shall otherwise be in form and substance satisfactory to the Lender (the Bankruptcy Order ). The Chapter 11 Plan of the Debtors shall have become effective pursuant to its terms. 3. GUARANTY 3.1 Guaranty. By its signature below, each Guarantor hereby jointly and severally with the other Guarantors guarantees, as a primary obligor and not merely as a surety, to the Lender and its successors and assigns, the prompt payment in full when due (whether at stated maturity, by required prepayment, declaration, demand, by acceleration or otherwise) of the principal of and interest (including any interest, fees, costs or charges that would accrue but for the provisions of (i) Title 11 of the United States Code after any bankruptcy or insolvency petition under Title 11 of the United States Code and (ii) any other Debtor Relief Laws) on the Loan, and all other obligations from time to time owing to the Lender by any Loan Party under this Note (such obligations being herein collectively called the Guaranteed Obligations ). Without limiting the generality of the foregoing, the Guaranteed Obligations shall include any such indebtedness, obligations, and liabilities, or portion thereof (in each case, outstanding pursuant to 4

10 Main Document Page 10 of 17 this Note), which may be or hereafter become unenforceable or compromised or shall be an allowed or disallowed claim under any proceeding or case commenced by or against a Loan Party under any Debtor Relief Laws. The Guarantors hereby jointly and severally agree that if the Borrower or other Guarantor(s) shall fail to pay in full when due (whether at stated maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the Guarantors will promptly pay the same in cash, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such extension or renewal. 3.2 Obligations Unconditional. The obligations of the Guarantors under Section 3.1 shall constitute a guarantee of payment (and not merely collection) and to the fullest extent permitted by applicable law, are absolute, irrevocable and unconditional, joint and several, irrespective of the value, genuineness, validity, regularity or enforceability of the Guaranteed Obligations of the Borrower under this Note or any other agreement or instrument referred to herein, or any substitution, release or exchange of any other guarantee of any of the Guaranteed Obligations, and, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or Guarantor (except for payment in full). Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not alter or impair the liability of the Guarantors hereunder which shall remain absolute, irrevocable and unconditional under any and all circumstances as described above: at any time or from time to time, without notice to the Guarantors, to the extent permitted by law, the time for any performance of or compliance with any of the Guaranteed Obligations shall be extended, or such performance or compliance shall be waived; any of the acts mentioned in any of the provisions of this Note or any other agreement or instrument referred to herein or therein shall be done or omitted; or the maturity of any of the Guaranteed Obligations shall be accelerated, or any of the Guaranteed Obligations shall be amended in any respect, or any right under this Note or any other agreement or instrument referred to herein or therein shall be amended or waived in any respect or any other guarantee of any of the Guaranteed Obligations. The Guarantors hereby expressly waive diligence, presentment, demand of payment, protest and, to the extent permitted by law, all notices whatsoever, and any requirement that the Lender exhaust any right, power or remedy or proceed against the Borrower under this Note or any other agreement or instrument referred to herein, or against any other person under any other guarantee of any of the Guaranteed Obligations. As provided below, this Guaranty shall be governed by, and construed in accordance with, the laws of the State of New York. The Guarantors waive, to the extent permitted by law, any and all notice of the creation, renewal, extension, waiver, termination or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by the Lender upon this guaranty or acceptance of this guaranty, and the Guaranteed Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred in reliance upon this guaranty, and all dealings between the Borrower and the Lender shall likewise be conclusively presumed to have been had or consummated in reliance upon this guaranty. This guaranty shall be construed as a continuing, absolute, irrevocable and unconditional guarantee of payment without regard to any right of offset with respect to the Guaranteed Obligations at any time or from time to time 5

11 Main Document Page 11 of 17 held by the Lender, and the obligations and liabilities of the Guarantors hereunder shall not be conditioned or contingent upon the pursuit by the Lender or any other person at any time of any right or remedy against the Borrower or against any other person which may be or become liable in respect of all or any part of the Guaranteed Obligations or guarantee therefor or right of offset with respect thereto. This guaranty shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon the Guarantors and the successors and assigns thereof, and shall inure to the benefit of the Lender, and its successors and assigns, notwithstanding that from time to time during the term of this Note there may be no Guaranteed Obligations outstanding. 3.3 Reinstatement. The obligations of the Guarantors under this Section 3 shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of the Borrower or other Loan Party in respect of the Guaranteed Obligations is rescinded or must be otherwise restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in insolvency, bankruptcy or reorganization or otherwise. 3.4 Subrogation; Subordination. Each Guarantor hereby agrees that until the payment and satisfaction in full in cash of all Guaranteed Obligations it shall waive any claim and shall not exercise any right or remedy, direct or indirect, arising by reason of any performance by it of its guarantee in this Section 3, whether by subrogation or otherwise, against the Borrower or any other Guarantor of any of the Guaranteed Obligations or any security for any of the Guaranteed Obligations. 3.5 Remedies. The Guarantors jointly and severally agree that, as between the Guarantors and the Lender, the obligations of the Borrower under this Note may be declared to be forthwith due and payable for purposes of this Section 3, notwithstanding any stay, injunction or other prohibition preventing such declaration (or such obligations from becoming automatically due and payable) as against the Borrower and that, in the event of such declaration (or such obligations being deemed to have become automatically due and payable), such obligations (whether or not due and payable by the Borrower) shall forthwith become due and payable by the Guarantors for purposes of this Section Instrument for the Payment of Money. Each Guarantor hereby acknowledges that the guarantee set forth in this Section 3 constitutes an instrument for the payment of money, and consents and agrees that the Lender, at its sole option, in the event of a dispute by such Guarantor in the payment of any moneys due hereunder, shall have the right to bring a motion-action under New York CPLR Section Continuing Guaranty. The guarantee in this Section 3 is a continuing guarantee of payment, and shall apply to all Guaranteed Obligations whenever arising. 3.8 General Limitation on Guarantee Obligations. In any action or proceeding involving any state corporate limited partnership or limited liability company law, or any applicable state, federal or foreign bankruptcy, insolvency, reorganization or other Law affecting the rights of creditors generally, if the obligations of any Guarantor under this Section 3 would otherwise be held or determined to be void, voidable, invalid or unenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability under this Section 3, then, notwithstanding any other provision to the contrary, the amount of such liability shall, without any further action by such Guarantor, any Loan Party or any other person, be automatically limited and reduced to the highest amount that is valid and enforceable and not subordinated to the claims of other creditors as determined in such action or proceeding. 6

12 Main Document Page 12 of Information. Each Guarantor assumes all responsibility for being and keeping itself informed of the Borrower s financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks that each Guarantor assumes and incurs under this Guaranty, and agrees that the Lender shall not have any duty to advise any Guarantor of information known to it regarding those circumstances or risks. 4. REPRESENTATIONS AND WARRANTIES The Loan Parties hereby represent and warrant to the Lender as of the date hereof as set forth below. 4.1 Organization; Existence; Good Standing; Compliance with Laws. Each Guarantor is (a) a limited liability company duly formed, validly existing and in good standing under the laws of its jurisdiction of formation, (b) duly qualified in each material jurisdiction in which it is required to be so qualified in order to conduct its business and (c) in compliance with laws applicable to such Guarantor. 4.2 Legal Capacity. The Borrower has the legal capacity to execute and deliver this Note and to perform the covenants, duties and obligations described herein. Each Guarantor has the limited liability company power and authority and has taken all necessary action to execute, deliver and perform this Note and to consummate the transactions contemplated hereby. 4.3 Validity; Enforceability. This Note has been duly executed and delivered by each Loan Party and is a valid, legal and binding obligation of such Loan Party, enforceable in accordance with its terms, except as enforceability may be limited by applicable insolvency and other laws affecting creditors rights generally or by the availability of equitable remedies. 4.4 No Conflicts. The execution and delivery by each Loan Party of this Note, and the performance by it of its obligations hereunder, do not and will not violate, breach, conflict with or require any consent pursuant to (a) any existing law or regulation or any writ or decree of any court or Governmental Authority; (b) the Guarantors constitute documents or (c) any agreement or undertaking to which any Loan Party or any of its Affiliates or its Affiliates assets are bound. 4.5 No Default. No Event of Default exists hereunder or would result from the making of the Loan or the application of the proceeds thereof. 4.6 No Undisclosed Liabilities. Except for the obligations of the Loan Parties pursuant to the Settlement (including any liabilities to Bay Point) and under the Clarke Settlement, the Loan Parties have no liabilities that could reasonably be expected to exceed $1,000,000, other than disclosed to the Lender in writing on March 31, Title to Assets; No Liens. The Borrower has good title to in the Conuma Stock, free and clear of all Liens, charges or claims, except for the ROFR. 4.8 No Litigation. There is no claim, action, suit, proceeding or investigation pending or threatened against of affecting any Loan Party (a) with respect to this Note or (b) the Conuma Stock. 7

13 Main Document Page 13 of COVENANTS 5.1 Punctual Payments. The Borrower and the Guarantors shall punctually pay all principal, interest, fees or other amounts due under this Note at the times and place and in the manner specified herein. 5.2 Obligations and Taxes. The Borrower will pay all of its material financial obligations arising after the date hereof promptly and in accordance with their terms and pay and discharge promptly when due all material taxes imposed upon the Borrower or the Borrower s income or profits or in respect of its property arising after the date hereof, before the same shall become delinquent or in default, as well as all material lawful claims for labor, materials and supplies or otherwise arising after the date hereof that, if unpaid, might give rise to a lien upon such properties or any part thereof; provided, however, that the Borrower shall not be required to pay and discharge any such tax or claim so long as the validity or amount thereof shall be contested in good faith by appropriate proceedings and such contest operates to suspend collection of the contested obligation or tax and enforcement of a lien with respect thereto. 5.3 Further Assurances. Upon the reasonable request of the Lender, duly execute and deliver, or cause to be duly executed and delivered, to the Lender such further instruments and do and cause to be done such further acts as may be necessary or advisable in the reasonable opinion of the Lender to carry out the intent and purpose of the express provisions of this Note. 5.4 Right of First Refusal. On the day that is 90 days after the date hereof, the Borrower shall offer to sell the Conuma Stock to the Lender at a price equal to $4,000,000 plus any accrued interest and fees on the Note. Substantially simultaneously therewith, the Borrower shall notify any and all parties that it is required to do so (including the AMCI Group) of such offer, which will trigger the right of first refusal (the ROFR ) of certain parties pursuant to the organizational documents of Conuma Coal Resources Limited. If (x) the ROFR is not exercised and (y) the Note is not repaid in full in cash, together with accrued and unpaid interest, on the Maturity Date, the Lender shall automatically take ownership of the Conuma Stock in satisfaction of the Note. If the ROFR is exercised at a price which the Lender agrees to, then any and all proceeds from the sale of such Conuma Stock shall be paid directly to the Lender. 5.6 Notice to Conuma. Promptly after Closing (and no later than 5 Business Days after Closing), the Borrower shall direct Conuma Coal Resources to make all payments in respect to the Conuma Stock directly to the Lender upon any Liquidity Event; provided, that if a Liquidity Event occurs prior to the transfer of the Conuma Stock to the Lender pursuant to the Escrow Agreement, the Lender shall be entitled to receive such payments only up to the amount required to pay the Note in full. 5.7 Use of Proceeds. The Borrower may use the proceeds of the Loan solely to fund the consideration by Ken McCoy and Jason McCoy under the Settlement. 6. DEFAULT 6.1 Events of Default. Each of the following shall constitute an event of default (each, an Event of Default ): (a) any Loan Party shall fail to pay when due any principal amount payable hereunder, (b) within three Business Days after the same becomes due, any Loan Party shall fail to pay any interest on this Note or any other amount payable hereunder; (c) immediately upon any default in the due performance or observance by any Loan Party of any term, covenant or agreement contained in this Note; 8

14 Main Document Page 14 of 17 (d) any Loan Party institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors, or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for such Loan Party for all or any material part of the property of the Borrower other than the Chapter 11 Cases or (e) immediately, if any representation, warranty, certification or statement of fact made or deemed made by any Loan Party in this Note, or in any document required to be delivered in connection herewith shall be incorrect in any respect when made or deemed made. 6.2 Remedies Immediately upon the occurrence of any Event of Default described in Section 6.1, (x) title to any and all assets held in the Escrow Account shall immediately pass to the Lender without defense or counterclaim and (y) the unpaid principal balance of this Note and all other amounts owing under this Note shall immediately become due and payable; provided, however, that upon the occurrence of any Event of Default described in Section 6.1(d), the unpaid principal balance of this Note and all other amounts owing under this Note shall immediately become due and payable without any action on the part of the Lender Immediately upon the occurrence of an Event of Default, pursuant to the Bankruptcy Court order approving the Settlement, the Lender shall obtain a default judgment against the Loan Parties, and the Lender shall automatically obtain a perfected judgment lien as of Closing Date of the Note on any and all of the assets of the Loan Parties subject to execution; provided, that the Lender shall only be entitled to exercise its rights in respect of such lien in the event that it does not receive the Conuma Stock (or the proceeds thereof in the event of the exercise of the ROFR). 7. MISCELLANEOUS 7.1 Waiver. Each Loan Party hereby waives presentment, demand, diligence, protest, notice of intent to accelerate, notice of acceleration, and notice of nonpayment, dishonor and protest. 7.2 Assignment. This Note may be assigned or transferred by the Lender, in whole or in part. No Loan Party may assign or transfer any of its obligations under this Note without the prior written consent of the Lender. 7.3 Notices. All notices, requests, demands, claims, and other communications hereunder shall be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given if and when (a) delivered personally, (b) mailed by first class registered or certified mail, return receipt requested, postage prepaid, on the date certified by the U.S. Postal Service to have been received by the addressee, (c) sent by electronic mail; provided, that sender personally calls the recipient and confirms receipt of such electronic mail, or (d) sent by a nationally recognized overnight express courier service, on the date certified by such courier service to have been received by the recipient, in each case as follows: 9

15 Main Document Page 15 of 17 If to a Loan Party: [ ] Attention: Telephone: If to the Lender: MC Southwork LLC [ ] Attention: Any party may change the address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the others notice in the manner herein set forth. 7.4 Headings; Counterparts. The article and section headings contained in this Note are inserted for convenience only and will not affect in any way the meaning or interpretation of this Note. 7.5 Governing Law. This Note and the performance of the obligations of the Borrower hereunder will be governed by and construed in accordance with the laws of the State of New York. This Note may be executed in any number of counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed counterpart of a signature page of this Note by facsimile transmission or other electronic transmission (i.e., a pdf or tif ) shall be effective as delivery of a manually executed counterpart hereof. 7.6 Amendments and Waivers. No amendment, modification, waiver, replacement, termination, or cancellation of any provision of this Note will be valid, unless the same shall be in writing and signed by the Borrower and the Lender. No waiver by the Lender of any default hereunder shall be deemed to extend to any prior or subsequent default hereunder or affect in any way any rights arising out of any prior or subsequent such occurrence. No failure or delay on the part of the Lender in exercising any right, power or privilege hereunder shall operate as a waiver of any privilege or right hereunder or preclude any other or further exercise of any other right, power or privilege. 7.7 Severability. The provisions of this Note shall be deemed severable and the invalidity or unenforceability of any provision will not affect the validity or enforceability of the other provisions hereof. 7.8 Indemnification. The Loan Parties will reimburse and hereby indemnify the Lender, its Affiliates and their respective partners, members, shareholders, officers, directors, employees, agents and advisors (collectively, the Indemnified Parties ) from and against, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, advances or 10

16 Main Document Page 16 of 17 disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against any Indemnified Party to the extent arising in connection with this Note or the Loan, the guarantees by the Guarantors hereunder or the Conuma Stock, or any action taken or omitted to be taken by any Indemnified Party in connection with any of the foregoing, except those that are found by a final and non-appealable decision of a court of competent jurisdiction to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnified Party. 7.9 Expenses. The Borrower shall pay to Lender, promptly after receipt of a customary invoice, all reasonable and documented costs and expenses incurred by Lender, including reasonable and documented attorneys fees in connection with: (i) the preparation and negotiation of any amendment, supplement, extension, renewal, reinstatement or modification of, or any waiver or consent under or with respect to, this Note; or (ii) the enforcement or satisfaction by the Lender of any of the Borrower s obligations under this Note Set-off. If any amount owing to the Lender under this Note is not paid when due, the Lender is hereby authorized by the Loan Parties, at any time and from time to time thereafter, without notice, to set-off against, and to appropriate and apply to the payment of, the liabilities of the Loan Parties under this Note any and all liabilities owing by the Lender or any of its Affiliates to the Loan Parties (whether matured or unmatured) Entire Agreement. This Note constitutes the entire agreement and understanding of the Lender and the Loan Parties in respect of the subject matter hereof and supersedes all prior understandings, agreements or representations by or among the Lender and the Loan Parties, written or oral, to the extent they relate in any way with respect thereto. [SIGNATURE PAGE FOLLOWS] 11

17 Main Document Page 17 of 17 IN WITNESS WHEREOF, the Borrower and the Guarantors have executed and delivered this Note as of the date first above written. BORROWER: KENNETH MCCOY By: Name: Title: JASON MCCOY By: Name: Title: GUARANTORS: IRON MANAGEMENT, LLC, a [ ] limited liability company IRON MANAGEMENT V, LLC, a [ ] limited liability company By: Name: Title: By: Name: Title: