LEASE AGREEMENT

This LEASE AGREEMENT, effective the 1st day of January, 1995, by and between ALLEGANY COAL& LAND COMPANY ("Owner"), and PATRIOT MINING COMPANY, INC. ("the Company"), constitutes the final, complete, and integrated agreement to which Owner and the Company intend to be legally bound as follows:

SECTION 1
DEFINITIONS

1.01" AFFILIATE OF THE COMPANY" shall mean any person (including an individual, partnership, joint venture, or corporation) who directly or indirectly through one or more intermediaries controls or is controlled by or is under common control with the Company, or any of the partners who constitute the Company, "control" in this context meaning possession, direct or indirect, of the power to vote respecting the management or operations of the Company, of such person, or both, or the power to direct the management policies of the Company, of such person, or both, by contract or otherwise.

1.02 "APPROVED MINING METHODS" shall mean only the strip-mining method in compliance with good mining practices and applicable law, and shall not mean or include any other mining method.

1.03 "GROSS SALES PRICE" shall mean the gross sales price paid by the first purchaser who is not an Affiliate of the Company less the reasonable costs of transportation.

1.04 "LAND" shall mean those tracts of land in Allegany County, Maryland which are more particularly described and delineated in Exhibit "A".

1.05 "LEASEHOLD ESTATE" shall mean all of the seams of Mineable and Merchantable Coal in, upon, and underlying the Land, together with all Mining Rights, and shall not mean or include any of Owner's Retained Interests.

1.06 "MINEABLE AND MERCHANTABLE COAL" shall mean all of the coal that can be reached and economically recovered by mining to a high wall height of sixty (60) feet of overburden over the uppermost seam then being mined, and shall include all the coal that can be reached and economically recovered from the Pittsburgh and Moran town seams when the Company is mining in the Redstone seam.

1.07 "MINING RIGHTS" shall mean all of the rights and privileges described in Section 2.02.

1.08 "OPERATIONS" shall mean the mining and removing by Approved Mining Methods of all Mineable and Merchantable Coal that can be produced from the Leasehold Estate by the Company.

1.09 "RETAINED INTERESTS" shall mean and include all of Owner's right, title, interest, and estate in and to the surface and minerals in, upon, and underlying the Land other than the Leasehold Estate.

1.10 "THIRD PARTY" shall mean any person (including an individual, partnership, joint venture, or corporation) who is not the Company or an Affiliate of the Company.

1.11 "TON" shall mean 2,000 pounds.

SECTION 2
LEASE/RESERVATION

2.01 In consideration of the royalty payments to be made by the Company, Owner leases the Leasehold Estate to the Company in accordance with the terms and provisions of this Agreement.

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